Statistics show that nearly 95% of our fellow citizenswill retire at or below the poverty line by the age of 65. These people will be dependant on friends, family and theFederal Government for financial support.
If ours is the land of opportunity, why does thisstartling reality exist? The answer can be traced back toour upbringing.
From our early years we are taught that the correct pathin life is to go to school, get good grades, and get a"secure" j.o.b (Just Over Broke) with benefits. Soundfamiliar?
And let's face it folks, you won't ever get rich workingfor someone else! With "Job Security" a thing of the past,thousands of people are looking for alternative ways tomake money.
Real estate investment continues to be one of the largestwealth creation tools in America. It remains one of thefastest and proven ways to amass a fortune, and moreimportantly, once you understand the basics, almost anyonecan do it.
Incredible profits can and are being made by purchasingrun down homes and improving their value with a quickmakeover. The strategy is quite simple: Buy a run downhome below market value (wholesale), fix it up, and sell itfor full retail price.
Newcomers to this field are advised to devote considerabletime to research and study. Before you test the waters,there are four factors that you should consider:
1. You must know something about remodelling and get anidea of how much it will cost to get the house back intoshape. Consider what you will be able to do yourself andwhat it will cost if you have to have it done.
2. The location and design of the home are two of the mostimportant factors to consider. Study the neighborhood,shopping and transportation facilities.
3. You make your profit when you buy. Therefore, you mustlearn how to calculate your ideal purchase price.
4. You should always finance the project in the mostinexpensive way and use very little if any of your ownmoney.
Why is it a smarter way to invest? Traditional buy andhold is too slow for my liking. Buying a home and relyingon the market to go up is one of the riskiest ways ofinvesting that I know of. I call it the buy and hopestrategy!
I prefer a method that will give me my profits up front,and any increase in value from market forces should be seenas a bonus.
Still not convinced? Well, here are another four powerfulreasons why:
1. Fast track your capital growth: The biggest advantageof the buy, fix-up and hold strategy is that you can makeinstant capital gains of 10 to 30 per cent over and aboveany gains made from market forces.
2. Make $100,000 plus per annum: If your objective is tobuy, fix-up and sell, then a six-figure income is not outof the question. The equation is quite simple really: Fiveproperties flipped at a $20,000 profit each equals $100,000!
3. Sack your boss: Depending on your financialcircumstances, you may be in a position to generate enoughincome and stop working full time.
4. Get a life: You have probably heard the saying that theday you find a job that you love doing, is the day you stopwork. If, like me, you enjoy rolling up your sleeves andgetting your hands dirty, then this may be the greatestcareer move that you make.
As you can see, fixing up old homes does have itsadvantages over traditional strategies. Sure it may takemore work, and things don't always go to plan. But asanyone who is wealthy will tell you, their level of successhas a direct relationship with the effort they put in.
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