Let me fill you in on the most interesting discovery I made when I started investing in real estate…
It may be easier to buy a 2-4 unit apartment building than to buy a basic single-family house. If you have always wanted an investment property, think about buying multi-units. It is usually easier to qualify for a loan, and you might have less competition from other buyers.
Even better, you can live in one of the units, save your money, and reap the tax savings and other benefits. This is a great way to start, especially if you don’t already have a lot of cash.
You don’t need to buy a cheap property and flip it to make serious money. There are long-term riches in buying rental property with affordable loans, and then getting tenants to pay your mortgage.
In fact, the government wants you to become a landlord. There are special loans and programs to help you get started.
The banks want to help you, too, and they make it easier to qualify for a loan to buy a small apartment building than for a single residence. The reason for this isn’t that hard to understand.
When you have a duplex or a triplex, you’ll have tenants paying rent. The banks know this, and to them it means you’re less of a risk. Even if you lose your job, you’ll still have income that will help you pay the mortgage.
Because of the extra income from rents, the bank is more likely to approve a loan for a higher amount.
If you look at the wealthiest people in the world, you will notice that the majority either made their wealth in real estate or they hold their wealth in real estate. There are a lot of good reasons for this.
When you buy a small apartment building, you technically own a business. You will have the ability to write off many expenses often including the total cost of the building! It is common for the tax write-offs to exceed the income, which may make your profit tax free!
Everyone’s tax situation is different, so if you want to work together I will work with your CPA to help you understand your unique situation and craft solutions that best accommodate your goals.
- An owner-occupied multi-unit property can be purchased for as little as 3.5% down
- Real Estate investing is usually a “business”, and, when done right, you can write off your expenses
- Qualified investors get a $25,000 per year tax deduction which you can use against any income you earn, even your job
- There are legal ways to sell your property without paying taxes on the profit
I can hear you asking, “why don’t more people know this? Why don’t more people do it?”
After thinking about this for years, I think I know the answer. While it is easier to qualify for a loan to purchase a multi-unit building, the process to make the deal work is harder to understand. The business of investing in Real Estate and dealing with tenants isn’t as easy to figure out as it sounds. I don’t think most agents understand the business and so can’t really guide buyers to finding good deals.
I was an investor with 7 units in my portfolio when I finally became a Realtor. I was frustrated from dealing with agents who didn’t understand investing and didn’t know how to help me.
When I got my license, it removed obstacles for me. Now I’m passionate about helping other investors as well as myself. I teach my clients landlord bookkeeping, tenant management, and landlord record keeping.
It is not very hard… it is just different. It is a mindset.
I would be happy to sit down and talk to you about taking this big step towards financial freedom. You can always contact me, and I’ll walk you through the whole process.