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For numerous individuals, the sole means of acquiring a house is by securing a mortgage and gradually settling the debt over an extended period.
In the final quarter of 2024, the median price for a U.S. home stood at $510,300, as reported by Federal Reserve Economic Data. Considering that the median yearly salary was only $61,984 in the same period, it becomes clear why many average working Americans find it challenging to cover even the down payment, much less purchase a house outright.
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However, ultra-rich individuals are in a distinct situation. People who have accumulated billions of dollars can afford to purchase a house entirely instead of opting for a mortgage.
Still, notable figures such as Mark Zuckerberg, Elon Musk, and Jay-Z have garnered attention for securing multi-million dollar loans — not due to financial needs, but to take advantage of several key perks.
This facilitates improved cash flow.
A person who has become a billionaire multiple times might not be overly concerned with cash flow. However, choosing to borrow for a house enables them to retain their liquidity, keeping their funds available for other uses instead of locking it into an illiquid asset.
Take Hollywood’s
it
For example, consider the influential duo Jay-Z and Beyoncé, who have a collective fortune valued at approximately $3.2 billion. However, in 2017, when their total wealth stood at around $1.6 billion, this dynamic pair secured a $52 million loan to acquire a hillside property in Los Angeles priced at $88 million, as reported by the L.A. Times.
Robert Cohan, managing director at Carlyle Financial, told Business Insider in an interview that depending on their investment portfolio, both Beyoncé and Jay-Z might reap significant benefits. This would provide them with flexibility and enable them to clear their mortgage whenever they choose.
Even if you’re not part of the top 1% in America, you can still secure a reasonable mortgage rate. The important thing is to avoid settling for the initial proposal and instead compare offers by seeking quotes from at least two to three different lenders.
A study carried out by LendingTree found that 45% of homebuyers who obtained multiple quotes ended up with a better interest rate than their first offer.
Mortgage Research Center
Can assist you in browsing for rates from approved lenders close to your location.
Simply provide us with some essential details regarding yourself, including the kind of property you’re interested in along with its corresponding ZIP code, overall expenses, preferred initial payment amount, as well as your yearly earnings and credit rating.
The Mortgage Research Center subsequently connects you with lenders who are most appropriate for your requirements. Afterward, you have the option to proceed.
schedule a complimentary, non-binding meeting
to better determine if they suit your needs.
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Release more funds for investment
If you bought a home within the past few years with a fixed interest rate, it’s likely that you could currently refinance at a reduced rate.
Mark Zuckerberg, who ranks as the globe’s second wealthiest individual according to the Forbes Real Time Billionaires list, followed suit.
In 2012, when Zuckerberg ranked #40 on the list with an approximate net worth of $15.6 billion, he refinanced his residence in Palo Alto, California, taking out a 30-year adjustable-rate mortgage at an interest rate of 1.05%.
While rates probably won’t go down to that level any time soon, the Federal Reserve’s rate cuts over the past few months have already had a noticeable impact. Median mortgage rates are currently hovering around 6.95% — down from 8% in October last year.
Given that the Federal Reserve plans to reduce benchmark interest rates in the coming months, it could be wise to begin exploring your alternatives.
Preferably, you could secure a better interest rate by comparing options. A LendingTree research indicated that 56% of homeowners browsed different lenders before refinancing their mortgage. Additionally, 81% of these individuals managed to obtain a reduced rate after deciding to refinance.
The Mortgage Research Center is likewise a useful resource if you are searching for
refinance your current mortgage
.
The procedure remains unchanged – you must provide details about yourself and your present mortgage, after which the Mortgage Research Center will handle the rest.
pair you with pre-approved lenders
offering competitive rates.
Additional methods for investing in property
Acquiring extra properties aimed at generating rental or investment revenue can still pose challenges, even for those who qualify as accredited investors. Besides concerns over regular upkeep and property tax obligations, one must also contend with the inconveniences associated with managing tenants when considering leasing the property.
This is where
First National Realty Partners (FNRP)
With an initial outlay of at least $50,000, accredited investors have the opportunity to acquire a share in high-quality commercial properties anchored by supermarkets, all without needing to handle the detailed work themselves.
The specialists at FNRP oversee every stage of your investment—from evaluating potential properties to acquiring them and handling tenant relations. They usually rent their locations to well-known retailers offering necessary products, such as Walmart, Whole Foods, and Kroger.
FNRP also distributes all payouts.
Positive cash flows distributed as quarterly dividends
, assisting you in creating residual income effortlessly, without the hassle of managing properties and tenants.
For individuals seeking cost-effective investment choices,
crowdfunding opportunities
can offer a method for constructing a passive real estate portfolio without having to handle all the hard work.
For instance, accredited investors have the opportunity to put money into private REITs via DLP Capital’s investment funds. Such investments come with tax benefits and distribute any positive cash flow through monthly, quarterly, or yearly payouts. Consequently, this could provide potential advantages.
earn passive income through real estate
.
DLP Capital’s investments target an annual return between 9% and 13%, which aligns with the S&P 500 index’s typical return rate of 10.26%. However, with DLP Capital, investors also gain the advantage of diversification through their strategic approach.
income-producing real estate funds
in your portfolio.
An alternative approach is to invest in real estate via Homeshares. This platform enables accredited investors to obtain direct access to a portfolio comprising hundreds of properties.
residential properties owned by homeowners in major American urban areas
Through their U.S. Home Equity Fund — avoiding the hassles of purchasing, owning, or handling real estate.
The fund concentrates on properties with significant equity, employing Home Equity Agreements (HEAs) to assist homeowners in obtaining liquidity without taking on debt or facing extra interest charges. This method offers a practical, effortless means of doing so.
Invest in top-notch real estate homes
, coupled with the additional benefit of spreading investments across multiple geographic regions – requiring only a minimum investment of $25,000.
The U.S. Home Equity Fund provides accredited investors with internal returns adjusted for risk, which fall between 12% and 18%.
a minimal-effort substitute for conventional property ownership
.
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The content of this article serves solely as information and must not be interpreted as advice. It comes with no guarantee or warranty whatsoever.
