no this is not a bull**** get $$ quick scheme. i don't believe in those and i know how they end.

per request of the jake i'm gonna tell you guys how to do this **** up the right way, without rippin yourselves or anyone else off. i've decided to make this a sticky for the time being because i think that if you all can take the patience to read through this all, that it will really benefit you in the end. and i want to give you all a fair chance to check this **** out.

i'm in the process of doing the following up and i am here for any of you who would like help or advice in it as well:

to let you all know, this deals with rentals. some get freaked about renting **** out cause tenents CAN, in fact, bring a hassle to an owner.

this is why you buy investment properties that have EXISTING tenants, with a good track record. don't raise their rates too high in the beginning otherwise you may lose their loyalty.

i'm going to use $$$ amounts for sample purposes in the following posts to show you how the numbers WILL make sense. jake, pay attention bro.....

1st step is to get your financing. that's a process in itself that i can help you with but we won't cover it now.

once you're financed then go out and get either a duplex, triplex, or fourplex. your goal is to live in one of the units and collect the $$ from the existing rents.

so let's say your mortgage payment is $1500. you are collecting $800 in rent and therefore you pay $700 to complete the payment.

at this point, you're breaking even.

so chill out and keep it like this. after a year or so, the value increases and therefore you can bump up your rent a good $50-$100 or so. chances are, you will still be paying less per month then you would be if you were renting.

NOW!

at this point go out and buy your 1st condo (or startup home). NOW you can rent out the unit that you were living in.

so now you're collecting rent from BOTH of the units. using our above examples and average statistics of real estate values....you should be collecting around $900 for both units, totalling $1800 a month. remember, your mortgage payment on the income property is still only $1500!! this is giving you a $300 per month profit.

NOW DON'T BE A ****IN IDIOT AND PLAY WITH THE PROFIT!!!

INSTEAD, use it towards your mortgage payments. you will now begin to knock out the prinicple balance of your investment property MUCH quicker.

so you've still got yer little condo that you're ALSO making the mortgage payment on. make that payment with the income you derive from your job.

meanwhile the investment property is makin $$$ for itself and the balance is lowering tremendously. statistically, you can increase your rents around $100 per year.

so picture, how quick you can start to knock out the principle balance of the investment property after just the first 5 years or so!!!!
****! by then you should seriously own the pad valued around $400,000 and only OWE around $320,000 average on it!!

this puts you in a MAJOR equity postion WITH good mortgage history....therefore allows you to purchase ANOTHER investment property without even having to make more $$$ from your day-to-day job!!!

in the end:

AS LONG AS YOU ALWAYS PUT YOUR RENTAL PROFITS TOWARDS THE PRINCIPAL BALANCE OF YOUR LOANS YOU WILL MAKE IT.

keep the above examples up and, after your first 10 years in this, you will be making around
$40,000 a month gross
$25,000 a month NET

why so much net???
because if you knock out the balance of the loans as described above.....you will probably be owning at LEAST 3 properties FREE AND MUTHER****ING CLEAR.

now think about it....how long does it take $25,000 a month in NET PROFIT to pay off the other mortgages???

this is a system that multiplies. it's no different from winning in the game of monolpoly. you guys remember when you FINALLY could buy boardwalk and put a hotel on it???
by then, you usually owned most of the board.

so there you have it.

everytime you pass by a pimp-looking mansion by the beach, understand that the owner of that mansion probably owns at least 10 other properties.

also understand that out of the 5% of people who are making all of the $$$ in this world, 85% of them are doing it through real estate.

this isn't get-rich-quick, this is reality.

ballz in your court folks, dribble it out

"AS LONG AS YOU ALWAYS PUT YOUR RENTAL PROFITS TOWARDS THE PRINCIPAL BALANCE OF YOUR LOANS YOU WILL MAKE IT."

Words to live by...Thanks mate...am just getting into this whole home owner caper, and what you just wrote is excellent advice for when the option present itself

This is pretty much what I was thinking about...

One of the books I just read by Dolf De Roos states that he hates the idea of paying off the mortgage. He figures the mortgage will pay itself off over time so why expedite the process. I think adding equity to the deal is a good idea but I guess I can see an argument both ways..... I should point out he says he never plans on selling property. He buys it to hold it for the passive income (whereas a lot of other books I read talk about flipping land and then deferring capital gains by investing in another, more expensive piece of real estate).

