December 2024

There are some companies whose reputations speak for themselves—Enron, Lehman Brothers, Madoff, Theranos—where the scandals were so dishonorable you’d think there would be zero chance of a comeback.

Well, you’d think.

On Monday, a “new” Enron released a press release revealing its “relaunch” to “solve the global energy crisis” just in time for the 23rd anniversary of the company’s collapse.

Related: How Bernie Madoff’s Niece Turned a Family Scandal Into a Mission to Fight Against Pay Inequities

There’s a new Enron.com website that looks spookily legit, with “Who We Are,” “Careers,” and “Company Store” options. The store is selling merch (T-shirts, hoodies, vests, sweatshirts), and there’s even an “employee” portal. They also have new social channels.

The website says a “big” announcement is coming in six days.

Is Enron Really Back?

It’s doubtful. The relaunch appears to be an elaborate prank to sell merchandise. Ars Technica suggests the announcement that is coming in six days could be a crypto coin.

Publicly available documents found by CNN reveal that an LLC out of Arkansas called The College Company bought the Enron trademark in 2020 for $275. Connor Gaydos, the co-creator of “Birds Aren’t Real,” a joke that became a Millennial and Gen Z conspiracy theory, is connected to the LLC.

Under the terms and conditions, the website says that it is “protected parody” for “entertainment purposes only,” per USA Today.

When CNN reached out to the press contact on the new website, they received a reply from New York communications firm Stu Loeser & Co that said they’ll “have more to share soon,” and declined further comment.

Related: From Tom Brady to Kevin O’Leary – See Who Lost Big in the Wake of the FTX Crypto Collapse

What Happened to Enron?

Formerly based in Houston, Texas, Enron was an energy and commodities company that collapsed in 2001 after executives were found to have majorly overstated earnings and the financial health of the company.

Executives, including the CEO as CFO, went to prison after receiving criminal convictions for lying to investors. At the time, Enron held more than $60 billion in assets and the scandal left thousands of victims in its wake.

It was one of the biggest bankruptcy filings in the history of the U.S., per Britannica. The corruption also led to the dissolution of Arthur Andersen LLP, which was then one of the largest auditing and accounting companies in the world.

Related: From Enron to Bernie Madoff to FTX, This Oil Tycoon Lost Billions to Bad Investments and Ponzi Schemes

Though it can help start a business, act as a personal tutor, and even roast Instagram profiles, ChatGPT has its limits. For example, ask it to tell you about David Faber. Or simply ask it who Jonathan Turley is.

Those names, plus a few others, will cause ChatGPT to spit out an error message: “I’m unable to produce a response.” The user is then unable to write another prompt to continue the conversation; the only option left is to regenerate the response, which yields the error again.

^{Screenshot. Prompt: Tell me about Brian Hood.}

ChatGPT users discovered over the weekend that a few words could break the AI chatbot, or cause it to stop working. The trend started with the name “David Mayer,” which ChatGPT users on Reddit and X flagged.

404 Media found that the names “Jonathan Zittrain,” which refers to a Harvard Law professor, and “Jonathan Turley,” which is the name of a George Washington University Law professor, also caused ChatGPT to stop working.

Related: Here’s How the CEOs of Salesforce and Nvidia Use ChatGPT in Their Daily Lives

Ars Technica noted that “Brian Hood,” the name of an Australian mayor, “David Faber,” which could refer to a CNBC journalist, and “Guido Scorza,” which is the name of an Italian attorney, all yielded error messages.

ChatGPT refuses to say the name “David Mayer,” and no one knows why.

If you try to get it to write the name, the chat immediately ends.

People have attempted all sorts of things – ciphers, riddles, tricks – and nothing works. pic.twitter.com/om6lJdMSTp

— Justine Moore (@venturetwins) November 30, 2024

As of the time of writing, ChatGPT no longer produces an error message when asked about David Mayer and instead gives the generic response, “David Mayer could refer to several individuals, as the name is relatively common. Without more context, it’s unclear if you’re asking about a specific person in a field such as academia, entertainment, business, or another domain. Can you provide more details or clarify the area of interest related to David Mayer?”

However, for the other names — Brian Hood, Jonathan Turley, Jonathan Zittrain, David Faber, and Guido Scorza — ChatGPT persistently produces an error message.

