A real estate investor who owns over 1,000 units and retired at age 36 shares the 5 pillars that drive wealth in real estate — and explains how investors can combine them to compound their income and 'create true financial freedom'
"All five of these different pillars create wealth on their own, but the beautiful thing about real estate is that we combine all five of these at the same time," Allred explained in a recent interview with Insider."This is the beauty of a compounded effect of investing in real estate — it continues to create more and more wealth, repeatedly, while you're sleeping."
With mounting volatility ahead for real estate markets, Allred believes that default risk will increase in 2023, meaning that now is an especially important time for investors to focus on maximizing their cash flow so they can retain their assets for the long term."I think there's going to be a lot of distress in the markets and quite a few assets that owners lose due to not having liquidity to be able to service those debt payments," he said.
"When people look at 2023, they talk about a housing correction and all these scary things. To me, it's actually so much more of a healthy reset to being more in line with what's normal," he said.Allred believes that tax benefits — or depreciation, as he calls it — are among the most underappreciated aspects of real estate investing, especially given how favorable the US tax laws are for real estate investors.
The depreciation benefit is recaptured down the road upon the sale of the asset, but this is where the time value of money can really benefit an investor."In the meantime, you're able to go out and acquire more and more property, and that additional property is going to have more cash flow, more appreciation, additional depreciation benefits, and principal reduction, and therefore creating more and more wealth," Allred explained.
because it can make investors eligible for residential owner-occupied financing such as FHA loans, which lower interest rates and decrease the amount required for a down payment, according to BiggerPockets' Dave Meyer.As someone who was raised to fear debt, Allred has since come a long way in understanding the difference between bad debt and good debt.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stock trading, cheap bets for 'though-the-roof returns': CIOA CIO shares the strategy behind 'The Big Short' garage hedge fund that flipped $110,000 to over $80 million — and explains how to use the same approach in today's stock market to make extremely cheap bets for 'though-the-roof returns'
Read more »
The war on TikTok is a distraction masking the need for US privacy lawInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Read more »
Fiverr versus Upwork for freelancers: Pros, cons, and differencesInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Read more »
Uber, Lyft drivers reveal the 6 car features they can't drive withoutUber and Lyft drivers say vehicles with Apple CarPlay, plastic screen dividers, and phone chargers for passengers make rides easier and more fun
Read more »
Wealthion's Adam Taggart Doesn't Want to Entertain YouAdam Taggert's financial advice YouTube channel Wealthion has exploded to a monthly viewership in the millions in under 2 years. He explains why he's had such quick success — and what's next for the brand.
Read more »
It's time to give babies $1,000 at birth: Reps. Pressley and BookerGiving babies $1,000 at birth is an 'unprecedented opportunity for financial security,' Ayanna Pressley and Cory Booker say
Read more »