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As we’ve discussed on our show, both the podcast and on KURM, real estate remains an incredible long term investment.  And contrary to popular belief, you can begin investing in real estate without a large net worth and at a very young age.  This article from Inman News is a great summary on the pros and cons of investing.  Click here to read. 

If I could, I’d like to offer my opinion as well.  More and more young singles are buying homes.  This is great as young people begin to realize the overall benefits of home ownership.  But it could go even further.  FHA loans allow a purchase of up to four units and will allow the rental income on those units to be counted towards debt to income qualification.  FHA loans only require 3% of the purchase price from the buyer, thus creating an incredible opportunity.  Therefore, a potential new homebuyer could purchase a 4 plex, live in one, and then rent out the remaining three.  With current interest rates, the cash flow created will nearly pay for the owners owners unit.  In addition, at the end of each year, the owner will have multiple tax benefits.  In addition to deducting 1/4 of the mortgage interest (their residence portion), they will also be able to take depriciation on the other three units.  Following a two year period, should they decide to sell the 4plex, the owner will then be able to avoid gains taxes on 1/4 and tax defer the other three gains into more investments in real estate.  This is the path to early retirement….and can you imagine if you start early???
 
This entire scenario began with simply 3% down.  And it can be borrowed.  There will be a lot of family and friends that will be anxious to help you pursue this venture with the benefits listed above.

This is complicated and I’d love to explain it more…but its really unbelievable.  And it continues to show that real estate, above all else, is the best investment….even in a “correcting” market.