Insiders Secret #14
How to Become a Millionaire and get your House to send you monthly checks,
In this Insider Tip, we’ll talk about …
a.) Buy, but never sell. Tenant mortgage pre-payment. How to make money, even if houses go down in value.
b.) Equity re-utilization – a Multi-millionaire strategy.
The Most Widely-Used and Proven Wealth-Building Real Estate Strategy:
Part A: Buy and Never Sell: You have an opportunity to get involved with a vehicle that has made many, many millionaires in this country. If you can hang onto it and never sell … this house can be paid off for you by a tenant, and that tenant can actually pay you extra money over the amount of the monthly mortgage payment.
Then, you can apply this money toward mortgage principal prepayment, as we talked about in a prior strategy, remember?
Tenants’ rents can cover all the expenses and maintenance. The tenant can cover extra mortgage principal prepayment and actually pay this house off for you in 10 to 15 years!
And now you have a house that you didn’t pay for -- someone else literally bought it for you. Plus you get extra tax breaks as a landlord that you don't get as a homeowner. And, after it’s paid off, all the rent coming in is pure monthly, free cash flow to you.
This is how most of the millionaires have made their money in real estate. This is how most investors try to get involved. The difference is, as an investor, they have to put up a much, much larger down payment than you do as a homeowner.
You, as a homeowner, are actually being offered a situation where you can buy a house, with low money down – AND, you can have an asset that someone else will pay off for you! You can continue to get tax breaks and cash coming in, after it’s paid off. It’s a no brainer, obviously.
Now there are some downsides. You have to maintain the house. But if you write your leases properly and you have the necessary ‘home warranties’ (another Insider trick you can learn about at the Webinar) in place and adequate insurance … you don't have to worry about extra major expenses.
And again, this is another whole topic, another whole seminar that I teach. But, this has proven, over time, to be one of the most tried and true ways of getting wealthy in this country.
How to make money even if your house goes DOWN in VALUE … No Need to Rely on Housing Appreciation …
You can even make money if Real Estate goes down in value and here’s how:
If you bought a house for $200,000.00, and you had a tenant, paying a market average rent of $1500.00 a month, which is paying off your mortgage for you every month – then, by the end of the mortgage (which could be just 10-15 years), you’ll have an asset that is owned free and clear of any debt … if you applied the ‘principal prepayment strategy.’ (Re-read your first Inside secret on this strategy to refresh your memory!)
Let’s assume you’ll be making the extra principal prepayments because you’ll be getting a little extra in rent – allowing you to have the house paid off in 15 years.
OK, now let’s say at the end of 15 years, the $200,000.00 house you bought has gone down in value to $150,000.00. You haven’t lost any money because you didn’t pay any money …
Because you only had to come up with the down payment, which was maybe $10,000, or perhaps only $5,000, when you first bought the house.
In our example, let’s use a hypothetical $10,000.00 as the down payment you used when you bought this $200,000.00 house. You now have a $150,000.00 house paid off, owned free and clear.
You’ve turned $10,000.00 down payment into a $150,000.00 asset that is owned free and clear, because someone else (the Lender) lent you the money to buy it and then someone else (the Tenant), paid off the loan for you. That’s the power of leverage. And that’s the power of how Real Estate makes people very wealthy.
And the icing on the cake? You’ve also got $1,500.00 a month checks coming in every month from continued rent after the property is paid off. So that’s how you can actually make money in real estate when it goes down in value.
Of course, we hope it doesn’t go down in value. We’d like to see it go up and make even more money, but your downside is protected. The house would have to go down to a ridiculously low value of $10,000.00 -- for you to risk not being able to recoup your original $10,000.00 down payment.
That’s pretty ridiculous, and I don't see that happening in the future.
Part B: Equity Reutilization – the Multimillionaire Strategy: The strategy I just told you about was with just one house. Quite often, people will get the house paid down to a point where there is some extra equity in the house.
Then they’ll take some of the equity out of that house without selling it, and they will use it as a down payment to buy another house. Then with the second house, they’ll take equity out again after a few years, since the tenant has been paying it down for them -- and they buy a third house and so on.
This is much like the board game, Monopoly. This is done by thousands of real estate investors every year. That’s why you hear about people owning multiple properties because they can become multimillionaires from just three or four houses.
You can even become a millionaire, with only one house, if you have a $400,000.00 or $500,000.00 house that’s paid off for you … and the extra money coming in is reinvested well -- at a compounded interest rate of maybe only 8%.
Quite often, people are millionaires within 15 to 20 years – from only one house. The Multimillionaire strategy is just simply repeating the process with more than one house.
This ‘equity reutilization strategy’ and the previous millionaire strategy is not a get rich quick scheme. But it is one of the most proven and conservative wealth-building strategies that’s produced more millionaires than any other Real Estate strategy.
You can find out more about how we are currently using Insider Strategies learned from my Real Estate Radio show to save homebuyers tens thousands of dollars on their home purchase and financing everyday right here in Northern Virginia, just check out my free Live online webinar, at www.HomebuyerInsideSecrets.com, that’s www.HomebuyerInsideSecrets.com.
You can also get all of these insider techniques applied to your personal home purchase with our Free ‘Insiders Access Homebuyer Savings Program’ and get a minimum guaranteed savings of $25,000 or more. And the best part is we guarantee you save at least $25,000 or more with my exclusive strategies, plus the service is no cost to you. Go to www.NovaHomeSavings.com and find out why even other realtors and mortgage lenders actually use me as their buyer broker on their own personal home buying transactions, instead of relying on themselves, that’s www.NovaHomeSavings.com.
Find the Best Deals and Save $25,000-$50,000 on Your Northern Virginia Home Purchase. Get My FREE Homebuyer Savings CD to find out How to use the "Insider Techniques" to get Huge Home Purchase Savings.
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Your ‘Insider’ Real Estate Advisor,
Thierry Roche SFR, CDPE
Host of Talk Radio's,
'Inside Real Estate'
P.S. If you would like more detail on the types of ‘Insider’ strategies that would work best for your personal home buying needs, then call my office for a FREE, over-the-phone consultation with me.
Then, you’ll learn how I can represent you at no additional cost whatsoever!
Call 703-222-6714. You can also e-mail me.