The Banker is an interesting 2020 American drama film directed and produced by George Nolfi.
It is based on a true story about the first two African American bankers in the United States of America; Bernard S. Garrett Sr. (Anthony Mackie) and Joe Morris (Samuel L. Jackson).
In the film, Bernard and Joe try to circumvent racial limitations of the era (1950s) by recruiting a working-class white man, Matt Steiner and training him to pose as the head of their business empire.
Matt basically poses as the front of the company in meetings to facilitate the sales. Eventually, they become extremely successful in Los Angeles real estate, with the two teaching Matt the basics of real estate investing.
After their success in real estate, they move into banking. Racist bank practices during the time had excluded black people from receiving loans for small businesses and home ownership.
The idea of buying banks was premised on giving black people the opportunity to grow and pursue the “American Dream”. While one of the main themes in the film is racism, Piggy notes important tips about real estate investing that one can take-way.
Real estate investing tips
In order for one to make money in real estate, there should be a willingness to make calculated long-term decisions.
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Real estate is one the safest types of investments but is generally long-term in nature.
Investors make money in real estate through property price appreciation, rental income and property flipping. Piggy summarises the main real estate investing tips hereunder:
Location
The location of a property influences profitability. Key factors to consider when it comes to location include the following:
Metrics such as property values, rental yields and occupancy rates; Emerging neighbourhoods;
Crime rates; and
Local amenities.
Buy low, sell high
The concept of “buying low and selling high” is not just stock market wisdom. It is golden for the real estate industry given that it maximises returns and offers a buffer against market downturns. Imagine acquiring an investment property at 20% below market value. Not only is this a steal, but it can also provide a buffer against unexpected market plunges.
Property portfolio diversification
Investors should avoid tying their entire capital in a single property, geographical area or class of real estate. The main advantage of diversification is that an investor can capture varied tenant demographics whilst creating a cushion against market downturns.
Real estate investors should always have a clear investment strategy and should also watch out for the following:
Hidden costs: A budget-friendly property might have hidden repair or maintenance expenses. There is need to invest in thorough inspections and due diligence;
Location traps: Some properties may appear cheap or affordable because there are in low-demand areas, making it difficult to rent out or resell. The choice of location should align with the investment strategy and long-term goals; and
Legal hurdles: Unresolved legal tangles, from boundary disputes to cloudy titles, can turn a dream deal sour. Title checks are key.
Overall, while real estate promises rewards to investors, there are limitations in terms of the required investment amounts, particularly for first-time investors.
Piggy recommends Real Estate Investment Groups (REIGs) and Real Estate Investment Trusts (REITs) as options to gain exposure in the asset class. Real Estate Investment Groups (REIGs) are a pool of money from a number of investors, similar to a small mutual fund that is invested in rental properties.
In a typical real estate investment group, a company buys or builds a set of apartment blocks or condos. On the other hand, Real Estate Investment Trusts (REITs) act like mutual funds for commercial real estate.
Individuals and institutions can invest in a REIT, which is publicly traded, making it very similar to investing in the stock market. The upside is that they do not require a large up-front investment and investors can earn regular dividends.
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Matsika is the creator of the PiggyNetwork. — +263 783 584 745 or [email protected]
