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If you are interested in purchasing your first property, we have a free guide just for you! Click here to download the 25 page WealthBuilders First Time Home Buyer Guide.

As we head into a new season, I am reminded that this is one of the best times of the year to embark on a new venture. Like a pilot taking off into the air for the first time, you may feel propelled towards the next stage in your life, ready to activate your ideas and get your plan off the ground.

My ultimate goal has always been teaching you how to reach financial freedom so that you can build wealth for the Kingdom. However, at this time each year, I feel that ambition grow even stronger. I know through 30 plus years of experience that one of the best ways to build wealth is through investing in real estate. I firmly believe that anyone can become a successful real estate investor and change the trajectory of their financial future as long as they are willing to learn.

Throughout the years, I have personally helped people, young and old alike, become millionaires through simple real estate knowledge. If you feel that God is pushing you to take the next step financially, this blog will teach you how to build wealth from real estate investing.

The First Steps Toward Financial Freedom

1. Learn to Put Money Aside For a Down Payment

The first step to getting started in real estate investing is saving for a down payment. I often tell the story of a young man in Dallas who came to me overjoyed and ready to begin his real estate investing journey. The only problem was, he didn’t have any money saved! I challenged him by saying, “come back to me when you have $10,000 saved up.” Six months later, he called me and I walked him through the process of buying his first investment property. He went from owning zero properties to owning 63 investment properties. 

The advantage you have today in this market is a down payment can be as low as three percent. So, let’s think about that for a minute. That means if you’re buying a 100,000 dollar house, that would be 3,000 dollars. Not as scary and intimidating as you might think, right? I recommend you start by calculating how much you can comfortably save each month and how long it will take you to save the amount needed for a down payment. This will give you a firm time frame and the ability to adjust your savings if needed. You may even want to look into a high-yield savings account that will help you gain more interest than a regular savings account.

A great way to get your numbers in order and calculate your costs is by using the Investment Property Calculator that is available on my website. This calculator will help you to determine your loan amount, monthly payments, expenses, cash flow, etc. The best part is, this resource is free! Just head over to wealthbuilders.org and click “calculators” in the right-hand corner.

One of the most beneficial rewards of being a homeowner is that you can build equity in your home by paying down your mortgage. Calculating your home equity is easy. All you have to do is subtract the amount you still own on your mortgage from the current market value of your home. After you pay down what you owe on your home, you can begin to use your home as your bank. In other words, you can use your equity to open a HELOC.

A home equity line of credit functions the same way a credit card does. Essentially, you’re allowed to access a certain amount of funds for a limited amount of time. There are many pros and cons involved with opening a HELOC, however, when done the correct way, it’s a great alternative funding source that can be used to purchase an investment property. Before you jump into using a HELOC, I strongly urge you to do your research. Those who get burned are often the ones who jump in headfirst without any prior knowledge or understanding. Once you’ve acquired a HELOC, you can use it as a down payment on your first investment property.

5. Rinse and Repeat

 

If you’ve made it this far in the process, I commend you. It’s not easy getting to this step, but this is the fun part! This is when you get to take the knowledge, understanding, and wisdom you’ve gained throughout the process and use it to buy your second investment property. To recap, at this point in time, you should own a personal home and one investment property. When it comes time to look for your second investment property, do the following. Take the same amount of money you put in the first house, pay that house down, either obtain a HELOC or refinance, and put it towards your next investment property. Now all you have to do is rinse and repeat!

If you are interested in purchasing your first rental property, we have a free webinar just for you! Join us Wednesday, April 20th, at 4:00PM MDT for How to Invest in Real Estate: WealthBuilders Coaches Tell All. Click here to register in advance.

 

3. Buy a (Personal) Home to Live In

People usually have two options when it comes to finding a roof over their heads, either renting or buying. If you’re serious about real estate investing, I’ll explain to you exactly why I believe that purchasing a personal home is the best option. First off, if you’ve decided to go with the renting route, you’re already paying a monthly expense to your landlord. That’s a big chunk of money going out the door every single month. When you rent, you don’t have the ability to build equity. Therefore, you’re missing out on a valuable asset. Why not use your expenses from rent and put it towards your own home so you can build equity? If you’re still not sold on the idea, stay with me because this leads right to step four.

4. Build Equity and Use Your Home As Your Bank

One of the most beneficial rewards of being a homeowner is that you can build equity in your home by paying down your mortgage. Calculating your home equity is easy. All you have to do is subtract the amount you still own on your mortgage from the current market value of your home. After you pay down what you owe on your home, you can begin to use your home as your bank. In other words, you can use your equity to open a HELOC.