^{Screenshot. Prompt: Who Is Jonathan Turley?}

It’s unclear why these specific names cause the AI bot to malfunction and to what effect.

Ars Technica theorized that ChatGPT being unable to process certain names opens up new ways for attackers to interfere with the AI chatbot’s output. For example, someone could put a forbidden name into the text of a website to prevent ChatGPT from accessing it.

Social media users speculated that certain names being blocked meant that ChatGPT would be monitored and tightly controlled by powerful people. They also found that other AI chatbots, like Google’s Gemini, were able to process the names with no problems.

Comment
byu/Kasvanvliep from discussion
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OpenAI did not respond to Entrepreneur‘s request for comment.

Related: ChatGPT Finally Gives Businesses What They’ve Been Asking For

Artificial intelligence (AI) and machine learning (ML) are not new concepts. Equally, leveraging the cloud for AI/ML workloads is not particularly new; Amazon SageMaker was launched back in 2017, for example. However, there is a renewed focus on services that leverage AI in its various forms with the current buzz around generative AI (GenAI).

GenAI has attracted lots of attention recently, and rightly so. It has great potential to change the game for how businesses and their employees operate. Statista’s research published in 2023 indicated that 35% of individuals in the technology industry had used GenAI to assist with work-related tasks.

Use cases exist that can be applied to almost any industry. Adoption of GenAI-powered tools is not limited to only the tech-savvy. Leveraging the cloud for these tools reduces the barrier to entry and accelerates potential innovation.

Related: This Is the Secret Sauce Behind Effective AI and ML Technology

Understanding the basics

AI, ML, deep learning (DL) and GenAI? So many terms — what’s the difference?

AI can be distilled to a computer program that’s designed to mimic human intelligence. This doesn’t have to be complex; it could be as simple as an if/else statement or decision tree. ML takes this a step further, building models that make use of algorithms to learn from patterns in data without being programmed explicitly.

DL models seek to mirror the same structure of the human brain, made up of many layers of neurons, and are great at identifying complex patterns such as hierarchical relationships. GenAI is a subset of DL and is characterized by its ability to generate new content based on the patterns learned from enormous datasets.

As these methods get more capable, they also get more complex. With greater complexity comes a greater requirement for compute and data. This is where cloud offerings become invaluable.

Cloud offerings can be generally categorized into one of three categories: Infrastructure, Platforms and Managed Services. You may also see these referred to as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).

IaaS offerings provide the ability to have complete control over how you train, deploy and monitor your AI solutions. At this level, custom code would typically be written, and data science experience is necessary.

PaaS offerings still offer reasonable control and allow you to leverage AI without necessarily needing a detailed understanding. In this space, examples include services like Amazon Bedrock.

SaaS offerings typically solve a particular problem using AI without exposing the underlying technology. Examples here would include Amazon Rekognition for image recognition, Amazon Q Developer for increasing software engineering efficiency or Amazon Comprehend for natural language processing.

Practical applications

Businesses all across the world are leveraging AI and have been for years if not decades. To illustrate the variety of use cases across all industries, take a look at these three examples from Lawpath, Attensi and Nasdaq.

Related: 5 Practical Ways Entrepreneurs Can Add AI to Their Toolkit Today

Challenges and considerations

Whilst opportunity is plenty, harnessing the power of AI and ML does come with considerations. There’s lots of industry commentary about ethics and responsible AI — it’s essential that these are given proper thought when moving an AI solution to production.

Generally speaking, as AI solutions get more complex, the explainability of them reduces. What this means is that it becomes harder for a business to understand why a given input results in a given output. This is more problematic in some industries than others — keep it in mind when planning your use of AI. An appropriate level of explainability is a large part of using AI responsibly.

The ethics of AI are equally important to consider. When does it not make sense to use AI? A good rule of thumb is to consider whether the decisions that your model makes would be unethical or immoral if a human were making the same decision. For example, if a model was rejecting all loans for applicants that had a certain characteristic, it would be considered unethical.

Getting started

So, where should businesses start with AI/ML in the cloud? We’ve covered the basics, a few examples of how other organizations have applied AI to their problems and touched on the challenges and considerations for operating AI.

