With our lending program, we require 10% down payment. However, we are able to finance 100% of the repairs. What does this mean for you as an investor? It means that you can leverage your investment. Yes, there will be fees and slightly higher interest rates, but these will be for the short term. The idea behind leveraging a portfolio is to maximize its value. When I first started and if you are currently figuring out how to get started, it is commonly referred to as sweat equity. Let's say I can acquire an asset worth $200,000 for $100,000, but it requires repairs such as a roof, furnaces, and kitchens. By knowing how to improve the property, I can invest $50,000 in repairs. This allows me to maximize our investment value and gives us the opportunity to leverage our portfolio. The trick is to find a property that you can acquire for $100,000 and invest $50,000 in repairs. At this point, you can only invest with $10,000 (plus fees and interest payments) from Milwaukee. Once all the improvements are done, including a new roof, furnaces, kitchens, bass, tile, and granite, the property's value can increase to $200,000. Now, you can approach the bank and request a loan based on the after repair value (ARV) of $200,000. Assuming a leverage of 75%, you can secure a loan for $150,000. This means that as an investor, you can be fully leveraged without using any of your own cash in the property. By having tenants pay down your mortgage, you can start accumulating wealth through cash flow and appreciation. This is the ultimate real estate leverage for wealth accumulation, and as a landlord, you can preserve your assets.
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