How Can I
Buy 10 Rental Properties Without Over Leveraging?
having 10+ different sources of positive monthly cash flow. That’s 10 unique
sources of income every month. This is a common goal for investors. There is
security when you have multiple sources of income. That way if you lose one,
you have others to back you up.
you’re new to real estate investing and looking down to road, or if you already
own several investment properties and are looking to grow your portfolio, you
may be asking how to keep attaining new properties without over leveraging.
will only lend you so much before you are too high of a risk. Even if you could
get 10 mortgages, you don’t want to over leverage, meaning you don’t want to accumulate
more debt than you can handle. There are strategies that address this though,
allowing you to invest without racking up more debt than you can manage.
main way to do this is using other people's money (ie. Joint Venture Agreements).
Almost all investors need to start looking at joint ventures once they reach
their lending limits. If you’ve successfully managed properties, or sold Rent
to Own homes, you have valuable skills that someone with money but no
experience may want to partner with. When you can team up to share assets,
everyone can be a winner.
Main Benefits of a Joint
- Each person gains value/access to the others skills
- Allows you to purchase/invest in more properties.
- Lower risks involved going with a group
- Creates a win/win scenario for both (all) JV partners
Main Reasons Joint
- Not building the professional team around you.
- Entering a joint venture agreement with people who
bring the same experience/resources as you. You should be leveraging
people with complimentary skills/resources.
- Not doing your due diligence on the agreement and
partners. Do your homework and make sure you are entering an agreement with
people you can rely on. Also make sure the agreement is in everyone’s best
interest. You can read more about creating fair joint
venture agreements here.
sure you build a team of experts around you to help your JV ie.
Real Estate agentsLawyers
the confidence to make use of your expertise in forming or joining joint
ventures. Know your strengths and your weaknesses. Partner with people who are
strong where you are weak, and deliver on your strengths to best support your
the joint venture deals are win/win for all parties
other main factor in attaining multiple properties is by leveraging your current properties.
in a Buy and Hold property for the long term. As it appreciates you can
refinance, giving you access to the equity built up in your home. This occurs
when the mortgage is paid down, and when the house appreciates. This is
essentially free money accumulating as your tenant covers the mortgage and
builds the equity in the home for you.
to Bank's Money at lower interest rates
maximum use of your current investment portfolio
benefits from Real Estate Appreciation (via market increases and/or
improvements done to the property)
Benefits (convert Non Tax Deductible Debt over to Tax Deductible Debt)
values go down
rates go up
into a Riskier Debt Ratio by Refinancing
allows your investment property (and even your home) to "work for
you" by giving you funds, which can be used to purchase more investments.
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