Why should I Invest in Cash Flow Real Estate?
Investing in our cash flow properties is a great addition to your portfolio, some of the benefits include:
- Properties selected with high valuable assets. Like real estate assets there will always be value in the land and home.
- Property investments offer better returns than the stock market, and not as much volatility. Real estate market may go up and down, but your rental income will not see the same swings as the market itself. Properties provide rental income monthly that can supplement your retirement income, or even provide financial independence.
- Over time, your real estate investment will appreciate in value. History has shown us that the longer you hold your properties, the more money you will make. Even when you take into consideration the dips in housing value, real estate has proven to be a great long-term investment.
- Owning investments in real estate has many tax benefits.
Our property investments selection criteria:
We invest in vibrant, working class neighborhoods with strong rental demand. In these communities, most people rent and so there will always be a demand for nice rentals.
We acquire properties at discount to ensure positive cash flow, even after all monthly expenses have been paid. Return on investment must be strong. We want these properties to add to your long-term net worth.
What are the advantages of Pareto Real Estate Investment Crowdfunding?
Our Crowdfunding platform is simply the pooling of funds from multiple investors for a common investment and goal.
The advantages include:
✓Low investment minimum of $5,000
✓Greater asset class diversification
✓Enables Small Investors to “Play in the Big Leagues”
✓Better high value deals
✓Purchase larger & higher quality properties
✓Professional management
✓Economy of scale; Blanket contracts
✓Easier to get into outside markets
✓Does not require day to day management or oversight from investors
✓Risk is limited to original investment
✓We have the expertise to deal with complex issues
Do I pay taxes on the distributions?
Taxes are applicable only on the net income after all expenses and depreciation.
What if something happens to the economy and the property doesn’t sell as planned?
The future is hard to predict. We track five economists who predicted the 2007/8 crash accurately. We only invest in asset classes that have in our opinion lower than average risks based on the last recession. If an asset drops in value, we feel that our investments will fare better than most other investments that one might consider.
How would a housing market crash affect my investment?
The future is hard to predict. We track five economists who predicted the 2007/8 crash accurately. We only invest in asset classes that have in our opinion lower than average risks based on the last recession. If an asset drops in value, we feel that our investments will fare better than most other investments that one might consider.
Do you typically charge an asset management fee?
We offer zero management fee.
Am I allowed to purchase real estate assets using my IRA?
The answer is yes! The Employee Retirement Income Security Act (ERISA) of 1974 passed the responsibility of retirement saving from the employer to the employee. Created in 1975, IRAs provide individuals a chance to direct where their retirement funds are invested.
Can I Use My 401(K) Funds With My Current Employer To Purchase Assets?
Yes, If your company has a self-directed 401K you may have the ability to self-direct your 401(k) into real estate investments.
What other funds can I use to open a self-directed account?
Most employer-sponsored plans, like 401(k) do not let you roll your account into a new vehicle while you are still employed. Some employers, however, do allow you to roll a portion of your funds. To be certain, contact your current 401(k) provider.
What if I don’t have enough money in my IRA to invest in Real Estate?
You may partner with yourself or others; you make allowable contributions; you may obtain debt financing through private sources or financial institutions on a non-recourse basis; You may arrange a seller carry back loan; you may sell other assets in your IRA to raise cash to make the purchase; you may transfer funds from other IRAs or rollover funds from qualified plans, such as 401(k), 403(b) or government 457 plans you may have had at employers where you no longer work.
Does Pareto Realty charge a fee to investors?
Investors do not pay a fee to register with Pareto Realty or to search our database of available investment properties.
Does Pareto Realty own the property or the investor?
Investors owns the property.
Is my data secure on Pareto Realty website?
At Pareto Realty we use a combination of firewall barriers, encryption techniques and authentication procedures, among others, to maintain the security of your online session and all Pareto Realty accounts and systems from unauthorized access. When you register with us we transmit your buy /sell / manage transaction data securely and our servers are in a secure facility. Access requires multiple levels of authentication. Our databases are protected from general employee access both physically and logically. All backup data are encrypted.
What's the advantage of real estate investment over the stock market?
Real estate is an alternate asset class that does not have a correlation to the stock market. The stock market tends to react to many real-time triggers such as Fed’s comments or the latest unemployment reports or emerging market slowdowns. In addition, automated trading machines make it difficult for the real investor to time market entry and exits. Our clients invest in real estate to diversify from the stock market and balance their risk so that they don’t have all their eggs in one basket.
Are these investments risky?
As with all investments, there is some inherent risk. The major risk elements are vacancy, maintenance expenses and trying to sell in a down real estate market. In general, real estate has less volatility than the stock market.
Will my property appreciate?
It is always difficult to predict the future. We use a proprietary forecasting model that looks at employment, historical appreciation, new construction starts and a number of other factors that are neighborhood specific to come up with a Home Appreciation Forecast on all listed properties. In general, higher appreciation properties will be ‘growth’ oriented with lower cash flow while higher yield ‘income’ properties tend to have lower appreciation.
How does Pareto Realty help me select the right investment property?
We first try to understand your financial goals, investment method (IRA, cash, loan etc), risk tolerance and any other preferences that you may have by asking you a few simple questions. We use the answers you provide to create a personalized investment portfolio that fits your needs using our proprietary real estate investment algorithms. Our Solutions Specialists then work with you every step of the way to select final properties. We deliver a hands-free investment experience for our investors.
How should I think about income or cash flow vs growth?
The best income opportunities arise when rents on a house are high compared to its purchase price. For example, a $130,000 house in Florida may rent for $1,500 per month, and a $750,000 house in Ohio may rent for $3,000 a month. Therefore, an investor looking for cash flow would do better by buying $750,000 (or less) of properties in Florida if she has the budget. Cash flow neighborhoods also tend to have a lower quantum of investment. A growth investor may find the Ohio property more attractive as there has been historically good appreciation in the area compared to Atlanta, which should continue if current fundamentals hold.
What happens if the tenant leaves?
The property manager will refresh the property so that it is in ideal condition for showing and market the property to get another tenant. Damages are offset from tenant’s deposit. The property manger will charge a leasing fee to secure a new tenant.
Who manages the property?
Pareto Realty has qualified property management partners in each of the locations where properties are displayed for potential investment. Selected property managers have to demonstrate process, scale and a history of performance in that given location.
