CHAPTER 3 Financing Your Investments
Now that you know why real estate investment is a good idea, it’s time to learn how to do it. But before we get into the nitty- gritty details of each investing method, let’s address the elephant in the room: To make money, you need to have money to invest, right? Well, yes and no. To be completely honest, I got started in real estate with VERY LITTLE money to my name, and living paycheck to paycheck (right after graduating college). If I can do it...You can do it if you put the effort in and work towards a goal! While you do need money to invest, it doesn’t necessarily need to be your own. If your only reference for real estate information is house-flipping T.V. shows, you might assume real estate investing is ALL about cash buying. However, there are many investment deals that transpire throughout the real estate market on an annual basis, and they are not ALL cash deals. The majority are achieved through traditional lenders and institutions such as banks, but some are accomplished through less traditional means. In most cases, it’s because the investor couldn’t raise the capital or didn’t have the credit score to do so. According to the 2017 NAR® Investment & Vacation Home Buyers Survey, 47% of investors financed less than 70%. And more than half — 64% — used a mortgage. So, whether you’re reading this as a newbie or a seasoned pro, you shouldn’t feel bad — not even for a minute — if you don’t have the cash to use. (This is where the benefit of "Leverage" comes into play.) Like state above, when I got started investing, I barely had $1,000 to my name and bought my first house using NONE of my own money. In fact, sometimes it seems to me that the ultimate goal 7
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