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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” Ebook 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: