Why do it? Why invest in Real Estate? Isn't it SCARY? US Commercial

Update:

The logic of buy now, even with rent moratoriums and Covid, still ring true.  Buy when people are dumping properties.  The economy will turn around by this coming January and if you can get a property from an undercapitalized investor, do it now.

Original Post.

About 35 years ago, I was newly married, in a strange city, without much of a job to think of and wondering how my new husband and I were going to make ends meet.  Love doesn't pay the bills, jobs weren't just falling out of the sky and the ones that did, had potential, but paid little in the beginning.  My husband, a Baltimore native, found a 2 unit house to buy and convinced me that living in the first floor apartment and renting out the upstairs would almost cover the mortgage.  

Here were the numbers (hard to find now, but that's kind of the point).  Purchase price was 56K.  We got an FHA loan, with 3.5% down at 11% (it was the 80's).  The mortgage, with taxes and insurance and MI was about $550 per month.  The college girls that moved in upstairs paid $450.  Our monthly rent at our former apartment was $500.  Ultimately, the fact was we would be able to live for $100 per month in an apartment that was bigger with a yard made the decision a no brainer.

Was it scary? You bet it was.  I was scared to death of $50K in debt for that 2 unit. Did it ever seem overwhelming (self managing a property is much easier when you live in it and we didn't live there for more than a couple years which increased its profitability)? Absolutely. Was it worth it? Every month.  Ultimately, we took the plunge and thank God we did.

That same house on Chinquapin Parkway is now worth a little under $200K and the rents are around 2K per month total.    Solid increases all around.

Here's the deal; you can't rely on family or friend or the government or even the stock market and the various and sundry 401K's and IRA options when it comes to building wealth over time and there is no better time than now to begin building your empire.  With due diligence and a solid team of professionals to help you, you'll be fine.

There's an old Chinese proverb that says "The best time to plant a tree is 20 years ago.  The 2nd best time is now."  Plant your tree now so you can watch it grow and enjoy its fruit over time.

Happy investing

Stephanie