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How to Get Rich With Real Estate Investing
Joe: Hey, it’s Joe Crump. How do I get rich with real estate investing? There’s two main ways that you invest in real estate. One is short term flip properties where you buy and you sell and you make immediate cash. And that’s great for making a living and bringing in money to live on and having a great lifestyle. It doesn’t take a lot of time to make money like that and it’s a lot better than having a job.
Joe: But if you want to get rich, if you want to build wealth, you do that over time by holding on to property. And you get control of these properties whether you use them subject to, multi-mortgage, land contract/contract for deed, assignable cash deals and lease option, you get control of these properties and you hold onto them for the long term. You keep them and let them pay themselves off. That’s going to be the fastest path to wealth as a real estate investor.
Joe: Now, in order to speed up that process, learning how to buy properly, learning how to buy right, where you buy properties that are under market value, where you get those properties financed by the seller, where you get financing by the seller that has a zero interest rate, those are the ways that’ll get you there faster. Remember, if you have, just take for example, if you have $100K mortgage on a 30-year bank note, it’s going to take you 30 years at about $850 a month to pay off that mortgage.
Joe: If you paid that same $850, you know, PITI, and I’m just ballparking here, but, you paid that same amount with a zero interest rate rather than a 4% or 5% or 6% interest rate, you’d pay that note off in one-third the time, about 10 years instead of 30 years.
Joe: That means that you retire three times as fast. And that gives you an extra 20 years of wealth, of income, that you can live on once you have that thing paid off. So being able to finance your properties right, being able to structure your deals properly will make all the difference in whether or not you build wealth soon or later. But owning properties, keeping them for the long term, it still makes sense. Even if it takes you 30 years to pay it off, because typically properties go up in value. If I buy a property subject to the existing loan and it’s $100K property and it’s worth $100K and it’s got $100K mortgage on it and it’s still got 27 years left to pay on that mortgage and the PITI on it is $850, and I can rent it for $1,000 I’ve got $150 positive cashflow.
Joe: So I’ll have that positive cashflow and as 10 years goes by the value on that property is going to go up. It’s probably going to go up by 50% to 75% over that period of time in most places, so the value will go up to $150K, $175K, in that neighborhood. So now you’ve built equity because of appreciation over time. You’ve gotten a little bit of cashflow, not much. You’ve gotten the lease option fees from selling that property on lease option of people that didn’t exercise their option.
Joe: You’ve gotten some other advantages plus you’ve gotten the buy down on the note. But over a 10 year period it’s only going to pay down a very small amount. It takes 20 years on a 30 year note to get to 50% on your mortgage. So to get it down to $50K you’re going to have to pay 20 years on that 30 year note. So it takes time for that to happen that way, but you’ll still get money in your appreciation.
Joe: That’s why I like the zero interest rate deals the best. And being able to use that model in the low priced areas either urban areas or rural areas, there’s so many of them all across the country, and being able to do that stuff remotely. Even if you don’t live there you – I don’t live near very many of my properties. And I haven’t seen most of my properties. Some of them I’ve never seen ever. Most of my properties I’ve seen at least once, but I’ll go for 10 years without seeing a property because I have property management that handles that stuff for me, sends me pictures, sends me updates, keeps me apprised of what’s going on with that property and I don’t have to go mess with it.
Joe: So you don’t have to be in the location where that property is. You just have to own that property and make sure that it’s managed properly and pay attention to the job that the people that are working for you are doing to make sure that it’s being done properly.
Joe: Anyway, that’s how you build wealth. It doesn’t have to take 30 years to make that happen. It can happen in 5 years. It can happen in 10 years where you build substantial wealth. And you can buy properties where you own $1M, $2M, $5M worth of property in a very short period of time. We’ve been able to buy properties where we could buy $1M or $2M of properties in less than a year. And it’s something that I’ve seen a lot of my students do that where they build a portfolio of subject to properties, or build a portfolio of land contract or contract for deed properties and do that same technique with that.
Joe: It just doesn’t take that long to make that happen. But it doesn’t happen overnight and you have to have the skills and ability to make that happen. You need to learn how to put these deals together, how to structure them properly and most important how to talk to the sellers in a way that they’ll trust you and feel that you’re competent and trustworthy before they’ll work with you.
Joe: All right. I hope that helps. Check out – hit the subscribe button and I will send you a notice every time we put out a new video. Go to ZeroDownInvesting.com and check out my mentor program. Go to PushButtonAutomarketer.com and find out how we automate our business and then go to JoeCrumpBlog.com for 700 free training videos that’ll show you all these different techniques that I’m talking about here.
Joe: All right. Take care.