Tag Archives: property

The 4-step, never-fail plan to making a fortune in real estate …

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There is a lot of BAD stuff written about real estate and a little bit of GOOD stuff … start by finding and reading some of these good books (google “John T Reed” and see which books he recommends and which ones he pans).

The truth is that most people MAKE money through a business, then KEEP money by investing in real estate.

If you can’t (or won’t) start a business (even on the side) then you can at least accelerate your LIFE SAVINGS PLAN by buying and holding income-producing real-estate.

Right now, it’s very simple:

1. If you don’t yet own your own home (but would like to) BUY one now and LOCK in the interest for 30 years.

Why?

Home prices are relatively cheap (if you think they will get cheaper then wait a little longer … if you’re not SURE they will get cheaper, buy now).

Money is cheap – mortgage rates are probably 2% lower than they will be by 2009 or 2010.

You want to keep buying that cheap money for as long as possible …

… but, only IF you are prepared to take the next step, which is to …

2. Assess the increased / excess equity (what your house is worth – what you still owe) in your house yearly and use that excess equity to buy another as soon as you can scrape up a reasonable deposit (20% if you are conservative).

3. Lock in the interest rates for 30 years; rent the property out; keep raising rents; reassess the value of all of your properties yearly.

4. Repeat until Rich!

Now, this will take 10 to 30 years … to accelerate: start that little (or big) side-business and use the excess cash-flow to buy more investment properties rather than Porsches!

Simple … and, you couldn’t be starting at a better time in history.

Is your home an asset? A simple question with a not so simple answer …

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According to InvestorWords.com an asset is:
Any item of economic value owned by an individual or corporation, especially that which could be converted to cash.
Examples that they give include:
Cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property.
Now, here’s a definition that I like even better …
… it’s Robert Kiyosaki’s definition of an asset from Rich Dad, Poor Dad: 
 

Poor Dad vs. Rich Dad

My Poor Dad Says   My Rich Dad Says
       
  “My house is an asset.”   “My house is a liability.”
       
  Rich dad says, “If you stop working today, an asset puts money in your pocket and a liability takes money from your pocket. Too often people call liabilities assets. It’s important to know the difference between the two.
  
I don’t always agree with Robert Kiyosaki, but to me, this nugget is one of the best pieces of financial wisdom ever written (and, I have HIGH standards). Why?
Because, I have seen TOO MANY people base their ENTIRE financial strategy on the VALUE OF THEIR OWN home … 
But, your own home is ONLY A PLACE TO LIVE!
It’s only BECOMES an asset when you either (a) sell or (b) put the equity to work for you … until then, it’s just a piece of paper (title deed).Let me share a true story from my own family:
In the 60’s my Grandparents bought a 2-story downtown property with some friends … over the course of 40 years it became old, underdeveloped compared to the multi-story buildings that had sprung up all around, and simply didn’t bring enough rent in to allow her (and her partners) to keep up with costs (personal, and property-related taxes, maintenance, and holding costs).But, they tightly held onto the building because it was an ‘asset’ …

My Grandmother is still alive (she is now 95) and last year I had to LEND HER $40,000 (really! And, she wouldn’t let me just give it to her! Amazing woman …) because she couldn’t afford her share of the real-estate taxes.

Just before Xmas last year, she gave my son a check for his birthday … it bounced!

Happy ending, though …

She (yes last year at the age of 94, and on her own because her partners all live overseas) finally negotiated the sale of this building for $18 million (!) to a developer who way overpaid because he is putting up high-rise luxury apartments.

NOW it’s an ASSET. What about your home?

Groovy gurus or scheming scammers?

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There is plenty of ‘investment advice’ floating around im books, in newspaper ads and, yes, even in blogs!

You know you need the financial education to get ahead, so how do you tell the good from the bad?

For a start, try the Fedral Trade Commission’s Test Your Investment IQ …

Done? Now take a look at this BS Detector – it’s aimed at real-estate ‘gurus’ but will work pretty much for any type of financial advice.

And, if you have an interest in investing in real estate, and want to read some books, here is a very opinionated assessment of a number of the s-called real estate gurus out there and some of their books.

You might be surprised at some of the names ….

It seems that this guy doesn’t like ANYBODY, but he has some interesting things to say about them.

If you’ve been to some of these seminars or read some of these real-estate investing authors, let me know what YOU think.