One of the key figures behind the expansion of the American steel industry in the 19th century and author of several well-read books, Andrew Carnegie, was able to deduce the secret behind wealth generation during his era. With the growth in technology and emerging industries, real estate has taken a back seat, but it is still one of the most promising investment options available for wealth generation. Forbes top 400 list of billionaires in 2015 maintained the names of real estate pioneers, such as Donald Bren, Stephen Ross, Richard LeFrak, Ted Lerner, and Donald Trump, among others.

The fundamentals of real estate investing are still the same, and the only thing that has changed is your ability to leverage credit, and strategy to ensure a healthy cash flow. With that being said, real estate may not be able to land you in Forbes’ list, but it surely can ensure a fulfilling life starting today. At Sense Financial, a large part of our client-base comprises of real estate investors, who use IRA real estate opportunities to create a lucrative retirement portfolio. Considering the number of times we have been asked about real estate investing, we decided to take a look at the different real estate investments available to the average investor, and the latest figures associated with these investments.

RA Real Estate Investment Options (Facts, Figures, Quotes)

Single Family Homes

“If I had a way of buying a couple hundred thousand single-family homes I would load up on them.” ~ Warren Buffet

Figures: 35% of the total renter-occupied households in the U.S., 15.19 million, rent a single-family home.

The investment wizard might have stretched a little too far saying that, but the idea itself holds a lot of truth. Single-family homes were the second most popular housing structure in the renting industry at the end of August 2015. The best aspect of investing in single family home is its ease of sale, purchase, and financing. An average single-family home rents higher than an apartment, although it also offers more space, including storage areas, basement, living room, bedrooms, and kitchen.

Why do you want them?

  1. Ease of purchase, sale, financing
  2. Easy management & higher occupancy

2/3/4 Unit Apartments

“Rental income is quite stable when compared with the income of property developers.” ~Castor Pang

Figures: 18% of the total renter-occupied households in the U.S., 7.78 million, rent 2 to 4 units property.

While talking about investment properties, small multi-family apartments offer the ease of maintenance of single-family houses along with flexible financing, and are a great source of rental income. The traditional lenders consider them equivalent to single housing units, hence offering easy financing options.

Why do you want them?

    1. Lower competition and higher availability
    2. Quick closing and higher cash-on-cash returns
    3. Lower equity requirements, making them perfect for beginner investors

Written by: Dmitriy Fomichenko

Dmitriy is the founder and president of Sense Financial Services LLC, boutique financial firm specializing in self-directed retirement accounts with checkbook control. He began his career in financial planning and real estate investing in 2000. He owns multiple investment properties in various states and is a licensed California Real Estate Broker. Over the years, he has instructed hundreds of investment and financial planning seminars and has mentored thousands of investors.