Since finishing college, San Francisco native Soli Cayetano has built a real estate portfolio that would make most seasoned investors do a double take.
Cayetano got a taste for real estate in college, where she juggled her studies as a finance major with a budding career as a broker working in commercial real estate — then things changed.
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“Long story short, the pandemic hit and nobody was leasing office space, and so my whole world just went black, she told Marketwatch. “I needed to figure out how to build passive income streams for myself so that if this happened again, I wouldn’t be left with no money coming in.”
That’s when Cayetano decided to buy her first investment property at the age of 22 and the rest is history.
Here’s how she did it and what you can learn from her journey as a real estate investor.
How did she do it?
Fresh out of college, Cayetano didn’t have the capital or income to qualify for a mortgage on a house in the Bay Area — where the average home price sells for over $1 million.
Instead, she settled on the thriving city of Cincinnati, Ohio, where home prices were lower and cash flow opportunities were better.
“While other people [my age], maybe it was normal for them to go out, to party and to travel — for me, it was normal to invest in real estate,” she told Marketwatch ‘Money Matters’.
The young investor bought a two-bedroom, one-bathroom single family home for $98,000 with a $20,000 down payment — significantly less than the approximate $200,000 she’d need for a 20% downpayment in the Bay Area.
She spent $15,000 on renovations, including turning the living room into a third bedroom, and quickly boosted the property’s value.
“I did what’s called a BRRRR in the real estate world: buy, rehab, rent, refinance and repeat,” she explained. “It’s a way to force equity in a house so that you can refinance, pull out most of your money and use that money to buy your next house.”
After her first successful deal, Cayetano “got the bug of real estate.” She used social media to share her experience and connect with other investors and her business grew quickly.
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Within two years, she’d bought 27 units that brought in around $10,000 in total per month. Since the Marketwatch video was filmed, she’s turned 25 and invested in another 12 houses, an office building and an apartment block.
While the dollar signs may look attractive, Cayetano admitted there are many bumps along the road.
“I’m not going to lie, it’s really difficult,” she said in the Marketwatch interview. “Things go wrong every single day. I’ve had houses broken into, stuff stolen, people ghost me, tenants not pay, [I’ve had] to do evictions — and it’s all just part of the journey.”
If you’re inspired by Cayetano, but the costs and hassles associated with buying a physical property, maintaining it and possibly even renting it out don’t appeal to you, there are other ways you can invest in real estate.
Other ways to invest in real estate
You can invest in a residential real estate investment trust (REIT). REITs are publicly-traded companies that collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.
As REITs are publicly traded, you can buy or sell shares any time and your investment can be as little or as large as you want. It’s not like buying a house, which normally requires a hefty down payment followed by a mortgage.
You may also want to consider a crowdfunding platform. These allow everyday investors to pool their money to purchase property (or a share of property) as a group.
If you don’t want to make investment decisions on your own, investing apps and online platforms can help you invest in diversified real estate portfolios that will maximize your returns while keeping your fees low.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
