Here’s the strategy: You purchase your first property with a maximum 20% down, if and only if the rent covers your mortgage and expenses. Then, over 30 years, even if the property never generates a positive cashflow but breaks even, and hypothetically never appreciates in value $1 (which doesn’t happen), you will be getting a return of approximately 8.5%. This is simply due to leverage and your ability to borrow funds to purchase the asset. After 30 Years, even if you put 20% down you own 100% of the property and made 5 times on your money…assuming no appreciation has occurred. What other investment vehicle can you buy with that kind of leverage?
Compare that to other investments, such as stocks. Try calling up a stock broker and say, “I want to buy 100 shares of Apple, but I’m only going to give 20% of the total cost.” They would laugh and hang up the phone. You can’t do it!
Your goal should be to leverage your cash to purchase multiple properties that will generate cash flow and grow your wealth over time.
We are real estate investors ourselves and have helped many people use this strategy to build wealth. We can guide you from your first investment to your twentieth, and open your eyes to real estate investment principles like “L.I.D.”.
[L.I.D. stands for Lifestyle, Investment and Debt. L = How much money do you need to continue to enjoy your current lifestyle into retirement? I = How much do you have to invest? D = How much debt you need to pay off including taxes and mortgage debt]
The first step to launching your real estate portfolio is to give us a call to setup an initial consultation. We’ll talk about what your goals are, what your financial situation is and how we can help. Since this is a long-term, wealth building strategy, the sooner you start building your real estate portfolio the better!
If you would like the Michael Edmond Team help you succeed as a real estate investor, call us today at 914-437-6292.