Building wealth with real estate does not have to be complicated.
You can build a multi-million dollar real estate portfolio with a full-time job buying one house a year.
That’s right!
You don’t have to buy hundreds of houses, huge apartment complexes, or quit your job to chase real estate deals full-time to build wealth in real estate.
Consider what it would look like if you bought one house a year for the next 10 years.
That is a simple goal that anyone can do, regardless of real estate experience.
If each rental property was worth $200,000 and you had a mortgage on it for $150,000 then you have $50,000 in equity, right?
Assuming the properties did not go up in value at all (and ignoring debt paydown), at the end of 10 years you would have 10 properties with a combined $500,000 in equity.
Surely, $500,000 in equity is nice and all, but it is not enough for retirement.
Here’s the secret though…
With 10 rental properties you are already a real estate millionaire!
Most people focus on the $500,000 in equity.
While equity is important, it’s also important to realize that you have $2 million in assets under management – and that’s if the properties didn’t go up in value at all!
All you have to do is let your tenants pay off your mortgages.
There is a simpler way though…
Buying and managing a rental portfolio takes time.
Even if you have a property management company, you have to manage the manager as well as the acquisition of new properties.
However, you can own real estate and earn strong, risk-adjusted returns as a passive investor without having to deal with daily operations and management.
With the real estate market softening the next 12 to 24 months may be one of the best buying opportunities we’ve seen in a while.
How you want to take advantage of it to build wealth?
Do you want to actively buy and manage a rental portfolio?
Or would you prefer to passively invest in opportunities with successful operators?
You might end up doing both, but it’s important to pick a primary strategy.
Next week I’ll go over the pros & cons to both strategies.