Why talk about real estate investors or post a blog named Real Estate Investing 101? Because real estate is still the best game in town. Do not let anyone fool you. Building a strong real estate portfolio can add substantial wealth building to your personal life.
Benefits of real estate investing:
- Borrow money from others (lenders) to own real estate.
- Holding real estate in specific business formations can limit liability.
- Real estate values can rise. This delivers investment ROI.
- Real estate can be depreciated.
- Real estate can be rented (rental properties). Paying for itself while building equity.
- Real estate delivers freedom and supports liberty.
You can start with a simple fix-and-flip project. Build cash flow levels and move into rental properties (or even fix-and-hold). As you gain experience, more lenders will provide better rates, terms, and flexibility.
Build a Real Estate Empire
We have many clients that have been able to build incredible real estate portfolios. Some with 100 rental units and others with thousands of rental units. Others stay with the fix-and-flip field and keep generating more cash flow.
You can do the same.
The first step is to take a step. Have a plan. Put words and thoughts into action.
A motivator: if you have 5 rental homes bringing in average rents of $1,500 per home, you will generate $7,500 in gross income.
If these 5 homes are being financed (at 90% LTV), the majority of this $7,500 is going toward interest, principal payments, etc. But keep in mind that the renters are paying this. After a few years the Debt-to-Value Ratio will be very different. You will also have rent increases. Now you are making money and building equity.
These homes will increase in value (most likely) and have lower mortgage balances. Do the math if each home had a specific value after 5 to 10 years.
Or you can just rely on Social Security for your retirement.