Buy and hold ... but where do I live?

[Esteban Pau]

Hey guys,

So I got a question which might sound dumb..

Basically I am soon going to be able to finally purchase the apartment or flat I'm currently living in. I've saved up enough for a downpayment and since I live in a great area and very expensive one as well, I couldn't be happier to purchase this property.

The price will be €250,000 but the actual value is probably double of that! (it's a family property so I'm getting a family price on it).

My question now is, once I purchase the flat, how do I get a second mortgage for a new flat?

Is there a way to get a mortgage on the flat I will be buying although I'm going to ask for a mortgage for it already?

Basically what my plan is, is to purchase this flat and pay off the mortgage with my girlfriend and myself. Then get a second mortgage somehow and purchase a new flat somewhere else and rent that out.

I'd the repeat that step and have several flats until I don't have to work anymore and happily live off my monthly rent coming in whilst paying off all the mortgages!

Would love to hear your answers as I'm obviously very new to all this and if I wasn't very clear I'd be happy to try and explain it a little better.

Thanks in advance!

[Mike Warder]

Esteban Pau cash flow is generally viewed as one of four benefits to real estate investing. The other benefits are asset appreciation, principal pay down by tenant, and tax deductions (which I'm sure vary greatly by country). Once you factor those into the equation, cash flow isn't as important as you probably thought it was.

Check out the book Millionaire Real Estate Investor. The author includes some charts that provide the kinds of investment maps you are looking for. Basically, tax deductions help you preserve your cash returns, and appreciation and principal pay down get you to a point where you can borrow against your increased equity in the property so that you can purchase another one. Rinse and repeat and your portfolio snowballs from there. It won't happen overnight though. Once you see the charts and read the explanations of them, it is much easier to envision a path forward and see your end goal. Good luck!