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The 4 Best Paths to Invest in Real Estate in 2026 · The Hannah Hammond Show

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  In the world of investing, there's a ton of noise.
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  You'll hear people say real estate is dead because of
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  interest rates, or that it's the only way to get rich.
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  But the truth usually always lies somewhere in the middle.
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  Real estate isn't sexy. It's durable.
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  It's a tangible asset, an inflation hedge, a tax strategy,
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  and one of the few places where you can still use smart leverage
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  to build generational wealth and true financial freedom.
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  But here's the catch. Real estate isn't just one
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  thing, It's a dozen different businesses disguised as one.
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  And today, I'm going to break down the four primary paths to
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  real estate investing in 2026. I'm just here to give you the
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  pros, the cons, and the reality of each so you can decide which
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  vehicle fits your life best. Well, before we dive into the
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  paths, let's address the why. Why bother in real estate in
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  2026 when you could just buy an index fund or cryptocurrency?
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  Well, there's five main reasons. Number one is tangibility.
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  It's a physical asset with intrinsic value.
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  We all need real estate. It provides a roof over someone
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  head or a floor for their business #2 is the inflation
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  hedge. As the cost of living goes up,
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  so do rents and property values. It's a natural protector of
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  purchasing power because when your money's in the bank and the
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  government keeps printing money and inflation continues to
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  occur, your purchasing power goes down and your money loses
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  value. Generally, real estate is a
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  great store hold of value. And as inflation continues, the
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  real estate asset value continues to go up with
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  inflation #3 is leverage. It's one of the only assets
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  where a bank will lend you 70 or 80% of the purchase price at
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  relatively pretty low rates. And #4 is cash flow.
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  Unlike a growth stock, real estate pays you to own it.
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  Real estate isn't about getting rich overnight.
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  It's about building a foundation that is difficult to disrupt.
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  And having cash flow is how you have true financial freedom.
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  Because without cash flow, if you just have equity
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  appreciation, you may look like you're making money on paper,
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  but that doesn't actually pay your bills.
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  So for me, I have AG Wagon, it's a $250,000 car.
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  Well, my real estate assets pay for that car payment every
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  single month while I sleep. That's pretty cool.
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  I don't have to worry about if I have enough money coming in this
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  month from my earned income to pay for my vehicle because I
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  know that my rental properties have it taken care of.
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  And the fifth reason is the tax advantages with real estate.
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  It's so amazing because you don't have to pay a lot of taxes
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  generally on the cash flow that is generated from your real
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  estate assets and even more so if you're in in the business of
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  real estate. If you're a real estate
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  professional, you can do something called accelerated
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  depreciation and this will accelerate the depreciation of
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  the asset and reduce your taxable income tremendously even
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  on your earned income. But that's if you're a real
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  estate professional. If you're not a real estate
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  professional and you work another job or you're in a
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  different business that is not real estate related, you still
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  get amazing tax advantages because you can use that
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  depreciation against your passive income.
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  So if you have assets that are providing you with passive
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  income, let's say it's making making you $5000 a month, well
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  that depreciation will offset that income.
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  So you don't actually have to pay taxes on the $5000 a month
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  gain as you would if you were making $5000 a month on a
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  dividend stock, for example. And so when you don't have to
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  pay taxes, this makes you more money and puts more money back
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  into your pocket. So diving into some of the
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  different paths that you can take when investing into real
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  estate, path number one is owning your own properties.
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  This is the operator path, and this is exactly how I got
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  started. The first path is the most
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  traditional owning your own properties.
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  This could be residential like single family homes or small
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  multi family apartment complexes.
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  Or this could be commercial properties like retail center,
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  shopping centers, storage facilities.
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  This is the operator path. The pros is you have control,
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  you make every decision. You pick the property, you pick
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  the tenants, the paint color and the exit strategy.
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  And if you are a real estate professional, you get the most
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  tax advantages with this strategy.
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  Between depreciation, 1031 exchanges and interest
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  deductions, the tax benefits are absolutely unparalleled as a
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  real estate operator versus any other income that you're going
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  to possibly make. Also, when you own your own
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  assets, you have the ability to heavily influence forced
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  appreciation. You can physically improve the
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  asset and increase its value. So for example, if you go buy a
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  property, let's say a old house that needs to be renovated and
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  it's a pretty ugly house. So you ever see the we buy ugly
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  houses, right? You go buy one of those houses,
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  nobody wants to buy it. Banks don't want to lend on it.
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  You get a hard money loan to buy it.
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  And you know, if I go put $100,000 into this house, it's
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  going to go up $400,000 in value.
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  Its rent potential is going to go up tremendously.
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  So it's going to put let's just say $4000 a month of cash flow
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  into my pocket. When you buy your own assets,
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  you have the ability to make these decisions and go in and
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  force appreciation those assets. And then it reduces your risk
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  even in a market fluctuation because you're getting it below
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  market value. There's massive upside that you
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  could force the appreciation into it.
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  So even if market value drops, you force so much appreciation
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  into it that you're usually OK even in a worst case scenario.
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  And next is skill development. You learn the gut of the
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  business. You become a true real estate
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  professional and you have those skills you can utilize and
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  implement throughout your entire life and start to become a deal
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  junkie. And always keep your eye on the
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  lookout for these really good opportunities and these good
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  deals and start to build the relationships and the resources
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  and the network and the tools and skills to be able to go take
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  advantage and pounce on these good deals.
