Alternatives to homeownership in Southern California and beyond
The California housing market had reached unprecedented heights in March 2024, with the average home price sitting at $930,000, according to data from Zillow.
And Cuban emphasizes the importances of considering the full financial picture when thinking about homeownership. While you might believe you can afford the initial down payment, there can be significant ongoing expenses to maintain the property.
“You’d have to pay all those taxes,” said Cuban, nodding to the high property tax rates in California.
According to the California Association of Realtors, a minimum annual income of $208,400 is needed to afford the costs associated with homeownership in Q1 2024.
Thankfully, there are ways you can make money on the current real estate market that don’t involve buy a home, paying property taxes or taking on the work of managing a rental property and tenants.
If you’re anything like Bobbi, feeling priced out of southern California, you can invest in real estate through Fundrise eREITs — some of which include portfolios with properties in California and the rest of the Sun Belt.
Each eREIT has a distinct investment strategy and holds a range of assets including residential and commercial properties or real estate loans, ensuring diversification within your portfolio.
You can start investing with Fundrise by signing up and answering a few questions about yourself and your investing preferences and risk tolerance.Then Fundrise will suggest a portfolio best suited to your goals
If you are looking to make a larger real estate investment, First National Realty Partners (FNRP) might be the right choice for you.
FNRP is a private equity firm where accredited investors can access institutional-quality, grocery anchored commercial real estate deals, without having to scope out them out themselves.
Their team of experts has developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods, and provides insights into the best properties both on and off-market. They oversee the entire deal process, allowing you to enjoy the benefits of investing in n necessity-based real estate, without the burdens of purchasing or managing a property yourself.
How would you invest a large cash windfall?
In classic Bobbi Althtoff fashion, she not only asked for a $5 million dollar handout from Cuban but she pitched him on investing in her podcast.
“I don’t know that I’d invest in a podcast,” responded Cuban, despite Althoff mentioning her $20,000 debt related to her podcast.
High net worth individuals like Mark Cuban, might buy and sell large quantities of stocks, giving them the power to offset their gains with strategic losses to maximize their overall returns through tax savings.
One way you can do this is with the help of Frec Direct Indexing which can enhance the traditional index ETF by buying all stocks in an index individually and trading them algorithmically. By automatically harvesting losses, you can capitalize on market fluctuations, swapping out underperforming stocks for 30 days to secure tax deductions.
With Frec, your investing strategy is on autopilot so you can sit back and potentially generate up to 40% of their portfolio's value over a decade.
If you have no appetite for the ups and downs of the stock market and you have a large stash of cash you want to invest, there is an array of lucrative alternative assets open to you.
One option is fine art, a private asset that has historically been available exclusively for billionaires like Cuban.
But with Masterworks that isn’t the case anymore.
Through their easy-to-use online platform, you can now invest in artwork by iconic artists from Banksy to Basquiat without having to get all dressed up to attend an auction to pay the sticker price for a painting.
Masterworks makes artwork accessible to more investors by offering fractional shares of famous artwork. Simply choose your favorites from an array of artwork, as well as how many shares you’d like to buy, and Masterworks takes care of everything else.
