Questions people ask about Real Estate Investing (Real Estate Investing 101)

Real Estate Investing is the BEST way to build wealth. A lot of people have questions. I am a Real Estate investor so I thought it would behoove me to try and answer some of your questions.
1. How many investment properties do I need to take care of a family?
a. Well it’s a tricky question because first we need to know what life style expectations we have
b. Then we calculate how much we need per month.
c. Then we figure out how much the average house rents for and decide if we want to live off cash flow with a loan or with out a loan. Two strategies.
2. Isn’t debt bad and wouldn’t it be better to just save up for a house and pay cash?
a. Debt needs to be respected because it can ruin you but debt in cash flow assets is better than debt for liabilities. Know the difference.
b. Debt in real estate is powerful because leverage can increase your returns. For example if you have $100,000 and it goes up 10% you have $10,000. If you have $500,000 you now have $50,000
3. How much cash would I need to buy a house with a loan?
a. Depends on the purchase price but the best deal is probably an FHA loan which is 3.5% down and some closing costs. Let’s assume 3% so that’s 6.5% to obtain the asset. But some of the closing costs could be financed or paid with buyer assistance programs. However let’s just keep it simple.
b. So if you’re buying a $300,000 X 0.065= $19,500
4. What caused the housing financial crisis and will it happen again? That would be a really long answer but the short of it is that people were getting loans they couldn’t afford. We call them NINJA LOANS. No Income No Job No Assets. I suppose there is a lot of blame to pass around. But I don’t see something like that happening in the near future. The worry right now is if houses currently in forbearance (which means the owner has not been making the mortgage due to the crisis) will kick off another housing crisis. My short answer, is no I don’t think so.
5. What are some common things that can go wrong when trying to invest in real estate?
a. There are a lot of things but if I had to choose a few quick ones it would be not vetting your tenants well enough. Not having a good tenant can be a nightmare for a landlord.
b. The second thing is not having enough cash on hand to cover and emergence AND or being over leveraged. Kind of the same problem.
6. What is the hardest part about being a real estate investor?
a. Probably finding good deals

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Видео Questions people ask about Real Estate Investing (Real Estate Investing 101) канала Jason Bay - Real Estate Investing