The year is 2020, and there’s still a gap between women and real estate investment. The reasons for that are plenty: the gender pay gap, fear of losing out with a bad investment, and, according to Los Angeles-based Acme Real Estate founder Courtney Poulos, an outdated, and slow to change, cultural mindset. Even as more and more women bring in high incomes as CEOs and professionals from fields as diverse as medicine and business, many are only now starting to consider real estate as the place to put that money.
“As people are getting married later in life and some are not getting married at all, the old dynamic is changing,” Poulos said. “Real estate investment does not have to be a white picket fence, a yard and the house where you raise your kids. It can be a creative outlet or a money-making, longterm investment.”
Poulos, who will be speaking at Inman Connect New York, January 28 to 31 at the Marriott Marquis Times Square, talked to us about why we need to encourage women to let go of that fear and make the leap into real estate investing.
Your last book, “Break Up With Your Rental! The Professional Woman’s Guide To Building Wealth Through Real Estate” came out in November 2018. Why are so many still women still struggling to go from being owners to investors?
Up until the 1970s, women had a very hard time getting a mortgage if they were unmarried. Now that we’ve seen the cultural climate shift to more independent women bringing in money at an excellent rate, whether that be as CEOs or as influencers on Instagram, there are a lot more potential candidates for real estate investment. As people are getting married later in life and some people are not getting married at all, the old dynamic is changing. Real estate investment does not have to be a white picket fence, a yard and the house where you raise your kids. It can be a creative outlet or a money-making, longterm investment.
So there is a large number of women who have the money, but have never even considered that real estate investment may be right for them?
That’s exactly it. Women are just now getting into a state of mind where real estate can be a mechanism for building wealth as opposed to the place where you live or where you raise your kids. The sooner you start, the better. I’ve had clients who were like: “I thought you had to put 20 percent down” or “Chicago and New York are so expensive.” You don’t have to buy in Chicago because you live in Chicago. You can buy in Texas.
There are plenty of markets that are more affordable. We need to pique women’s curiosity early on and show both women and men the pathway early on in their professional careers so that they have more than just a 401K at the end of their early 20s. You can’t just save pennies from your paycheck all the time. You need a real estate mindset.
What if you want to invest, but genuinely don’t have very much money?
One of the things I’d recommend is getting a group of people who each have $5,000 and putting $20,000 down on a complex. Get yourself together with a little group of investors and start there. I have clients who bought a $230,000 property, put $50,000 in, put it on Airbnb and make $50,000 a year. You can do microinvesting that way or you can find people who are already investing.
For example, I have had clients who flip houses but don’t have any design sense whatsoever. If you have design sense and project management skills but no money to buy [a house], partner with an investor and become a profit-sharer in the resale. Become partners that way and once you get your first piece of money, you can leverage that for your next buy.
What is your market like right now?
L.A. is really hot right now. We have a lot of commercial developments that are forming emerging neighborhoods. Things are just on fire. Every property has multiple offers, and these buyer are qualified. They have good down payments, and often cash. They are excited about the convenience of new areas. Thank God there there are renovation artists [flippers] giving them what they want.
We try to support our real estate market by training and teaching our sellers how to deliver buyers the product that they want. There are people who can afford to buy the house that they really want, and there is more inventory. I think that we’re going to see a market that’s quite hot.
In your books, you argue that there is no bad time to buy. Why is it a bad idea to wait until growth stabilizes or you start earning $10,000 more a year?
Yes! Just yesterday, I had a gal ask me whether it’s still a good time to buy because prices have gone up so much. It’s always a good time to buy. I wish somebody would have told me to buy when the market was down. But our reptilian brain is always telling us to be careful and not make the wrong decision. It always finds a reason to tell us to wait.
I’ll give you an example: When the market is appreciating we say, “Oh, I don’t want to buy at the top of the market.” But when the market starts to depreciate your brain says, “Well, prices are going down so what if I buy a house and its value goes down?”
You have to acknowledge that your first instinct on waiting isn’t always based on intelligence or merit. It’s really based on fear of making a bad decision and potentially taking a loss. But if you look at the long run of any market, you will see that property values appreciate over time. Some places do it faster than others and, yes, it goes through a cycle but, in L.A., the people who bought in 1977 and sold in 2007, made a freaking killing. That’s what you need to tell yourself when you’re jumping into something unknown.
How do you get over fear of losing your job or having less money?
Rent it out! One of the considerations you should make when you’re making your first purchase is “How’s the rental market in this area?” If you’re looking to manage your risk, look at the rental market and the very least you need to make your mortgage payment. In L.A., we have a shortage of rental housing, too. It’s a no-brainer.
Are you ready for what the industry holds in 2020? Inman Connect New York is your key to unlocking opportunity in a changing market. At Connect you will gain insight into the future, discover new strategies and network with real estate’s best and brightest to accelerate your business. Create your 2020 success story at Inman Connect New York, January 28-31, 2019.
Thinking of bringing your team? There are special onsite perks and discounts when you buy tickets together. Contact us to find out more.