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Transforming Debt Into Wealth

How To Finance Real Estate Investment Using Other People's Money

Transforming debt into wealth is the secret ingredient that makes the rich so wealthy.

So, if you wish to retire wealthy, you must learn how to create wealth using other people's money.

Here's a quick note of warning before we dive deep into this subject.

There is good debt and there is bad debt.

Good debt is debt you incur in order to invest in assets that grow in value over time.

Bad debt is debt you incur to buy liabilities, which depreciate in value over time.

For example, if you take a loan to buy a bigger TV set, that would be considered bad debt because the TV set depreciates in value over time.

In fact, the value of your TV set depreciates by about half its value when a newer model hits the market.

On the other hand, when you buy a property through an investment property loan, you incur a debt but the debt is considered to be good debt because the value of the property will grow over time.

Bottom line.

Transforming debt into wealth is possible when you invest in assets that grow in value over time. And the asset that is guaranteed to grow massively in value over time is real estate.

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How To Build Wealth Through Real Estate

How do you build wealth through real estate?

Simple answer . . . buy a lot of investment property.

Buy the best land investments possible and also invest in rental property.

How do you get the money to invest in multiple plots of land for sale as well as buy rental properties?

Simple. Get into debt . . . good debt.

How?

Well, there are at least two basic ways to get into debt without having to deal with the stringent rules associated with applying for mortgage loans.

1. Take loans from reasonably well-to-do friends and family to part-fund the property you wish to buy or

2. Apply for personal loans against your salary to fund your real estate investments

The growth in value of your real estate investment will then help you in transforming debt into wealth.

Quick question: Why use a personal loan when you can apply for a proper mortgage loan, which has a longer repayment period and gives you access to bigger cash?

The reason is this: Most banks offering mortgage loans often require the applicant to have what is called equity contribution.

Equity contribution is the percentage of the loan amount the applicant must provide in order to qualify for the loan. And usually the equity contribution is about 20 to 30 percent of the loan amount being applied for (depending on the bank).

Investing in real estate using a personal loan allows you to start buying investment property right away without the need to make equity contribution.

Of course, we encourage you to also take advantage of mortgage loans, if you have the credit level to do so.

Transforming Debt Into Wealth - A Quick Case Study

Just how big can your real estate investment grow?

Consider a simple example.

Suppose you buy a piece of investment land for $2,700 today and the investment land is situated in a location that grows at, say, 25% per year.

Suppose too that you decide to hold the property for 15 years with the goal of have the money available for you to spend after you retire.

Guess what.

The $2,700 you invested in the land will grow to about $151,000 in 15years.

That is 56 times the value of your initial investment!

That is massive!

What if you decided to take a personal loan of $10,000 and invest the entire amount in a property in this area?

In 15 years, that initial $10,000 investment would have grown to about $560,000.

Surely, that is the kind of growth in investment you desire. That is the kind of money that will make your retirement enjoyable.

The repayment period for personal loan is about 4years.

If you take up a new personal loan every 4years (and buy additional investment property every time you do), at the end of 12 years, you would have acquired at least three investment properties. And the combined value of your real estate investments would be over a million dollars.

Get the picture?

Bottom line.

The secret to build unlimited wealth is learning how transforming debt into wealth can make you a multi-millionaire. And then acting on that knowledge.

Want to retire wealthy?

Start buying investment property today using other people's money.

Don't be afraid to take bank loans . . . either personal or mortgage loans . . . to finance your real estate investments.

Related Article:

Investment Property Loan

Real Estate Investment Loan