Why I Invest in Real Estate
Back in my 20s I never thought I would become a real estate investor. In fact I kept procrastinating even with my
first house purchase. It was actually that purchase where I first got burned by real estate. The house I was buying
got rezoned into a flood zone as I was buying it. Flood insurance went from "optional" to $500/year to over $6000/year
in a period of a month when I was buying it. I panicked and backed out of the deal using "material change" clause.
Unfortunately, the seller didn't care for the clause. She was offended that I walked away from her house. As a widow of a local entrepreneur, she had plenty of money to burn, and so she did. At the end of a 2 year lawsuit, and repeated settling attempts just to make the stress go away, she finally agreed to settle. The ordeal cost each of us around $30,000. For her it was a game, for me it was a tragedy. I got desperate, I started reading every financial book I could get my hands on, watching every youtube video that seemed like it could teach me investing.
At the time my sights were set on the stock market, which I was already invested in. I tried learning the derivatives market and quickly realized I wasn't going to make money there. The more I researched, the more I realized that real estate, the very same niche that I no longer wanted to touch witha 10-foot pole, is the fastest route to wealth in US. I still recall a quote from one of the earlier books I read:
75% of millionaires make their money in real estate, the other 25% is stocks, inheritance, celebrities, and entrepreneurs combined.
If that's how others made money, there must be merit in it, I thought to myself. After 2 years of research, I finally jumped in. I made a lot of costly mistakes, dealt with a lot of headaches and tenants from hell, at times I thought I wasn't going to make it, but in the end it paid off. I learned to do my homework ahead of time, I learned what makes a good deal, why some people make millions in real estate and others lose their shirt. I can finally sleep well at night knowing that my children won't have to live through financial hardship I had growing up. I invest in real estate because I understand it, because it's the safest asset class, and an asset class most favored by US economy and tax code.