SUPER Easy Tips to Build Wealth FAST! Real Estate Investing

Today I wanted to do a video that's a little bit different. It's a little bit more of a tip for investors that don't have a lot of money right now or just getting into investing. This is a strategy that I advise for people to use when they're buying rental properties.

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Faranesh Real Estate and Property Management
2510 W. Horizon Ridge Pkwy, Suite 220
Henderson, NV 89052

📞 (702) 536-9000
🌐 https://faraneshlv.com/
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So, just to give a little bit of back story, yesterday I closed on for a client of mine, he's about 25 years old single guy, closed on his first property that he's going to move into. It was a condo in Henderson a nice two-bedroom. When we were at the property, we started talking and he said, hey Wasim, I'd really like to maybe start buying a property every year and then start renting them out. So I sat down and I talked to him about this strategy and I'm going to go over it with you and I kind of wrote it down here on the board.

So this strategy really works best for people that have the flexibility to move often and when I say often, it could be every six months every year. So it's tougher for somebody like me, that's got a wife and kids at home. So it's hard for me to just pack up and take everybody and go. I wrote it down here on my board. This one is really specific even. So, I started the first example with his property specifically. So you'll see here, I've got the houses right here and the purchase price.

So he purchased a property at $195,000. It's a two-bedroom condo, he bought it at $195,000. Because he's a first-time homebuyer and he's moving into the property, he got to take advantage of an FHA loan. So it's a really low down payment, 3.5% down. So on $195,000, he put down $6,800. So that's his down payment. If you go down here to the monthly payment, you'll see at a 15-year loan his monthly payment is $1,150 and a 30-year loan his monthly payment is $800, okay?

Now that property for rent - we've got the rent column right here. It can rent between $1,250 and $1,300 a month. So my strategy for him is hey you move into this house or to this condo and in six months, you start looking for another place, right? So we already know that the $1,250 - $1,300 is going to cover him if he does cover his 15-year loan, it's going to be cash flow positive on the 30-year loan, so he's making money on this as soon as he starts renting it out and he got into it really low at $6,800 down payment.

So in six months he calls his lender and he says hey you know you say whatever reason I want to move to a different side of town. Now it works for him because again, he's single, it's just him, he's flexible, he can move. So in six months hopefully he saves up another down payment and he starts looking again. Then he goes to property number two.

Let's just for argument's sake we're going to say he buys that at $225,000. Now because you can only have one FHA loan at a time. So his next next loan and there's programs that lenders offer. It's a conventional loan but because he's going to occupy it, he can now put 5% down which is very low. So just to give some perspective as an investor and I actually owned quite a few rental properties. When I buy a rental property, if I'm going to use a loan I have to put down 20% - 25% sometimes. So it's a big difference on a down payment from 25% to 5%.


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