How Much Money To Invest In Real Estate

How Much Money To Invest In Real Estate

Hello. Kris Krohn again with REITV. Today
we’re gonna be talking about how much money it actually takes to get YOU into real estate – which can be anywhere from nothing, to perhaps a whole lot. So how much money does it take to invest in real estate? Well, it depends. If you’re very, very, very, very creative, it can take
nothing, or if you’re gonna do traditional or conventional real estate, it can take as
much as 30%. On average, conventional financing requires 20% down. Now, beware. There are times in the economy when banks will only allow you to put 10% down or 5% down. I personally never recommend that. Whether you’re using your money or somebody else’s, putting 20% down creates a really great safety net. So if you bought the house at a discount and you put another 20% down, then you might have that home almost already half-paid off. And that means that if the economy does a little bit of this, you’ve still kept a cushion
and it means you still got great cash flow when the economy is down. So, 20% is a really great standard. Now, there are a couple other options. Another one is that if you buy a primary residence, one of
the things that you can do is often get away with a 3 and a half percent downpayment. Some things even will work with the government and have zero downpayments. On a primary residence, you can get away with putting very, very little down. So for the home that you live in, you’re making a commitment that is different from an investment property. Make sure buy that house with this much of a discount as possible. If you go for a 15 or a 20% discount, you have a chance if you do that, to walk into a 20, 30, 40, 50, 60 thousand dollars of instant net worth increase, like that. Okay? So putting a really tiny amount down and then walking into all that equity, for a home that you’re gonna live in that is both a house
and a home, is a really great decision for you and your family. And, if you commit to live there for a year,
you could move a year later and do the exact same thing. My wife and I did that and for
less than 10 thousand dollars out of our own pocket. We got into four different properties. Because we used the equity from both of them to fund our third and our fourth deals. So, we basically built a net worth over $200,000 with less than $10,000 out of pocket. And then of course there’s the best strategy
– which is partnering. Let’s say that you were bringing the team
to the table, you were doing the sweat equity, or you were finding the deal, and you had
a partner coming up with the money, maybe playing more of a passive role, maybe they put in all the money and you put in all the work, and then you have some type of split – maybe a 50-50, a 30-70, 70-30. And in that situation, you’re walking in
with NO money down. I hope you enjoyed this week’s video. If
you liked it, then do us a favor. Hit the thumbs-up button and hit that Subscribe button so we can keep bringing more videos like this to you.

15 thoughts on “How Much Money To Invest In Real Estate

  1. Chris, I have loved watching your videos over the past month and a half. Additionally, you are very good at explaining your ideas. slow, articulate, easy to understand and absorb.

    what I would really like to see is what tools a future investor (current college student, I work for sustenance) could use to scope deals and learn the market.

    A typical speculative investor may reach out to websites such as zillow, but as you've mentioned before by the time homes get here, most of the sweet deals have already been picked off. I understand I will not be able to get to most of the "sweet deals" till I am a weathered and hardened investor, but how do I get my foot in the door? real estate agents are looking for investors today (rightfully so) and aren't interested in tire kickers such as myself.

    My field of study is in accounting and I hope to bring my technical business knowledge to the table when I go to start my investing adventure.

  2. @Chris, do you do mentoring? One of my biggest questions is how do you manage a market where the average median house is priced about $225,000 and deals are hard to come by? In addition, the difficulty of coming up with ones' own capital by saving while starting a family?


  3. Hi Chris i'm a highschool student and i have a really important question for you: do you think i should really study economy at university in order to become an investor or it doesnt really matter?
    Ps. I really like your videos and i'll get your book soon

  4. Hey Kris! I'm interested in this idea but I just recently purchased 2 vehicles and I am making 2 auto payments and want your advice in this situation

  5. What is your opinion on multi-family property investment, as opposed to single family property investment? If you haven't already, please do a video on this.

  6. Isn't 2016 the worst time to invest into real estate?

  7. In this video, I discussed how much money is needed to invest in real estate. What discourages you from investing? Is it the economy, lack of money, or lack of knowledge? Because if you've seen the video, you know you can already cross off the money part. So, share your reservations below!

  8. For some reason this video is really sticking in my head, I love the points you've touched on. I want to find myself worked up to larger scale commercial and or industrial RE investments, any tips on building a long term strategy plan? Thanks.

  9. can anyone and everyone benefit from real estate without worrying so much about competition?

  10. Hi Kris, is there a book you would recommend that would help me get started. I would greatly appreciate it.

  11. I know exactly where that is in Salt Lake City. I can see why you choose to live there, it's one of the nicest cities in the country.

  12. Hey kris!
    My cuestión is, if i got 40k, equity how can i take it out? Should I refinance?

  13. Hey kris ive been a long time subcriber and was thinking about putting this plan into motion would we be able to set up a game plan for myself?

  14. I'm new to real estate and have been living off inheritance for a long time with no job, I can't stand working for others… I have $50,000 cash I can put down on a house and have good credit. I'm not sure a bank will give me a loan though without at least 2 years of stable work history. I'd like to get more into this.

  15. Hey Kris, How can you get 20% discount on property. I am currently looking for my first home and try to get 15-20% discount but don't know how. Could you please tell me what's your strategy? or at least a link of your video teaches us how? Thank you!

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