The Best Ways to Buy Real Estate in 2024 – Episode 1028

The sky is the limit when it comes to ways to purchase real estate. Some investors like working with their local hometown banks, some use private financing, and others enjoy the benefits of buying real estate inside their retirement accounts. The beauty of this is, there’s no right or wrong way to build wealth through real estate. As long as you’re taking consistent action toward your goals, it’s going to pay off.

But if you’re not sure where to start, the number of options can be overwhelming. On today’s show, I’m going to share some of the best ways to buy real estate in 2024. We’re going to cover a few ways that our clients at Morris Invest are building out their portfolio, and touch on some of the main benefits of buying real estate right now.

More About This Show

1. Conventional mortgage. There’s a reason why the 30-year mortgage has stood the test of time. It’s a great product whether you’re buying your primary residence or a rental property. Think about it, you come up with a down payment, and the bank finances the rest of an appreciating asset. Over the past few years, we’ve seen rates everywhere between 3 and 8% — and the conventional mortgage has remained smart investing move through it all. Right now, though, rates are starting to drop, little by little. A month ago, mortgage rates were around 8%, and now they’re hovering closer to the 6.5-7% range. Most predictions are forecasting around 6% for the end of the year (2024), so we’re inching toward rates being as good as they’re going to get. If you’re holding out for rates to drop back down to pre-pandemic levels, well… good luck! That’s not likely to happen anytime soon. If you can buy a single-family home or duplex that is cash flow positive and in a solid rental market, it’s a smart investment. It is a good time to get locked into these current rates. Consider this – if and when rates drop, it’s going to be minimal. So while you might save around 1% in interest, you could pay up to $50k more for a property in a bidding war. Smart investors look for reasons to buy now, and this is one of them. Start building your equity, build out your portfolio, and get the tax benefits of investing now by utilizing a conventional mortgage.
2. Number two on my menu is a combo! The self-directed IRA plus a non-recourse loan. If you’re a candidate for using retirement funds to invest, combining a non-recourse loan with a self-directed IRA is an incredibly powerful formula for building wealth. Now, this is a bit of a complex topic. I’ll do my best to explain quickly and thoroughly, but if you want a full breakdown, I do have another video that dives into all the complexities. It’s called The Ultimate Self-Directed IRA Strategy to Build Wealth. Okay, so here’s a quick rundown of how it works. A self-directed IRA is a retirement vehicle that can be used to buy a wide variety of assets, including rental properties. Let’s say you’ve got $50k in a self-directed IRA and you want to buy real estate. You can use those funds as a down payment and finance the rest with a specific loan type called a non-recourse loan. A non-recourse loan is based on the value of the property and is not tied to your personal credit. In general, a non-recourse loan can be hard to find and tricky to qualify for… but at Morris Invest, we have new construction rental properties that have been approved for non-recourse loans. When you pair a self-directed IRA with a non-recourse loan, you’re paying down the loan’s principle inside of a tax-deferred vehicle, and exponentially growing the equity inside of the IRA. There’s truly no better way to leverage in 2024.
3. Multifamily home loan. Now here’s a really interesting strategy… Fanny Mae recently introduced a new policy change. Effective November 18, 2023, Fanny Mae is accepting down payments as little as FIVE PERCENT for owner-occupied multifamily homes—that’s anything between a duplex and four units. This is a fantastic opportunity for anyone who is looking to house hack. That means you buy a property, live in one unit, and rent out the remaining units. House hacking isn’t for everyone, but if it’s something you’re open to, this is truly a great opportunity to start building your portfolio. Imagine getting into a rental property with just 5% down, and then eventually snowballing that equity and continuing to buy rental properties until you’re financially free. Wow.

These are just a few of the powerful ways we’re seeing our clients grow their portfolio for 2024. There are many other great strategies out there, and I’d be willing to create a part 2 of this video. Let me know in the comments below if you’d like to see more content on lending trends and the best ways to buy real estate in 2024.

Another thing to consider about the current landscape is that there are some really great incentives available to borrowers, not limited to rate buy downs, negotiations on appraisal fees, and more. These incentives are going to disappear later in 2024 as rates continue their slow descend.

If you have any questions or interest in the financing options we touched on today, come over to our website, morrisinvest.com. We’d be happy to learn more about you and help you determine if any of these strategies are a fit for you and your goals.

Episode Resources

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