Five Steps To Wealth Through Real Estate Investing
Not only can you become quite wealthy by investing in real estate (even if the value of the property never goes up).you should be able to.
The five step formula to wealth through real estate investing is:
1) Purchase income producing real estate at below market value prices
2) Buy (leverage) and hold additional properties over time
3) Have your real estate professionally managed
4) Properly direct the cash flow from your investment properties
5) Become financially secure and wealthy over time
Its that simple because
Investing in real estate provides a vehicle and opportunity which really has no peers. Its in its own category. Real estate provides leveraging opportunities, financing and tax benefits that other investments (stocks, bonds, CDs, etc.), by law, arent allowed to offer.
And investing in real estate offers something else that the others dont typically provide: a predictable cash flow that commences immediately following a property purchase.
This form of investing has existed for many years. When executed properly, its reliable, predictable and lucrative. It may appear complex initially but is actually quite a simple and straightforward process once familiar. After the correct resources are in place and purchases completed, there are very few moving parts. It functions much like its on an auto pilot with good property management.
A certain perspective and understanding is certainly necessary. How much property a person owns isnt the primary aim or focus. Whats most important is how much cash flow the properties generate which is determined by factors such as: purchase price, renovation expenses, fees, rents, property management costs, mortgage pay down rate, etc. Naturally, its important to become familiar with the variables as being knowledgeable encourages effectiveness which can then be replicated again and again. It becomes a system, which in many ways, functions like franchising fast food restaurants.
NOTE: There are a few other necessary ingredients related to this investment model: 1) to have a genuine desire to become wealthy which helps to develop your 2) vision and investment goals, 3) a level of patience and 4) discipline which enables your 5) long term plan for success by managing your cash flow properly
Heres a very general example of a long term goal and how it works:
Consider if you were able to purchase one rental property per year for fifteen years (think leveraging). If your fifteen properties were producing an average of $700 per month each in rental income, at the end of the fifteenth year, youd be receiving a collective cash flow of $10,500 per month. Now that youve been doing this for a little while and had been disciplined, that cash could now be directed towards your own living expenses (retirement perhaps) or for reinvesting purposes.
Also remember, that if you purchased the homes with fifteen year mortgages (which we suggest), the homes purchased in the earlier years are beginning to be paid off. So not only are you receiving the average $700 per month from each property, youre also becoming the owner of a growing number of homes that no longer have mortgages if you obtained financing. Theyre beginning to become yours outright.
Plus, yet, another possible benefit: theres a very strong likelihood that your properties have also appreciated in value over the years.
So now you, the focused, patient, disciplined real estate investor, have received:
- Built-in equity immediately due to an under market value purchase
- Positive monthly cash flow throughout
- Mortgage principle pay down through the years
- Outright property ownership once mortgages paid
- Highly likely property value appreciation over time
Certainly, this isnt enough information to equip you to immediately begin investing in real estate. The intention is to share highlights of the income producing real estate investment model to you and generate some awareness of its possibilities.
Only about 5% of our countrys population becomes wealthy or financially independent within their lifetimes. Wed like everyone to be able to live their lives within that 5% and to enjoy what it has to offer. It is available.
All thats required is knowledge and an understanding of the steps. Just add goals (vision), desire, patience, discipline and enjoy the feeling of your impending financial security