The starting point on any business’s roadmap to successful adoption of AI is the identification of opportunities. Look for areas of the business where repetitive tasks are performed, especially those where there are decision-making tasks based on the interpretation of data. Additionally, look at areas where people are doing manual analysis or generation of text.

With opportunities identified, objectives and success criteria can be defined. These must be clear and make it easy to quantify whether this use of AI is responsible and valuable.

Only once this is defined can you start building. Start small and prove the concept. From the solutions mentioned, those at the SaaS and PaaS end of the spectrum will get you started quicker due to a smaller learning curve. However, there will be some more complex use cases where greater control is required.

When evaluating the success of a PoC exercise, be critical and don’t view it through rose-tinted glasses. As much as you, your leadership or your investors may want to use AI, if it’s not the right tool for the job, then it’s better not to use it. GenAI is being touted by some as the silver bullet that’ll solve all problems — it’s not. It has great potential and will disrupt the way a lot of industries work, but it’s not the answer for everything.

Following a successful evaluation, the time comes to operationalize the capability. Think here about aspects like monitoring and observability. How do you make sure that the solution isn’t making bad predictions? What do you do if the characteristics of the data that you used to train the ML model no longer represent the real world? Building and training an AI solution is only half of the story.

Related: Unlocking A.I. Success — Insights from Leading Companies on Leveraging Artificial Intelligence

AI and ML are established technologies and are here to stay. Harnessing them using the power of the cloud will define tomorrow’s businesses.

GenAI is at its peak hype, and we’ll soon see the best use cases emerge from the frenzy. In order to find those use cases, organizations need to think innovatively and experiment.

Take the learnings from this article, identify some opportunities, prove the feasibility, and then operationalize. There is significant value to be realized, but it needs due care and attention.

Are you struggling with how to best handle a bad contractor? No doubt, working with contractors ranks among the hardest parts of real estate investing.

However, as a real estate investor, unless you have a property manager, working with contractors unavoidably comes with the job, whether building a property, remodeling or making repairs.

Be proactive when learning about hiring or firing contractors so that if trouble arises, you are prepared.

Assemble All Evidence

The first step when dealing with a bad contractor is to gather all paperwork and evidence. During the hiring process, you should have collected copies of their license, bonding, and insurance paperwork and a clear written contract with the scope of work.

Take photos throughout each project stage, take notes about progress or lack thereof, delays, and so forth.

In addition to information about their work, keep records of all communication, including phone calls, emails, and texts. Specifically, any important agreement between the two of you should be put in writing. Unfortunately, we cannot trust the old “handshake” agreement in situations involving thousands of dollars.

Finally, keep track of all deposits, materials provided, and payments to the contractor. Make all payments either electronically or via check. Where is the money trail if you paid half of their bill in cash?

Additional Documentation to Support Your Case

Remember to maintain a collection of supporting evidence beyond the basic paperwork to strengthen your position if issues with the contractor escalate. Below are some of them:

Fire the Contractor

While this seems obvious, it is not always the most comfortable thing to do. Initially, your contractor will most likely challenge the firing as a breach of contract. This is precisely why having a record of how they actually breached the contract agreement first is key. Some things to consider as you document their misdeeds:

• • Did they ever not show up when they were supposed to?
  • Were non-agreed materials used?
  • Did they consistently stick to the schedule?
  • Did they go over budget?

Don’t dig yourself into a deeper hole. After you have compiled sufficient evidence of the contractor’s poor job, fire them immediately so that you are not continuously paying for bad or mediocre work.

File a Bond Insurance Claim

Before proceeding, note that you can only file a claim if the contractor is bonded. Therefore, you should only work with bonded and insured contractors for large projects.

You can reclaim the money you already spent by communicating with the contractor’s insurance company. Even the threat of filing a claim often persuades wayward contractors to finish the work. But do it properly! You never know when you need to escalate to the real thing. 

File a Complaint to the State Licensing Board

If the contractor is licensed, you can file a claim to the state board if needed. No contracting company wants this to happen. Licensed contractors can charge more and earn more projects, so they don’t want to jeopardize their licensing in any way.

You can force the state board to act by threatening a complaint. In these cases, they will usually want to resolve the conflict, and you are also more likely to receive your money back. Look up your specific state’s complaints process for more information. 

Go to Court

By filing a suit in a small claims court, you can receive justice at a small price. Not only are suits in small claims affordable, but they also offer the option for you to represent yourself with no attorney or legal fees.

