How do you buy investment property?
My name is Kris Krohn, I achieved my financial freedom at the age of 26.
And frankly for the last decade and a half, I've been traveling the world and living life
and amazing ways because what buying investment property has done for me.
Today, I'm actually going to go back to the basics --investing 101.
We're going to be talking about what you should be buying.
We're going to talk about good debt and bad debt and what your next steps look like so
you can start building wealth today.
So, I must've been a really odd person because I was so concerned in my early 20's about
my future.
I didn't want to wait 30 or 40 years in a career only to find out that I might not enjoy
it.
In fact, I couldn't even really imagine liking doing anything for 30 or 40 years.
And so, for me, I just want it out.
I wanted to find a way to live life on my terms.
Listen, I wasn't even trying to be rich.
All I really wanted at the end was to have a replacement income so I didn't have to have
the job.
I met 3 men who had all made millions of dollars in real estate that gave me the guidance like
I'm going to be doing for you today.
So, check it out.
There are some really important basics for you to understand when it comes to, "Okay,
what is investment property?"
For those of you that have actually bought property and might think that this is a little
basic, listen super carefully because I'm going to share some of the new ounces that
can make differences between 1 or 2 properties and literally hundreds of properties like
I have.
So, when you buy a property, there's a couple of basics to be aware of.
First of all properties are kind of scary when you're brand new or if you're young.
Because if you think about it, it's like the most expensive thing that you can buy that
is still considered a commodity.
You know, if you take a look at the national median, meaning the average price in this
country, it's over $200,000.
So if I take a $200,000 piece of property, it's like, "Wow, that's a lot of responsibility."
And all of a sudden, you're going to be thinking, like, "What happens if someone doesn't pay
the mortgage or I don't pay the mortgage or what my credit get ruined?"
Here's the basics that I think are super important for you to understand.
First, one is, is if I buy this property for $200,000.
I have to come up with the down payment.
Usually if it's an investment, you're going to put 20% down.
And 20% on 200,000 comes out $40,000.
Now, I'm going to show you some strategies later in this video where you can pay a lot
less money or even potentially no money.
But understand that this is the other thing that scares a lot of people.
I have to come up with a lot of money.
And "Kris, how am I going to save that?
Can I use money for my 401k or my IRA?"
Let's just assume for a moment that because you're a subscriber to this channel and I'm
teaching you these things that I show you literally dozens of ways to get money that
are super easy.
That don't require saving and waiting.
But accessing this money, if you buy this property, what you're going to get is something
called the mortgage.
And a mortgage is basically is where the base is.
If you give me 40,000, we're going to give you the other $160,000.
And it's a loan.
And you got 30 years to pay us back and you're payment on that is going to be a thousand
dollars a month.
So, now you have a brand new obligation.
Some people will say, "Kris, that's debt and debt is bad.
I've been taught that you should stay out of debt."
I actually hate consumer debt.
But I love business debt.
The difference between the 2?
If I but a boat or a car, that debt and i cost me money.
It takes money out of my pocket every month.
This debt, make no mistake, this is actually really positive thing.
And you actually want as much as this debt as you can get.
Why?
Because if I take this property...
And let's say that I'm going to own it for 5 years before I sell it.
What can I do with it?
Well, I'm not just going to sit around and pay $1,000 a month.
What actually needed to do is get this house producing income for me.
And you can do a couple different things.
You could turn it into straight rental as in, "All right, I got to find out that someone
can rent this for more than $10,000 a month."
And in this price range, if these numbers, you're going to find that you're going to
be able to rent that positive cashflow.
It might be only 1 or 2 hundred dollars left over every month.
So, let's say, our tenant comes in here.
And let's say that they rent it and that the renter is willing to pay is $1,200 every single
month.
You're thinking, "Great, they're going to cover my $1,000.
They're going to work on paying this home down and I have $200,000 left over a month."
if I'm mentoring you for example how to do a lease option, which I recommend how newbies
get started, then I'm going to show you instead how to do rent to own and collect on average
closer to 14 or 15 hundred dollars a month.
So that you're now getting the difference of you pay your thousand a month, you're collecting
1,500.
Guess what that means?
There's an extra $500 every single month.
