Is now a good time to invest in real estate? Or would it be better to wait til some of the dust settles in the market? That’s the first question I’m answering on this episode of Investing in Real Estate!
On this Q&A episode, I’m taking three of your thoughtful questions on the right time to invest, house hacking, and using a HELOC to buy rental real estate. Click play to hear my thoughts on these topics!
On this episode you’ll learn:
- How to determine the right time to invest.
- Tips for getting started with house hacking.
- What you need to know about investing with a HELOC.
How to Determine the Right Time to Invest
If you’re wondering, “is now a good time to invest?” the answer is always yes. Now, it depends on where you’re investing and what you’re investing in. I believe that if you’re doing things correctly, it’s always the right time to invest. Right now there’s an affordable housing crisis in the United States, and people need homes to live in. Additionally, interest rates are incredibly low.
While I understand the hesitancy with the pandemic, I believe that investing in recession proof markets with plenty of job diversity is a smart move. That’s why I have continued to grow my personal portfolio and my company continues to build new construction homes in well-researched markets.
Tips for Getting Started with House Hacking
Here’s how house hacking works: first you buy a duplex in your own name, likely with a conventional loan. Then talk to a real estate lawyer about transferring the property into an LLC for liability protection. If you have a tenant living in the other side of your home, you do not want to be personally responsible for any liability; this is important. Check out Corporate Direct or Clint Coons if you need a lawyer.
You then get a tenant placed, and their rent pays down your mortgage. If you’ve done your math right, you’re living for free! This is a great strategy for getting started in real estate.
What You Need to Know About Investing with a HELOC
If you haven’t considered using a HELOC to invest, I’d urge you to take a look at your numbers and see if it’s right for you. After all, you can’t eat equity. If I had home equity just sitting there, I would certainly use it to grow my portfolio.
Here’s how it works: once you’re approved for a home equity line of credit, you have a zero balance on your account. It’s a revolving line of credit, similar to a credit card. You can use those funds to put a down payment on a rental property and start building your portfolio.
While you might worry about the debt involved in doing this, remember that you’re building your net worth and your renters are paying down the debt.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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