America is the known all over the world as the land of opportunity. People come from all around the globe to America in search of “living the American dream.” Many foreign and domestic families have risen through the ranks, overcoming poverty and failure, and have achieved this dream through real estate. The biggest hurdle in real estate, just like most things, is taking that initial leap. This article will show you three ways on how to begin your journey into real estate investing.
- The first way might seem inconsequential, but if used the right way, this can be the first and easiest step investing in real estate. Here we go. Are you ready?? Buy a single family house! I know what you’re thinking; how can that be an investment? All the big guys like Robert Kiyosaki and Grant Cardone say unless it produces income, then it’s a liability. I agree with their logic. However, I will show you a real-life example of how this works. I had a client that purchased a single family house (5 bed 3 bath) this year and their monthly mortgage payment was $800 a month (Principle, interest, taxes, and insurance). After closing, my client proceeded to rent two rooms out to a friend and family member for $400 a month each (A total of $800 a month). Also, there is still one bedroom to rent out if needed. This example shows that investing in real estate isn’t as hard as people make it out to be.
- This second example is more common than the first. With an FHA loan, one can purchase a 1-4 unit owner-occupied home with only 3.5% down. That’s right, you can purchase a 4-plex, where you live in one unit and rent out the other three, with a down payment of 3.5%. This is way less than the stereotypical 25% down that most people hear about. Oddly enough, you can actually use the rent from the other units as qualifying income.
- The last example is also used quite often. If you have lived in your primary residence for more than one year (With making on-time payments), you are able to move out of that and purchase another property as your primary residence and keep the old one as a rental. Yes, you have to qualify for two mortgage payments, but many people take advantage of this since you are not required to put 25% on your next home purchase.
These are just a few examples that many people, young and old, take advantage of. Real estate has made more millionaires than almost any other industry out there. It is a great way to diversify your portfolio and create long-lasting residual income.
For further questions, feel free to email me.