Bulletproof Investing

CHAPTER 12Getting started

As is true with most worthwhile endeavours, the hardest step is the first one. Entering the real estate market is no different. Exactly where do you start and what comes first? As my own (nervous and uncomfortable) entry confirmed, you don't need hundreds of thousands of dollars to buy a property. In fact, under normal circumstances, a bank will lend you 80–90 per cent of the property value.

So, if you're buying a $500 000 property, the bank will lend you between $400 000 and $450 000. That means you only need to come up with the balance — somewhere between $50 000 and $100 000, depending on how much you're prepared to put in (or you want to borrow). This is what successful people refer to as leverage, which means using someone else's money (in this instance, the bank's) to invest.

‘Why would I want to get into debt?’ you ask. The answer comes back to the distinction between good debt and bad debt.

BULLETPROOF TIP

Use other people's money to get started

The longest, most arduous journey starts with the first step. Regardless of age, gender or background, we all have to start somewhere. Access other people's money to commence your journey and grow your own limited resources from there. This might involve using bank debt to leverage your investment or borrowing from friends or family for a deposit on your first property. It could also mean pooling ...