The world of real estate offers the opportunity to invest some of your hard-earned money in a reasonably secure way. There are many options when it comes to investing in real estate. You could purchase land, flip a house, buy a rental property, or own a commercial property. However, if you do not have the time or the funds readily available to invest in this way, joining a real estate investment group might be an option for you.
What Is a Real Estate Investment Group?
A real estate investment group (REIG) is a group of people who pool their funds and knowledge to invest in real estate. This group is generally composed of five to ten people who have common investment goals. Most REIGs are organized partnerships; however, some are informal. Whether organized or informal, the members must make investment decisions together. In an organized group, the group forms a legal bond so that each member becomes part-owner, eliminating the possibility of one member making decisions for the group. When the group decides to buy or sell property, the group name goes on the deed.
Because there are numerous investors involved, most REIGs will have written rules and procedures that must be followed. To make the process run smoother, most groups will have elected positions. Along with the elected positions, REIGs may also have appointed jobs, such as record keeper, sales executioner, property maintenance, tax preparer, and member communications, to spread out the workload. The group will meet regularly to discuss business. These can be in-person meetings, online meetings, or conferences. At times, voting may also occur during these meetings to determine the group’s next steps.
How Can I Join a Real Estate Investment Group?
Joining an REIG is not difficult, but one should be well informed before deciding to join a group. You can use the internet to find groups in your area or even join an online group. You will want to ensure that the group has the same investment goals as you before joining. The National Real Estate Investors Association is a great resource to use when looking for groups to join. Ask questions and do research to find the club that fits your needs. See if you can sit in on a few meetings before joining so that you can get a feel for how the group operates. You’ll also want to know if the club charges a fee to join or monthly dues.
What If I Can’t Find an REIG Near Me to Join?
If you can’t find an REIG near you, consider starting your own. If you’re looking to join an REIG, there are likely others in your area who would also be interested. A few things to consider before starting an REIG include:
- Find another club to visit to learn about their structure and how they operate.
- Learn more about the purpose while discovering what the club offers its members in return for membership.
- Decide what you want your REIG to look like, how it will operate, and its overall mission.
Once you’ve established a mission and direction, start recruiting members, such as experts in finance, accounting, and real estate law.
Advantages and Disadvantages of a Real Estate Investment Group
When joining any club, there are advantages and disadvantages. It’s essential to do your homework before committing to any group. Knowing your ultimate goals will help you find the right fit for a real estate investment group. Some advantages to investing using an REIG are:
- You will have access to more money and more opportunities for your investments. With more significant sums of money available for investing, the return rate has the potential to be much higher.
- You can gain more knowledge about the real estate field, which in turn could help you in the future if you decide to invest independently.
- More minds working together often means better ideas. When investing on your own, all responsibilities and risks are yours alone. When working with others, you can bounce ideas and thoughts off of each other, generally resulting in better decisions.
- Being a part of a group, you will probably make more connections with other people, potentially leading you to better opportunities and the chance to network with like-minded investors.
While all of these are great reasons to join an REIG, there are some disadvantages as well.
- In some groups, speakers or educators could be brought in to help inform the group about real estate do’s and don’ts. These professionals will probably charge a substantial fee to pass on their knowledge and resources.
- Not everyone plays fairly. You could have members that join but never invest. They receive all the benefits of the available education without giving the group any money.
- It’s sad to say, but there are scammers out there. You need to make sure you do your due diligence so you don’t fall victim to a scam.
- Fees can also be another drawback. While it is not unusual to pay membership fees, it may be a negative, as it’s money out of your pocket.
How Can a Real Estate Investment Group Help Me?
An REIG can be helpful for anyone, whether you’re an amateur or advanced real estate investor. An REIG will help you better understand real estate investing. They can teach you how to start investing, where to invest, and when to invest. If you’re looking for a monthly payment, real estate investing can do just that while being more profitable and less risky than the stock market. Real estate investing can provide you with financial freedom for your immediate life situation, including paying for college, or it can provide you a nest egg for your future.
Real estate investment groups are a secure way to invest your hard-earned money. Real estate will never go away, making your investment more valuable, and joining an REIG allows you to collaborate with like-minded people, all while creating financial freedom. Whether you know nothing about real estate investing or are an expert, REIGs are designed to teach you and guide you along the way. If you’re interested in finding out more about investing in real estate or are ready to get started, contact the knowledgeable team at Titan funding.