Why I’m Never Going To Afford A Home

Today we're addressing a Reddit User who says he will never be able to afford to buy a house on his current salary - here is my response, and how anyone can invest in real estate - Enjoy! Add me on Instagram: GPStephan

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First, LOOK AT WHAT YOU CAN AFFORD.

One of the BIGGEST “cheat codes” to real estate is to speak with a mortgage broker, a bank, or a local credit union to see approximately what type of loan you can qualify for.

Second, SAVE FOR A DOWN PAYMENT.

The nice thing when it comes to mortgages is that there are a WIDE VARIETY of mortgage options for you to chose from with varying down payments, ranging anywhere from 20% on a conventional loan, to as low as 3.5% if you’re able to qualify for an FHA loan.

Third, INCREASE YOUR CREDIT SCORE

The lower your credit score is, the higher the risk you are to banks - and because of that, you’ll pay a higher interest rate, costing you more money.

Fourth, BE RELENTLESS ABOUT SAVING

FIRST comes REDUCE SPENDING AS MUCH AS POSSIBLE.

Take a look over your budget, track every PENNY in your account over the next few months, and cut out ANYTHING you don’t absolutely need. I know this sounds common sense, but it was found that the average American spends $18,000 PER YEAR on nonessential spending…and ALL OF THAT is money that could be put towards a down payment, instead.

Next, Part 2: Earning More Money.

The fact is, if you’re saving as much as you can, and you’ve hit a wall in terms of what you can do…the only logical option now is to work on increasing your income. One of the most effective ways of doing this, statistically speaking…is to change jobs. Studies have shown that people who stay with their employer longer than 2 years, on average, earn 50% LESS than those who hop from one job to another. This allows you to start your new baseline salary at a much higher level than you would otherwise get from a salary increase at your current job…so, consider switching employers, use your current job as leverage for negotiations, and - you mind find yourself making SIGNIFICANTLY more money in the process for doing the exact same work.

Next, fifth, BE REALISTIC

Instead of buying a 3 bedroom, 2 bathroom house in the middle of the city as a single guy - look for a 2 bedroom home 20 minutes outside of town, where prices might be HALF THE COST. If home ownership is something you want to make a priority - be open to other areas that you might not have otherwise considered - sometimes, the difference of 20 minutes can make a SIGNIFICANT impact in terms how much you spend, so that shouldn’t be overlooked.

Sixth, BUY A MULTIFAMILY BUILDING TO SAVE MONEY.

In my opinion, this is one of THE most effective ways to begin building wealth in real estate for a few reasons:

One, LESS COMPETITION.

The majority of families and home buyers NEVER THINK to go and look for a 3-unit triplex, because they don’t want to have neighbors, they don’t want any shared space, or - they don’t want to be a landlord, and that’s understandable.

Second, you can get a LARGER MORTGAGE

That’s because, on established properties, lenders will take 75% market value of rents - and apply that to how much you qualify to receive as a loan.

Third, you can SAVE MONEY.

That’s because you’re becoming a landlord under the same umbrella of purchasing a property for yourself, and using that income to offset the cost of owning the building.

And lastly, YOU CAN GET A LOW INTEREST RATE.

As long as you move in as a primary residence, lenders pretty much treat 2-4 unit properties as they would any other house in terms of your interest rate.

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For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/