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Earn a Grand Per Month by Investing in Real Estate

What if you could invest in real estate and earn an additional $1,000 a month without investing any additional money? That’s right, what I am about to teach you is how to take absolutely no extra money out of your bank account to purchase a multiplex and earn cash flow that you never had before. This isn’t a hoax, but it isn’t all that simple either. Plus, you will definitely have to change your lifestyle.

How to Buy That Multiplex

I have been thinking about this for some time now, but have not yet pulled the trigger on it. I am not a big fan of debt (that is the understatement of the century by the way – I despise debt), so I have been aggressively paying down my mortgage loan on my house. Since I knew that I wanted to get rid of my debt as soon as possible, I found a fixer-upper that didn’t cost me much.

My house only cost $78,000, but needed some repairs. I put down 10% and took out a loan from the bank for the remaining $70,000. At this point, I have fixed up my house and it is valued at approximately $130,000 and I have paid down my loan to about $45,000. Given these figures, I have approximately $85,000 of equity in my house.

If you have been aggressively paying down your debt like me, then you most likely have some equity in your house like me. You can use this money to put as a down-payment on a multiplex. I know what you’re thinking – you think I’m going to tell you to refinance and pull as much equity out of your house as possible. This is absolutely incorrect. I told you that you would have to change your lifestyle for this plan.

In order to increase your income by $1,000 per month (or more), you could sell your house, use the equity to put money down on a multiplex (preferably a 4-unit complex) and live in one of the units yourself.

The Numbers

I have a friend that has actually done this very thing. He currently lives in a 4-unit complex and rents out the other three for $700 each, giving him an additional $2,100 in cash flow each month. The beautiful thing is, by making this change, he is not only getting his multiplex paid for by his renters, but he is doing very little to earn this money each month! His estimate on the number of hours worked is about 10 hours. That’s a solid $210 per hour. Heck, lawyers don’t even make that!

With my $85,000 of equity, I could purchase a $150,000 multiplex (which is possible in my area) and keep my monthly payment the same. By charging my renters $550 a month, I would earn $1,650 each and every month. So what do you think about this idea? Would you consider trying this in order to earn an extra grand per month?

 

This article was written by Derek Sall, owner of LifeAndMyFinances.com

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