Buying Investment Property

I first got interested in buying investment property from watching those late night infomercials with Carleton Sheets and his “No Money Down” course.

Some of you may know what I am talking about if you watch TV late at night or real early in the morning.

Anyway, the more I watched his presentation the more it began to make sense to me.

I watched Carleton’s “No Down Payment” infomercial for about 2 weeks before I finally decided to order his program to see what it was all about.

When the package came I read every chapter, listed to the audio CDs and watched all the video tapes.

I was pumped!

I didn’t stop with Carleton’s course.

I began to research anything and everything about dealing with buying investment property from the internet.

I ordered books online and checked out books from the library also.

Eventually I bought my first house and my life as a real estate investor had begun…

In this article I will discuss a few benefits I received from buying investment property and how it made me a millionaire!

This was my first house and I lived in it for 4 years! It was a foreclosure and I bought it for $20k less than its market value. Completely paid it off in 7 years. When I moved I made it an investment property and rented it out!

CLICK HERE to see the program I used to pay off my 30 year mortgage in only 7 years!

You make money in real estate when you BUY not when you SELL”

Buy Investment Property And Create A Passive Income Stream

Maybe you have heard of the term passive income but don’t know exactly what it is.

A Passive Income stream is something that is developed after having to work hard at once.

And once you complete that hard work (task), that’s it.

Your work is done! The money will keep flowing into your bank accounts for the rest of your life … whether you work, sleep, travel the world … or even die.

Say for Example – Books, Music & Movie Royalties.

Royalties are the best examples of passive Income.

Robert Kiyosaki, the New York Times Bestselling author of the Rich Dad Series of Books, worked hard only once to write a great book.

Once the book is created, his job is over. He will make money even while he sleeps … without any further efforts. This is due to the that people will never stop buying his books.

Other Examples of Passive Income are:

– Rental Income
– Interest Income
– Dividend Income
– Online Income (Blogs, Websites, Affiliates Marketing … etc …)
– Royalties
– Network Marketing
– Business Income … etc …

In all the above cases, you have to work hard only once in order to develop that passive income stream. Once you complete your hard work, your job is over.

So after you buy your investment property your goal should be to always keep it rented. By keeping a tenant in the property you will collect a monthly rental income. Use your tenant’s rental income to make your mortgage payment. There is a little more to it but using this simple strategy your tenant will basically buy your house for you! Isn’t that wonderful? This is what we call using OPM (Other Peoples Money) to build your real estate empire.

Now once your mortgage is completely paid off and you own the home Free and Clear you will be able to pocket the majority of the income (minus taxes, insurance and repairs).

Think about it this way. What if you had about 10 houses that were completely paid for (mortgage free) and each house had a monthly rental income of $1200? That would be $12, 000 a month or $240,000 a year that you would collect for as long as the houses are rented. Would you still be working your same old job you are now?

>>CLICK HERE TO PAY OFF YOUR MORTGAGE IN RECORD TIME<<

Buy Investment Property And Increase Your Net Worth

What is your net worth and why is net worth important?

Your net worth is the total of your assets (property and possessions that you own) minus the total of your liabilities (money that you owe).

Your net worth is critical information. Knowing your net worth is the first step in organizing your personal finances and building wealth. But even more important as a real estate investor you need to understand how banks view your net worth. Keep detailed records of your assets on your balance sheet (excel document).

When a bank is reviewing your business documents, they’ll want to see that you’re paying careful attention to all of the relevant factors. At some point you may have to borrow money from the bank.

But before you receive any money from a bank, the lender will scrutinize both you and your business to see if you’re a viable borrower. So if you pass a credit check and you operate a healthy business, most banks will also require an additional, and tangible, guarantee that their loan will be repaid: collateral.

You may not have a high paying job or a lot of cash in the bank but if you have a lot of assets the bank will definitely consider that! Having multiple income producing investment property on my books has allowed me to receive large personal and business loans I know I would NOT have otherwise received from the bank!

Buy Investment Property And Build Wealth

Buying investment property is the rich man’s secret to building true wealth. Real estate normally appreciates (goes up in value) over time unlike a new car that depreciates as soon as you drive it off of the car lot! Let’s go back to the scenario I described earlier.

If you have 10 houses that were completely paid for (mortgage free) and each house appraised for $120,000. If you were able to sell each house for $100,000 you would still pocket a cool one million dollars! Not bad, especially since you started off with a handful of lint in your pocket.

