The IDEAL Way to Invest in Real Estate

Northeastern Ohio Podcast with Michael Kaim

The key to successful real estate investing is as simple as one word: IDEAL. Today, I’ll be explaining what IDEAL stands for, and how it can help you build wealth with real estate.

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Why does investing in real estate make sense in today’s market? First of all, I want you to know that I’ve been investing in real estate myself for the past 10 years. A decade ago, my father convinced me to get into the real estate investment game.

Way back then, he told me one word that has stuck with me ever since. This one word can basically describe all of the values involved in real estate investing. The word is “IDEAL.”

So, what does IDEAL stand for? Well, that’s exactly what I’ll be sharing with you today.

“I” stands for income. When investing in real estate, you can either make a single sum of income by selling, or you can rent out a property and earn continuously.

The second letter, “D,” stands for depreciation. But, what investment benefit could possibly be associated with depreciation? Actually, you can depreciate the value of the property by 5% a year as a tax write-off. If you have 20 investment properties that you paid $100,000 for, you could be saving thousands in taxes.

Next, “E” stands for equity. If you’re working with the right real estate agent when you buy these properties, you’re going to get great deals. You’ll likely be purchasing bank-owned properties, estate sales, short sales, and other inexpensive properties that will earn you a lot of equity.

By remembering this one simple word and taking it to heart, you can earn a lot of wealth from real estate.

The fourth letter is “A,” which stands for appreciation. In a good market like the one we’re seeing currently, you can expect a 3% to 5% appreciation rate each year. This means that the properties you’re purchasing now will be worth a lot more down the line. In 10 years, you’ll have a lot more equity because of this appreciation.

Finally, “L” stands for leverage. When you own a property, fixed it up, and are ready to rent it out, you can then go to the bank and request a cash-out refinance. Most of the time, the bank will then give you 70% or 75% loan-to-value, depending on the appraisal. If a property is worth $100,000, you could be earning $75,000 back. You can leverage these earnings back into more investments.

At the end of all of this, you’ll find you can achieve huge success. If you remember this one simple word and take it to heart, you can earn a lot of wealth from real estate.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.