Is real estate one of the best investment categories in the world? Do people always need a place to live? So why is it almost impossible to invest in real estate in California, which is known as one of the world's most worthwhile investment properties between New York and Florida, unless you have millions of dollars? This is because they are densely populated, and the situation in Los Angeles has been very significant, not only has increased by 40% in the past six years, but has quadrupled to 400% in the past 30 years. [Standard & Poor's Index Los Angeles] These are huge rewards for assets that are considered safe and moderately growing. So, if a person lives and grows in Los Angeles and wants to invest in real estate but doesn't have a million dollar investment, what should he do now? The solution is simple, invest out of the state!
Many people find it difficult to invest in a state like Texas. You have to manage the property, collect the rent, and make the right investment decisions for a long time in a state that you are only familiar with, right? So let me explain to you why it's not a good idea for someone, and how a great agent can get property for you in another state transaction, tenants, people who use real estate are managing property for you. Even pay your property tax! Not only that, but these are institutional companies that guarantee you a commitment of up to 10-15-15 years per contract. It's just that I started to explain how investing outside your comfort zone with appropriate advice can benefit you and your family.
What is the security of these investments? I don't want to lose my hard earned money. You are not. So why are you investing in anything outside of Los Angeles or California? This area has been proven for decades and shows promising signs of growth in some areas. These are all effective points in the eyes of fanatic investors, but it may be time to reconsider. I have already mentioned that housing prices in Los Angeles are very expensive, which is one of the main reasons for investing elsewhere.
Didn't you notice that many people living in California have moved to neighboring states, where life is much cheaper, and old and new businesses have begun to thrive? I personally know some people who have moved. According to the Texas Department of Health Services, Texas alone has added more than 5 million people to its population over the past 13 years, and it is still growing. With this in mind, it doesn't seem to be a good thing to buy commercial real estate in a state that can buy about $150,000 to $300,000 in commercial real estate? Unless you want to buy an old building, you can't do it in Los Angeles.
Are you beginning to understand how easy it is to invest outside the state, and why is it more profitable? If you do this, that's fine, if not, this is another way to understand it in a digital number context scenario.
My friend Jack now has $500,000 and he wants to invest.
This would happen if Jack invested in Los Angeles commercial real estate between 2015 and 2020.
Let's say Jack won't take out the loan and buy the simple commercial real estate.
$500,000 x 4% interest per year = $20,000 in income/year [before tax] x 5 years = $100,000
During this time, the value of the property will reach $600,000 by 2020, and Jack will sell his property to Jenner. This resulted in a profit of $200,000 before capital gains and income taxes.
Now let's say Jack walks out of his comfort zone and decides to get a property in Texas.
$ 500,000 x 8% = 40,000 income / year [before tax] x 5 years = $ 200,000
During this time, the value of the property was as high as $750,000, and Jack now shows Jenner how easy it is to invest outside the state due to the structure of the deal. He told Jenner that Starbucks manages his property every month and pays on time, making it easier for him to invest as an investment. Now, Jenner wants to buy this investment from Jack because he sees this benefit, and Starbucks wants to add another 10 years of rent increase signing!
As the value of the property increased, Jack earned another $250,000.
Overall, Jack has accumulated $450,000 in investments in Texas over the past five years. get it ? ! Do you understand these benefits and financial returns? It's not that you can't have these structured deals in Los Angeles, but keep in mind that they're half-interested in markets that have risen 40% in the past six years.
Jack has invested $450,000 in Texas and invested $200,000 in California with the same amount of money. This will increase the profit by an additional 125%, which will allow you to get a larger amount in the next huge investment!
Orignal From: California Los Angeles Commercial Real Estate Investors Investment Abroad Guide
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