I was listening to a radio show the other night where a guy was describing that he went out and bought three properties with zero money down. Now, he has had some deadbeat renters and he is 3 months behind on the mortgage payments. He is having a hard time selling the properties and is close to foreclosure on the properties. It had him very scared and confused about what to do next. My assumption is that this guy listened to some get-rich-quick scam artist and now he is getting burned.
I have heard way too many horror stories about real estate investing, so it is my personal advice to only invest in real estate when you know what you are doing and when you have a BIG cash reserve to put into the property. Real estate is a great investment, but it HAS to be done properly or else you are playing with fire. Only people with a good chunk of change should be buying investment properties, in fact, I would say do not buy an investment property unless you can pay cash for it. Then, you will never have to worry about deadbeat renters or other murphy’s law type situations happening.
My other piece of advice from talking with people is to never treat your primary residence like an investment property. You should DEFINITELY maintain your home, and you should DEFINITELY make improvements and upgrades as necessary. However, do not have the mentality of solely living in this house to make a big profit from. Then, you’ll be thinking aboug uprooting you and your family every time the opportunity comes. Your home is your home, and if you end up making $100,000 profit by the time you need to sell it, then that is great! My philosophy is to always roll your positive equity from a house into another house. If you walk away with a $100k, then use that whole amount towards the next house. Do that a few times, and you’ll have a paid off home before retirement!
