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Your first home – live for free and become wealthy

Your first home – live for free and become wealthy


Whenever I meet someone who is currently renting an apartment, I get really excited.  They have an opportunity that many do not have!  If you are in an apartment and are currently used to being in a home with less yard space and sharing a wall then you are in a perfect position to buy a home that is a duplex…  and this will set you up for financial freedom for your entire life.

I believe in buying rental property anytime in your life as there are many reasons why this is one of the best wealth building tools available (8 out of 10 millionaires became millionaires through real estate), but buying investment property as a place where you will also live has unique advantages:

  1. Owner occupants can put less down.  When you buy an investment property the bank is typically looking for a down payment of 10% – 25%.  When you owner occupy you can do as low as 3.5% or 5%.
  2. Owner occupants get a better interest rate. Investors generally pay about 1% higher than owner occupants.
  3. You keep these advantages as long as you own the home.  If you live there a year and then move somewhere else that is perfectly fine.  You don’t have to refinance the home.  The only thing that would change is your property taxes would increase when you no longer owner occupy.

This doesn’t need to be the place you plan to live forever.  But while you do live there, the rent you collect from the other unit typically covers 75% – 100% of your mortgage payment.  This means you are living pretty darn close to FREE!!!!  Take this time to save for a down payment on the house that you buy that is a forever house.  And when you move to that forever house you rent out the apartment you were living in and it makes money for you!

For example, if you decide to buy 3 duplexes in 5 years (move every 18 months or so) and then after that buy a home where you would have a bit more space, a yard, and a white picket fence, you will have sufficient income from your rental properties to then make the payment for your single family house.  You can continue to live for free or almost free your entire life. 

I get really excited about this idea because I think of the freedom of lifestyle you could have if you didn’t have a house payment!

Maybe you’re reading this and you’re thinking “But, I’m already past this point and can’t buy them with a low down payment and interest rate anymore.”  I was in that spot too and have still been able to purchase rental property.  It can definitely still be done as an investment.  As they say “The best time to plant a tree is 25 years ago, the second best time is today.”

Start planting trees, my friends!