FREE SPECIAL REPORT
How to Turn a "Bad" Housing Market
Into the Best Thing That Ever Happened to You
You requested this report because, unlike most investors, you understand that slumping markets often present phenomenal investment opportunities if you know where to look.
When things are going well, when the economy is soaring, even the dumbest investor can make some money. Remember back in the �¢??90s when you had to be practically brain dead to not make money in the stock market? Everyone's 401k was soaring and we all thought we were investment gurus. Same thing with the housing market. Seemed like all you had to do was buy something, anything, and it would go up in value.
But, here's a question for you: who made the REAL money back then? Not the ones who just jumped in screaming, "buy, buy, buy!" as things were going up. No, the ones who made the big money were the ones who SOLD at the peak, when it seemed like things were going so great.
The ones who made the real money were the ones who SOLD HIGH.
Do you know any of those people? I know a few, but I know plenty more who didn't get out in time. And I'd be willing to bet that you know a lot of people that had 401k plans that got trashed because they didn't get out in time. Right? They waited too long and didn't SELL HIGH.
BUY LOW, SELL HIGH?
What does this have to do with today's housing market? Everyone seems to know the saying "Buy low, sell high" but nobody seems to do it. As the illustration above shows, you need to know when to sell high. But you also need to know when to buy low.
So why is it that when markets are down, like today's housing market, we hear investors saying "I'm going to wait until the market starts going back up before I buy"?
TODAY'S HOUSING MARKET IS THE PERFECT "BUY LOW" OPPORTUNITY FOR
SMART INVESTORS
(if they know where to look)
You can't go a day without hearing negative news about the housing market and how foreclosures are at record highs and are expected to continue soaring. Lenders are going out of business and the ones hanging on are tightening their lending practices and turning away would-be-buyers by the boatloads.
Consequently, we have too few buyers while inventories continue to rise. High supply + low demand = nose-diving prices.
While almost every indicator suggests that today's housing market is at its nadir, most investors are still sitting on their hands, waiting for the market to turn around.
In essence they're saying, "I'm just waiting for the price to get higher, then I'll buy".
Brilliant!
Well, not me. I've been taking advantage of this foolishness and using it to make big money. And now you can too if you'll join me.
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Listing Price: $225,000
Selling Price: $209,250 (Current average is 93% of list price)
Closing Costs: $ 6,278 (3% average including seller contribution)
Commission: $ 12,555 (6% average)
Repairs: $ 4,186 (Repairs needed to get property in selling condition i.e. painting, carpeting, repairs required from inspection 1%)
Holding Costs: $ 6,278 (Mortgage interest, insurance, taxes, utilities, lawn/snow, etc., paid waiting for house to sell and close - 4 months average = Approx. 3%)
Base Sales Price: $179,953 (Approx. 20% of list price)
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How I buy houses
I buy houses for the same base price the seller would get from a traditional sale. I arrange to take over their existing financing and make their payments until I sell the house to a tenant/buyer. To the right is an example of a traditional real estate transaction based on a $225,000 listing price.
My system doesn't take advantage of the seller like so many schemes out there. The seller gets the same money they would get with a traditionally sale. In fact, they often wind up in a better financial position... and they get there even faster.
As a quick refresher course, let's now compare a traditional stock market investment with real estate.
Traditional Stock Market Investment
Let's assume you have $20,000 to invest. You invest it in the stock market and earn a 10% return or $2000 in Year 1. If you leave the interest in the account and continue to earn a 10% return each year for three years, you would make a total of $6620 "profit". Now let's assume the market tanks in Year 4 and the return is -10%. This brings your average annual return over the four years down to 4.5 %. A money market account would have done better. To get back to an average of a 10% return over 5 years, you'd have to earn a 34% return in Year 5! Good luck. But if it actually did rebound and give you 34% in Year 5, you'd finish the 5 years with a total profit of $12,103.72.
Now let's look at real estate.
Take the same $20,000 investment and invest it in a $225,000 house (which can be done without securing new financing or taking much of your time, but we'll get to that in a minute). Let's say the market stays flat for another two years and then things start turning around, and in year 3 we get back to a modest 3% appreciation. That $20,000 would generate $6750. That's almost the same return as the 10% stock market right?
Not exactly. Each month the tenant pays rent a portion of that monthly mortgage payment goes against principle, so you build equity. Let's say the principle portion each month is $150. That's another $1800 each year or $5400 over 3 years. Now we're up to a total return of $12,150 over 3 years.
You also get to depreciate the house which would save another $1753 in annual taxes for the taxpayer in the 34% tax bracket. That's another $5259 over the 3 years. Now we're up to $17,409 over 3 years!
Now if in the 4th year the market continues at 3% appreciation, that's another $6952 in year four and so on. Plus, the houses we pick up for our investors already have equity in them because we pick them up at roughly 20% below the current market as shown above and there typically is some monthly cash flow. I can even show you how to buy houses in your IRA, and how to sell without paying taxes or recapturing the depreciation expense.
