There are Forces at Play




In 2008, you could have bought a single-family home in many parts of the country for as cheap as four times yearly rentals. (A house whose rental income was $1,250 per month, or $15,000 per year, could be bought for as little as $60,000.)


Location is a major factor in real estate investing. This was difficult to find in prime areas where values tended to be 8 to 10 times yearly income.   In 2010 the 4 x factor was trending more like 7 x.   Good real estate locations are always in demand.


Today, it is very hard to acquire the same kind of property for that multiple. The deals I’m looking at are 12 to 15 times yearly rentals. (In other words, the same house you could have bought for $125,000 in 2008 and $150,000 in 2010 would cost you $187500 if you can find one today.)


Rental Real Estate is coming back strong:

 That’s an increase of about 15% in every year.  Inventories are low and rents are going up.  Occupancy rates are above 95% in good areas too.   This should  be good news for landlords who have suffered along with everyone else during the downturn in real estate.    Try this for more answers

Opportunity is passing you by…

There’s a good reason for this inflation in housing prices. Smart, sophisticated investors set aside an abundance of cash from 2005-2008 during the housing bubble. They then put this money back into the market after prices had collapsed.

It feels like things are stalled.  Unemployment is high, rents are going up and every time I go to the grocery store I do a double take when I get the bill at the checkout line.  I really believe that Inflation is likely at some point. When?

 No one from the government is telling you but…

It is happening NOW!   It is not reported.  Inflation is here even in stealth mode.  It is artificially held at bay by the Central Banks.  The USA and the EU and many Banana Republics are printing  cash to “stimulate” the economy.

I have lived through this.  It was tough and we had to figure it out.  We should have it now.  The problem is that the Government has changed the rules on how to calculate it.  It does not include food or fuel.  So, if you don’t eat and your not inclined drive a car or go anywhere you should be fine.

Here is a strategy:


If you are renting now, start an investment/savings plan in a liquid form like the stock market.  Buy BIG Blue-chip dividend paying stocks,  not get rich quick… speculative securities.  You will want to get at the money soon, so make sure you are secure where you start saving it.  You can read more on this in the blog posts we wrote about earlier.


So please consider the present market where interest rates are being held at record lows.  NOW is the time to make an offer, enter into an option or find an equity parterre to help you.  Make owning a home a priority.  The costs will be equal to or less than the cost of rent on a monthly basis.


If you are working now, getting a W-2 at the end of the year, look at how much money you could save in taxes if you paid a mortgage payment, instead of rent.

 No Money Honey???   You can still get  96.5% loans from the FHA and 100% loans from a variety of government backed programs.

If you have no money for a down payment, start saving.  Look at a small stock portfolio that will pay you a 2% to 4% dividend.  It will get you investing.  The dividend will be more than banks will give you for a plain-Jane savings account.  It is likely that a dividend paying stock will be tied to a multi-national corporation and give you some security.  Best of all, the funds are liquid, you can save now and get cash later… easily.


Even if you are broke, you can make the choice to be involved in making life better for you and the people you love.  Love and affection are great but there is more to life.  Everyone needs some money.  Start with nothing and you still have something… pride, effort, time, talent, ingenuity, self discipline…


You have time and your personal effort.  This is what you will convert to cash.  It is the 2nd best things in life that cost money.


You have lots of Rich Real Estate Dummies rooting for you.  Go… go …. go


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