Ways to quickly build mortgage equity

If you have the ability to perform minor maintenance, you should considering purchasing a multiple family unit as your first home.  Multiple family units (up to 3 of 4 units depending on the actual loan) are considered to be residential properties as opposed to commercial.  The biggest advantage to having a residential classification is having a home which requires a lower percentage down payment. 

Commercial property will typically require a minimum of 20% in order to be financed.  Residential houses can be financed for considerably less money out of pocket.  By choosing a multiple family unit, you will be able to purchase a property with a larger valuation. 

The biggest bonus is the ability to leverage the income of your tenants towards the qualification process.  What this means is that when you are buying a multiple family unit, you can count a percentage of the rental income as “your” income.  By using this simple strategy, you will be able to qualify for a larger loan.

Once you own a multiple unit property, you can take advantage of economies of scale.  For example, you can create extra cash flow by getting a single internet connection and sharing with your tenants.  Other things you can do to increase rental cash flow include putting coin laundry machines in the basement, offering a maid service, etc. 

As long as your property is purchased at a reasonable valuation, this can be a great way for younger people to start building wealth.  Reasonable valuations are the key to success in this strategy.  Consider joining a local real estate investment club, if you wish to learn more information.

Valuation is depending on location, and can differ greatly.  The best way to understand valuation is to look at as many rental properties as you can.  You should look at no less than 10 houses before you buy.  The reason you want to look at as many as possible is to learn how to value properties.  While having a realtor is helpful, keep in mind that their goal is to get you into a property.  Real estate agents make money on volume.

Because they only make money when you decide to purchase a property, their interest is not necessarily to find you a best property.  The more time they spend with you, that is time they can be spending closing other deals.  It is because of this reason that you should look at as many properties as you can.  While you can use your realtor as a sounding board, your success will ultimately come from being able to properly identify good buys and fair pricing.

If you wish to find *killer deals your best bet may be houses which are unlisted.  Unlisted units can potentially net savings based on a seller who doesn’t have to pay a realtor commission.  The best way to find unlisted deals is to ask around or privately make offers.  Placing free ads on forums such as Craigslist may generate leads for finding a potential property.