Real estate investing is traditionally the best way to leverage your assets, time and involvement. Many smart investors start out with an investment single family residence, condo or duplex, then, after experiencing success with that type, continue to build on their success buying similar types of units. This creates a “money machine” effect, where you build on your strengths and experience by repeating past successes.
Other smart investors like to gain traction with smaller units, then work with larger properties, such as triplexes and fourplexes, utilizing the same techniques but leveraging their base investment even more with larger properties.
Here’s an example (*):
|Initial Investment (**)||$137,500||$178,750||$220,000||$275,000|
|(*) Assumes similar construction quality, condition & neighborhood|
|(**) Including 25% Down Payment, + 1.5% Closing Costs & 1% Rehab|
You can easily see that, in general, the more doors you invest in, the better the ROI, and the more you leverage your initial investment.