Invest in Real Estate and Live Rent Free
Starting a business in real estate investment can be daunting. You are using your cash reserves to buy and often fix up, properties. What if you could leverage your purchases by living rent free at the same time? Without your own living expenses, you can use more of your available cash in your projects.
Sound too good to be true? Would you like to know how to do this?
The first step in any real estate investing project is to identify the right opportunity. If your goal is to also live rent free, then the property needs to provide immediate availability for a rental tenant. This could be as simple as an extra room, as long as it provides you enough income to offset your own costs.
A typical option would be to consider a multiple family building. This could be a duplex, triplex or larger. This could allow you to rent out one or more of the units while fixing up the others. In this way you can use your available funds to add value for the investment and not to pay the cable bill.
New investors are often stymied by the aspect of financing a property. Lenders are aware of the increased risk of investment properties and often attaining financing is difficult and expensive. The rules are different for an owner occupied property. As long as you live in one of the units, lenders will treat your purchase as an owner occupied purchase. You might be able to use FHA financing which allows you to get into the property for as little as 3.5% down.
Sound too good to be true?
It’s not, but you do need to do your homework and plan carefully. If the goal is to live rent free, then you have to recognize which opportunities will offer this option to you. Existing leases transfer with the sale, so you need to know if any units are currently vacant and will it fit your needs. Pay attention to other leases coming due as well. An unexpected vacancy can affect your funds for the project as much as an unexpected repair.
If you are considering your first real estate investing buy and flip property, it might make sense to live on the property and live rent free. Living on site, gives you increased awareness of the project itself and allows you to focus on your goals and timelines on a daily basis. Utilizing part of the property or one of the units as your living quarters makes perfect sense. With careful evaluation, you can also offset your own living expenses and live rent free. This maximizes your cash flow for your project.