My advice is always before you get into a rental property, take care for yourself first. Have zero debt, emergency fund, good investment account, and a paid-off personal home.

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1. Buy Slowly and Pay Cash
– Now obviously this means that if your in a certain area like New York Or California ( unless an extremely high income it might mean your out the game )

Truth is that when most people hear this advice:
– They say well that’s going to take forever
– Why wait until I can pay cash for a house
– When I can get the house out right now and pay off over 30 years with the tenant potentially helping me

Look at the Results:
– A lot of people do that and they up really paying home and struggling for 30 years
– 214k homes we’re foreclosed last year
– And when people an unexpected repair but they don’t have the money they start to freak out
– My point don’t just use the YouTuber with 50k per month income that owns the rental property as an example of why you should do it too

What I think about this Advice:
– I think paying cash for it might be too crazy and you might be waiting for a while ( but if your buying at around 200k per property and you can save 30% of your 50k income, it’ll take you 13.3333333 years to actually be able to buy )
– What I’m going to do is this, I’ll put down 20%, and have 3-6 months worth of emergencies just for the property and repairs (15-year mortgage)
– And I’ll use the tenant’s money plus my money, to pay it off in full fast as possible.

The key here:
– Is to only rely on your numbers to make the math work
– Not the tenant ( if the number work with the tenant then awesome

2. You Make your Money on the Buy
– This is something you hear every single real estate guy say
– The one that really know how real estate works
– They the money in real estate is made on the buy

I’ll tell you a story:
– I know this lady that doesn’t want to sell her real estate for almost 300-400k profit because she believes the area is going to go up even further in value
– Or the couple that Is willing to pay more for a house because they are a lot bids on it right now
– Or the investors that fall in love with a location so he thinks it’s worth the risk

Truthful:
– I agree here, you have to make the money in real estate going in
– You have the buy the property at a discount so you get instant equity

3. Pay no More than 70-80% percent of the Market Value
– This is hard to do and it only works during the certain market and under certain condition

For example:
– Right now currently no one is taking any low offer because there is more demand than supply and everyone is buying
– However, if the market flips and demand goes down, you’ll see people willing to take lower offer

Do agree:
– This is a numbers game, so it means a lot of calling and asking and no
– But that’s a part of the game ( because when you do get a deal you cash in big )
– Also having money to pay cash is obviously better ( because people that need that money, want to close as fast as possible )

4. Only Buy Property In your Area ( where you live )
– This is to prevent you from dealing with property that is way to far away from you
– Or that you cant look over personally
– And especially initially when you can’t afford a property managers
Do I agree:
– It’s way more convenient and you always going to know your area more than anyone else
– But if you start in your area and then move to another area then it still solid in my opinion

Overall: the hardest thing about these rules, is the patient it requires.

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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