[quote name='javeryh']I mean, I guess you could sucker a bank to loan you the money for your business but you need to have a viable plan in place. Banks are into sure things, not high risk ventures. If you default on your loan obligations, what's in it for the bank? To do what you propose you would need to find a private investor willing to finance your company initially in exchange for a majority ownership in your company. This is not easy to come by and you better have a good idea other than buying and selling real estate in order to spark someone's interest...[/QUOTE]
It's not a sucker plan. You honestly have to have a sound business plan to present to a bank outlining your plan. I agree it has to be viable. While true that banks are into sure things, it is not difficult to start a company up. If one bank doesn't approve your loan, there's a simple solution - go to another one. It took me 6 banks before I got approval but now I do business with them exclusively. Now the other 5 banks are kicking and biting each other to lick my shoes. As I said before, it requires a lot of patience and perseverence. And you must be honest about your intentions. None of what I have said is done with the intent to be malicious or deceive. Real estate is generally not a high risk venture since it takes years for property values to differentiate significantly in the market (barring natural disasters such as earthquakes or floods). That said, it also takes years for a property to gain value but I generally buy and plan to hold for at least 15-20 years (depending on whether the property loan is paid or not) And, as I said before, obtaining a loan for a small apartment complex is easier if you present yourself as a real estate investor as opposed to a homeowner. The fact that you will live at the apartment complex for a time (usually 18 months) to establish residence and ownership is a small detail. Most young people won't be able to afford a home straight off the bat anyway unless they're lucky and get a 6 figure income. So why not own the complex you want to live at while building your equity towards the eventual home you DO want? While living at the apartment, you collect rent and apply it towards improvements, maintanence, and fees (such as taxes, insurance, and town utilities such as recycling). At the same time, you gain equity since that was the purpose of the loan in the first place. After about 2 years you SHOULD have paid off at least a 1/3 of the principal on time or ahead of schedule. You should've been searching for other properties at this time. Once you find a property which will be profitable (after doing your due diligence in research), you can use the equity in your apartment complex to apply it to the down payment towards the 2nd property. You then repeat this process. It's not hard. I'm already on 2 properties. I'm 28 and I'm on schedule. I'll probably retire about 35 or 38. I'll probably have a net worth close to or over $1 million. My own personal salary right now is probably less than the average starting salary for an office drone but come tax time, my company will effectively retain more $$$ than my own personal income. I don't aspire to be as big as Billy Gates but I won't be lacking for anything that's for sure. As it stands, I don't do anything extraneous and unnecessary as I've done my stupid shit in college. I don't live a life of excess but I can get most of everything I want on hand. Yes there are times in which i don't have $$$ but it's only because I apply it towards my properties which will increase in value and increase my equity as well. My own company pays for all the things I necessarily need (such as computer supplies, toiletries, pens, pencils, etc.) as long as it is justified by the budget set forth by my accountant and I as well as following legal procedure to make sure it is all and legal as set forth by my lawyer.
I am still boggled by the fact that people are still working hard when it's better to work smart. Investing right and doing due diligence is the only way to truly get any sort of financial independence. If a doctor who is making a $300,000 salary sudden is sick and out of work for a year and doesn't have any investments to work to make $$$ passively while not working he is just as in much dire financial trouble as the poor man being hassled by creditors. He'll still have to pay off that big mansion he bought as well the 3 or so fancy cars he has as well as pay for his kids' tuition if he sent them to private schools. And not to mention dealing with high insurance rates for all of his things (house, car, life, etc.). If a person has something that generates passive income for him, he is better since it doesn't matter if he is sick or not - money will be made regardless of his health or an outstanding emergency.
