Scott Stokas: How to Build a Portfolio of Rental Properties

● Scott Stokas is the vice president of acquisitions at Pontus Capital, a private investment firm focused on investments secured by real estate.

● Once the purview of only the very wealthy, real-estate investing presents an attractive opportunity for many investors of more modest means.

● Because it is possible to purchase a residential property and rent it out for enough to cover the mortgage payment and associated costs, many Americans have turned to real-estate investing as a way of generating additional retirement savings or income.

● Their strategy is to use the income generated by the property to pay down the mortgage and generate equity, which can be cashed in when they retire.

● There are other strategies that can potentially generate a greater return.

● One approach, for example, is to purchase a new property every year.

● This should not present a significant challenge as long as the properties already owned are occupied and generating revenue.

● Once at least seven years have passed, the first property can be refinanced with the tax-free loan proceeds banked to supplement one’s investment portfolio or retirement income.

● The other properties can each be refinanced after they have been owned for seven years, thus generating a significant additional income every year.