How many of you have considered investing in real estate? Now, how many of you think that you’ll have to take on massive debt in order to do so? This is simply not true. I have developed a plan where my wife and I could acquire more than 10 houses without ever having more than $80,000 home loans.
“How could this be?” you might ask, “…when one single property investment can easily cost $150,000 by itself!”
The answer……T-I-M-E, time.
Property Investment Should Not Be Get-Rich-Quick
There are various books out there that explain how you can get rich quickly in real estate. They have you buying one new property every year and show you how much cash-flow you could have, but somehow they always fail to mention that you’ll owe more than $750,000 to the bank after all of your properties are acquired.
I don’t know about you, but if I owed anyone $750,000, I would not feel as though I were “rich”. Sure, I may own 10 properties, but if I had only 3 of those properties vacant at any time, I’d most likely lose it all!
Our Plan of Attack
I stated earlier in this article that the trick to getting rich with property investment is with time. Let me explain.
Rather than take on 10 mortgages at one time (and paying an insane amount of interest!), why not take things a little more slowly and build yourself an even larger empire!?
The First House
Right now, my wife and I are in “Stage 1” of our overall plan (by the way, this is not our only investment plan, but it is one of the many options for the upcoming years). About 2 months ago, we purchased our very first home. It cost us about $76,000 and we have a plan to pay off the mortgage entirely in less than 4 years.
The Second House
After our 1st house is fully paid for, we’ll quickly be able to save up a down-payment for another property of similar value. For easy numbers, we’ll just say that the property costs $80,000 and will rent out for $1,000 per month. With our day jobs, we’ll be able to put $2,000/month toward the mortgage as well, which totals $3,000/month. Along with the initial down-payment (of $8,000) and 2 years of payments, this house will be completely paid for.
The Third House
Within the first 6 years, we’ll only have 2 properties fully paid for, but this is the point where it all starts to pay off (and the empire begins).
After only a few months, we’ll have another solid down-payment for an $80,000 house. With the rent set at $1,000 per month, we’ll now have $4,000 going toward the mortgage each month. So, this loan will get paid off in less than 2 years (20 months actually).
The Rest of the 10 Properties
By now, I’m sure you see the pattern. With each house, you earn an extra $1,000 a month, so by the time you have that 10th house, you’ll be earning enough money to pay it off in less than a year!
At that point, you can decide whether you keep buying more. Frankly, I’m not sure why you wouldn’t! By that time, you might even consider an overseas property investment! Maybe you’ll enjoy the Bahamas or Costa Rica. When you’re earning over $100,000 per year passively, these options are certainly possible!
What do you think of this plan? Would you rather take on the extra risk and buy a bunch of properties at once?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.