Leveraging Your Future

Investing in real estate is a great way to earn extra cash, supplement and diversify your investment portforlio, or begin and grow a new career. There are many different ways to get involved in real estate investing. In this article, Certified Income Producing Real Estate Specialist Olivia Patterson-Ryans, will help you understand the intricacies of becoming a real estate investor.

Throughout the year, our neighborhood has annual celebrations where we meet at a designation home for a hot dish potluck and a second home for desserts. It’s a great time to meet neighbors new to the area, to meet old neighbors new to us and catchup with the ones we know. The one question that is always asked, is, how long have you lived in the neighborhood. I’m amazed at the number of people who have lived steps away from each other for years, and don’t know each other…have never even met before. The most common way long timers describe their tenure in their home is by the price they paid. “We bought in at $150,000. $280,000 someone else says, as another moans about paying in the threes. The latest property to go into escrow in the neighborhood was listed well over two million dollars.

I tell this story because it is well known that one of the most common ways to build generational wealth is by passing on the family home, that is if the property is protected from probate with a trust…a topic for another time. But how can YOU benefit from your accumulated equity TODAY? By leveraging your home to purchase multifamily properties, you can create for yourself passive income to improve your lifestyle today.

A home equity line of credit (HELOC) is like a credit card against your house. You use the equity, turned cash as needed and pay only after you utilize the cash. It’s also good to know that you can take out a HELOC and later convert that outstanding balance to a closed-end loan like any other. Sometimes it’s better to do a full refinance than a HELOC, for instance, if you can improve an existing interest rate. Using tools such as these is called leveraging.

Leveraging is commonly used by real estate investors. It can be great way to expand your portfolio, create passive income and build wealth without tapping your personal bank account. Leveraging can also be dangerous if you don’t start with a plan and manage your plan. Using leverage, you are creating a new debt. Many people are afraid of debt. We live in a society where the word “debt” has a highly negative connotation, and the benefits of managed debt is rarely explained. Debt comes with risk, Risk Should be Managed, not Feared. The best way to prepare and help manage your investment plan is to put together a team of specialists to educate, advise and guide you to success. Your team should start with a mortgage lender, a CPA, A real estate attorney and a REALTOR™, all who specialize in working with real estate investors.

Imagine a life where you own 4 apartment buildings each generating $2000+ a month in cash flow. Imagine how each of those building appreciate in value over the years, just as your home has. Imagine a life where you can work when you want, how you want, on what you want, with whomever you want! For most of the world – this is nothing but a dream, but for real estate investors, it’s possible if you take the right actions. Taking the first step makes the second and third much easier. Experience Creates Momentum!

Next step if you are interested in learning more about real estate investing is to join us on February 23, 2019 for Real Estate Investing, What You Need to Know. OPR