As you might be aware, I’m a real estate agent and investor in Montgomery, Berks and Schuylkill Counties in Pennsylvania. I’m passionate about helping people become homeowners and helping investors start or grow their investment portfolios – as well as adding to my own 😜.
Something you might not be aware of is that I’m also passionate about helping people grow their wealth through real estate without having to actually own any real estate.
What? How is it possible to grow wealth with real estate without owning real estate!?! What do I mean by that!?
Let me explain. When we purchase and rehab properties, we don’t use banks – we use private lenders and partners who make upwards of 8% on their money every year.
For example, we recently borrowed $68,000 for a rehab project from a private lender for 6 months. At the end of the 6 month period we paid her $72,000 – so she made $4,000 in 6 months doing absolutely NOTHING! And I was ecstatic when I wrote that check. Why? Because I was helping a real person grow their wealth – not some big bank!
Many people choose to keep their money in the bank, earning minimal interest rates. Banks then lend that money to real estate investors like us at a significantly higher interest rate and pocket the difference.
Keeping money in a savings account with a bank may seem like a secure and effortless way to earn a return on your investment, but it’s not the most efficient way and, in fact, depending on the inflation rate a person keeping their money in the bank could actually be losing money!
How? Let’s say that the current inflation rate is 5%, and you deposit $10,000 in a savings account that pays 1% interest. At the end of the year, you will have earned $100 in interest, bringing your total balance to $10,100. However, due to inflation, the cost of goods and services has increased by 5%. This means that your new balance of $10,100 can only buy the same amount of goods and services that $9,619 could buy a year ago. You have effectively lost $381 in purchasing power!!
If you don’t invest your money in a way that keeps up with inflation, you will effectively be losing A LOT of money over time. It’s absolute insanity that this isn’t talked about more – and frankly, it should be something that is taught in all schools.
I’m passionate about making people aware that they can make significant returns by indirectly investing in real estate by finding active real estate investors needing funding rather than putting their money in the bank. Cut that middleman, the bank, out of the equation!!
For example… let’s say you were to become a private money partner with us and you provided $100,000 and in return we offered an 8% return. At the end of one year we’d write you a check for $108,000! You just made $8k on a $100,000 investment — but what about inflation? Well, you still effectively made $2,857 and are way ahead of where you’d be investing in a 1% interest bearing savings account (in which you’d effectively LOSE $3,810!)
See the two graphics below for a breakdown of what I’m talking about.
When you think about it, if I were to use a bank to fund my real estate investments, I’m essentially using the money you’ve deposited with them anyway… the difference is the bank is the one making all the money on interest while they’re giving you, the depositor, a measly 1% interest rate (of course this rate can vary depending on the type of account you use for your savings.) And you know what they’re doing with that money? Investing it in real estate and lending to real estate investors (among other things.)
Anyway… I won’t drone on much more about this topic but it just gets me so fired up!! (And don’t even get me started on using a self directed retirement account to earn tax free or tax deferred money that compounds so fast it’ll make your head spin!! That’s a whole other topic for another day.)
What I want you to take away is this. You don’t have to OWN real estate to INVEST in real estate. Let’s all grow wealth together without making the big banks richer.
Want to become a money partner for our future projects? Get in contact with me! (Contact info below!)
Or do you just want to chat more about this topic? Feel free to reach out on Facebook or Instagram or contact me directly with the information below.
Kiersten Vogt
GuaranDeed Real Estate
Cell: 215-906-7047
Email: Kiersten.Vogt@gmail.com
Disclosure: All investments come with risks and real estate is no different.
