There is a reason why you don’t see many investors get interested in physical ownership of real estate until they can ensure that they can afford a property management company to run the day-to-day operations and the size of the family wealth is substantial enough that a single apartment complex won’t consume most of the family’s assets. In effect, this means that outright physical real estate ownership in the portfolios of investors with less than $1,000,000 in investable assets but takes off quickly once you study the assets of investors that have over $2,500,000 to invest. So why don’t you see a lot of real estate investments from the wealthy before that $2.5 million net worth point?
First, it requires a large amount of capital. If you buy a $250,000 house that you want to rent out, you are going to need at least $50,000 in cash to make the … Read the rest of this article!