How others have found investing beneficial...
Example 1: One woman was interested in investing in rental property. She had two daughters. One was in
elementary school and the other was about to be married. A friend had told her that real estate investing was
a great way to building wealth, but she was skeptical. Although she had excellent credit, she did not have any
money to invest. We provided her with two options based on a $75,000 fully renovated property. The property
was already under a 12 month lease at $650 per month.
In option 1, we offered to sale her the property at the appraised price of $75,000 and provide her with a check
for $5000 at closing. In this case, her monthly payment, including taxes and insurance, would be $703 per
month. In the option 2, we offered to sale her the property at $63,750; 15% below the appraised price. In this
case her monthly payment would be $618, including taxes and insurance.
Based on her circumstances, she chose option 1. She used the $5000 check to help finance her older
daughter's wedding. She adds $53 per month to the rental income to make her payments. Had she financed
the $7500 on her credit card, the monthly payment would have been considerably more. In 10 years, when her
second daughter goes to college, she can sell the property. Based on past performance of the real estate
market, she should make at least $25,000 on the sale. She will be able to use this toward tuition costs. This
woman was able to help both daughters with one purchase and no money down.
Example 2: A young man had read several books regarding real estate investment and was looking forward
to building a residual income. We provided him with two options based on an $80,000 fully renovated property.
The property was already under a 12 month lease at $850 per month.
We could sell him the property at the appraised price of $80,000 and provide him with a check for $5000 at
closing. In this case, his monthly payment, including taxes and insurance, would be $820 per month. Or, we
could sell him the property at $72,000; 10% below the appraised price. In this case his monthly payment
would be $730, including taxes and insurance.
Based on his circumstances, he chose option 2. He makes a residual income of $120 per month. He is now
in the process of purchasing his second property with us. His goal is buy enough properties to replace his
current salary with rental income.
