Question about make profit out of renting houses.

[Hyunwoo Shin]

Hello everyone,

First of all, I'm so glad that I found this website which have ton of people who would help you to succeed in real estate.

I'm totally new in invest on real estate and have thousands of questions.

My first question is can real estate invest get you money if you keep buying houses with putting down payment with line of credit? 

I've watched few real estate investing videos on Youtube and all of them are saying you can buy a house for lower price than the market and put down payment on new house with the difference (equity?!)

So you have 1 house first year, it becomes 2 after the first year then you can get 4, 4 becomes 6 or whatever.

If you constantly expanding your portfolio and nothing have actually  paid off then how can you make money out of it?

I am sorry for my poor English but I hope you guys understand what is the point of my question.

[Kerry Baird]

@Hyunwoo Shin, I will answer more simply.  A very common path to get started is this:  

Get one house the first year, with 4 units.  5 units are too big for conventional lenders.  Rent out the other units and live in one unit.  When you live in a property, the banks can give you lowest down payment requirement, and lowest interest rate on the loan. 

Save the rents until you have enough for another 4-unit property...two or three years, and move into it.  Rent out the other units.  

Save up the rent from the first and the second property.  Buy a third property and move into it.