And the answer is that it’s a matter of the decreased risk associated with lower leverage vs. the expected greater return that the funds that would payoff the mortgage principal can generate when used for a different investment.

There will also be many homeowners who have had the properties in the family through generations and own free and clear but now still need to obtain a construction loan to rebuild. 

It'll be up to the next generation to figure out if they want to build an empire or not. 

This generated $2M+ in equity, and thus is highly lucrative, but takes 2-3 years.Note worthy: I am located in California, but I did this project in Canada.

Hello, I am new to real estate and looking to get into it and out of renting and starting to work on building that generational wealth.

Buildium streamlines the process by generating screening reports for us.

Currently still favor the house rental for MTR and long term strategy in ABQ, but I don't think you generate any solid cash flow unless you can get a turnkey 2BR for under $250K.

Equity Created: $550,000 ARV - $409,000 loan balance = $141,000 in equity.Cash Flow: The property rents for $2,950/month, covering all expenses and generating slight positive cash flow.HELOC Potential: Post-refi, I can secure a HELOC up to $86,000 (90% LTV) to fund future investments.

Losing 85% on a single REIT would’ve been devastating if you were all-in, but spreading out across 10 investments turned the overall outcome positive because of the winners.Here’s a few extra key tips to avoid big losses in passive investments:Focus on cash flow: Invest in assets that generate consistent income.

You also have the option to use non-recourse loans to leverage your real estate purchases, though this may trigger Unrelated Business Income Tax (UBIT) on the income generated.