Last time, we mentioned it only takes about $12,000 to get into your first income property real estate deal. How is that possible? It seems like such a low number. The possibility arises through the prudent use of leverage. Leverage is the road to wealth. Around the Empowered Investor Network offices we’ve seen it happen more than once to people just like you.
The crux of the matter is that you want to put as little money down on the property as possible. The more money you put into the deal, the greater the risk and the lower your return. Not the right way to do real estate. Real estate does not perform well as a bank.
In fact, one of Jason’s favorite quotes used in educational events is “Real estate is the best investment, but it’s the worst bank.” Another of Jason’s favorites is “Real estate is a great place to invest someone else’s money.”
How do you invest someone else’s money and use very little of your own? All together now: “Leverage!” Leverage is a powerful tool when used properly and responsibly, which means you need to have the proper amount of reserves in the bank on the sidelines when you put the minimum down on rental properties so that they are sustainable investments. Another way of saying that is that they pay for themselves with enough incoming rent to cover the monthly mortgage note at the bank.
Follow the concepts taught by Empowered Investor Network and you will never become over-leveraged. You probably don’t understand all you need to know about leverage from this short primer. Don’t worry. It’s the job of your Empowered Investor investment counselor to help you understand and they won’t stop until you do.
Best of all, the learning is free!