So, over 5 years, this real estate investment example would give you $83,676 while the stock market would give you only $12,104.
Stock Market $12,104 profit
Year Return Avg Annual Return
1 10% 10%
2 10% 10%
3 10% 10%
4 -10% 4 �?�½ %
5 34% 10%
Real Estate $83,676 Profit
$225,000 house bought for $179,953
Principle reduction $9000
Depreciation Tax Savings: $8765
Market value after yr 5 $245,864
You see, investing in real estate has so much potential it's no wonder why the rich use it as the centerpiece of their investment portfolio. Now, you can too.
Here's How I Make it Easy for You
Most smart investors know that investing in real estate is one of the best ways to true wealth, but they don't invest as much as they'd like to because they think that real estate is so much more difficult to invest in than stocks, bonds, CDs or mutual fund accounts. They remember when they bought their own home and all the house hunting, inspecting, paperwork, and hassle of closing. And then there's the property itself. You have to take care of it. You have to live in it, or find someone else to live there and pay rent.
But, did you know that most multi-millionaires who own real estate, don't spend any time managing it? And now you don't have to either...with my help.
I can show you a way to invest in real estate where I find the deals, I handle the leasing, I oversee the management and the maintenance, I set up the accounting, I attend the closing...and all you do is put up the money.
My "secret" and whyI want to pass it on to you
You're probably thinking that if there is so much opportunity out there...so much profit to be made, why would I give any of it to a stranger? Why not just keep all the houses and profit for myself?
Here's why. I'm a real estate broker and I own a property management company in the Twin Cities. I've been managing and investing in real estate for over 20 years. As the housing market ground to a halt, owners started contacting my company to manage their houses...because they weren't selling. Many have already moved out of the area and bought another home. They needed relief from making double payments and the hassle of trying to maintain a home they no longer lived in.
So, I put together a way to buy these houses by taking over their existing financing. First, I would fix up the home and either rent it or lease-option it to a tenant/buyer. I would put an average of $20,000 into a house including closing costs, improvements and vacancy.
It was great. I was buying all the houses I could handle but the calls kept coming. If I had an endless supply of money, I would buy all the houses I could. (Actually, if I had an endless supply of money, I'd play tennis all day every day, but...) Of course, I don't have an endless supply. So, with the biggest market opportunity I've ever seen, I have to come up with another way. And fast...before the market turns around and starts driving up the prices again.
That's where you come in. I figure that having to split the profit with you is better than sitting on the sidelines and missing out on all these great deals. You get the best of both worlds. Great profits, no work.
The Game Plan
Owners are coming to me in droves and I need to create a way to help them out and take advantage of this great, (but time-limited) profit opportunity. Therefore, I'm looking for investors who will put up some of the money. That's it.
I'll do all the work. I'll negotiate the deal to buy the house and take over the current financing; I handle all the accounting, and handle all the day-to-day property management...and even coordinate the property maintenance.
We split the monthly cash flow and expenses for the property and we split the upside profit 50/50 after your initial investment is paid back to you. Keep in mind I'm already bringing in properties with an average 20% equity. The typical investment averages $20,000-40,000 but it will depend on the property. The money goes to pay the closing costs, improvements, vacancy costs and any cash out to the seller.
Making money in real estate couldn't be any easier
but it's not a sure thing!
Like any investment there are risks. The market could go down further and take years to bounce back. Rents could remain flat while property taxes and insurance go up thus creating negative cash flow requiring more money to feed the property. I'm not looking to partner with everyone looking to make a quick buck. In fact, I would discourage you from doing this unless you can tie up your funds possibly for years and possibly loose it all. Real estate is a long term investment and it could take years for things to turns around.
I'm also not looking for managing partners. I manage the properties and make the decisions on what to do and when to sell. It's like putting your money in a mutual fund or stock. You don't tell the fund manager what and when to buy or sell or tell the company what to do. If you can invest your money and sit back and wait, then read on.
This is a market unlike any market we've ever seen. How long will this opportunity last? No one knows. So the time is now for us to make huge profits in real estate.
You remember all those folks in the 90s and early part of this decade who thought "Why sell? The market is so great!" The ones who look back now and say, "If I had only sold in 2001..."
Well, now we're hearing the opposite, "Why buy? The market is so bad!" I refuse to be one of those "buy high, sell low" investors. The ones who will look back at this market 5 years from now and say "If I had only bought in 2009..."
If you want to get in sooner rather than later, email me now at dave@rpmgmt.com and simply request my investor questionnaire. If chosen, I will send you my home investment set up packet, which includes the agreement and frequently asked questions.
But hurry, because I'm only one man and I will only work with 10 hand-picked investors. (As of today, I have 6 openings left). Once those are filled, that's it.
Make 2010 a very prosperous year.
David Holt, CPM, MPM
President/Broker
R P Management, Inc.
dave@rpmgmt.com
