Starting with a Small Multi-Unit Property
My friend Jeff in Cheyenne, Wyoming is looking to real estate as a path to financial freedom. He started his journey in real estate investing by purchasing a fourplex and moving into one of the units himself.
Banks treat properties with up to four units as a single residential property, and if you move into the property yourself, you can get a conventional mortgage without jumping through special hoops.
Paula Pant from Afford Anything used a similar approach to start her real estate empire in the Atlanta, Georgia area. To qualify for a regular mortgage, you must live there yourself for at least one year, after that, you can move out and keep the same type of mortgage loan.
Growing to a Multi-Unit Empire
Once you start earning cash flow from a duplex, triplex, or fourplex, you’ll start to enjoy some of the passive income that comes with a well-managed real estate investment. Of course, either you or a property manager should be on call 24 hours a day in case of an emergency like a broken pipe, but otherwise property management at this scale isn’t too time intensive.
You should be able to save up some of the cash from your first property to save up a down payment for a second. Again, if you move in, you can get a regular old mortgage. Everyone is generally limited to eight mortgages, so if you are married you could have up to 16 mortgages on different investment properties.
Leveraging your first property for cash flow makes it is much easier to expand to own a second, third and beyond as your growing real estate empire begins to earn as much as your primary job.
Expanding to a Lifestyle Business
A startup is a business looking to expand exponentially and offer huge returns on investment. A lifestyle business is a company that is focused on earning enough income to pay for your lifestyle without a goal of growing into a massive, time consuming endeavor.
You’ll find that after owning two or three multi-unit buildings, you could end up with a nice income that is enough to support your family. If you live in an expensive city like New York or San Francisco, your money won’t go as far as less expensive cities. Consider your investment location and your own personal location as your real estate empire continues to grow.
At this point, it could also be worth considering hiring a property manager to deal with all your properties for you. Using systems and outsourced help, you can build a business that deposits money into your personal bank account each month with very little personal intervention, if any.
Developing Financial Freedom Through Real Estate
You can guess where things go from here. Eventually you have enough cash coming in each month that you can easily cover your living expenses and can stop going to work everyday. Instead, you can focus on your real estate business full-time, or part-time. Whatever you choose.
The income from your holdings will eventually be enough to pay off a mortgage or two, increasing your monthly cash flow. If you are a studious saver, you can start to buy more properties, or even buy a property outright in cash.
The sky is the limit. Or maybe a skyscraper is the limit. I’ll leave that to you to decide.
A Trusted Agent Can Help You Get Started
If you are excited at the idea of building a real estate lifestyle business but don’t know where to start, don’t worry! The team at AgentHarvest has your back.
AgentHarvest features listings of vetted, trustworthy, experienced agents that you can count on to help ensure a smooth transition into the world of real estate investing. Before you start to search for the perfect property, you need the right agent. Find that agent at AgentHarvest.