Another idea I read by Robert Kiyosaki is that in America you can DEFER capital gains tax. I'd LOVE to know if you could do this in Australia (NZ has no capital gains from what I'm hearing... Christ!). Tony, is this legit? Can you defer capital gains tax in America??

Anyway, he would use the profit income from the first duplex/triplex/fourplex unit, depreciate the value of it and use the (tax deferred or tax clear) money to build a deposit for other houses. Or maybe just refinance the thing to get more money to get deposits for even more houses.

Does that sound right?

Whats the probabilty of finding mortgaging out there with say 80-90% or more funding? Out here in Australia we've got all sorts of first time home buyers grants and **** like that, with added incentives from the banks so people can buy houses with bugger all deposits (Seldom, is that grant still going?)? I know it'd be hard but can it be done? Do you know of certain lending institutions that react positively to first time home buyers, particularly with an eye towards investment?

- The Jake

One of the books I just read by Dolf De Roos states that he hates the idea of paying off the mortgage. He figures the mortgage will pay itself off over time so why expedite the process.
why expidite the process???
dude, cmon now!! that's one of lamest things i've ever heard.
for every $100,000 you fully pay off on in 30 year note, you're going pay probably over $185,000 in interest ALONE! you wanna pay that bull****? the whole goal in ANY type of financial dealing is to put yourself in the most debt-free position possible.

I think adding equity to the deal is a good idea but I guess I can see an argument both ways..... I should point out he says he never plans on selling property.
lol. so he says NOT to pay off the note yet don't sell the place either. then what's the point in owning it?

He buys it to hold it for the passive income (whereas a lot of other books I read talk about flipping land and then deferring capital gains by investing in another, more expensive piece of real estate).
flipping is a good way to make some good money but it isn't the smartest thing to do with ALL of your properties. just like in stock investing the key isn't to gamble on some smokin deal and then sell it for bank once it skyrockets- it's diversification.
don't get me wrong, i'm pretty sure people did it with microsoft, dell, yahoo, and even krispy kreme's....but that was during a very rare time. people made the mistake of picking up that "flip" habit of investing (day trading) and most lost out in the end.
if you are diversified then you are in a position to take a few risks, make quick $$$, or lose and learn valuable mistakes.
in order to be diversified in real estate investing then you wanna own a good amount of assets that hold strong equity positions BEFORE you go out and take that gamble. otherwise you're going to build bad habits
another thing. don't make it a goal to always buy a bigger and better house. after homes start increasing beyond around $500,000 they stop becoming good money-makers. large homes won't gain value as quick as, say a $200,000 tract home in the right neighborhood. you want to own lots of those types instead.
as long as you are generating positive cash flow from them, then you can just keep on buying without having to derive any more income from your regular 9-5. there's no limit!

Another idea I read by Robert Kiyosaki is that in America you can DEFER capital gains tax. I'd LOVE to know if you could do this in Australia (NZ has no capital gains from what I'm hearing... Christ!). Tony, is this legit? Can you defer capital gains tax in America??
that in itself is a world in it's own. i wouldn't jump too far into that as of yet bro.

Anyway, he would use the profit income from the first duplex/triplex/fourplex unit, depreciate the value of it and use the (tax deferred or tax clear) money to build a deposit for other houses. Or maybe just refinance the thing to get more money to get deposits for even more houses.
my question is, how do you depreciate the value???
you're either investing in a ****ty area or your playing games that you shouldn't be playing. i'd like to know more about that.
so far, it sounds like the 2nd option is better.

Whats the probabilty of finding mortgaging out there with say 80-90% or more funding? Out here in Australia we've got all sorts of first time home buyers grants and **** like that, with added incentives from the banks so people can buy houses with bugger all deposits (Seldom, is that grant still going?)? I know it'd be hard but can it be done? Do you know of certain lending institutions that react positively to first time home buyers, particularly with an eye towards investment?
that's what i do for a living bro. i specialize in FHA first-time home buyer programs. i detailed it in that other thread. i can even do 104% financing and, yes, we can loan up to 4 units for an investment property....you just have to be living in one of the units. we can even count 85% of the existing incoming rental money as INCOME for you, therefore helping you to qualify.

Originally posted by Purity
One of the books I just read by Dolf De Roos states that he hates the idea of paying off the mortgage. He figures the mortgage will pay itself off over time so why expedite the process.
why expidite the process???
dude, cmon now!! that's one of lamest things i've ever heard.
for every $100,000 you fully pay off on in 30 year note, you're going pay probably over $185,000 in interest ALONE! you wanna pay that bull****? the whole goal in ANY type of financial dealing is to put yourself in the most debt-free position possible.