A home equity line of credit functions the same way a credit card does. Essentially, you’re allowed to access a certain amount of funds for a limited amount of time. There are many pros and cons involved with opening a HELOC, however, when done the correct way, it’s a great alternative funding source that can be used to purchase an investment property. Before you jump into using a HELOC, I strongly urge you to do your research. Those who get burned are often the ones who jump in headfirst without any prior knowledge or understanding. Once you’ve acquired a HELOC, you can use it as a down payment on your first investment property.

5. Rinse and Repeat

 

If you’ve made it this far in the process, I commend you. It’s not easy getting to this step, but this is the fun part! This is when you get to take the knowledge, understanding, and wisdom you’ve gained throughout the process and use it to buy your second investment property. To recap, at this point in time, you should own a personal home and one investment property. When it comes time to look for your second investment property, do the following. Take the same amount of money you put in the first house, pay that house down, either obtain a HELOC or refinance, and put it towards your next investment property. Now all you have to do is rinse and repeat!

If you are interested in purchasing your first rental property, we have a free webinar just for you! Join us Wednesday, April 20th, at 4:00PM MDT for How to Invest in Real Estate: WealthBuilders Coaches Tell All. Click here to register in advance.

 

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2. Learn to Track and Improve Your Credit Score

Before you start discussing how to finance investment properties, you need to take a good look at your credit score. Your credit score basically determines your buying power. The last thing you want is to be denied or forced into paying extremely high-interest rates as a result of poor credit. While it may take some time to bring up a low credit score, it is doable if you begin by taking an in-depth look into your credit report. If there are any errors or incomplete information, consider disputing them by contacting the credit bureau. Even if they are small mistakes, they can make a difference when it comes time to invest in your first property!

Once you’ve thoroughly reviewed your credit report, you need to have a solid understanding of exactly how you plan to improve your credit. If you’ve been slacking with paying bills on time, make a payment calendar to stay on top of due dates. Work on rebuilding your credit by adding positive references to your account, such as secured credit cards or credit builder loans. If you pay those accounts on time, it will boost your credit score in the long-run. You should ultimately aim for a credit score above 640. A bad credit score isn’t the end of the world, and it certainly doesn’t mean you can’t become a real estate investor. However, it’s important that you identify any credit issues beforehand and productively work towards a solution. That way, you’ll in good shape when it comes time to finance!

3. Buy a (Personal) Home to Live In

People usually have two options when it comes to finding a roof over their heads, either renting or buying. If you’re serious about real estate investing, I’ll explain to you exactly why I believe that purchasing a personal home is the best option. First off, if you’ve decided to go with the renting route, you’re already paying a monthly expense to your landlord. That’s a big chunk of money going out the door every single month. When you rent, you don’t have the ability to build equity. Therefore, you’re missing out on a valuable asset. Why not use your expenses from rent and put it towards your own home so you can build equity? If you’re still not sold on the idea, stay with me because this leads right to step four.

4. Build Equity and Use Your Home As Your Bank

One of the most beneficial rewards of being a homeowner is that you can build equity in your home by paying down your mortgage. Calculating your home equity is easy. All you have to do is subtract the amount you still own on your mortgage from the current market value of your home. After you pay down what you owe on your home, you can begin to use your home as your bank. In other words, you can use your equity to open a HELOC.

A home equity line of credit functions the same way a credit card does. Essentially, you’re allowed to access a certain amount of funds for a limited amount of time. There are many pros and cons involved with opening a HELOC, however, when done the correct way, it’s a great alternative funding source that can be used to purchase an investment property. Before you jump into using a HELOC, I strongly urge you to do your research. Those who get burned are often the ones who jump in headfirst without any prior knowledge or understanding. Once you’ve acquired a HELOC, you can use it as a down payment on your first investment property.

5. Rinse and Repeat

 

If you’ve made it this far in the process, I commend you. It’s not easy getting to this step, but this is the fun part! This is when you get to take the knowledge, understanding, and wisdom you’ve gained throughout the process and use it to buy your second investment property. To recap, at this point in time, you should own a personal home and one investment property. When it comes time to look for your second investment property, do the following. Take the same amount of money you put in the first house, pay that house down, either obtain a HELOC or refinance, and put it towards your next investment property. Now all you have to do is rinse and repeat!

If you are interested in purchasing your first rental property, we have a free webinar just for you! Join us Wednesday, April 20th, at 4:00PM MDT for How to Invest in Real Estate: WealthBuilders Coaches Tell All. Click here to register in advance.

 

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