Want to make a MILLION Dollars??? UPDATED!!
Submitted by takeaction on Tue, 10/20/2009 - 11:11
UPDATE:I was jumping around online......could you imagine 50 or 100 of us DP'ers going into this neighborhood and buying 50 to 100 of these houses. We create our own food, water and solar source etc. very interesting.....just a dream.
Read the Article.......especially the part
Lesson no. 1: Forget about flipping: this is the landlord business
http://money.cnn.com/2009/10/16/real_estate/Real_estate_barg...
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Being in business for over 30 Years now, and have written several books on the topics of wealth building...we are coming into a time of either make it or break it.
STOP: Before I continue......I want to put a halt to all of the comments that are going to come saying..."If we still have a country", or "Just buy food and ammo", etc. I am prepared for the worst case scenario if our country collapses...but you also have to be prepared if IT DOESN'T!!
The time is coming.......
I just got back form a 2 week trip to Miami, and to the Dominican Republic. The first week I spent in Miami, I got the itch to do some research in regards to property values. I was amazed to see that you can buy a house in Miami for less than $15,000. That is amazing. I even found a duplex for $10,500. Sure these homes are in bad shape, and need a little work, but come on.....Rents are still high in these areas and if it pencils out....it is a no brainer.
Here is how you become wealthy in your lifetime.....it is so simple. Of course if SHTF it really doesn't matter, but I am going to assume for this little bit of info that we come out of this financial crisis without chaos. Sure it might get worse...but when their is blood on the streets...BUY.
Now is the time to start making offers on properties that you can rent out for a positive cash flow. I am talking LOW Ball offers.
In my area, Portland, Oregon, house prices have not fallen as bad as Miami, or Detroit, but I am ready to start making offers if the Rents pencil out.
I am seeing houses offered for about $110,000. I will offer $80,000. I will do this over and over until one says yes. I put $10,000 down and finance $70,000. The payment at 5.5% interest is $397 a month. I can rent this house all day long for $895. So I am making close to $500 a month while somebody else is paying off this house. And it even gets better. This house that sold for $200,000 several years back...will eventually go back up in price......When it does...you are wealthy beyond your dreams. Do this 10 times.....and you are making $5000 a month, and will have $1 Million dollars faster than you think in equity.
Even if you want to do it on a small scale.....lets say you have never bought a house before. Well, figure it out now!!!!
This could be the biggest wealth building time of your life. If you don't figure it out....Oh well, thanks for paying for my retirement....LOL.
Sorry....I am just trying to motivate you....
If you want to start out small....here is a way.
Lets say you buy the same house I am. The one for $80,000 with $10,000 down. The payment is only $397 a month. Then you rent out one of the bedrooms for $500 a month to an older person or a college student. (Always somebody with good credit). Now you ar owning a home for ZERO out of pocket expenses.
Do you get it??
Now....some people are going to comment.....
I don't have $10,000...
I don't have good enough credit....
I can't find houses like that....
The country is doomed so I don't care....
I don't make enough money....
Blah...Blah...Blah.....
No matter what "Your" excuse is, you better figure it out. The time is now to take advantage of this big downturn in real estate.
If you understand what I just typed.....I hope you act on it. If you don't understand it......you might want to read it over and over until you do get it.
Either you figure this out.....or you work forever.
The nice thing that has happened right now is that RENT prices far out pace the cost of owning, so it is relatively easy right now to buy homes or a duplex that will produce a positive cash flow.
When this happens.......Myself as an investor could care less what the markets do. If I am paying $397 a month on a mortgage, and making $500 a month. The house value can still go down to zero...and I don't care.
Does this make sense??
Thanks, for posting
makes for a very interesting discussion. Good luck to you on this.
I'm in Palm Beach County,
I'm in Palm Beach County, not Dade, but the houses I've seen for $15,000 are knock-downs. My family is in real estate and we've been doing a lot of bank owned/ short sale/ foreclosures lately (if you need a GOOD Realtor or property manager in FL, message me). It's mostly investors buying right now. There are a TON of empty apartments here and property taxes are being raised. I don't want to discourage anyone from buying. I just want you all to be careful (because I love you guys :)
Rand's March 23 Moneybomb. Pledge! www.winrandwin.com
Where in Miami? I got cash
Where in Miami?
I got cash and would love to jump in on the real estate game now or even 2010 but I'm in Japan so I really don't know squat about what's going on back there.
Fill me in!
One of my favorite sites is
Zip realty......
If you are serious.....Learn how to use this site. It is 100% FREE....and if you learn how to use this site......you can do your own research in your area......and find out what market you want to look at.
After you learn how to use this site.....print out the addresses of the houses you are interested in...and go look at them.
Then you contact a GOOD realtor, go into the houses you like....and after that...start slinging offers.
You have to learn how to use this site.
http://www.ziprealty.com/
After you grab the listings you want.....sort by price.
This site is kind of like Ebay in the way it works...you can sort the properties in many different ways.
You can not bid on them...but the sorting functions are really good!
I appreciate it, thanks!!!
I appreciate it, thanks!!!
Read
the article I just posted in the OP!
takeaction,
is this your idea,
or a copy-and-paste from someone somewhere on the internet?
lol..... vlbc... the thorny
lol..... vlbc... the thorny prick of the daily paul....
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
lol ... sierra
If you have nothing to say, don't bother posting.
I just asked a question ... OK?
100%
me. No copy and paste. Bought my first duplex when I was 18 years old.....I am now 43. And after getting back from a little vacation.....and physically seeing houses for $15,000 or less in Miami myself with my own eyes....I could not believe it.
It triggered me to start buying properties again.....
This is the first time in 8 years where properties are actually penciling out into a positive cash flow situation.
I was just trying to help my fellow DP'ers....
