There are a lot of real estate quotes that stand out to me, but none other then “Don’t wait to buy real estate, buy real estate and wait.”  When I started my real estate portfolio in 2007, while I had heard this quote, I truly did not understand the impact of this statement.15 years later, this quote is so profound and visible when analyzing the 5 ways real estate pays you (cash flow, equity, appreciation, tax savings and hedge against inflation). Have there been ups and downs? Of course, no different then my retirement account. Just like your 401(k) ups and downs, in real estate, time fixes problems and because of those 5 ways RE pays you, even when their is a property hiccup, you may not see it, but 1 or more of those 5 ways are paying you. When a hiccup is occurring, the days can be long, but I promise you, the years are fast. I would say the # 1 key to getting over those hiccups is to have a portfolio of homes rather then a property or two as to sustain the non-performing property. I recommend at the very least, 4 properties, but advocate maxing out the Fannie Mae limit of 10 financed homes with 25% down on each. Really, if you are not going to buy at least 4 homes, I would talk you out of buying real estate property. My first investment property at 158 Wilson, Collierville, TN 38017 resulted in an eviction. After that first eviction, I did have second thoughts on real estate investing, but came back to the statement, “Don’t wait to buy real estate, buy real estate and wait.” That eviction was used as a learning process of how to mitigate the risk of a bad tenant (mainly trust but verify) and went under contract with property 2, 3 and several more after that. “Waiting” has certainly paid off as we have saved hundreds of thousands on taxes, the portfolio value has grown, equity has been built an, cash flowed received and benefiting from the principals of time value of money.

2007: All in this home at $82,000
2007 Value: $84,000
2021 Value: $165,000
2007 Rent: $850
2021 Rent: $1,200
Total Deprecation Taken: $43,426 (check out deprecation schedule below)

The dramatic spike in value has everything to do with buying at the very bottom of the RE crash, thus don’t expect 100% appreciation in 15 years. Even if the property only appreciated 3% a year, I would still have over $80,000 in equity after appreciation and my tenants creating equity by paying down the mortgage. I am still buying today at higher prices and my expectation is still in line with “Don’t wait to buy real estate, but real estate and wait.” That philosophy will best position you to capture the 5 ways real state pays you and put you in the right mindset to be an successful real estate investor.

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