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How To Get Into Real Estate Investing

Posted on April 8, 2017 by Ray Williams.

How to get into real estate investing: For me, it started with my first home purchase. I knew I would eventually develop that property. Now, I am developing that property but you see this is over 10 years later. I have 5 properties and a comfortable portfolio, but not going to trick you into believing it just “happened”. I am doing more advanced maneuvers with Real Estate investing because I have grown capital and equity in my holdings. As an example, one of my holdings is a V.R.B.O rental in a resort community. But you see I have always had one thing.

That one thing I have always had is a vision of what the process would look like and where it would ultimately lead me. Mine is simple; to create residual income for retirement at X per month. That is a value position, and leads me to be able to focus on calculated moves for long-term returns. To that accord I will avoid poor decisions just because I feel I need to buy another property.

There are numerous ways on how to get into real estate investing. Are you wanting to flip, develop, be a landlord? These are three different paths. For many of us it starts with being a landlord. So how do you get into real estate investing this way? Well, you may already own a home, and be looking into this. How long have you owned it? Would you be willing to move out of it and convert it into a rental? Why do I ask this question. Because if you are willing to move out of it you can actually put less money down because the next property will be your primary residence. That is an amazing leverage tool right there. Yes, this may not be right for all. However, if you are single, or even in a relationship, this can be easier to do without kiddos I get that. But at the same time, if you have kiddos, are you willing to make sacrifices to grow your family’s wealth, and ultimately help those kiddos in ways you can’t imagine?

Let me break that philosophy down further. If you were willing to move out, what does that mean? How does an underwriter look at your debt from the existing house payment? Well, if your next home is financed under a few loan programs (VA, Conventional) you will get rent credit to offset the mortgage payment, thus reducing your debt ratios for the house you buy to move into. If your next home is financed with FHA, then there are qualifiers on when they will give you rent credit. And also, if the house you are moving out of has FHA financing on it now, there are qualifiers to when the underwriter will give you credit on the potential rent from tenants who move in. Sound complicated? Not to me but this is where you need to enlist services from a lender who is well versed in investment properties. If you think Rocket Mortgage will get you there, you may have another thing coming folks. Would you trust someone making $22/hour to advise you on growing your wealth? Will they educate you on the process? Will they know about 1031 exchanges? Talk to you at a high level? or merely help you push button, get mortgage.

Another way, could be if you really didn’t want to move out of your existing home, but have owned it for some time. In Denver, you should have equity sitting in your existing home. Well, did you know you can tap this equity to use as a down payment on an investment property? You may or may not want to touch your first mortgage depending on terms of that loan. But there may even be reasons to restructure that loan and also pay off other debts to free up debt ratios so you can qualify for that investment property.

So you want to know how to get into real estate investing. I touched on two, but this topic is vast and deep. I am going to continue my series on real estate investing so check back for new posts! But until then if you have questions, of course, call me 303-779-0591 x101.

Ray

(Insta: @MortgageMaestro)

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