First Time Home Buyer
Most of us want to live the American dream and when do we want to live it? Well, right now of course. Unfortunately, it doesn't quite work that way unless you're planning on winning the lotto. It takes time to accumulate wealth and anyone can do it.
I’m going to show you how to accumulate over half a million dollars in real estate, with a mortgage payment of $1,100 a month over 27 years. And there will be no price speculation, so this plan will not be adversely affected by what the market is doing. This system works like the debt snowball method except it is used for accumulating wealth instead of paying off debt.
When I meet with first time home buyers I advise them to purchase a home they can pay off in less than six years. I know that sounds impossible. It is not. If a young family finances a $70,000 condo and makes a payment of $1,100 a month the loan will be paid off in 6 years. If they were to take the same $1,100 payment and put it towards a $300,000 home it would be 30 years before it would be paid off and after 6 years they would have only paid their loan down by $33,000. Once this little condo is paid off they can rent it for $600 a month and profit $500.
Now our young family is ready to buy a second home. At a purchase price of $150,000, making the same payment of $1,100 plus the $500 from their rental, this home is paid for in less than 9 years. This second home can now be rented for $1,000 a month with a profit of $850.
It's been 15 years now and our family owns over $200,000 in real estate and has residual income of $1,350 a month!
Now our family is ready to move into a $300,000 home. With the same payment of $1,100 a month plus the $1,350 from their rentals and this home is paid off in less than 12 years.
What if they are not able to make the monthly payment? No problem the rental income will cover the minimum payment on the 30 year mortgage!
It has now been 27 years since they purchased their first home, and they now own over $500,000 in real estate. That’s it! What are you waiting for? Get out there and get started.
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