Ed Neuhaus Every time I read the story of the tortoise and the hare, the tortoise wins. Every time. In life most good things come to those who wait. Not waiting around and doing nothing, but purposefully taking small steps everyday to achieve an amazing end result. For most people real estate investing is something other people do. But with a few easy steps I can make everyone a real estate investor. One small step at a time.
The first thing to know about real estate investing is, the faster you get rich the faster you can lose it. Everyone wants a get rich quick scheme, but very few of them really work. I don’t know a single millionaire who earned their millions over night. The richest people I know, did not become rich quickly. It took most of them decades to make their first million.
Step 1: It’s all about getting a good start
The single most important and simplest thing to do when investing in real estate is to own your own home. Would it surprise you to know that only 56% of the single family homes in Texas are owner occupied? Home owners have an estimated net worth of 31 times that of renters.
Step 2: Thinking about the first big move
Most people move about every 5 years. When you move, most people think they should sell the house before they buy another one. But consider: if you spent $10,000 to buy a house as an owner occupant vs $43,000 to buy the same house as an investment, you’re $33,000 ahead by buying as owner-occupied first.
Step 3: Buying your next target property
Once we have decided not to sell the first home, we need to save more for down payment, and make sure we can qualify for the extra debt. Buying your second investment property is the hardest one to qualify for.
Step 4: Get your move on already
Congrats on closing on your second investment property! Plan on staying in your new house for 5 years. Now that you know the process, start saving money now for the next down payment.
The Results After 25 Years
Following this slow and steady approach—buying a new property every five years as your primary residence, then keeping it as a rental—you would be a millionaire in just 25 years.
Summary
The slow way to make a ton of money with real estate investing and win every time is to follow these simple steps:
- Buy a house to live in
- 5 years later move into new house
- Keep old house and lease out
- Repeat as many times as your wife will let you
Originally published on LinkedIn December 17, 2014
