Are you thinking about investing in multifamily properties? Here are some advantages of investing in multifamily apartment buildings that will definitely inspire you to think about this asset class.
After doing an extensive research of what form of real estate investment is most profitable, I come to the conclusion the multifamily properties is the way to go, no matter what level of experience you might have.
Leverage makes investing in real estate, specially multifamily extremely affordable. You only have to come up with 20% of the total asset value in order to experience the benefits of multifamily investing.
For example, if you buy a $2 million multifamily property, you only have to come up with a bit over $400,000 to secure the property, on which, you could raise the funds from other investors, a concept we’ll explore later on this blog.
If you have invested your $400,000 into a mutual fund or the stock market you would have $400k worth of stocks. By placing your money in a multifamily investment you immediately have an investment worth over $2 million, 80% more than your initial investment.
The appreciation you will receive over time is based on the $2 million, not in the initial investment of $400,000 that you put as a down payment.
At an average appreciation of 6 percent a year of the total value of the asset, you would be making $120,000 a year in profits (without counting the monthly positive cash flow or value added by doing renovations), versus the same total appreciation in your down payment would be $24,000. That’s a difference of $96,000!
You would be leveraging 5 times from the bank’s money to your benefit and the bank does not get a cent of that.
Get into the business of real estate investment and reap the benefits of leveraging the bank’s money to create wealth for you and your family!
If you would like to learn more about real estate investments contact me here and I will be happy to share some my own experiences with you.
Comments
Post a Comment