Let’s face it, most people are not going to build wealth in their lives based on their salary only. Making a lot of money doesn’t make you wealthy! Unfortunately when you die so does your income UNLESS you have created a PASSIVE INCOME stream! Are you going to leave your family a bunch of debt (liabilities) or wealth (assets)?

Yes, Investment Property Made Me A Millionaire

Using the techniques I describe above I became a millionaire on paper. That means although I don’t have a million dollars in the bank if I were to sell all my investment property at the current market value I would easily surpass the million dollar mark.

Buy Your First Investment Property Today

If you have not already done so, try starting with buying your own home first!

P.S. If you have enjoyed this article please make a comment or share with others!

Thinking about buying your first rental property?

From time to time I get asked how I got started buying rental property. Well in this blog post I want to share a little bit about my first real estate investment purchase.

From the first decision to invest in real estate to actually buying your first rental property, there is a lot of work to be done. This task may be daunting for the first-time investor. Owning property is a tough business and the field is peppered with land mines that can obliterate your returns.

My First Rental Property

Here is a picture of the very first rental property I purchased. It was a little two bed room house located in Rolla, Missouri. I believe it was less than 1000 sq ft and built in like 1950,

A common mistake for beginning investors is to believe that you have to buy a big (spacious), costly and newer home or else families looking to rent a home will not rent your house.

This is simply not true! You don’t have to purchase your “dream house” for your first or subsequent investment property.

The most important thing is to take an unbiased approach to all the properties and neighborhoods within your investing range.

So what is the average tenant looking for before they rent a home?

Most tenants are looking for the following: Affordability (rent price), good neighborhoods (safe), schools, jobs and amenities (malls, gyms, movie theaters, public transport hubs). So if your home has decent outward appearance (not falling apart), well maintained yard, and on the inside it has nice carpet, appliances, paint job then there is a strong chance that you will be able to rent your property fairly quickly.

Top 3 Things To Consider Before Buying Your First Rental Property

So what should you consider before buying your first rental property?

There are several things you should consider but in my opinion these are the top three:

1) The physical property, 2) neighborhoods, and 3) potential cash flow.

The Property

In general, the best investment property for beginners is a residential, single-family dwelling or a condominium. Single-family homes tend to attract longer-term renters. Mainly because families are generally better tenants than one person is because they are more likely to be financially stable and pay the rent regularly. As a landlord, you want to find a property and a neighborhood that is going to attract that type of demographic.

Neighborhoods

The quality of the neighborhood in which you buy will influence both the types of tenants you attract and how often you face vacancies. For example, if you buy in a neighborhood near a university, the chances are that your pool of potential tenants will be mainly made up of students and that you will face vacancies on a fairly regular basis (during summer, when students tend to return back home).

Cashflow

When you have the neighborhood narrowed down, look for a property that has appreciation potential and a good projected cash flow. After all the whole reason your are investing in real estate is to make money and build wealth, right?

Lets go back to my first purchase (above), the original owner was asking $39K for it and I purchased it for $32K.

Difference in $: 7,000.00
Difference in %: 17.95%

So as you can see I purchased the home for almost 20 % below the asking price. I rented the home for $425 a month until I sold it a few years later for $42K (just before the real estate crash).

Whenever you are considering purchasing your first rental property or any investment property you should always do a cash flow analysis. This is how an investor takes a look at how that a property generates cash flow from rental operations.

The main use for doing a detailed analysis is to figure out if your first rental property or any prospective investment property will ‘cash flow’ (Income minus Expenses is greater than Debt Service).

In most cases, investors want positive cash flow but for some properties, you may be willing to put up with a small negative cash flow before taxes.

Just remember when investing you make money when you BUY not when you SELL!”

Check out how buying investment property made me a millionaire and changed my life.

Buy Your First Rental Property Today!

I hope that this article has been informative.

By The Way, Are You Already A Home Owner?

Check out the little known program I used to build equity and pay off my rental property fast! Click Here Now! Request a FREE, no risk, no obligation, analysis today!

P.S. I’ll show you what the Banks DON’T want you to know… how to rapidly pay off your mortgage and other debts AND make $5000 a month in the process!CLICK HERE and let’s work together now!

P.S.S Don’t be afraid to buy your first rental property today!

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