How Much Money Do I Need To Get Started?
I often get emails from people all over the world who want to know the answer to this question. Unfortunately again, there isn’t one universal answer.
We teach “Buy and Hold”, specifically in the area of residential real estate. There are, however, partners on my team that specialize in Commercial Real Estate and Industrial Real Estate, lots and land, or even mixed use property. The reason I tell you this is that there are different amounts of money involved in these transactions. Commercial, for example, usually requires at least 25% down. With residential real estate there is much more flexibility. You can buy a lot of property for very little initial cost – as low as 0 – 10% of the cost of the unit.
There used to be an abundance of “No Money Down” products available, now (because they were abused) they are a thing of the past. But you can still find 10% or even 5% down mortgage products available AND because the LTV (Loan To Value) is based on the Value (not the actual price), you can sometimes find properties with some equity built in to cover your 5% - 10%, so you only need to come up with closing costs.
Then the remaining amount needed is actually dictated by the lenders and their associated companies and vary significantly by state, because of differing tax laws, etc. Check with your local lender and get a “Good Faith Estimate” from them that will disclose all associated costs.
