When you search the wealthiest individuals in the World, many of them acquired a large portion of their wealth through Real Estate. You may have heard that the McDonald’s franchise is the Real Estate game, and fast food is a bi-product.
There are 7 Rules of HOLD Real Estate Investing:
- Be an investor, not a spectator.
- Cash flow is King.
- It isn’t personal, and the numbers matter most.
- Learn the Magic of Leverage.
- Cultivate relationships.
- Keep learning.
- Give to others.
If you’d like a copy of a property Analysis worksheet for a 15 year or a 30 year loan, please contact us and we will email you an excel workbook
Here are some of my thoughts and tips around Real Estate Investing.
- If you are a day trader with the stock market, you may not like Real Estate Investing, and it is not instantly liquid, and it will cost you heavy fees for every transaction.
- If you are a set it and forget it type of investor, then let’s do some math…
- A $200,000 home in this market will yield you about an annual rental come of about $16,200 annually ($1,350 a month) If you were to pay
- Cash:you would recoup your investment in a little over 12 years, or about 8%. That is assuming you have no expenses which we know is not the case
- Finance: you can buy with 25% down, or $50,000. Revenue is still $16,200, however borrowing <4% on $150,000 is a total mortgage due of ~$11,700. You are netting ~$4,500 a year. Up to 9%. We suggest this and look at your cash on cash.
- If this was the only benefit, then it is pretty comparable to the market, however; you will also have Real Estate Appreciation, with a historic average of 4% a year. You will also have debt reduction, because every month, when your tenant pays your mortgage, they are reducing your balance owed. You will also have deductions and depreciation for tax advantages
- A $200,000 home in this market will yield you about an annual rental come of about $16,200 annually ($1,350 a month) If you were to pay
- The BRRRR Method is a great strategy, especially if you are handy. Buy, Rehab, Rent, Refinance, Repeat. This is essentially buying a fixer upper. Repairing it, and receiving top dollar for rent. Going back to the bank to refinance it with the improved value, pulling your initial investment back and owning a cash flowing asset, and go find another home.
Check out our YouTube page under Investing Playing for more video, interviews, tips and strategies around building wealth in Real Estate.
If you’d like a copy of any of the Keller Williams Investing books, contact me, or visit KellerInk.com.