These people tend to tell that the key is to use capital that’s not your own – like from a bank. I understand how it works with common mortgage. But let’s say I already have a mortgage, thus own one property/real estate. Now I’m in debt towards the bank and they’re not giving me another loan to buy another flat since I need to be repaying the first one (?).
So, how does it work? Where do these people get the needed money to buy the second property? The third one?
In: Economics
Think of real estate investing like a game of Monopoly. You start with one house, then leverage its equity for another mortgage. Some investors also partner with others or use private loans. Once you have a few properties generating rental income, it gets easier to finance more. It’s all about using the value in your current properties to fund new ones. It’s a cycle of buying, renting, and refinancing.
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