The Principles of Building a Real Estate Empire

#foryou #realestate #realestateinvesting #getrichslow #business #realestateagent

Have you ever thought of how people are able to amass dozens and dozens of properties in the real estate portfolio?

In this article, we are going to go over the principles of building a real estate empire. The first thing you have to do is get started, just buy something, anything.

However, if I were to start from the beginning, I would buy something that is in a decent neighborhood, probably not any war zones or with fewer crime rates, and in places where there is a good chance of appreciation or at least a decent appreciation.

Once you have acquired a property, you will need to manage it well, and then hopefully the value goes up over time. Once that value goes up, you're going to have equity, which is the key to building these empires.

You don’t necessarily have to partner up with people or take other people's money to do apartment syndications or anything complex. This is just talking about just you, just mom and pops, regular people buying and building big portfolios. And, this is how they do it.

They buy one, let the value go up. Then, the property gains equity and they refinance to unlock that equity.

Now, refinancing is a tax-free event. This allows you to unlock a lot of your equity to go buy more properties and not pay taxes to Uncle Sam. That's really the basic gist of it.

However, there are ways to expedite empire building and one of the most well-known methods is the BRRRR method. This means Buy, Rehab, Rent, Refinance, Repeat. To do this, you will need to look for properties that need work or fixer-uppers.

These properties sometimes need full guts or complete remodel. You buy them at a price where you can put in the money, fix it up, refinance and get most, if not all, or more of the money that you put in back, so you could go buy more properties.

I recently have done one. We bought the place for $160,000.00. We put about $40,000 into it, which puts us at a total of $200,000.00. The house got appraised for $330,000.00 and we are going to get a 30-year fixed loan of about $240,000.00.

At settlement, not only am I getting my down payment back and the rehab costs back, I'm going to get another check for about $40,000. So, I'm going to use my original down payment and rehab money, plus the new money that I got that's tax-free, and go buy two more properties.

As you're building your portfolio, building your real estate empire, one thing that I constantly look at and monitor is my equity, equity of all the houses, and equity of the entire portfolio. Doing so provides you an idea of how the portfolio is doing. The increase in your equity should be a good indication of how much capital you can potentially grow.

I do it on a monthly basis, some people do it quarterly, but some people don't do it at all. I recommend you at least do it on a quarterly basis to get an idea of how much equity, how much value you have in your portfolio. This way, if needed, you can access it to grow more.

There are no real secrets to building a real estate empire. It's all about leverage and borrowing money and having the property appreciate over time which is a little slower or forcing the appreciation through the BRRR method.

Want to watch the video? CLICK HERE