Of course, if you paid your contractor a large amount, consider hiring an attorney even if the amount falls under the jurisdiction of small claims court.

Post Public Reviews

Although this strategy may not yield financial gains, the threat of posting poor reviews on many websites might convince the contractor to fix their faulty work.

Even if that doesn’t work, at least the next person looking to hire a contractor may think twice before hiring them.

There’s something almost mythical about buying real estate in the United States. 

The dream of owning American real estate spans across the globe. Since its foundation, people from around the world have sought after a piece of land in America. From settlers moving to California to take part in the gold rush to new waves of immigrants searching for a better life, U.S. real estate has symbolized hope and prosperity. And you’re probably reading this because you dream of building wealth through real estate investing. 

The path to property ownership is not the same for a U.S. citizen and a foreign national, though. Even so, much of the information out there is geared toward Americans investing in U.S. real estate. This article is intended as a guide for non-U.S. citizens.

By understanding how to navigate the process and overcome some of the most common obstacles you might encounter, you’ll be well on your way to achieving your “American dream.”

Why Invest in U.S. Real Estate in the First Place?

Before taking another step, it’s crucial to understand why you want to invest in real estate in the United States. There are houses in your home country and investment opportunities around the world, yet many people still opt to invest in American real estate. These are some of the most common reasons:

Political and economic stability

There are significant risks that political policies could drastically impact the economy each time a government changes. Given America’s stability compared to other countries, it’s no wonder the U.S. market is perceived as a safe haven for investment.

Historical performance

While there have been drops in U.S. home values during different periods of history (the Great Depression and the 2008 housing bubble), these have been more of an exception than a rule. For the most part, American real estate has climbed steadily over the past several decades. This consistent growth over extended periods of time has led to significant gains for property owners. 

Stable currency

The U.S. dollar constantly ranks among the strongest currencies in the world. Compared to places where inflation is high and currency values change rapidly, the American dollar is very stable. A currency that holds its value, combined with a real asset (real estate) that has historically grown in value, is a strong hedge against inflation. 

With these benefits in mind, you might be wondering, “Are the challenges worth the benefits?” If so, keep reading.

Obstacle 1: Lack of Market-Specific Knowledge

Imagine going to a restaurant with hundreds of items on the menu. Some are delicious, some are bad, and others are mediocre. How do you know which menu items to select? That’s the dilemma you’re probably facing as you explore American investment property options.

There are 50 states in the U.S., and each has its own laws, climate types, and housing needs. On top of that, every real estate market within a state could have totally different pricing, trends, considerations, job opportunities, and more.

Don’t worry if you don’t know where to start. Follow these steps to discover a market that meets your needs.

Start with strategy

It’s no coincidence that David Meyer’s book goes by the same title. Determining your strategy allows you to back into certain locations. Are you looking for passive income? Is real estate a way to protect your money from currency inflation in your home country?

Whatever the case may be, you’ll find that your unique situation is best suited for certain approaches compared to others. For example, not everyone has the skill set or personality to live in Australia and flip houses in Alabama—or “woop woop,” as the Aussies say.

There are entire posts written on this topic that can give you direction. Take the time to read and reflect before making this decision. 

Find markets that match your strategy

Once you find the right investment strategy, it’s time to select a market. At this point, you can work backward from the strategy you chose to select a market. This is crucial because a place that would make a great vacation rental might not necessarily be great for flipping houses or long-term rentals.

Use BiggerPockets’ Market Finder tool to explore cities across the United States based on your strategy. For example, let’s say you want to buy and hold rental properties. You can analyze rent-to-price ratios to see where you might get the best returns. 

Spend some time narrowing down your market and come up with a short list of a few cities. Then, get even more specific.

