Did Ya'll Think I Forgot About Real Estate Investing???
I came onto steemit with a plan to teach real estate investing. That focus has been shifted quite a bit as I went down the steemit and crypto rabbit hole and have been leveraging the crap out of my trading background.
I'm Still Doing Real Estate Though!
I supposed I realized it's been some time since a real estate related post because I was at my monthly real estate coffee meetup. A bunch of people, new and experienced investors alike show up a this coffee house in Delray Beach and talk real estate investing for a few hours.
So let me tell you my...
1. Principle Paydown
When you purchase a property using a mortgage your tenants are the ones paying that mortgage down for you.
So whether the value of that property goes up, down or sideways you are building equity in it as the balance of the mortgage gets paid off.
2. Leverage (but conservative leverage)
How many other investments are there where you can control a $100,000 asset with just $20,000 of your money? (aka - putting 20% down)
The list is not long and the beautiful part is it amplifies your returns compared to something you cannot leverage.
For instance - if you buy a 100K property with 20K down and value of the property rises to 10% you have no increased your net worth by 10K.
However, if you were to use 10K for an investment you cannot leverage and it went up 10% than you have only increased your net worth by 1K.
3. Appreciation
This is just the icing on the cake because I never bank on this. If it happens then that's just lovely, but at the same time if I "buy right" so the property cash flows I do not have to worry about appreciation or not.
Conclusion
That is the key though, you must buy right and understand the numbers to plug into a property calculator when analyzing deals.
If you do not have a property calculator then download mine: https://scaredycatguide.com/
If you do not know what it is to "buy right" well, to be honest - read my book!
Best Regards,
Thanks for your great advice on property investment. Would love to get tips from you.
Don't wait to buy real estate, buy real estate and then wait.
You can get that leverage in the futures markets as well sometimes can get more like 10x, putting up 10% of the money as a margin requirement. It depends on the contract each asset and company that sponsors those contracts has their own rules.
I have always been a huge fan of the 5 year retirement plan where you spend ~20k each year buying a 100k house for a total of 5 rental properties to net 1000 a month after expenses from each house giving you about 60k a year income to live off of. currently a comfortable retirement can be done with 50k so you have a bit of breathing room as well. In the future though this may turn into the 6-10 year retirement plan. Also helps more and more the less you have to spend on renovations and upkeep.
You working on your retirement in this way/already on your way with it?
Soon we will all be able to spend a bit of our STEEM and buy a few houses... :D
That's the plan!
One of my crypto goals is to get a down payment on a rental property. I hope to be there by the end of the year.
YES! I love that goal. Eventually I will probably cash out some crypto to my more rentals. They have been good to me thus far :-)
Seems like I'm on the same game plan you guys are on!!
I hope we get it done sooner rather than later.
Very True!
Step number one in the road to investing in real estate.
Realize that prices go down when interest rates go up. Interest rate hikes diminish buying power.
Understand that the Fed is set to raise rates several times this year, and did so a few times last year.
This will send prices down, not up, as nominal purchasing power for new buyers evaporates with every uptick in interest.
90-day delinquencies for many forms of debt (think auto loans and student loans) are already high and climbing, look for mortgages to be next.
Overextending yourself with too much leverage is how you get caught with your pants down when the music stops and you need to find a seat.
Yup, I did a post on my website about how just a .375 increase in rates costs more than people realize.
Do you endorse buying and doing-up houses, then selling the improved property for a profit? Got to say, housing is one of the best and safest avenues to be invested in.
I know plenty of people that do fix and flips. It takes on a little more risk, but if done right can make good $$$. Just need to be cognizant of the market.
I prefer to buy, renovate and rent.
Thanks for the reply, will be following your posts with interest!
excellent..you may want to see my blog re" gold..especially silver as THE buy of 2018..thanks!
Thanks for the article its great to hear other alternative investments especially on real estate.
I might invest in my sisters realestate
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