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How Much Money To Invest In Real Estate


Hello. Kris Krohn again with REITV. Today
we’re gonna be talking about how much money it actually takes to get YOU into real estate – which can be anywhere from nothing, to perhaps a whole lot. So how much money does it take to invest in real estate? Well, it depends. If you’re very, very, very, very creative, it can take
nothing, or if you’re gonna do traditional or conventional real estate, it can take as
much as 30%. On average, conventional financing requires 20% down. Now, beware. There are times in the economy when banks will only allow you to put 10% down or 5% down. I personally never recommend that. Whether you’re using your money or somebody else’s, putting 20% down creates a really great safety net. So if you bought the house at a discount and you put another 20% down, then you might have that home almost already half-paid off. And that means that if the economy does a little bit of this, you’ve still kept a cushion
and it means you still got great cash flow when the economy is down. So, 20% is a really great standard. Now, there are a couple other options. Another one is that if you buy a primary residence, one of
the things that you can do is often get away with a 3 and a half percent downpayment. Some things even will work with the government and have zero downpayments. On a primary residence, you can get away with putting very, very little down. So for the home that you live in, you’re making a commitment that is different from an investment property. Make sure buy that house with this much of a discount as possible. If you go for a 15 or a 20% discount, you have a chance if you do that, to walk into a 20, 30, 40, 50, 60 thousand dollars of instant net worth increase, like that. Okay? So putting a really tiny amount down and then walking into all that equity, for a home that you’re gonna live in that is both a house
and a home, is a really great decision for you and your family. And, if you commit to live there for a year,
you could move a year later and do the exact same thing. My wife and I did that and for
less than 10 thousand dollars out of our own pocket. We got into four different properties. Because we used the equity from both of them to fund our third and our fourth deals. So, we basically built a net worth over $200,000 with less than $10,000 out of pocket. And then of course there’s the best strategy
– which is partnering. Let’s say that you were bringing the team
to the table, you were doing the sweat equity, or you were finding the deal, and you had
a partner coming up with the money, maybe playing more of a passive role, maybe they put in all the money and you put in all the work, and then you have some type of split – maybe a 50-50, a 30-70, 70-30. And in that situation, you’re walking in
with NO money down. I hope you enjoyed this week’s video. If
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