Conduct market-specific research

You want to be extremely thorough when researching the specifics of a market. Here are a few key indicators to explore as you get started:

• Job market: A strong job market drives demand for housing by increasing income levels and attracting new residents. Look into who the major employers are and see if there’s diversification. This reduces your risk because places, where one company employs a large proportion of the population, are greatly impacted if that industry does poorly or the company leaves for another market. Having various employers in a market makes your potential renter pool less tied to one industry and spreads the risk around.
• Population growth: Population growth signals rising housing demand, often leading to price appreciation and attracting businesses. Even within a city or town, there are certain areas that grow faster than others. Pro tip: Connect with local real estate agents and investors on phone calls to ask what trends they’re seeing.
• Transportation: Access to public transportation or major highways enhances a location’s desirability. In cities where the subway is a common mode of transportation, a rental property near a train station would be viewed as more attractive to buyers and renters.
• Neighborhoods: The characteristics of neighborhoods, such as safety, proximity, and amenities, significantly influence property values and investment potential. Don’t worry about jumping on a plane—use Google Maps to see an area’s main attractions like restaurants, shopping centers, or transit options. You can also use Google Earth to walk the streets virtually to give you a feel for the area.

Keep in mind that what looks good on paper doesn’t necessarily always match the reality of what’s happening. It’s always a good idea to connect with local investors to see what strategies they’re using and in what neighborhoods. 

Based on your findings, you’ll be able to confidently select a real estate market.

Obstacle 2: Finding and Managing a Remote Team

Living far away from your investments might feel overwhelming at first. Luckily, there are many others who’ve had success investing from a distance, which means you can too. There are simple strategies and great resources available to help you build a strong team and make your real estate business successful without being located in the U.S.

How to find your team members

When starting a real estate investing business, you’re the boss! To make sure your business runs smoothly without you, you must build a strong team. Whether you’re searching for a real estate agent, contractor, lender, or property manager, the process to find them is the same.

These recommendations will yield the best results:

• Build your network: Network on the BiggerPockets forums with investors operating where you want to invest. More specifically, look for people using the same strategy that you want to use. You’ll also find that most American cities have people from other countries—if there are communities of people from your home country living where you want to invest, connect with them too!
• Referrals: If you build a network, they can introduce you to people that they’ve worked with and even tell you who to stay away from.
• BiggerPockets Team Builder: Using this tool, you can plug in a variety of information, such as the team member you’re looking for (real estate agent, for example), location, and other key details. Based on your responses, you’ll receive a list of people that’s been curated for you.
• Research online reviews: Leverage platforms like Google, Yelp, or local real estate websites. You can gather feedback on their reputation, helping you assess their reliability and performance before even reaching out to them.

Tips for vetting real estate professionals

You’ve created a list of potential team members—now what?

Vetting real estate professionals effectively is essential to long-term success as a real estate investor. It’s even more important if you live in another country because you can’t just drive to your rental property whenever you feel like it. This step can help ensure that you collaborate with trustworthy, knowledgeable individuals who understand the local market. 

Here are some key tips to guide you through the vetting process:

• Check credentials: Verify licenses and certifications so you know that they are qualified and compliant with local regulations. You can often find this information on a state or city website.
• Ask for references: Request references from past clients. Take the time to follow up with them to gain insights into their experiences and the quality of service provided. Don’t skip this step—it’s worth the time.
• Conduct interviews: Schedule video calls to discuss their experience, approach, and understanding of the local market and gauge whether they’re a good fit personality-wise. If they speak your native language, that could be a huge plus! In contrast, note that it’s a major red flag if they aren’t willing to do calls.

As you complete the vetting process, always trust your instincts. Pay attention to your comfort level and gut feelings about their reliability, expertise, and overall character.

Tools to manage your team

Once your team is established, it’s time to start finding deals and setting up systems. You always want to have an open line of communication so that you’re informed about what’s going on regularly. 

These are some useful tools to find deals and manage your team from outside the U.S.:

• WhatsApp: No American cell phone plan? No problem. Just have your team members get the app—it’s just like texting.
• PropStream: PropStream provides access to property data, analytics, and marketing tools, helping you identify profitable deals and analyze potential investments.
• RentRedi: This property management platform is designed for landlords and simplifies tenant screening, lease management, and rent collection, making it easier to manage rental properties remotely.
• Airtable: Airtable combines spreadsheet and database functionalities, allowing you to create custom workflows, track deals, and manage your team’s tasks in a visually appealing format.

The list of software is endless, but these tools will help you get started and build from the ground up.

Obstacle 3: Finding Financing as a Non-U.S. Citizen

According to a recent NAR report, 50% of all international buyers paid cash for real estate in the United States, whereas about 28% of all existing buyers paid cash. 

