ScaredyCatGuide to Real Estate: Make Your Money Work For You Using Real Estate
One of the reasons I love owning rental properties is because it puts my money to work for me.
Real estate is just one of many ways to put your money to work. However, it is my favorite so let’s talk about it.
Make Your Money Work For You Using Real Estate
When I use money to invest in rental properties I’m essentially giving two jobs to that money. Jobs that earn me money from that money. My money grows on its own, that is the type of money I like!
Rental Cash Flow
The first job that the money has is providing monthly cash flow to me. This is why I preach buying right and why we use the property calculator to analyze deals. Literally my whole book is wrapped around the theme of buying right.
A rental property must provide positive cash flow in order for your money to be working for you in this regard.
Remember, we always want to factor in a percentage of rents for vacancies and maintenance to figure out expected cash flow. If you do not, then you can easily see cash flow go from positive to negative.
Principal pay down
This job is why I like using loans to purchase rental properties. Being I am the scaredycat, I do not over leverage and generally put 20% down on my purchases.
However, I’m still using leverage to have more properties for roughly the same amount of money out of pocket as if I were to purchase with cash.
The best part of those properties is my tenants are paying down the mortgage for me. Thus increasing the value of the property by the sheer fact the principal on the loan is shrinking each month.
So again, my money earning money.
In the end there are really two ways to earn more money.
You can work more or put your money to work for you. Whether it’s real estate or some other investment. Put your money to work for you now!
To Learn More about Rental Property Investing
Smart Man. Putting your money to work for you is very wise. Wishing you a bumper crop of profits in 2018 Bro!
source
Nice!
Real estate is one of the most trending businesses nowadays and people are investing to get high profit in the end. ScaredyCatGuide has explained investment very clearly. I have visited a site offering pinehills homes for sale. They are comfortable and furnished homes with beautiful view. You can visit Zillow or download their app.
Thanks a lot for sharing your valuable post....
Carry on next
Best of luck..
I will still wait for your next post....
over all thats amaizing
enterpreneurship is key to earning stress free
Thanks
Win win, just have to make the move to let your money work for you. I'm still a scaredy cat.
baby Bear
Nice , post yes they are a lot of money in real estate it's good business plan
This is what I'm dreaming about doing one day, have my money earn me more money. Real estate seems like a good route to go, though the threshold is quite high to get started with current property prices here.
Yes, depending on the market there may not be much opportunity. I am not even looking in my market of South Florida anymore. Finally may so the out of state thing. Carolinas, maybe Missouri.
Break this down for me: I’m still using leverage to have more properties for roughly the same amount of money out of pocket as if I were to purchase with cash.
If you have 100k rather than buy 1 house at 100k for cash, buy 5 houses at 100k using debt, after you service the loans you will have about the same cash flow but after 20 years you will have 5 houses not just 1.
That's right! Exactly what @djk said. Use 20k each for down payments as opposed to just spending 100K on one property.
I love rentals as well. I bought 16 sfrs from 2010 to 2015, but prices got too high in Colorado. I ended up buying 4 commercial rentals last year. Just bought a 2.1 million dollar commercial property a couple weeks ago.
What do you invest in? Multi family or single family homes? I’m looking to buy my first duplex by the end of this year.
I've looked at duplexes and tri-plexes but have not acquired one. I have single family units - townhomes and condos. Multi-family is definitely a good bang for your buck. I'm going to look at a duplex out of state next weekend as my area does not have much of an inventory and most of it is in areas I do not want to own.
I see. Good luck on your out of state search!