Real Estate Investor Seeking Diversification & Opportunities
Meet Ben. At the young age of 24, he scraped together a few thousand dollars for the down payment on his first home, purchased for $90,000. While working a corporate 9-to-5, he spent evenings and weekends renovating it himself. He then borrowed against the property to buy a couple of rental units, renovated and rented them, and used their equity to acquire more. Over the next 15 years, Ben repeated this process and steadily built a substantial portfolio — now owning more than 200 rental properties with estimated equity of nearly $25 million. This is the American Dream in action!
Ben came to Peerless Wealth to begin diversifying outside of real estate and to build a portfolio positioned for long-term growth. Over the past five years, through a combination of property sales and refinancing, his investments with our firm have grown to nearly $10 million. This diversification has been timely — while he has not been able to materially increase rents in recent years, property taxes and maintenance costs have climbed, reducing net cash flow. His allocation to equities has helped balance the impact of those changes.
Among the many services we provide, two stand out for Ben:
- Portfolio-based credit line – Ben has access to a line of credit secured by his investment portfolio, allowing him to access funds quickly without having to sell securities. This flexibility has been useful for short-term real estate opportunities or covering temporary cash flow gaps. It also avoids the delays and documentation often associated with traditional real estate financing. Peerless Wealth worked with the custodian to negotiate competitive rates for this credit line.
- Direct Indexing strategy – A portion of Ben's portfolio is invested using a direct indexing program. This approach involves owning individual stocks in an index-like portfolio, which allows for ongoing tax-loss harvesting opportunities throughout the year. These harvested losses can be used to offset taxable gains elsewhere, such as from real estate sales.
Real estate investors often focus almost exclusively on property holdings, but in Ben's case, building a diversified portfolio alongside his real estate business has provided additional flexibility and resilience in changing market conditions.