You might interpret that to mean that foreign investors are more affluent. On the flip side, it reveals something about the U.S. mortgage industry’s inability to provide financing to non-U.S. citizens. These are common reasons foreign nationals feel stuck: 

• Limited financing options: Many lenders are hesitant to provide loans to non-U.S. citizens due to perceived risks. For those seeking primary mortgages or financing for second homes, options from government-sponsored entities like Freddie Mac and Fannie Mae are typically not available to non-residents. Investment property-specific loans are even harder to come by.
• Lack of credit: If you don’t have a credit history in the United States, it’s hard for lenders to assess your creditworthiness. Without a credit score or established financial history in the U.S., your options are more limited and likely come with higher interest rates—that is, if you find a lender to work with you.
• Income verification: Lenders want to make sure you’re not engaged in any illegal activity. As such, they’ll dig deep into your financial records to verify your income. Even if you’re not a drug dealer and have strong finances, your lender will likely ask for translations of all documentation. That’s because money coming from outside the United States is viewed as a higher risk—it can be harder for lenders to pinpoint where money is coming from abroad.
• The banking system and currency exchange: Navigating the banking system and currency exchange can be daunting. There may be additional fees, fluctuations in currency value, and limitations when transferring funds internationally from your home country to the United States.

While this may seem discouraging, know that if you’ve read this far, you’re not a quitter. Rest assured that there are ways to overcome these obstacles.

Cheat Codes to Financing American Real Estate 

It probably crossed your mind to marry an American citizen. Then, you’d have plenty of financing options!

In all seriousness, there are other ways to obtain financing as a foreign investor. Here are some potential solutions, depending on your situation:

Hard money

Hard money loans provide quick access to capital based on the after-repair value (ARV), which is ideal for flipping houses. However, these often have double-digit interest rates, and lenders will likely ask for a personal guarantee tied to you personally, even if the property is purchased under a business entity. 

Private money

Private money lending refers to raising money from individual investors rather than traditional banking institutions. If you can raise money for the full purchase price amount, it will appear as cash to the seller. Keep in mind that borrowing money from individuals also comes with strings attached, like higher interest rates.

Seller financing

With seller financing, the property seller acts as the lender, allowing you to bypass traditional financing barriers and negotiate payment terms directly, which can simplify the purchasing process. This creative solution doesn’t work in all situations, but it can be a great option if you want to spend time negotiating the structure with the seller.

Debt-service-coverage ratio (DSCR) loans

DSCR loans are evaluated on a rental property’s performance, not your personal income. It takes into consideration the amount of rental income a property can produce compared to the monthly mortgage payment. Sounds perfect for foreign investors!

These loans are made to business entities and may require credit reviews, depending on the lender. As such, there are only a handful of companies that offer DSCR loans tailored to foreign nationals. The leader in this space is Waltz, which specializes in working with non-U.S. citizens. In addition to lending, they have solutions for forming an LLC, obtaining a U.S. bank account, and currency exchange capabilities. 

All these financing options provide ways for foreign investors like you to start investing. It’s up to you to determine which one is right for you.

Move Obstacles Aside and Start Investing

Investing in U.S. real estate as a noncitizen presents unique challenges, including navigating market knowledge gaps, assembling a trustworthy team, and securing financing. Just know that U.S. real estate investing is attainable and within your grasp.

Over the last year or so, about 54,000 purchases were made by foreign investors across the United States. By following these recommended measures, you’ll be able to add to this number and inspire others to do the same.

Find the Right Agent, Close the Best Deal

Step #1: Use Agent Finder to match with top investor-friendly real estate agents to help you find, analyze, and close your next deal.

As 2024 draws to a close, many entrepreneurs are reflecting on their investments and preparing for the opportunities that 2025 will bring. Amid evolving markets and economic uncertainties, real estate stands out as a reliable and time-tested strategy for building wealth.

Offering stability, long-term growth and income-generating potential, it’s clear why real estate should be a key consideration for any diversified investment portfolio.

Related: 10 Reasons Why Every Entrepreneur Should Invest in Real Estate

Real estate fulfills a fundamental human need

Real estate uniquely satisfies one of humanity’s most basic needs: shelter. Unlike speculative assets like stocks or cryptocurrencies, housing demand remains constant, even during turbulent economic times. This intrinsic value makes real estate a resilient and reliable investment.

