Published January 16, 2020
Basics of Buying & Holding Real Estate
I’m sharing an overview of how to successfully buy and hold real estate.
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There are many different kinds of real estate investments. You could flip houses, you could buy and hold them, or you could purchase new primary investments. For today’s example, we’ll focus only on buying and holding. I’ll reference a lot of good information from a book called, “Hold: How to Find, Buy, and Rent Houses for Wealth.”
First, let’s answer this question: Why would you want to invest in real estate? Well, it’s a less volatile investment, it’s certainly more tangible, and you’ll reap some great tax benefits. Which other investment allows you to put 20% down and have someone else pay 80% of the mortgage off for you?
To get started, assemble a solid team. Identify a trusted real estate agent, mortgage lender, contractor, and property manager that will handle the property after you get the initial improvements done and move a tenant into the home.
Which other investment allows you to put 20% down and have someone else pay 80% of the mortgage off for you?
With your team in place, it’s time to search for properties. Figure out what neighborhood you want to be in; you can look in well-established districts, or focus on more up-and-coming areas of town. Once you find a house, understand the repairs and renovations needed for the home—don’t forget that some lenders can give you a ‘rehab’-type loan for repairs.
Lastly, make sure you know the cash flow that the property will generate once it’s ready to go. If the cash flow is positive and there are no other red flags, then that means you should pull the trigger.
If you have any questions about buying and holding, please give me a call or send me an email. I’d be happy to help you.
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