INVEST IN RESIDENTIAL INCOME PROPERTY
INVEST IN RESIDENTIAL INCOME PROPERTY
LEVERAGING YOUR MONEY
This is the MOST EXCITING part of investing in income property (this is the "GET RICH" part). I'll give you a hypothetical example, but this is exactly how it works...
You're buying a new house from the builder that costs $100,000, and you're putting down 20%, or $20,000.
You give the builder a $5000 deposit check (that's applied towards the $20,000 down payment later on).
You wait 9-12 months while they build your house. Hopefully, each time the builder releases a new phase the price will increase a bit. By the time your house is built, maybe it will be selling for $110,000.
Immediately, upon closing on your new property, your $20,000 down payment will be worth $30,000 in equity in the house. You've made a 50% return on your investment immediately.
You pop a tenant into the property, and you're breaking even on your monthly costs -- or maybe you're making $100 profit each month. So far, so good.
A year later, property values in that community have gone up 9%. Your $110,000 house is now worth $120,000. That's 100% return on your initial investment in one year.
Wait 5 or 10 years, and your property value has doubled from $110,000 to $220,000. Your initial $20,000 investment has increased six times. Now, you can refi and take the cash out of this house to buy others -- or sell it and exchange it for three houses in the NEXT up and coming community.
NOTE: Leveraging your money also applies to Tenant in Common ownership.
Where to invest
- Right now, we HIGHLY recommend Austin, Texas
(not Dallas, not Houston...)
Buying a new home from the builder
Tenants
Property Management
Never pay capital gains tax - 1031 Exchanges
Depreciation is your friend
Leveraging your money (it's a beautiful
thing!)
Tenants in common -
TIC Investments
Excel Spreadsheet
Investment Property Analysis worksheet
(note: you must have Excel on your computer to open this)
When To Sell
Miscellaneous - And
recent remarks by Suze Orman