In today’s podcast episode we interview Whitney Hutten, Director of Investor Education at passiveinvesting.com. Whitney’s team creates deep experience and intensive due diligence while creating intelligent real estate investments through the hottest real estate markets in the United States. Today’s topics are focused on the questions LPs should be asking as the year 2022 comes to an end which will help limited partners find viable deals in the real estate markets.
7 Must Haves of a Real Estate Investment
According to Whitney there are 7 principles that a real estate investment should have before Limited Partners risk real money on the line.
- Able to Preserve Your Capital - This means that the selected asset should be backed by a hard asset and you can affect a business plan on that asset.
- Assets with Cash Flow - This only means that you are looking for an asset that provides consistent home runs, not necessarily a Grand Slam every single time.
- Assets with High Equity Potential - Whitney emphasized the ability of getting three net operating income (NOI) on the assets which means multiple streams of income decreases the expenses on the property.
- Assets with Tax Benefits - Taking advantage of depreciation, accelerated depreciation, and depreciation recapture is one of the best things to look for a real estate investment.
- Has an Inflation Hedge - Having an inflation proof investment is best for Limited Partners to take.
- Smart Use of Leverage - Having the right knowledge on the type of debt used by the operator that is being underwritten is also an advantage.
- Working with Seasoned Operators - Working with operators with very strong business knowledge is important for Limited Partners.
The Tax Benefits of Owning Real Estate
The tax benefits of owning real estate lie in depreciation wherein you are entitled for tax exemptions. One important tip which Whitney used for utilizing depreciation to your advantage is by doing a cost segregation analysis in which you can get accelerated depreciation on your assets which means, lesser taxes and more funds to reinvest in other properties.
The Benefits of Investment Diversification
Limited Partners should not limit their investments solely on multifamily assets. They can also take advantage of acquiring other real estate assets into their portfolio like:
- Hotels
- Car Washes
- Self - Storages
Who is Whitney Hutten?
Whitney is a real estate maven who, after purchasing her first rental in 2002, and hitting a homerun, then nearly losing it all on her second deal, took control and figured out how to invest in real estate the right way. She realized that success must leave clues. So, she studied and replicated the very personal finance and wealth creation strategies the wealthy use to create financial freedom.
Today, Whitney is a partner in $700M+ of real estate —including over 5000+ residential units (MF, MHP, SFR, and assisted living) and more than 1400+ self-storage units across 7 states—and experience flipping over $3.0M in residential real estate.
- LinkedIn— https://www.linkedin.com/in/whitneyelkinshutten/
- Website— https://www.passiveinvesting.com/
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