3 Reasons to Invest in Real Estate and Ditch the Market

There are a number of reasons to be attracted to real estate as an investment asset class, especially now.  The stock market has been on a nauseating ride in 2020, with Covid-19 acting as the black swan catalyst.  Thus, the longest bull market in history came to an end after an 11 year run. When the continuation of monetary and fiscal stimulus is no longer sustainable, it’s anyone’s guess as to what kind of valuations await for equities. The Federal Reserve has put us into uncharted territory by printing money and keeping interests rates ultra-low, thereby driving down bond yields.  Many analysts are calling for expected returns in the low single digits over the course of the next 10 years.  This environment will make it very difficult to achieve retirement goals. 

As investors weigh these conditions, many have sought out alternative investments and adjusted their portfolios.  Frustrated by the wild swings that seem to be manipulated by computer algorithms and insiders, many have turned to real estate as one of those investments.  Over the last decade it has become increasingly easier to access real estate, either through direct ownership or by investing as a limited partner in a real estate syndication. 

Real estate, like stocks, offers both capital appreciation and pays income.  However, there are a couple of key advantages real estate has over stocks.  Let’s explore those.


The power of leverage is a huge advantage of real estate investment over stocks.  Let’s say you have $20K to invest.

Scenario 1:  Invest the $20K in a diversified total market ETF or mutual fund.  Let’s say after 1 year, your initial investment has grown to $22K, a nice 10% return .  Pretty good if it keeps churning through the power of compound interest year after year.

Scenario 2: Invest the $20K in a $100K (20% down) property.  After one year, your property has appreciated 10%, the same percentage gain as scenario 1, and is now valued at $110K.  You have gained $10K in equity with only investing $20K, a 50% return!  I’ll take that, thank you.

The power of leverage is huge.  If you can find properties where you can add value through renovation, raising rents, or lowering costs, you can see appreciation beyond market factors, as specially with commercial properties.  If you don’t want to find properties yourself, investing with operators who have a proven track record of forcing appreciation is a great passive alternative. 


Another major advantage of real estate investing is income generation.  Stock market growth comes from appreciation through GDP growth (3%), inflation (2%), and dividends (2%) all averages.  Add up the percentages and this is what gives you the historical 7% return of the stock market (no dividend re-investment).  Dividends would be the comparable to rental income when comparing stocks to real estate.  Appreciation of real estate has typically been lower than stocks.  However, the income derived from real estate blows away any income that stocks produce. 

The S&P 500, a solid indicator of the overall US equity market, produces about a 2% dividend. You can find some decent equities that spit out a 4%+ dividend, but as dividend yields increase, typically so does the volatility of the stock’s underlying price.  These companies have to raise their dividends to attract investors willing to take on additional risk.  You can find 12% dividends and beyond.  If the stock price didn’t move at all, you’d have a nice 12% return.  However, these stocks typically fall in price and your overall return doesn’t look anywhere near the dividend percentage.

With real estate, you have a nice, income producing asset.  There are a number of ratios that serve as tools to evaluate real estate and the expected return it will yield.  One that helps measure income is Cash-on-cash (COC) Return.  COC measures how much money you initially invested, versus how much cash flow you expect to generate in the first year.  So if I buy a property for $70K, put $30K into it, my cost basis is $100K.  If I expect cash flow to be $10K after subtracting operating expenses and debt service, my COC is 10%.  This is completely achievable in many markets. That surely blows away a 2% dividend, eh?


Lastly, I’m attracted to real estate due to the tax advantages.  Full disclosure……I’m not an accountant, but I’ve made sure to find a good one through networking and I suggest you do the same when you build your real estate team.  I’m not going to go in depth into tax treatment of capital gains, but depending on whether it’s a short-term (under 1 year) or long-term hold, you have to pay capital gains tax when selling a stock.  This varies by income level as well.  Short-term gains are taxed as ordinary income, so the rate would correlate with your tax bracket. Long-term gains and dividends can be taxed up to 20% plus a 3.8% Medicare tax due to the Affordable Care Act, again depending on your tax bracket.

With real estate, you are taxed on your rental income.  However, you can write-off the depreciation of the property to offset the income.  With residential you can write-off the property over 27.5 years.  A commercial property can be written off over a 39-year life.  This is a huge advantage.  For example, if you have a 10 unit apartment building that is valued at $300K (land excluded), you can write off $7,692 a year off the income the property generated.  This will shelter your rental income nicely.  You can even accelerate the depreciation via cost segregation, which has amazing benefits if used properly.  Many syndicators are using this tool to show paper losses that can have a profound effect sheltering taxes for their limited partners.

In addition to taxes on annual income, you are going to be taxed upon the sale of the stock or real estate asset if it has appreciated in value.  Again, with stocks, your best bet is to hold longer than 1 year and sell with a long-term capital gain.  Your only tax shelter for capital gains on this sale would be another stock that you lost money on and sold to offset the gains.  With real estate, you can utilize a 1031 exchange.  A 1031 exchange allows you to sell a property and pay no taxes on appreciation, so long as the money is used to buy a similar type property.  This is a big benefit in allowing you to continue to grow your real estate empire and let tax-deferred dollars compound. 


Real estate can be an attractive asset class for any investor.  The power of leverage, income generation, and tax advantages make real estate an intriguing alternative to stock market investment at a time when the markets are very unpredictable.  

Stocks DO still hold key advantages over real estate, though.  

Your money is certainly more liquid.  Real estate is seen as illiquid because you cannot readily sell your property or your position as a limited partner.  With just a few hundred bucks to put to work, it’s simple to dollar cost average into a stock position.  It can be much harder to come up with a down payment for a property or a minimum for a syndication deal. 

It’s much easier to diversify your equity investment portfolio than with real estate holdings.  Additionally, properties take upkeep and maintenance, there are tenant issues that arise, etc., etc. All you have to do is click a button on your mouse to enter and exit equity positions. 

Passive income is certainly there with real estate, but it only comes after much effort and time has been invested, if you plan to buy-and-hold properties directly.  If you don’t want to deal with tenants and toilets, syndications are a more passive route.  There is still work, however, as you have to vet operators, understand income statements, evaluate pro forma projections, and study the geographic markets of the assets. . 

Predicting the future is tricky business.  Every asset class has its cycles and no one has a crystal ball.  Diversification allows for a balanced portfolio and better sleep at night.  Make real estate a core portion of your portfolio to weather uncertainty and grow your wealth.  

Paul Shannon is a full-time active real estate investor, as well as a limited partner in a number of syndications.  Prior to leaving the corporate world, Paul worked for a medical device company, selling capital equipment to surgeons in the operating room.  After completing a few rehabs employing the “BRRRR method”, he saw scalability and more control over how he spent his time, and left to pursue real estate in 2019.  Since then, Paul has completed over a dozen rehabs on both single-family and multifamily properties.  He currently owns over 50 units in Indianapolis and Evansville, IN and is a limited partner in larger apartments and industrial properties across the US. You can connect with him at www.redhawkinvesting.com

Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

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