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The
Number One Guide to Real Estate Investing
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The
Number One Guide to Real Estate Investing |
IT’S ALL IN THE
NUMBERS!
A Sneak Peek at How Fortunes are Made in Real Estate
Note: What you are about to read is the heart of creating wealth
in real estate. It's the way the professional
investors do it. Our
program has been extremely successful in showing people like you, how you can do
the
same thing they do.
Suppose you purchase a $100,000 home and put 10% in as a down payment ($10,000).
If you don’t have $10,000 to invest, you need to read our
“How To Invest In Real Estate With No Money Down and Minimum Risk”
E-book and
learn how to get around this problem.
You purchase the home and place a $90,000 mortgage on it. The figures look like this:
Purchase Price: $100,000
Mortgage: 90,000
Cash Down: $ 10,000
Monthly Cost of Ownership:
Mortgage Payment: $700.00 (rounded)
Taxes & Insurance 150.00 (estimated)
Repairs & Maint. 50.00 (estimated)
Monthly Cost: $ 900.00
You need to collect $900.00 a month rent to cover all of
your expenses. (A very reasonable rent
in most areas of the country). Your tenant will be paying utilities, lawn care,
etc.
Now, suppose you keep this home for ten years. Here is what the numbers will look like:
We’ll assume real estate values will increase only three
percent per year (about the lowest it has ever been since the depression in the
1920s.
At only 3 % per year appreciation, your home will have a fair market value
of about $134,000. At the same time, you tenant has paid down
your mortgage for
you (through rent payments). The remaining balance on your $90,000 mortgage
will be about $72,687.
Here is where you stand:
Market Value of Home in 10 Years: $134,000
Less: Mortgage Balance: 72,687
Your Equity: $ 61,313
Less: Your original investment: 10,000
Your Profit:
$ 51,313
You now have enough cash, by selling or refinancing this
home, to buy another or larger property.
One more factor we have not considered in our brief example above. Each
year you will be increasing the rent your tenants pay, at least by the
amount of
inflation each year. If you increase the initial $900 a month rent by the same
3 % each year, you will be collecting about $1,100 a month.
Of course,
increase in expenses and taxes will take part of that, but many investors thrive
on buying nothing but single family homes. Imaging what
would happen it
you purchased another home every year during that 10 year or 20 year period.
The secret to building a substantial estate in real estate
is the use of financing or "other people's money". In the above example,
we owned a
$100,000 property but only $10,000 was our own money. We were
gaining appreciation on $100,000 worth of real estate with only $10,000
of our
money invested.
The final session in our “Real Estate
Investments and How to Make Them” course explains in detail how the
professionals make fortunes in real
estate using this simple technique. But,
you have to know all of the details that go into locating the right property,
negotiating the purchase, handling
the investment, finding and screening
tenants, knowing when, why and how to sell to minimize taxes and maximize profits,
etc. That is what our
investment real estate program is all about. It
incorporates the techniques used by the real professionals in the business and
explains those techniques
in easy to understand and use terms. Over a quarter of a million
have learned real estate investing right here. Many pros also use our program
to
pick up new ideas and techniques.
One more comment: Above, we mentioned an
average three percent annual appreciation rate for real estate.
In 2004 and 2005, the nationwide average
appreciation rate was 14 percent!. This makes an average annual rate over
a ten year period of only
three percent a very reasonable expectation... and
history, over the past 100 or more years, confirms how real estate is certain to
appreciate over a
few year holding period.
To learn more, continue your tour by clicking on the link below: