Tyler Tysdal has spent his career in real estate investment and the majority of that he has spent working with a private equity real estate firm. Within his role in the firm Tyler has overseen some valuable acquisitions and he has helped his investors to make hundreds of thousands of dollars. We were lucky enough to grab some airtime with Tyler in order to find out more about what benefits there are to investing with a private equity firm rather than simply going it alone and investing in real estate yourself, let’s take a look at what he said.
Diversification
The minimum investment with a private equity real estate firm is usually around $250,000 or more, if you were to invest that alone then you may be able to buy one, perhaps even stretch to two properties. When you invest in a real estate equity firm however, this $250,000 will be invested, along with the rest of the money in the pool, into a diverse collection of properties from commercial to residential. This not only increases your chance of making profit from numerous properties, you are also lowering your risk of loss because of the fact that your investment is spread out, lowering your exposure.
Expertise
One of the main reasons why people are happy to invest in these funds is that they want to invest in real estate but they don’t know enough about it to have the confidence to go out and buy. These private equity real estate investment firms have experts like Tyler working within their walls, and the buying and selling of real estate is what they do best. For investors this is a very simple way to get involved in real estate investment without necessarily having to obtain the in-depth knowledge which is required to make it profitable. Investing in a firm like this is the best way to make gains from real estate, regardless of how much knowledge you have about the markets and the best places to invest your cash.
Bigger and Better
The biggest profits in real estate usually come from the most expensive properties, something which can only be done for most people when they pool their cash together with others. Let’s say that you are looking to sell a property for an average 5% profit, had you bought a property for $250,000 then you would be looking at making $12,500 on the investment. If however, that $250,000 has invested in a property worth $1million, which usually see profits of around 10% then the group return on each would be $100,000 in total. Your investment would still be $250,000 and there would be 3 others in the pool too. And so your $250,000 investment will see a return of $25,000 instead of $12,500, because the pool was able to help you acquire a more expensive property which had higher returns.
If you want to get involved in real estate investment this is a great vehicle to use.
