As you know by now, my goals are to make money, do it quickly and teach others how to do the same. If you want to get rich quickly, one of the solutions I have found is to invest in real estate.
In this article, I’ll go into depth on this subject, trying to explain in as much detail as possible because I believe that real estate is the best investment especially for beginners who are just starting to invest.
However, before we start, I want to make sure you are clear on one of the fundamental points of this subject: you make money when you buy, not when you sell.
You will understand this better if you consider this example: suppose you have an initial budget of 100,000 euros to invest. The first question to ask is: how much wealth in real estate can I buy with 100,000 euros?
You can buy a 100,000 euro property or if you sign up for a mortgage of 50%, a 200,000 euro property or with a mortgage of 66% a property of 300,000 euro or, with a mortgage of 80%, a property worth 500,000 euro.
Investing in real estate is possible because banks do not lend money to buy stocks, bonds, diamonds or gold, but they do lend money to buy property; if the business wasn’t safe they wouldn’t lend the money, would they?
Continuing with the above example: if you buy a property for 500,000 euro with a mortgage of 80%, and its value rises by 10% that is equivalent to 50,000 euro. At this point, the return of your initial investment of 100,000 euro is already 50%.
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Now let’s look at another example that I hope will help you to fully understand the focus of this article. If you have 20,000 euros to invest, you have two choices:
- Invest in a fund that makes an average of 5% per year so that after 12 years you will have 35,917 euro; or
- Invest 20,000 euros in a house that costs $ 200,000 with a bank loan of 180,000 euro. Suppose that you use the rent just to pay the mortgage payments and building expenses of the house, without gaining even one euro. Despite this, if the property is revalued by 5% a year, the property will have a value of 359,171 euros after 12 years and your initial € 20,000 will became 159,171 euro!
My advice, together with the above examples, make it obvious how investing in real estate is the best choice to make in order to get rich quickly! Now that you understand the reasoning behind property investment, I want to share with you some basic rules to follow to buy real estate.
- Buy property only in your immediate vicinity and take an interest only in apartments or small houses. Stay away from land and non-residential properties!
- Select an area and become an expert in that one area: read, make inquiries, monitor the evolution of prices per square meter. Stay tuned!
- Locate highly motivated sellers: those who have a lot of money problems, who leave their home and move, those who want to bargain, those who are sick, those who have legal problems. Ways to find these kinds of sellers are different: Try free newspapers ads, word of mouth among friends and acquaintances, judicial auctions.
- Make a written offer, never a verbal agreement. Take advice from a lawyer or contact me for more information.
- Buy a property with no money and resell the compromise by entering into a contract where you agree to buy a property without investing in it and resell the contract without ever becoming a property owner.
Finally, I will remind you once again that the number one rule in investing in real estate is that you make money when you buy, not when you sell. A property should always be purchased with at least a 30% discount.
To Your Financial Freedom