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Investing In Real Estate Podcast

If you’re wondering how to fund your next rental property purchase, I know it can be intimidating, especially if you don’t have a big chunk of cash sitting in your bank account. But the beauty of investing in real estate is that there are a multitude of ways to create and grow your portfolio.

So on this episode, I’m going to share some strategies you can use to acquire your next rental property. These are some of the smartest methods you can use in 2024 to build your net worth, reduce your taxes, and reach your financial goals.

More About This Show

  1. Conventional mortgage. Using the bank’s money to buy real estate is one of the smartest strategies you can use to buy rental properties. As a side effect of the Fed’s rate hikes in 2023, many banks had to tighten their lending standards. But rates are beginning to trend downward, so if you’re able to qualify a mortgage, it’s a great time to buy property before home prices shoot up in 2024. Here’s what’s great about using a conventional mortgage to buy rental properties: all you need to do is come up with the down payment, and the bank finances your asset. I know there’s a lot of debate out there about rates, but smart investors know that as long as your returns are higher than your interest rate, you’re making a good deal. If you’re in the position to buy, check with your local hometown banks and credit unions. They can typically offer competitive rates and promotions. The only real drawback of conventional mortgages for investors is that there’s a cap – you can only have 10. But if you haven’t reached that limit, a conventional mortgage is a great way to grow your rental property in 2024.
  2. House hacking. What if you could have free housing, with someone else paying your mortgage? House hacking is a powerful way for beginners to get started investing in real estate. House hacking is when you buy a piece of real estate, like a duplex, live in one unit and rent out the other. The tenant’s rent should cover the entirety of your mortgage payment. Housing is the number one expense for most people—so eliminating that cost entirely is an incredible way to begin changing your financial situation. I know house hacking isn’t for everyone… but if it’s for you, just imagine how this strategy can change your life. You’re eliminating your housing expenses, buying an asset, building your net worth, and building equity that you can use to buy more performing assets. 2024 is an especially great time to deploy this strategy due to some changes in lending standards. House hacking is an especially smart move for veterans or active-duty members who have access to a VA Loan. But Fannie Mae’s new policy allows all borrowers to take a multifamily home loan for just 5% down in owner-occupied units. If you’re looking to break into real estate investing with few resources, house hacking is really the ultimate way to get your foot in the door this year.
  3. 401k loan. More and more people are catching on – the 401k isn’t so hot. Taking a loan from your 401k loan can be a great way to grow your portfolio. Especially if you have a sizeable 401k balance and no plans to leave your employer, you can initiate a transfer from your 401k and use those funds as a down payment to buy your rental property. It’s your money, why not make it work for you? If you’re watching this video, I’d like to think you’re pretty intelligent. I’d bet that you can make better financial choices than the ones your 401k provider allows. Like any strategy, there are pros and cons to taking a 401k loan, and it may not be right for you – but it’s worth considering.
  4. Self-directed IRA. You’d be surprised how many people leave behind their retirement accounts when they change careers. But instead of letting those funds sit in old accounts, your money would be better utilized inside of a self-directed IRA. A self-directed IRA works just like a traditional IRA, except it allows you to invest in a wider variety of assets, like rental properties.
  5. Private money. Using private money to buy real estate is a great idea for any investor who cannot or do not want to use traditional financing. A private loan is a short-term loan that is typically provided by an individual or an organization. It can be as informal as your friend or as professional as working with a professional lender. Private money allows for so much more flexibility than any other loan type. You can expect much less red tape but be sure to do your due diligence and look for credible lenders.
  6. Non-recourse financing. A non-recourse loan is a commercial lending product that is based on the projection of the asset, not you – so dings in your financial snapshot, like a lower credit score, don’t really matter. Some drawbacks of non-recourse lending is that you’ll need a higher down payment and can expect a higher interest rate, but as long as you buy right, non-recourse financing can help you reach your goals.

Episode Resources

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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.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion. We recommend them because they are helpful and useful, not because of the small commissions we make if you decide to use their services. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.

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Posted on

May 16, 2024

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