Why I Invest in Residential Real Estate
I spent the majority of my career as a fundraiser in the nonprofit sector. It’s a job that I loved, and often miss. The downside to working at a nonprofit — particularly, a small nonprofit — is that the benefit packages are typically … less than robust. That includes retirement. So, a few years ago, I decided it was time that I got serious about how I was going to ensure that my wife and I could enjoy our lives after we stopped working.
I went back to school and got an MBA with a concentration in finance. I read countless books on investing. Books about stocks, bonds, real estate, small businesses, etc. I studied value investing, day trading, and dollar-cost-averaging. I read articles that said I should target growth stocks — and others that said I should focus on dividends. I studied multifamily, strip malls, raw land, etc.
After all of this, I landed on a pretty simple investment thesis… Good investing is merely acquiring cash-producing assets at a price point that makes sense relative to the asset’s intrinsic value — which is predicated on future cash flows.
While I believe most asset classes and strategies can be incredibly lucrative if you know what you are doing — there was one asset class that immediately stood out to me: residential real estate.
Compared to other asset classes residential real estate is easier to understand, easier to control, and offers a powerful combination of benefits that can accelerate wealth creation. Here are a few reasons I love it:
- It’s Easy to Understand and Analyze
You don’t need a finance degree or hours of studying balance sheets to grasp the fundamentals of residential investing.
It’s simple to analyze: income, expenses, comps, cap rate, rent growth, renovation scope, and exit strategy. Unlike public equities or structured products, we’re not relying on market sentiment or speculation—we’re buying real assets, with real value, that meet real human demand.
2. You Can Create Instant Equity
One of the most powerful features of residential real estate is the ability to create equity from day one.
We target mispriced or underperforming assets in markets that we understand. Through renovations, operational improvements, or simply buying right, we can capture substantial value at acquisition.
In almost all of our acquisitions, we’ve been able to achieve substantial equity gains before market appreciation and principal reduction even comes into play.
3. Attractive Leverage Dynamics
What drew me into real estate more than anything else is that it comes with readily available and scalable leverage—secured by the asset itself.
When structured conservatively, leverage not only enhances returns but reduces the amount of equity needed to deploy capital into high-performing assets.
4. Exceptional Tax Benefits
Residential real estate remains one of the most tax-advantaged asset classes in the U.S.
Investors in the residential space can utilize accelerated depreciation, cost segregation, and 1031 exchanges to significantly reduce or even eliminate taxable income. In many cases, investors receive strong annual cash flow—yet show a paper loss on their K-1.
It’s not about evading taxes—it’s about using the tools available to maximize after-tax returns.
Conclusion: Why Residential, and Why Now
Residential real estate is experiencing strong tailwinds due to a persistent housing shortage, demographic shifts, and increasingly favorable financing dynamics for investors. Years of underbuilding after the 2008 financial crisis have left the U.S. with a significant supply-demand imbalance, especially in entry-level and workforce housing. At the same time, millennials and Gen Z are entering the market, driving demand for both rentals and homeownership. Additionally, as interest rates begin to stabilize or decline, financing becomes more attractive. These structural trends create a compelling backdrop for residential real estate investment in the current market cycle.
When you look at the big picture—cash flow, appreciation, leverage, tax benefits, and control—residential real estate stands out as an exceptional vehicle for accredited investors seeking risk-adjusted yield with real collateral.
That’s why I continue to invest in it—and why I invite capital partners to join me in building long-term wealth through residential real estate.