Why Real Estate
Real estate builds more millionaires than any other wealth-building class.
No other asset class has the following attribute:
1. Higher net worth than non-owners – Even if you only own one house, the one you live in, you will have a much higher net worth than someone who rents.
2. High leverage – Your own home requires only 3.5% of the purchase price as a down payment if you use government backed loans like Fannie Mae, Freddie Mac, FHA, USDA and other programs. There are also down payment assistance programs you can leverage. Duplexes, Triplexes and Fourplexes also qualify for 3.5% down payment loans and are considered “Single Family Residences.”
3. Long term financing – Spreading out the cost of a valuable asset like real estate over a long period of time makes the monthly payments manageable.
4. Interest and business expenses are tax deductible – Reduce the costs of interest by writing off the interest for your personal residence. If you rent any of the property out for income, you now have a way to write off business expenses of operating, maintaining and upgrading the property.
5. Other people pay your mortgage – If you have 2-4 unit properties, the income from the other units covers the cost of the mortgage and your tenants are the ones who pay off your mortgage to build your wealth.
6. You can build passive cash flow – Buying multiple properties develops outstanding cash flow, especially after 30 years when the mortgage is paid off and the rents are free and clear cash flow without a mortgage. There are strategies to pay off a smaller portfolio sooner without hurting your cash flow.