How to Minimize Your Real Estate Investment Risk

Does the idea of losing money in investments strike fear into your heart? You’re not alone. Fear of losing money is very common.

About 77% of Americans feel financial stress and uncertainty about having enough money in the future. Plus, 49% of Americans worry about running out of funds before they hit retirement age. 

That’s why so many people are seeking safe, reliable ways of boosting their bank accounts with minimal risk. Here are three ways to make money through low-risk investments.

Invest Through Real Estate Syndication

Buying investment properties by yourself is a risky proposition, but there’s a real estate investment option that offers lower risk. Don’t buy. Syndicate!

Real estate syndication is like crowdfunding a property purchase, with all the day-to-day details managed by a central sponsor who handles property investments for a living. Compared to other types of property investment, syndication is safer and more likely to build value.

Of course, this approach hinges on your ability to join a lucrative syndication project that will reliably make money. Work with an experienced real estate syndication company to ensure you don’t make a rookie mistake.

Before making your first investment in a real estate syndication project, ask the sponsor plenty of questions that clarify how the process will work. Be honest with them about your low tolerance for risk, and be sure the sponsor and the project are a good match for you.

Invest in Multifamily Real Estate Projects

Another way of mitigating risk is focusing on multifamily real estate syndication investment projects. This type of investment tends to be lower-risk than other types of property investments, not to mention lower stress.

An apartment complex in need of rehabbing is an example of a multifamily real estate investment project. A skilled real estate syndication sponsor purchases an apartment complex with investment money, improves it to add significant value, uses marketing techniques to attract tenants, and shares the proceeds with investors like you.

These projects are not only personally lucrative for the investors but also publicly beneficial. In areas that desperately need more affordable housing, apartment communities offer cost-effective options for thousands of tenants.

Use Your IRA to Fund Your Property Investment

Here’s another safe, low-risk way to put your money to work for you. Instead of leaving your money sitting in an individual retirement account (IRA), use your IRA to invest in real estate.

This strategy takes some careful planning because you want to stay in the good graces of the Internal Revenue Service. For example, you’ll have to put the proceeds from your real estate investment straight back into the IRA, or you could risk paying heavy tax penalties.

The good news is that this approach both preserves and builds your retirement nest egg. You may even be able to retire early or explore semi-retirement through passive income

Sound good to you? If so, read more in our whitepaper, Passively Investing in Commercial Real Estate. With thoughtful planning and an experienced real estate investment partner, you can build a new path to wealth while minimizing risk. 

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