Financial Freedom by Investing in Real Estate

By: Sylvia Smith

Financial Freedom by Investing in Real Estate

Tags: REAL ESTATE INVESTING, FINANCIAL FREEDOM, PASSIVE INCOME, EQUITY, INVESTMENT PROPERTY

Have you been considering what is the best way to get financial freedom for you and your family? Have you considered real estate investing?  Are you dreaming of quitting your 9 am to 5 pm job?
 
Real estate investing is one of the best ways to generate passive income and build wealth in the long term.  The best part of real estate investing is that the tenants’ rent pays the expenses (mortgage, property tax, insurance repairs), and what is left is passive income on a monthly basis.  While you are generating passive income on a monthly basis that property continues to appreciate and you continue to build your equity.  Equity is calculated by taking the market value of a property and deducting the amount, if any, that you still owe on a mortgage.
 
There are a number of ways to get started with real estate investing.


1. Do You Currently Own a Home? You Can Buy with $0 Down

Real Estate Investing, Equity, Passive Income, Financial Freedom 
The first way to buy an investment property if you already own a home that you have built up some equity -  is to not use any of your own savings for the down payment but leverage the equity in your home to purchase an investment property.  

 Are you aware that financial institutions will give you up to 80% of the equity in your home?  Get a secured line of credit on our home and use the secured line of credit (bank money) to purchase investment properties.  The best part about this approach is that you can claim the interest on the secured line of credit to reduce your tax margin when filing your taxes as you are using this money to generate income.  
 
This is a great approach as you are using bank money to make money.

 
2. The BRRRR Method of Buying Investment Properties 

You can combine this strategy in conjunction with leveraging your equity in your home for the down payment.
 
You purchase an investment property by leveraging the equity in your home for the down payment.  The BRRRR method stands for: Buy, Rehab, Rent, Refinance and Repeat.  So how does this strategy work?  You purchase a property that is in poor condition or that requires updating, you renovate it, rent it out to a tenant, go to your bank and ask to have the property re-appraised, since you have fixed it up or renovated it is probably worth more than you paid for it, have the bank refinance and you pull the equity out of the property.  You use the equity to buy more investment property and continue to repeat and use this method to buy more property.
 
This strategy allows you to keep the property and continue to receive passive income on a monthly basis and also continue to build equity as the property appreciates.  This is a great strategy as you continue to use bank money to build your real estate investment portfolio and be in a position of creating financial freedom much quicker.
 

3. Flipping

 
Flip, Renovate, Real Estate Investing  
Flipping is another way of generating income but can be a little riskier if the market conditions are not right and you aren’t able to sell the property quickly after renovating it.  But of course, you could always rent it out if the market conditions do not support a quick sale or selling at a price that would not generate enough revenue.
 
I am personally not a fan of this strategy as the revenue generated will be taxed as income.  Plus if the market conditions change quickly pulling your money out of the property may not always work but you could always rent it out and change the investment strategy.
 
Trust me these strategies are not difficult and managing tenants really is not as bad as you hear in the media if you follow effective selection processes.
 
You have probably been thinking and dreaming about purchasing an investment property for some time.  What is holding you back?  Is it fear of all the what ifs?  Following proven best practices will dramatically reduce the risks and challenges.  It really isn’t that difficult.
 
When purchasing an investment property make sure that you are working with a realtor that also owns investment properties as they will be able to guide and educate you on the best practices in purchasing and managing an investment property. Sylvia Smith has been investing in real estate for over 17 years.  Have questions give her a call or email her.  647-622-7869 or email smith.sylm@gmail.com