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Discuss Latest WCI Blog Post: The Case for Private Real Estate

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  • Discuss Latest WCI Blog Post: The Case for Private Real Estate

    Is it really worth investing in private real estate syndications, funds, or REITs? Here's why private real estate could be a good investment.

    The post The Case for Private Real Estate appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

    Click here to view the article!
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  • #2
    I always enjoy these sorts of posts that challenge our collective "Bogleheads" wisdom (low cost index mutual funds for the win). I see real estate as valuable diversification for the investment portfolio, but also as optional. I have enjoyed teaching my kids about directly owned real estate as a more hands on path to wealth building in parallel to their 401k investments as part of their day jobs. On the flip side, I have looked many times and cannot make myself pull the trigger on the syndicates and funds. Just unwilling to give up the control, I guess. But that seems more a matter of investment preference than anything else.


    • #3
      Real estate to me is completely optional. Index funds do just fine.

      Where real estate shines is tax benefits and 'safe' leverage.


      • #4
        As a real estate aficionado I agree it is not for everyone and is not the set and forget it path like index funds. To do it right takes a lot of extra time to learn and execute and still most real estate investors admit to mistakes. The trick is to learn from your mistakes (or hopefully from others) and not make the same mistakes. The tax advantages have been huge for me as a I am now REP status but the vast majority of real estate investors can't take full advantage as they are still working elsewhere. Real estate investing cycles like the other investment categories but more slowly and non-correlating as pointed out in the article. Right now it is way too much a seller's market and will take significant overbuilding and higher fed rates for it to come back to a buyer's market.


        • #5
          I think it’s also important to differentiate whether real estate investment is direct ownership of residential versus commercial (office, industrial, retail).
          my experience has been in industrial-which has done well in this pandemic economy. ( compared to office (huge vacancy rates)😬and retail (getting killed by online commerce).

          industrial doesn’t suffer the same issues as residential when it comes to tenant eviction/rent freeze, high turnover, property damage, etc.

          It isn’t as much work as residential, but it certainly is NOT passive income

          The returns are historically more modest
          at ~5% tho.
          Last edited by Eyemd356; 01-07-2022, 04:36 PM.


          • #6
            I like the income and diversification I have from direct ownership of RE. With that said, you have to realize to do it right there is work involved. However, for me I enjoy the RE work. I like the process from identifying acquisitions, to planning renovations, to calculating returns. I like watching HGTV and going to Home Depot or Floor Decor and more and choosing materials. It's satisfying to oversee a renovation and watch your equity and income grow at the same time. I don't enjoy leasing, navigating fair housing laws (how do you deal with a "therapy" pit bull) or fielding tenant calls so I have a property manager for that. And no, I've never gotten a call at 2AM for a leaky toilet.