His argument is that debt in this case is good as it is used to provide leverage.

Originally posted by Purity
I think adding equity to the deal is a good idea but I guess I can see an argument both ways..... I should point out he says he never plans on selling property.
lol. so he says NOT to pay off the note yet don't sell the place
either. then what's the point in owning it?

Passive income, via. rent. Month after month. Year after year. Property value increases in the event you WANT to or need to sell.

He buys it to hold it for the passive income (whereas a lot of other books I read talk about flipping land and then deferring capital gains by investing in another, more expensive piece of real estate).
flipping is a good way to make some good money but it isn't the smartest thing to do with ALL of your properties. just like in stock investing the key isn't to gamble on some smokin deal and then sell it for bank once it skyrockets- it's diversification.
don't get me wrong, i'm pretty sure people did it with microsoft, dell, yahoo, and even krispy kreme's....but that was during a very rare time. people made the mistake of picking up that "flip" habit of investing (day trading) and most lost out in the end.
if you are diversified then you are in a position to take a few risks, make quick $$$, or lose and learn valuable mistakes.
in order to be diversified in real estate investing then you wanna own a good amount of assets that hold strong equity positions BEFORE you go out and take that gamble. otherwise you're going to build bad habits

Good point. Hadn't considered that.

Originally posted by Purity
another thing. don't make it a goal to always buy a bigger and better house. after homes start increasing beyond around $500,000 they stop becoming good money-makers. large homes won't gain value as quick as, say a $200,000 tract home in the right neighborhood. you want to own lots of those types instead.
as long as you are generating positive cash flow from them, then you can just keep on buying without having to derive any more income from your regular 9-5. there's no limit!

I would consider commercial properties beyond that point. Only large scale residential properties I'd be looking at are series of units or apartments at that point.

Originally posted by Purity
Another idea I read by Robert Kiyosaki is that in America you can DEFER capital gains tax. I'd LOVE to know if you could do this in Australia (NZ has no capital gains from what I'm hearing... Christ!). Tony, is this legit? Can you defer capital gains tax in America??

that in itself is a world in it's own. i wouldn't jump too far into that as of yet bro.


That's not a denial though.... :D

Originally posted by Purity
Anyway, he would use the profit income from the first duplex/triplex/fourplex unit, depreciate the value of it and use the (tax deferred or tax clear) money to build a deposit for other houses. Or maybe just refinance the thing to get more money to get deposits for even more houses.

my question is, how do you depreciate the value???
you're either investing in a ****ty area or your playing games that you shouldn't be playing. i'd like to know more about that.
so far, it sounds like the 2nd option is better.

Check out 'Real Estate Riches' by Dolf De Roos, and his website www.dolfderoos.com. Small, yet easy read (one sitting).
Another is 'Retire Young, Retire Rich' by Robert T. Kiyosaki.

Originally posted by Purity
Whats the probabilty of finding mortgaging out there with say 80-90% or more funding? Out here in Australia we've got all sorts of first time home buyers grants and **** like that, with added incentives from the banks so people can buy houses with bugger all deposits (Seldom, is that grant still going?)? I know it'd be hard but can it be done? Do you know of certain lending institutions that react positively to first time home buyers, particularly with an eye towards investment?
that's what i do for a living bro. i specialize in FHA first-time home buyer programs. i detailed it in that other thread. i can even do 104% financing and, yes, we can loan up to 4 units for an investment property....you just have to be living in one of the units. we can even count 85% of the existing incoming rental money as INCOME for you, therefore helping you to qualify. [/B]

I love you Tony. :)

- The Jake

Yeah... some of that just made my head spin. I get most of it tho.

And yeah I love you too Tony. :)

no love for Dogg as of yet......

****in punks!!!!

wait this ain't my thread.:ghost:
*hits the "back" button and steps away from pc*

That's coz you're not offering us how to make money :)

- The Jake

Originally posted by The Jake
His argument is that debt in this case is good as it is used to provide leverage.
i still don't see how that provides leverage bro.