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  Force the appreciation into and get the most upside when you go
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  to exit that deal or just sit on the cash flow and take the
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  depreciation tax benefits as well.
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  So the cons of being your own operator and buying your own
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  properties on your own is well it's time intensive.
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  This is a full time job. There's nothing passive about
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  buying and renovating and managing your own real estate
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  portfolio. You are responsible for the 3T's
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  tenants toilets and trash. You also have the most
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  operational risk. If any major systems fail or a
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  tenant stops paying, it's on you.
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  And if you don't pay the bank back the loan, the bank is
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  coming for, well, you. This is for the person who wants
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  mastery. This is for the person who wants
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  to be a real estate entrepreneur.
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  If you have more time than capital or if you want to build
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  a massive portfolio from the ground up, then you need to be
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  an operator. The second path is indications.
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  This is where you pool your money with other investors to
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  buy a much larger asset, maybe a 2 or 300 unit apartment complex
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  or a self storage facility that's managed by a professional
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  operator that has amazing relationships, amazing access to
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  deals, and they put their own risk on the deal.
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  So if they don't pay back the loan, the bank goes after them,
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  not you. So it reduces your liability and
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  your only real risk is the money that you invested.
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  So the pros is that it's truly passive.
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  You write a check and then you receive reports and
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  distributions, no midnight phone calls about leaky faucets.
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  And you also have scale. You get access to institutional
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  grade deals that you definitely couldn't find or afford or
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  manage on your own, at least not for a long time.
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  Most indicators have been building their resources, their
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  teams, their access to deals and their portfolios for decades.
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  And you're probably not going to ever have access to those on
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  your own, at least for not a very long time if you're just
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  getting started as an operator. Next is professional management.
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  You're betting on a team that does this 60 hours a week.
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  Now, what are the cons? Well, you have 0 control.
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  You are a limited partner. You don't get to vote on when
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  they sell or how they manage. You also have operator risk.
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  Your success is 100% dependent on the person that's running the
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  deal. If they fail, you fail.
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  Also, liquidity. Your money's usually locked up
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  for three to seven years. So who is this for?
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  This is for high earners, doctors, tech executives,
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  business owners who have capital but not time.
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  You're buying time by leveraging someone else's expertise.
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  The final path in real estate investing is often overlooked
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  and it's one of my favorites. Investing in the debt.
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  So instead of owning the building, you actually become
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  the bank. You lend money to the people in
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  path #1. The pros is usually as a lender
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  or investing in a debt fund. You have predictable income.
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  You generally will get a fixed interest rate.
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  It's very boring, but in a good way.
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  This helps you get actual cash flow.
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  Let's say you take $1,000,000 and you go invest it in a fund.
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  Well, you're upside on that investment may be 20% return per
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  year, but you may not get that money until the end of, you
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  know, four or five years and you have that money locked up that
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  entire time. Whereas if you invest that same
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  $1,000,000 into a debt fund or as a private lender on a
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  property, you may get a 9% interest rate per year and
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  that's paid every single month. So this gives you consistent,
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  reliable cash flow every single month.
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  But the downside side is, of course, you're making 9% instead
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  of potentially 20%. However, your risk is a lot
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  lower because development projects are risky.
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  There's a lot that can happen over three to five years in a
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  market or throughout a development project.
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  And when you're a senior debt position, you're the first one
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  to get paid back if everything goes bad.
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  Whereas if you're in the equity position in a fund, you're the
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  last one to get paid back because the bank has to get paid
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  back first. Another benefit of investing in
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  debt is lower volatility. You don't care if the project
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  value goes up or down by to 5% as long as the borrower keeps
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  paying the mortgage. And if the borrower doesn't do
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  so hot on the deal, you're still the one that has to get paid
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  back first. Next is priority.
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  In a worst case scenario, the debt holder gets paid before the
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  equity owner. So in an equity fund, you may
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  have potential for 20% upside per year, but if it doesn't go
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  well, you might lose all your money.
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  If you're investing as a lender on the debt side of things, if
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  they lose all their equity and there's no upside for them, you
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  still you'll get paid back first.
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  And you usually only lend at maybe 60 to 70% of the property
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  value or the total cost of the project.
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  And so there has to be a pretty big mess up for, for you to not
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  get paid back or a pretty big market collapse, which is what
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  we saw in 2008 for property values dropped, you know, 40% or
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  whatever, which the debt holders did not get paid back their full
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  investment. But that's only happened a
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  couple times in history. And generally if you're a senior
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  debt position, which just means you have a first lien position
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  on the asset. This is a pretty safe
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  investment. The cons is capped upside.
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  If the property value double s, you only get your interest
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  payment that was already agreed upon.
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  Inflation sensitivity. If inflation spikes to 10% and
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  your note is at 7%, you are losing purchasing power.
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  So which one is best? Here's the secret, the wealthy
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  don't really ask which one is best.
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  They ask how do I allocate across all four?
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  They might operate in a few local properties for the tax
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  benefits. Put a chunk of capital into a
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  syndication for the passive growth, keep some in a fund for
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  the diversification, and hold some notes for steady,
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  predictable income. I know me personally, I like all
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  four for all of these reasons that I just talked about above.
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  So real estate in 2026 isn't about finding a magic strategy.
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  It's about understanding your own goals, your own time, and
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  your own risk tolerance. Thank you so much for watching
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  and if you like this episode, please subscribe.
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  Please let me know which of these 4 paths resonates most
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  with you and why.