Properties in high-demand areas like London or New York consistently attract buyers and renters. These metropolitan markets hold their value due to a combination of desirability, limited land availability and a steady flow of residents seeking homes.

Long-term appreciation builds lasting wealth

Over decades, real estate has proven its ability to generate long-term wealth through appreciation. In markets like London, property values have risen by over 600% in the past 30 years due to urbanization, population growth and a constrained supply of developable land.

While short-term fluctuations are inevitable, the historical trajectory of real estate remains upward. Adopting a long-term perspective allows investors to leverage the compounding effect of appreciation, creating sustainable financial stability. A recent 2024 Market Outlook by J.P. Morgan emphasizes that investing in assets that generate steady returns over time is key to weathering market shifts — real estate fits this principle perfectly.

Real estate provides reliable passive income

One of real estate’s greatest advantages is its ability to generate consistent passive income. Rental properties offer a dual benefit: They produce steady cash flow while the underlying asset appreciates in value.

Real estate investors should focus on understanding market trends and tenant needs to maximize rental income. Properties in high-demand areas can reliably generate revenue to cover operating expenses, pay down mortgages or fund additional investments, all while delivering long-term growth.

Leverage amplifies investment potential

Real estate uniquely allows investors to use leverage, borrowing capital to acquire appreciating assets. Few other investments provide this opportunity to control a high-value asset with a relatively small upfront investment.

For instance, financing a property through a mortgage enables investors to amplify their returns as property values increase over time. As emphasized in financial strategies, the ability to utilize leverage effectively makes real estate one of the most potent tools for wealth creation.

Related: 5 Proven Steps to Become a Real Estate Millionaire, According to an Investor

Real estate protects against inflation

As inflation continues to impact global markets, real estate remains a dependable hedge. Property values and rental prices tend to rise with inflation, preserving purchasing power. Fixed-rate mortgages further enhance this benefit, ensuring consistent payments even as asset values grow.

This inflation-resistant quality makes real estate particularly attractive in uncertain times. As the cost of goods and services increases, real estate offers a stable and growth-oriented alternative.

Lessons from 2024 and preparing for 2025

The past year has highlighted the importance of diversification and investing in assets with intrinsic value. While digital assets and emerging markets garnered attention, real estate demonstrated its resilience. For entrepreneurs, 2025 offers an opportunity to capitalize on markets like London, which continues to thrive as a global hub for property investment.

Entrepreneurs who focus on high-growth locations and long-term strategies will position themselves to benefit from both stability and appreciation, ensuring they are well-prepared for the challenges and opportunities ahead.

Next steps for aspiring real estate investors

If you’re ready to integrate real estate into your wealth-building strategy, here’s how to get started:

1. Educate yourself: There are many resources out there to help you succeed. My YouTube channel and Buyer’s Agency Academy provide actionable insights into navigating the real estate market.

2. Target high-growth markets: Focus on cities with strong infrastructure, population growth and innovation initiatives that drive property demand.

3. Leverage financing options: Work with financial advisors to explore mortgages, shared equity models and other tools to optimize your investment strategy.

4. Start small: Begin with manageable investments like rental properties to gain experience and build your portfolio.

5. Partner with experts: Collaborate with seasoned consultants to ensure informed decisions that align with your goals.

Related: 8 Ways Real Estate Is Your Smartest Investment

As 2025 approaches, real estate continues to stand out as a cornerstone of financial security and wealth creation. Its ability to fulfill fundamental human needs, generate passive income and act as a hedge against inflation makes it an indispensable part of any diversified portfolio.

For entrepreneurs, real estate isn’t just about owning property; it’s about building lasting value, supporting communities and achieving long-term financial freedom. With guidance from experts, you can navigate this dynamic market and unlock its full potential in the year ahead.

Make 2025 the year you leverage the power of real estate to secure your financial future.

The broker channel has seen significant growth. According to Inside Mortgage Finance estimates, brokers accounted for 18.2% of first-lien mortgage originations in the second quarter of 2024. That was up from 16.9% in Q2 2023 and a substantial increase from the historic low point of 9.8% at the end of 2014.

Targeting LO compensation

As the broker channel expands, so does its exposure to regulatory scrutiny, according to some industry participants. Questions remain about certain regulations, which sources believe the CFPB audits will help to clarify. This is particularly true for rules surrounding lender-paid and borrower-paid compensation, a structure unique to the channel.