Passive income, via. rent. Month after month. Year after year. Property value increases in the event you WANT to or need to sell.

but should you want to sell then you'll just yank out even MORE equity since you were paying off the principle balance. especially if you go get licenesed and can save yourself the 6% commission pay.
keep in mind, i'm not indicating for you to take money out of your pocket to pay down the loan, i'm advising to take the rental profits only. what else are you gonna do w/ the profits that makes more long term sense?
put it in an interest baring account?? so you can top out a MAX 6% return?
play w/ stocks? even IF you get lucky, the return will be nowhere NEAR the type of return that you get from collecting rents on a property that you own free and clear.
if you own something free and clear and are collecting $2500 a month on it and apply an extra $2,500 a month to the loan of another property you own......do you know how quick you will own the 2nd one free and clear??
now think if you follow that pattern for the next 8 years. can you imagine owning 5 properties free and clear and collecting $2900 a month from them? that's $14,500 per month in straight income that you're collecting.
and by then you'll have about another 5 properties that you're still paying off- but you'll still be collecting around $2,000 a month in profit from THEM. that's a total of $16,500 per month in straight profit!!!
can you see how the pattern just multiplies itself? even the BEST money market, drip, stock, bond, reit, commodity, or cd investment out there can only
1) bring one large return then you continue to gamble or
2) earn a decent and continuous return every year

but this method will MULTIPLY your returns and there's no risk in it. the only risk is bad tenents or a bad property......but those are AVOIDABLE risks- unlike a stock market gamble

if you keep up following the pattern then, probably after 15 years or so, you should be able to be collecting nearly $40,000 per month in straight profit.
at this point you can either:

1) finance a house you two deserve. at 8% 30 fixed, plus property taxes and hazard insurance, the mortgage payment for a $1.5 million home is around $13,000 a month---you'd still be collecting $27,000 a month to either continue investing or just to live off.
2) or you could just save the $40,000 per month that you're making for a good 7 months and have, use $280,000 as a down payment....which would be 20% of the $1.5 million price, thus giving you a MUCH lower interest rate on the loan amount of 1.23 million.

either way, go check out www.realtor.com again. go pick a nice area that you wouldn't mind living in. now go see what kinda pads are available for $1.5 million.
as mentioned, this should be an easy scenario within 15 years. you're both now in your mid 20's. so picture living those pads yer looking at in your early 40's and still making tons.


I would consider commercial properties beyond that point. Only large scale residential properties I'd be looking at are series of units or apartments at that point.
even better. and an even BIGGER return. and by the time you're ready to play in the big leagues, you'll have plenty of experience from the minors :)


That's not a denial though.... :D
lol. not at all bro. but you don't wanna overload yourself with all the neverending tax games. for right now, have your long-term goals in the back of your head but take the steps 1 by 1 on achieving your short term ones. short term goal is getting into the first ****ing pad.


I love you Tony. :)
quit makin me blush!

- The Jake [/B]

remember, do what's proven successful. real estate is proven successful.

most people that have their money work for them just do it so they can retire comfortably.
the ones that earn the big bucks are usually gamblers and if you make $$$ quick, you lose $$$ quick. that's a proven fact.

aww shucks. i decided to have some more fun for you guys in that last scenario we had. so let's recap.

living in a $1.5 million home and, after the mortgage payments, still collecting $27,000 net income.
sooooooooo, here's a good monthly budget:

$2500 for a good property management firm to take 95% of your hassle away
$2,700 for a damn good personnal assistant.
$400 bonus to the assistant for getting the job done quick and efficient
$2,500 for normal bills: food, utilities, phones, etc.
$700 for a brand new pimpin SUV
$1,100 brand new pimpin benz
$1,500 brand new ferrari (mandatory)
$900 boat
$800 high risk stocks
$1,500 low risk stocks
$900 bonds
$2,500 mutual funds
$1,500 cd or money market account
$2,000 kids (if any)
$5,500 leftover for whatever

those investment accounts wouldn't be too shaddy ya know.
i mean, if you DON'T count the returns that you'll make (and hopefully reinvest), and invest the same amount each month as above, by the time you retire they will be worth:

stocks:
$552,000

bonds:
$216,000

mutual funds:
$600,000

cd/money markets:
$360,000

THEN go sell off the 40 outta 50 some properties (give yer kids the other 10) you should have owned by the time you're 65 and estimate to cash out another net:
$14 million

so without even COUNTING appreciations, you should be able to retire off of a good:
$15,728,000
and if you live till yer 85 then that's a good:
109,222 per month you'll be able to spend on yourselves for the rest of your lives.

wow. that was fun

Ok. I'm sold.

We got a friend out here that has bought 4 properties (looking at his fifth now) in 18 months with no money down. His goal is to have 15 properties in 5 years (at this rate, very feasible).

We're planning on meeting with him soon to discuss how he did it.

- The Jake

I am tired of seeing the Jakes name at the top so i must post