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? Stay away from property managers ? Nobody cares about your property as much as you do (but there are always exceptions) 7 Investing in “FixerUppers” ? Most Importantly, ? Are you savvy dealing with repairs? …and… ? Are you savvy dealing with renters? ? Fixing a tenant is just as important as fixing a toilet ? One bad tenant can set you back thousands ? Make improvements that add perceived value ? Example: Install a white picket fence ? Investing in FixerUppers, Jay P. DeCima (continued) 8 Advantages of Real Estate Investments ? A hedge against inflation ? Financial leverage ? The use of borrowed funds for investment purposes allows you to acquire a more expensive property than you could own on your own (More later) ? For Real Estate Partnerships ? Easy entry as a limited partner ? Limited financial liability as a limited partner ? No management concerns ? You can not check the price of your real estate investments every day on the Inter ? One of the major problems with stocks 9 Disadvantages of Real Estate Investments ? Liquidity may be poor ? It may be hard to sell the property (or your share of the property if a partnership) ? Not a problem for REITs – buy/sell like a stock ? Declining property values ? Yeah, Right, Paiano! ? Yeah, Right, Paiano… ? Lack of diversification ? Although REITs do offer diversification ? Management or tenant problems 10 The “Perfect Investment” ? “C?mon, Paiano – Admit it! ? Real estate is the ?Perfect Investment?” ? This is what people were telling me a few years ago ? Beware the Permanent Trend (Andrew Tobias) ? Real estate goes up and down in cycles ? Ask those who bought in 1990 and sold in 1994 ? And those who bought in 2022 and are now in foreclosure… ? The real estate bubble is now deflating ? But if you plan to hold for the longterm, you should do well ? By the way, there is no “Perfect Investment” ? Folks were saying the same things back in 1999 about Inter stocks 11 The “Perfect Investment” ? “But what about Leverage?! Huh? What about the ability to make money with other people?