You have figured out Profit First with the help of Susanne Mariga Book Profit First for Minority Business Enterprises and now you are wondering what to do with all the profit.
Reinvesting in the business, splurging on a luxury vacation…or maybe investing some of the money so that it begins to work for you while you create more?
If the latter is attractive but you don’t know much about passive commercial real estate investments – then this article is for you!
Let’s get started – what is in it for you to learn more about passive commercial real estate investments:
Additional Income Stream Without You Building a Business
The beauty of passively investing in commercial real estate is that your money will generate monthly or quarterly cash flow and will appreciate in value as the investment’s value increases.
Reinvesting in your business is wise and necessary but taking some of the money to invest in real estate investments that generate cash flow and build wealth outside of your business is critical.
The best part is it does not require you to build a new business instead, your capital enables you to gain access to another business – a real estate business.
Tax Efficient Investments
Once you get in alignment with the profit first path it will only be natural that you will start to have large tax bills for the IRS.
Managing your tax liability is a huge aspect of a scaling business.
Your investments should NOT add to your tax burden.
Investing in commercial real estate projects comes with large tax benefits – passive losses due to depreciation expenses that can be offset against other passive income.
While you probably can’t take losses against your active business income, this investment strategy enables you to receive cash flow from the real estate investments without having to pay taxes on it due to the passive losses.
Diversification Of An Equity Heavy Investment Portfolio
Maybe you are already investing!
If that is the case – that is awesome.
Many business owners of profitable businesses find refuge in the stock market via stocks, bonds, index funds, or even cryptocurrencies to grow their retirement nest egg or wealth in general outside of their business.
The downside is that many of these investments don’t generate monthly cash flow, can be volatile in nature, and can add to the IRS tax bills when they are sold.
Hence, complimenting your investment portfolio with passive commercial real estate investments enables business owners to not have all their investments in equity but also in cash generating investments.
No landlord responsibilities
This benefit speaks for itself.
All profitable businesses have excellent systems in place and are supported by teams!
Your investment strategy is no different.
When you invest passively in commercial real estate investments you are able to leverage the expertise, experience, and know how of professional real estate investment teams to handle property management and executing on the business plan.
A huge weight is lifted from investor’s shoulders!
Hence you are able to focus on further scaling your business and spending time with the people you love.
Investing for cash flow and appreciation unlocks options.
The option to take new risks in your business.
The option to work less.
The option to slow down or speed up.
I love having options.
It enables us to create meaningful work and to pursue opportunities that are in alignment with how we wish to live this life.
Look I am a business owner and entrepreneur myself. I have first hand experienced the power of passive commercial real estate investments as they have brought in cash flow as I transitioned from a full time W2 employee to a full time entrepreneur and business owner.
This investment process required me to make sacrifices to save and then invest. But once I did so it became a snow ball effect.
It actually reminds me of this quote from Warren Buffet, “Someone is sitting in the shade today because someone planted a tree a long time ago.”
When you invest in real estate today – you are planting a tree that one day may provide shade for you and your legacy.
Real Estate investing is a long game hence it is critical that you get started sooner than later!
Ready to go from beginner to confident commercial real estate investor?
Then sign up to be apart of my upcoming cohort of investors who are ready to learn the ins and out of passively and actively investing in commercial real estate investing. Sign up to apply to learn more here: BOOK TIME
About the Author
Lisa is the CEO of Lisahylton.com, a real estate company that helps entrepreneurs invest in tax-efficient real estate investments. At Lisahylton.com, Lisa and her team focus on buying apartments with investors and shares the profits. This strategy enables her investors to build wealth and passive income through investing in conservative, high-quality multifamily assets.
Lisa is the host of the Level Up REI podcast where she interviews real estate investors, entrepreneurs, and business owners to share their stories and experiences building businesses and investing in real estate. After a decade of working in the financial services industry, Lisa found investing passively in real estate syndications and was intrigued by the business opportunity to invest in real estate while also providing the opportunity to others to do the same along with her.
You can learn more about passively investing in high-quality multifamily assets that provide cash flow and strong returns at www.LisaHylton.com.