3 Ways You Can Leverage Real Estate To Build Wealth

Real estate may be one of the most important things that you will ever invest in, and is the number one way of increasing your financial well-being. If you’re getting into the real estate game and are wondering how to build a property investment portfolio and improve your net worth, here are three ways you can leverage real estate to build wealth.

Home Equity Line of Credit Loan

Also known as HELOC, this is the type of loan where a homebuyer taps into the equity of their home while they are still paying off their mortgage. As the equity that has been paid into the home is available without the homebuyer having to apply for it, this allows those who invest in real estate to borrow against equity to renovate the property or pay for a deposit on another property. It is always a prudent strategy to leverage mortgage financing in real estate. So long as you are not over leveraged. 

See this rental investment calculator to find out if a deal makes sense for you or not using conventional or hard money loans. Let’s look into more ways that show you how to build a property investment portfolio. 

Pick Properties That Will Appreciate

It goes without saying that most people want to invest in a property that will increase in value. Doing so will exponentially increase the equity in the property. As your tenant pays down the mortgage and the property increase in value you will gain more equity. Once you have greater than 30% of equity in the property, you can do a cash out refinance. After you receive the tax-free cash out from the refi, you can put that money to work in another investment. 

If you buy the investment property correctly to begin with you will never have to worry about losing money with real estate. This leads us to the third way to leverage mortgage financing in real estate.

Investing In Under Market Value

When you acquire properties that need improvements undervalue even after you add up all of your repair costs. You can use hard money loans that can immediately be refinanced to a conventional low interest loan after the repairs are done. With this method you may only be out of pocket a few thousand dollars. In just about all cases when high budget repairs are required using hard money loans to leverage mortgage financing in real estate will increase your cash-on-cash return and free up more capital for you to invest in more houses. 

Not only will you have an automatic gain with the purchase price, you will be able to invest that money into improvements in order to bump up the market price even more. While finding this type of property can be difficult for the newcomer, looking for neighborhoods with potential or properties that require little maintenance can be a good place to begin.

See this article for more information about hard money loans. This is the way to really leverage mortgage financing in real estate.

How To Build A Property Investment Portfolio?

There are few better ways to improve the financial feasibility of your investment portfolio than investing in a property that is under market valued, appreciating, and continually pulling equity out of your investments to reinvest them with more real estate. 

There are few better things to invest in than real estate, but it can be hard to know where to put your money in the beginning. Whether to wholesale, flip, buy and hold, etc., there are plenty of ways to bump up your net worth. If you’re currently considering an investment in real estate, you will want to use make sure you have as much information about the property, market and seller as possible. This is a tool that professional investors use that even many real estate agents don’t know about. For more information on how to build a property investment portfolio stay tuned into this blog site: https://realestatewaypro.com and get up-to-date real estate information.