Move N Places • Equal Opportunity Housing
Contact Info
You can reach me at (480) 390-7369 (Direct). You can also send email to PatrickHarvey@cox.net
Move N Places
202 W Main St #101
Mesa, AZ 85201
Investing in Real Estate
Some of the world's richest people got there by owning real estate.
And, most of the successful real estate agents I know not only help
clients buy and sell property, but they own quite a bit themselves.
Note: To see a rent vs. buy comparison that elucidates why investing is
a good idea, see Rent or Buy?
I was lucky enough to go to a seminar where Bob Wolff was speaking. He is a highly successful agent in California. The interesting comment he made was that he wanted to retire by having accumulated enough properties that he could sell one property a year for the rest of his life. Apparently, he doesn't sell very many properties, rather, he runs across a good opportunity and buys one -- and keeps it.
A Really Easy Way To Invest
If you really like the idea of investing in real estate, but you would rather not have to deal with rentals and all their problems, here is something you might like: Moneytree. You must register to see the short presentation but I think you will like it.
Cash Flow
The object of buying an investment property is not neccessarily positive cash flow. That's a wonderful thing to have -- but it is not a requirement, at least not in my book. (Of course, it's always nice to get someone else to pay the mortgage for you)
That's because either you have enough money that you can treat a real estate investment like a stock, just buy and hold (and pay the taxes), or, you have a slightly negative cash flow. That is, you have income from the property, but it doesn't quite make the payments. Or maybe it makes the payments, but doesn't quite make enough to pay the taxes and repairs (or management fees if you don't manage it yourself).
Buying
I think that the key to owning successful investment properties is buying them at the right price. Almost anytime is the right time, if you can get them for the right price.
I have been buying (and selling) investment properties, for myself, for more than 10 years. The first one I bought was a really trashed HUD home, back when you could buy them for less than market value. This home was so awful almost no one else bid on it. But, I fixed it up and rented it out, and I used a management company, so the cash flow was less than spectacular.
But mostly it paid its own bills, and eventually I sold it for twice what I
had paid. And that was after paying a Realtor®!
I continued the trend of renting, selling, and buying until the property
value had grown to the point that I could buy a small commercial property.
And, each time I sold, I paid no tax. That's because I used something
called a Starker, or 1031 exchange. This is a part of the tax code which allows
you to sell an investment property and buy a replacement property of equal or
greater value and avoid any tax on the gain.
And you can do this, too.
You can use the equity in your current home to finance the purchase of an investment property. Depending on your credit, you may be able to purchase an investment property using 90% or 95% financing. There are many options, and many "investor" loans available. Still, the key is buying at the right price -- and buying a property that can be rented, and that will appreciate.
I can help you do that, since I have been successful for more than 10 years.
Another Way
I have some clients who are a little bit mobile.
They move every couple of years. What they do, is they start by buying a brand-new home in an up-and-coming subdivision, such as a Pulte home, or an Engle home, or one of the other new homes available around the valley.
Then, they live in the home for a year (a little more, usually) and then write a contract on another brand new home.
The trick here is that the price you pay for a new home is set the day you write the contract. But the home won't be ready for almost a year, usually. That's a year of free appreciation!
Then, they move from the first home and move into the new home. Often they can re-finance the first home and keep it as a rental. Or, they can live in the first home for two years and then sell it and pay no tax on the gain since there is a tax exemption for your primary residence if you have lived there for two of the last 5 years. (there is more to this, please consult your tax advisor) But, they experience significant investment growth by hopping from home to home. If you don't mind moving often, this can be a great way to invest in real estate.
Rich Guys
If you have been investing in real estate, and have made it to the big leagues, there are even more options. If you are an accredited investor, I am happy to put you in touch with people who deal in larger investments. I do not receive any fee or consideration of any kind for these referrals, I just strive to help in any way I can.
If I can help you with your real estate investment goals in any way, please feel free to email or call.