Most of us understand the basics around making money from real estate, on the one hand you have the flippers who buy low and sell for a quick profit and on the other you have those with more long term plans with their properties. A third option however, and one which has been making hundreds of thousands of dollars for many investors is a private equity group. We normally think about the stock market and hedge funds when we talk about private equity but there are companies like TitleCard Capital who use this approach in the real estate market to, with great success, and here are the benefits of using such a system.
These funds have existed for some time now but it wasn’t until the early 1990s that they really rose to prominence. The real estate market slumped and groups of wealthy investors and even families, would pool together their resources in order to scoop up as much real estate as possible. This worked very well for these people and these funds are still thriving today.
If you invest $250,000 of your money then you may be able to purchase one property, perhaps two if you are smart and you can find bargains. What a pirate equity group will do however is pool the resources of a number of investors and they will buy multiple properties, spreading out the investment and boosting your chances of making strong returns. Diversifying your investment in this way is how you minimize your risk and your exposure. Markets change geographically and so having multiple properties across a number of different locations is how you can secure your investment.
The biggest upsides in real estate investment usually comes from the larger scale properties such as commercial buildings or mansions, something which most of us do not have the spending power to buy. When you invest in a vehicle such as private equity investment group, you will put yourself in a position to purchase properties like these, because it will be a pooled effort rather than the power of the individual investor.
The aim of any investment is of course to make strong returns and history has shown that investing in pools such as a private equity real estate firm can bring you very strong returns indeed. In most cases there is a cooling off period after your initial investment, usually around 8 years. Following this cooling off period however investors can count on annual returns of at least 6% and as high as 10%. It is these strong returns which draws people into this type of investment, combined with the additional benefits such as diversification of your portfolio, security and bigger spending power.
This is a great vehicle for anyone who is looking to get involved in real estate investment, the minimum investment usually sits at around the $250,000 mark but there are some which allow slightly smaller investment.