I heard a way to make millions in real estate, apparently once you have enough for a deposit for a house, you look for a house that costs lower that its market value, buy it, rent it out to cover mortgage payments obviously, and then take out a home equity loan or line of credit, then use that for a deposit for another house and repeat the same process. This is a very simplified version but can it work?
Real Estate Investing
Justin Sanchez
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Bentley Garcia
Lol yes im doing that rn ive made a billion
Jayden Scott
Yes it works very well apart from a few caveats.
1. You lose multiple tenants and the properties remain vacant for extended periods of time. Good luck covering multiple mortgages on your cuckwage. LIQUIDATED.
2. Interest rates go up. Rent no longer covers mortgage repayments. SUPER LIQUIDATED.
3. A combination of 1 and 2. M M M M MONSTER LIQUIDATED
Isaac Lewis
This.
Plus if you havent paid enough equity and the market shits itself you risk losing your investment property and your home to the bank.
It's only a good strategy in a strong bull market.
Christopher Lewis
Which it isn't
Christopher Edwards
ok so say in australia when the housing market finally crashes (predicted to fall 20-30% by 2020) i buy my first house then when the houses are cheap, then as the market slowly rises again i buy more house. Also if i only take out 50% of the equity incase the market goes down, on top of that make the tenants sign 6-12 month contracts and make them tell me a month before if they will renew the contract so i have a month to find new tenants if they dont. Good plan??
Chase Baker
and do a bunch of research on houses in good areas, get good deals etc
Colton Bailey
line of credit is no different than margin trading on bitmex, it still requires a strong bull market to make up for high interest and low yields
To get rich with property you have to play speculatively, not with dividend yields
Isaiah Edwards
yeah but you dont need to speculate after a property market crash, and if you do your research on the area. When the houses are payed off by the renters you get all the rent money anyway so its a lot more promising than internet moneys
Owen Taylor
Sure, you stand to do well long term. Enjoy your retirement at 65.
Colton Ross
or do 15 year loans and retire at 40
John Lee
Yep. Or get liquidated and kys
Juan Hughes
you're all gonna lose everything using debt to buy property. look up Dave Ramsey and learn, remember the borrower is slave to the lender
Joseph Peterson
>look for a house that costs lower that its market value, buy it.
Like nobody tries doing this. On average people and up with fairly priced deals compared to market and then it just depends on the general macro environment (interest rates, general economy) and how the micro location develops.
Nathaniel Stewart
how do you propose i come up with hundreds of thousands of dollars in a year? you cant, and if you can you dont need to buy houses.
Jordan Lopez
Make more money. it's not anyone's fault but your own you don't make 6 figures. A mortgage never ends well for investment property (a 15 year mortgage on your own home is okay if you have no other options). Trust Dave.
Landon Davis
even on 6 figures, it will take a few years of saving to buy a decent house with no loan. But then you cant access the equity without a loan from the bank anyway. im watching dave now and he said you save for a down payment and not save for the entire house.
Samuel Edwards
youtube.com
in this video he is even talking about paying off principle to gain equity
James Harris
> im watching dave now and he said you save for a down payment and not save for the entire house.
for your personal residence, yes he says a 15 year mortgage is okay. Investment property is only in cash. being leveraged to the gills in this market is downright dumb user. Slow down, a few years to begin buying investment property is literally nothing and wait for the market to cool off. Dave says he's not buying right now.
Charles Wilson
This. the only people who make it from real estate are speculators who buy low sell high. no one makes it from a 5% return by just sitting on a property and renting it out lol.
Parker Powell
your in australia. now is an extraordinarily bad time to buy rental property. you literally can't cashflow it houses are so expensive that you get nowhere near the ROI you'd need to break even on a mortgaged house from rent. Same deal somewhere like San Diego. The monthly rent you can charges is well less than 1% of the value.
It sucks but if I were you I'd be stockpiling cash. and waiting for the downturn or looking for alternatives.
Owen Sanchez
yes it's obviously rigged towards people who can get wholesale prices and sure no one makes it small time retail real estate investing, but it's nice supplemental income for relatively little work, at least on the small landlord side of something like 1 to 5 units. After 30 years you've at least beaten inflation and if you bought wisely hopefully the stock market, but at least you've hedged your bets and not put all your eggs in one basket. property is an essential part of your portfolio after a certain net worth.
Christian Hernandez
Yeah as i said the market in Australia is supposed to crash by 20-30% by 2020, ill start buying while its low. As for alternatives, this is the only method ive found where you have a very good chance on being worth millions, in solid assets. im open to hear what you guys know tho, but i guess if you're on Jow Forums you're not quite a busy millionaire
Brandon Morales
this is his strategy
daveramsey.com
the trick is finding those deals on properties before they are actually foreclosed, because you'll never make much money paying zillow (or whatever it is in australia) prices, other than the sort of lifetime appreciation that all real estate sees.
Zachary Green
>It's simple! Buy high and sell low!
You genius! What are the powerball number gonna be like next?
On your bike, m8
Jeremiah Cook
not a millionaire, but I do own two houses outright and am under contract for another condo I bought out of foreclosure for cash.
Easton James
yeah, i mean even if you dont make heaps off rent, lets say you break even after mortgage and managing fees. you'll still own the property once its paid off.
Xavier Perez
it was meant to read as ill start buying after 2020, after the crash. i thought it was obvious
Wyatt Taylor
thx for the link ill check it out
Carson Green
Don't stress lad, it was clear from your paragraph
I will also be jumping into the housing market post bubble if everything goes right t.ausfag
Godspeed user, we will make it
Levi Smith
noice. what are your plans? take out the equity for more propertys? or saving and buy propertys gradually with full cash?
Thomas Price
Godspeed fellow user, see you in the Billionaire Boys Club
Luis Clark
kek