I'm learning and preparing myself to become to start investing on realestate to become financially independant in next 6 to 10 years. I live in Bellevue Seattle area. As a step 1, working on to add a kitchen in my primary home basement to rent it out (working with an architect to get a plan to get approval from city). In parallel going to work with local banks to talk about my investment plans (adding kitchen in basement for rent out and then invest on a duplex). My question is, when i was talking with my agent, he recommended not to take Equity loan for the investment, he is recommending to invest if i have cash which i dont. is he correct? or i should leverage my home equity? My plan is rent my basement to manage the equity loan and use the rent from duplex to manage its own loan.
Most Real Estate agents have as much training about investment real estate as your typical W2 worker. My friend, a fellow real estate investor, decided to get his Realtor's license. He said that in the classes they were teaching people that if you buy a rent property you should work to pay off the mortgage. If you take investment advice of people that are working in a job, you get the same result they have.
If you never touched the equity in a rent property, you would be working forever. It takes a long time to save up a down payment just out of W2 savings. Taping into equity to buy your next deal is what you must do to grow. Just do the math and do it intelligently.
FWIW, becoming financially independent in 6-10 years is a very aggressive timeline. It can be done if you are willing to work very hard or have a lot of capital to deploy (or both). Don't get discouraged if it becomes apparent that it might take 15+ years.
It takes a while to get that flywheel spinning, but once you do, the benefits of compounding take hold. At that time growth seems to happen very quickly. My wife and I now sometimes look at our finances with disbelief because they have grown so much.