The S&P 500 is nearing its all-time high right now. Looking at what traders believe the future holds, the market assumes that short-term interest rates are still going to head higher.
However, smart money isn’t buying this theory, or else they wouldn’t keep adding to their positions in stocks.
You see, the market is heading higher because the party isn’t over yet. This is not because valuations are cheap, but because there is no other party going on.
In the investment world, asset classes are competing with each other for what is called Alpha, which is a fancy word used to define the excess return compared with the benchmark.
In other words, all investors are attempting to be better than average, yet close to 90% of them are not.
One way to beat the benchmark, though, is by investing in the index, while allocating another portion to investments outside the stock market.
In other words, when the index is expensive and offers relatively low returns compared with its historical performance, as the S&P 500 offers now on a 10-yr outlook, since it is already trading for ultra-high valuations, you, as an individual, can look outside the public markets for achieving your Alpha.
One of the best ways to beat the market over time is to invest heavily in it during bear markets and to let your holdings rise during the bull markets, while investing somewhere else in the meantime, waiting for the price to be cheap again.
We are not institutional investors, who are barred from owning certain assets, such as residential real estate. We have other options and possibilities, which the large firms haven’t got.
Today, I want to introduce to you a way to earn a several thousand dollars a month in real estate, using none of your own money.
Early on, I was able to make this work for myself, when I didn’t have two nickels to rub together.
SWEAT EQUITY: HELPING THE SHARKS CATCH FISH!
This strategy is powerful, since it works all the time, in any market, as long as it is not too rural.
It is based on the fact that there are around two million vacant residential properties in America right now.
For many reasons, which include divorces, relocations, unpaid back taxes, inheritance, or mismanaged rental experiences, they are now sitting there, collecting dust and overgrown weeds.
Now, these are hidden gems, if you could only (1) figure out who owns them, (2) learn what his equity situation is, (3) contact him to make an offer, and (4) find a buyer, who specializes in fixer-uppers to buy it, while paying you a fee.
This is how you can generate $2,000-$5,000 per closed deal, on average, and in some markets, $10,000-$15,000, flipping vacant homes or wholesaling them.
Heck, some cash investors, who buy these vacant properties, will even pay you just to locate them, without putting them under contract – going rates are $10-$20 per lead.
Sweat equity is great because landlords, who own three to four properties, will also approach you with proposals to manage their rentals, which is fairly easy as part-time work and will provide you with access to opportunities, since these landlords want more homes all the time.
In real estate, there are several ways to make money and build relationships with legitimate investors, who have cash, but need you to help with the deal flow.
There are hundreds of them in each county in America and the one property, which no realtor or referral can get them is a house that doesn’t have a “for sale” sign or an owner in sight. These type of homes are so potentially good, because you have no competition – no one knows they are being considered to be sold.
Now, to locate the homeowner, you can enter the home address on the public records, using the tax assessor website. Once you do that, you must either (1) use a service, which finds a phone number for the owner, or (2) mail him a marketing piece.
You must make contact to make an offer.
Real estate is the industry, which sprung 76% of America’s millionaires to date and it could be your part-time vocation, funding your vacations or a way to exit the rat race.
Remember, though, you don’t need to start by owning real estate yourself. You can begin by finding current cash investors what they want, and work your way up!
Research Partner, PortfolioWealthGlobal.com
This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.