Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business

How to Use Other People's Money in Real Estate


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👉 Get Your Free Copy of "How to Buy Your First Investment Property" - https://bit.ly/3PKhX4O In this episode, we dive into one of the most powerful strategies in real estate investing: leveraging Other People’s Money (OPM) to build wealth. If you've ever wondered how to invest in real estate without putting up a large amount of your own capital, this episode will change your mindset and give you actionable steps to get started. Host Jaren Sustar shares his own journey and breaks down the key methods that can help anyone scale their real estate portfolio using OPM. Why Real Estate? Jaren shares how real estate has been a historically reliable wealth-building tool. When he started buying rental properties in 2018, his goal was financial freedom. Real estate, with its ability to provide both time freedom and financial security, has consistently been a path to wealth for many investors. Whether it's through rental income, property appreciation, or tax benefits, owning real estate can put you on the road to financial independence. The Six Pillars of Real Estate Wealth Jaren outlines the six foundational pillars of real estate investing:
  1. **Leverage:** Buy properties with little to none of your own money, which is unique to real estate.
  2. **Forced Appreciation:** Increase property value by making improvements.
  3. **Traditional Appreciation:** Property values tend to rise over time.
  4. **Cash Flow:** Income earned after all expenses are covered.
  5. **Debt Pay Down:** Tenants paying down your mortgage.
  6. **Tax Benefits:** Leverage depreciation, 1031 exchanges, and refinances to reduce taxes.
Strategies for Leveraging OPM Jaren explores the three key methods for using Other People’s Money to fund your investments:
  1. **Private Lenders:** Individuals in your network who prefer passive investing.
  2. **Hard Money Lenders:** Companies providing short-term loans for real estate projects.
  3. **Institutional Lenders:** Banks or DSCR lenders offering long-term refinancing options.
The BRRRR Strategy Jaren highlights the BRRRR method as a winning formula for scaling your real estate investments:
  • **Buy:** Purchase a distressed home using private lenders or hard money loans.
  • **Rehab:** Improve the property to increase its value.
  • **Rent:** Generate cash flow by renting out the property.
  • **Refinance:** Secure a long-term loan at a higher valuation to pay back lenders.
  • **Repeat:** Use the refinancing proceeds to fund your next deal.
Real-Life Example Jaren walks through a real-life example of purchasing a $100,000 property, renovating it to increase its value to $150,000, and refinancing at 80% to cover the initial investment and turn a profit. Timestamps: - 00:00 - Introduction  - 05:30 - The six pillars of real estate wealth - 12:00 - Strategies for using OPM - 18:45 - Understanding the BRRRR method - 25:00 - Real-life examples of OPM in action - 30:00 - Conclusion: Building wealth with OPM
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Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a BusinessBy The Rich Dad Media Network

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