Personal finance

Bigger Pockets: Generating Infinite Returns in Real Estate – Is It Possible?

Real estate tends to be a great long-term investment. Part of the reason is that buyers can use leverage, putting down 20 percent or less to acquire a property. For investing in home rentals, mortgages are amortized, meaning they get paid off over time.

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  • First-time homebuyers can put up even smaller amounts of capital, typically in the 3 percent range or higher. But investors can also put down no cash when making an investment.

    When that happens, the profit margins become infinite.

    There are a few ways to make that happen. The first is to invest in a property, then refinance in the future, taking back the initial capital.

    The other method is to use a syndication deal, taking a stake in an investment as a managing member, putting down no capital.

    While it’s not technically infinite capital, it does go to show that patience can pay off in the real estate market. Acquiring a property requires capital, but it doesn’t have to be your capital. And that improving a property that’s undervalued for its market can lead to big returns over time.

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  • With interest rates rising to their highest levels in over 15 years, finding potential investors may prove a good way to invest in real estate right now. By avoiding the high cost of financing, it may be possible to get an exceptional deal in today’s markets.

     

    To read the full article, click here.