Now, by the way, when you're poor like I was just getting started, $500 a month is meaningful.
I mean that can make car payment.
For me, it paid down my credit card debt.
I had $8,700 of credit card debt.
And it helped paid that off which was a huge relief to me.
And so, that money is meaningful.
More importantly though is if you hold this home for 5 years and then you sell it in 5
years, understand that properties under the median always go up in value.
So, let's just say for a moment that this home actually went up to $230,000 in value.
If you sell it, you make that extra $30,000 dollars.
You're making the $500 a month.
And actually there's a lot more money to be made on this property than that.
It could be down payments that these people give you 5 grand upfront which is typical.
It could be the tax benefits if you want to pay less in taxes.
bottom line is real estate really makes sense when you're buying investment grail in real
estate.
This example is just to kind of show you some of those basics which is: You buy a property,
it's going to go up with time.
You're going to put a down payment whether you're money or someone else's.
You're going to control that property.
You're going to lease it strategically for more than what you're payment is.
And you're going to make money in 5 different ways.
If you go to Kriskrohn.com or you check the link below, you can get a free copy of my
book that actually talks about 5 different profit strategies.
And because....
I feel in love with it.
And by the time I was 26 years old, I bought 25 of these properties.
Those 25 properties produce $12,000 a month and increase my networth of 1.6 million dollars.
And that meant that shortly after graduating college, I walked in to my boss's office and
I quit.
And even though it's kind of nervous, it was really exciting, because I no longer needed
society or job or boss to take care of my family.
I knew how to do that myself.
And that's really what I'm empowering today in this conversation of how do you buy investment
property.
Now, if you're just starting out and brand new, here are couple of hacks and things that
will be helpful for you.
First of all, you can use your money and you can use your credit to buy property.
And I always believed that the first property that you should buy is a primary residence.
It's the first property for you.
And instead of 20% down payment, it's just a 3% down payment.
So, if we are talking about a 200-thousand dollar house, we're now talking about $6,000
to buy the house versus 40,000.
Because says that if you're going to live there, we think you're going to take care
it better than if you're going to rent it or use it something else with it.
To make that happen, you really need to establish 3 lines of credit.
So, you're going to want to get 3 different credit cards.
Apply for them and you're going to want to keep them paid off.
You're going to want them use them and pay them off, use them and pay them off.
And that shows the bank that you're responsible.
If you can be responsible for 2 years in building up your credit that way and you have a basic
stable job that you have for at least 2 years.
And you saved up that 3 percent down payment, guess what?
You're golden and you're going to buy your first house.
Or you're going to say, "Well Kris, what if I want to get into investments.
I want to go fast.
I want to hit the ground running like you did."
Then you're going to need a mentor then you're going to need some training.
If you click the link below, you're going to find out more information of how we can
help you with that.
Big thing that I want you to understand here just that I want to open up your mind to is
that, when buying investment properties, the biggest hurdles are finding good deals and
then finding the money for them.
And what I want to teach how to do is become a deal maker.
First of all, you should be a subscriber to this site.
Because everyday, I'm teaching videos of either strengthening your mindset so your positive
financial psychology or I'm actually teaching you the business skills for going out there
and actually crushing it in real estate.
And the reality is is that deals already exist.
And guess what?
People with money already exist.
Your job is to learn how to put that them together.
Now, there's several different ways of doing that.
And you'll learn on a lot of my videos how to do that.
If you click the link below, there's an opportunity for you to actually...
Yes, get a copy of my book but also get a consultation for free.
Talk to a member of my team.
They will put themselves in your shoes and say, "All right, if we were you starting at
your age and what you got..."
Which might be lots of money or in debt, like I was when I started.
And they're going to show you step by step what you need to do.
We call it a game plan.
And they're basically going to share with you what your next steps look like so that
you can build wealth in the most intelligent way possible.
Listen.
Buying investment property, it's easy if you have a team and if you have a system.
And you have a chance to inherit mine.
Or subscribing keep learning how to build your own.
Either way, if you're looking for shortcuts, I'm going to be providing those for you.
Thank you so much for watching today.
Make sure that you are a subscriber.
And if you want to get some hands on help, it doesn't cost anything.
And if you click the link below, my team stands ready to help you start building wealth today.