Sharp rise in foreclosures

[Jack Davenport]

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[Rey C.]

I wish I had enough $$$ to buy half of Minnesota. Property is where it's at. Don't invest in anything else exclusively. The more land you have, the more power you have.

Here's the thing though, Scott: you don't need a lot of (your own) money to get started in real estate. The people who say that you do, they've likely never done it or just haven't learned enough about how things (actually) work. But you do have to have a plan and a laser-like focus. You have to be serious. You cannot screw around. Raw land is fine, and you do need money for that (usually 50% down). Land generally doesn't produce much in the way of revenues (outside of **** land), but there will always be property taxes and carrying costs. Purchasing land is usually very speculative (and expensive).

You're in your 20's, right? Let's assume that you rent right now. You can buy a duplex or even a 4-plex under the FHA 203B program for about 3% down (at least that's what it used to be... I think it still is). And if you go out and get a real estate license and place it with a broker who will work with you, guess where the 3% could come from? Your commission on selling a property to yourself! Here's what I'm getting at. If you take the rent that you pay now and select a multi-****** property, could you cover the payment if you count the present tenant's rent plus what you pay in rent now? Is that amount no more than the fair market rent on the other unit? If you have a job and decent credit, you buy that property, live there for a couple of years... and then you do the same thing again. You rent out the unit that you lived in (now the entire mortgage payment is covered, plus a profit) and all you do is repeat the process. As long as you live in the property "for a period of time" (), you can get the owner occupied rate and down payment. The FHA 203B loan is a great program that more younger people should be using, IMO.

Within 10 years, if you have the stomach for it, you could easily be up to 4-5 duplexes/8-10 rental units without ******* yourself. There's a LOT more to it. And I don't mean to make it sound easy. There will be hard times and lots of stress, because you'll be dealing with people/tenants. But any younger person who is not taking advantage of these rates (4% +/- for 30 years) is making the biggest mistake of his/her life, IMO. I was happy as hell to finally get a mortgage below 10% when I got started... and I still made money. So surely to goodness you **** can make money at 4% interest rates. What would 5 duplexes/10 units mean? Let's say that you kept them all for 30 years... until the mortgages were paid off. Over that time, your payments would be made by the tenants. Let's say your positive cashflow was about $100/unit. So that's $1000/month in income or $12K a year (not a lot, but it's "free" money). But when the properties are paid off, you'd be collecting ALL of the rent as positive cashflow (minus expenses and credit losses). Let's say each one rented for $600/month. So in your mid/late 50's, you'd be pulling in $6K/month or $72K/year. Don't want the stress anymore? Hire a property manager and pay that person 10% of the gross. You're still making about $65K a year. Let's say you're making $60 grand/year in your full-time job, could you scrape by on $125K a year, Scott? Plus, let's say those duplexes are worth about $200K each after 30 years... never went up a dime in value from the day you bought them. You'd have a million dollars in assets. When they're paid off, your net worth should now be at least $1 million. Look at that! You're a "millionaire". :nanner:

I really wasn't trying to be a smartass to Jane Burgess in that other thread - hopefully she understood that (so few OCSM's will venture into political/economic threads other than her - so I respect that). When she mentioned "working hard" as the way to become wealthy, I knew where she was coming from. But you will not "get rich" by working hard (by itself)... you also have to work smart - more than working hard. And all I just gave you was a dummy example - no exotic down payment schemes or wrap mortgages or any of the other stuff that you'd learn about later on. You'd have to be damn serious and you'd have to put time and effort into it. You might have to look at a hundred properties to find just one that's worth even putting an offer on. But take my word for it, that's not working hard as much as it's working smart. All hard work will get you is tired. And IMO, tired is something I only want to feel after sex.