Jonathon Haddad, chairman and CEO of the Association of Independent Mortgage Experts (AIME), expressed support for the audits, calling them “a long time coming.” 

“The broker owners I’ve spoken to who are being audited are professionals of high integrity, dedicated to acting in their clients’ best interests, and we believe the audits will confirm this,” Haddad said. “As it currently stands, the primary focus has been on originator compensation structures — an area that deserves attention.”

The Dodd-Frank Act allows mortgage brokers to be paid by lenders, but these contracts are typically renewed every three months. Borrowers can also pay the fee themselves, creating room for negotiation.

Sources told HousingWire that borrower-paid compensation, which is often 50 to 100 basis points lower than lender-paid compensation, enables LOs to compete with the pricing exceptions offered by retail loan officers in a competitive market.

While regulations provide clear guidelines — such as prohibiting dual compensation from the borrower and lender, and banning compensation tied to transaction terms — they offer little clarity on when LOs can switch between lender-paid and borrower-paid compensation structures.

“I do believe that competition is always good for the consumer, and the CFPB should allow brokers to give credit to the consumer,” said Thuan Nguyen, CEO and founder of Loan Factory. “But the rule is not clear at all. It’s very muddy. That’s the risk of running a mortgage brokerage. We have to deal with it and don’t have a choice. We wish that the regulator can be clear on this.”

Colgate Selden, a founding member of the CFPB and an attorney at SeldenLindeke LLP, explained that some companies don’t allow LOs to switch from a lender-paid to borrower-paid compensation model after certain stages in the transaction — such as after disclosures or the loan estimate are issued — due to associated risks. He noted that this situation “hasn’t really been fully vetted.”

Sources said another issue on the CFPB’s radar is whether brokerage firms are directing most of their loans to a single wholesale lender while advertising that they are shopping around. 

This scrutiny comes in the wake of a class-action-seeking lawsuit against United Wholesale Mortgage (UWM), the largest U.S. wholesale lender. The lawsuit alleges that the company conspired with mortgage brokers to apply excessive fees and costs to borrowers. In response, UWM has called the accusations a “sham.” 

“If you broker 99% of your loans to one lender while marketing to people that you work with a bunch of lenders to find the best pricing, that has characteristics of what was happening before the meltdown in 2008, and the reasoning for the LO comp rule. That’s deceptive or a misrepresentation to the borrower,” Selden said.

Experts said a potential safe harbor for brokers is to work with at least three different lenders — not just three different products or scenarios.

“We’re starting to promote this approach as much as possible,” Sweeney said. “Most people operate in that manner, but there are times when one lender might have two different products viable for that consumer, and then your third option is from a second lender. It does sound like the CFPB is looking for three different lenders, not just three different products.” 

Requests for more lender options are growing amid increasing concentration in the wholesale lending market, where UWM and Rocket Mortgage dominate. Many brokers cite these two companies for their advanced technology, high-quality service and sometimes more competitive pricing.

At Loan Factory, Nguyen said his brokers work with 200 lenders and each loan runs through a pricing engine that compares offerings. But despite all of these options, 40% of Loan Factory’s loans are directed to a single lender.

“We have a big team of compliance staff to help. And of course we are planning to hire more now,” Nguyen said. “If the CFPB steps in, then it will be extra work, extra resources to be put into compliance.” 

Future of the bureau

Industry experts believe the CFPB could undergo significant changes under the second Trump administration. Elon Musk, the world’s richest man and the owner of Tesla, SpaceX and the social media platform X, has even called for the CFPB to be dismantled as part of his broader scrutiny of government spending.

“Traditionally, around D.C., if a regulatory agency starts an examination or enforcement action, the new incoming administration lets it proceed,” Selden said, adding that there was the case in the past when enforcement actions were shut down. “I would think that even the new administration may want to just continue gathering data, at least to monitor what’s going on in the market.” 

But McKay expressed caution.

“If any broker is sitting there crossing their fingers, hoping that the new administration solves their compliance problem, that’s a bad strategy,” McKay said. “There will definitely be changes within the CFPB, but even if there’s still the possibility it could all go away, this is more of a change within the broker channel than it is with the CFPB behavior.”

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