It has been 8 years since I have witnessed these type of property prices at this low of an interest rate.
I have nothing to gain from telling you this...
I just thought maybe I could help one person get out of the Daily Grind.
Hope somebody listens and gets it.
Okay, so your payment of $397 is based on a 5.5 loan for
30 years with a 700 plus credit score. If a lower score add 1%. Not to mention if you're buying a second or rental your rate will be higher than 5.5 initially. You say "making 500 a month", does not take into consideration mortgage insurance, (less than 20% down), homeowners insurance and property taxes (which are probably still based on a 200k value), the initial cost of fixer upper repair and of course the abuse by a tenant. I don't know about Miami, but where I am at, rentals are sitting empty. Anyway, you should probably do some recalculations before embarking on your get rich quick plan.
Good points, I forgot about
Good points, I forgot about the insurance. And yes, tenants will trash the place, so you have to budget a certain amount for that every year too, along with the midnight calls and repairs. Ever own a home? It takes a lot of money to maintain them properly.
Some people I know who own rentals don't make much off of them, they're hoping to cash in on them in 20 years by building equity and selling them off for retirement.
not only that, what about
not only that, what about the months that is sits vacant between renters etc.. maintenance etc...
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
I knew this was coming
I just gave you a quick run down to trigger your interest.
Either you figure it out or you don't.
Calculate in all of the other stuff... Sorry if some peoples credit score is SAD...that is their own fault an people will rent for life.....ooops.. I bought my first Duplex when I was 18 years old...I am now 43. It has worked for me....and it is the only proven way to build wealth......EVEN if you MAKE zero dollars per month.
Just trying to help. None of my Rentals are vacant.
This is not a get rich quick plan. It is fact. Again....this is why the top 5 percent of the richest get richer....they figured it out.
I am just moving forward on a plan that I have been following for the past 25 years.
All of the figures that I gave are examples. Pencil each one out for yourself in your area. You will know in a matter of minutes if it works or not.
And about your Negativity, and trying to put a damper on what I said.....Right now is the best time to Negotiate "Owner Carry Contracts". Even if you have horrible credit, and do it right, (Registering the transaction with the county) You can buy homes right now with ZERO down, and at 5% interest with NO PMI.
IT all depends on your motivation.
I don't want to sound like an infomercial......all I am trying to do is spark some interest so maybe people can come out of this so called "Financial Disaster" smelling like a rose.
I am not negative nor trying to put a damper on..........
"I just gave you a quick run down to trigger your interest."
Unfortunately, your quick run down neglected to mention numerous variables into the equation and you came off as not knowing what you were talking about. Hope you understand and I apologize for the misunderstanding if you don't.
"Either you figure it out or you don't."
I think my post should tell you I get it.
:)
All smiles my friend. I just hope other people here on the DP can use this so called "Financial Crisis" to their advantage.
Peace.
Yes, long term might be the way to look at it
Some people I know who own rentals don't make much off of them, they're hoping to cash in on them in 20 years by building equity and selling them off for retirement.
Your "quick run down" missed a lot of key costs though.
Good stuff.
Where do you find these listings? I've manged to find a couple really good deals, but only from one source. Do these tend to find their way to MLS or is it a local newspaper or signs kinda thing?
Having been in this movement for so long now and pretty much always thinking the "big one" was coming really soon, I feel like I missed a lot of opportunities out of aprehension. Well, as much as I'm still convinced the big one's coming, I need to get prepared in case it doesn't. Sounds funny, but it's true.
MLS
Is a good source....but in my experience in buying these properties...it is best to hook up with a REALLY GOOD Realtor. Their are a lot of horrible ones that DO NOTHING! But if you find one in your area, and check their past history in regards to Bank owned properties. And what I mean in regards to checking their history....is you need to see if they are getting the deals DONE. They will have a working relationships with the banks...and you are in. Many realtors have no clue in regards to what they are doing in dealing with "Short Sales' or "REO's". You need a good Realtor that does all the work for you. And start making offers.
I am making 5 offers today. They are low ball offers......and if they are not accepted....Oh well.....onto the next ones. It is like bidding on cars....their is always another....
Never get emotionally attached to any of these homes.....that is another key.
Also....avoid homes that are over 25 years old!!
A couple other little key things for you to chew on.
If you are really serious
I would suggest becoming a realtor yourself, or avoid them altogether... I bought and sold my last 2 houses 'by owner' - no agent. Saves time / $ / and headache's!
Risky time to be in the realestate market if you ask me. Try finding auction homes / forclosures? / bank sales. I know there are ways to find these before they are advertised publicly'.
Good luck! (try Estacada...Colton? or Mololla?)
Fibonacci Farm
http://www.facebook.com/profile.php?id=100000854898716&ref=s...
What about property taxes?
Don't forget to subtract those from your profit. Just because you buy a house that was worth $120,000 two years ago that was foreclosed for $10,000, doesn't mean the house's property taxes will go down by an equal percentage. They won't if the surrounding area is still doing OK. That's the one thing that most people don't consider or understand when they think they're going to rake it in by buying a house to rent. Property taxes can take a large portion of the profit you think you're going to be making. I'm not saying you can't make a million doing this, you certainly can, but don't forget this very important variable in your calculations.
Property
Taxes should be calculated into the equation....also, PMI like the guy mentioned above. I thank you for your comment......and to expand on your question....
Property taxes can be re-negotiated after the sale. The process is tedious but it is worth it.
Look into the county that your buying, and contact the local property tax office and ask them what they are doing in regards to re-negotiating property taxes. They will tell you the process.
The entire goal of Real Estate investing is to achieve a positive cash flow after all bills are paid.
I think people here are smart enough to pencil it all out. It is so simple, yet a very small percentage of people ever pull the trigger.
Again.....to all of the renters out their.....we thank you!