Short Term Rental Riches 85. How I Got An Apartment Building For “Free” (Why Lease Arbitrage Will Never Equal Ownership)
Jun 29, 2021
Discover how the speaker secured an apartment building valued at $690,000 for 'free'—with zero out-of-pocket expenses! Learn why property ownership outshines lease arbitrage, plus strategies for maximizing real estate investments. Explore the power of leveraging interest rates to turn properties into lucrative assets. This engaging discussion reveals why investing in prime markets is essential and offers listeners invaluable tips for succeeding in the short-term rental arena.
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Tim's Apartment Building Story
- Tim Hubbard bought an eight-unit apartment building for $270,000 and invested nearly $200,000 in renovations.
- After market appreciation and renovations, the property is now valued around $700,000, allowing him to refinance and recover his original investment.
Ownership Trumps Lease Arbitrage
- Owning property with leverage can lead to an infinite return when you refinance and get your original investment back.
- Lease arbitrage can generate cash but can never achieve the infinite return of property ownership.
Invest in Growing Markets
- Invest in stable markets with strong fundamentals like population and employment growth for sustained appreciation.
- Refinance when your property value increases to pull out equity and effectively own the property "for free."