“It takes money to make money.”
You’ve probably heard that quote if you understand the business world and are familiar with basic investing strategies.
Well, it’s very applicable and valid in the real estate world, too. Why?
Because to acquire rental property, regardless of whether it’s a single family home, small multifamily, or a 300-unit apartment complex, you’re probably going to have to pay a down payment and fork over some cash.
Hence, it takes money to make money.
In my personal experience in building a portfolio of properties in Indianapolis, I generally put 25% down on my investment properties, meaning I have a nice chunk of cash “tied up” in my assets. Since I’m constantly saving then re-investing on repeat, you could call me “asset rich, cash poor” -- which many investors can relate to, as well.
With money tied up to acquire property, that brings us to the questions, “Is real estate liquid?” and “Can I access my equity quickly, if needed?”
As a quick answer, I’d say no.
To keep reading, check out the full article I wrote that was published on Roofstock below!