Real Estate One house becomes thirteen houses
One of the most fascinating things that I love about real estate is the fact that you can turn one house into thirteen houses. This can also be achieved in a relatively short time. For the most part, every time I talk about it… I just get high! It’s like being high or something!
Now don’t go away, I’m going to show you right here in this article how you can achieve this with very little money. Of course, you’ll have to involve a bit of elbow strength, but that’s fine. That’s what makes it so fun and valuable. This is paramount! Be sure to shop well with the number one house! In fact, you will live in it. Maybe they lived in an apartment, then got married and the two of them decided to move into a house. Now remember to start with the first house and through the other twelve houses, buy three bedrooms, two bathrooms and a garage. All other amenities may vary.
To simplify the calculations, let’s say each home is worth around $100,000 APR (after repaired value). Buy houses that only need minor work and not a lot of repairs. These houses will need painting and a simple cleaning. Shop in decent neighborhoods. Buy from desperate sellers who will let you buy at least 50% to 70% less than it’s worth. Of course you ask… why would they want to do that? That’s the good stuff! They have to sell fast and they have to sell you cheap!
For whatever reason… who knows, they just have to sell! It could be divorce. They have to move out of state. They lost their job. The list could go on and on! Fast forward… now you have bought the house from her and are living in it. This is where the strength of her elbow comes in. For the next six months to a year… after I get home from work. You and your newlywed work on your home repairs in your spare time. This is where the excitement starts to happen. Now that you finally got your home ARV (value after repair) which is appraised at a value of $100,000. This is the same house you bought for $50,000 to $70,000.
What you’re going to do now is go back to your bank and borrow $30,000 on your $100,000 house. Now take that $30,000 and buy three houses and rent them out to tenants. In turn, the tenants will pay the mortgage on each house. Now remember that you were able to put $10,000 into each house, so you will have decent house payments. This in turn will give you some extra money each month… to pay others to fix up the houses. With the three ARV houses, you can now borrow from your neighborhood bank.
Remember that those three houses must have been purchased at 50% or 70% below market value! Now is the time you can borrow about $30,000 on each house to buy nine houses. Add them all. First you bought the house you still live in. Then you bought three houses. After that you bought nine houses. There you have 1 + 3 + 9 = 13 houses.
At this point, he is collecting rent on twelve houses. You’ll have enough cash flow from your rental homes to make the payment on the home you still live in. In essence you will live in a house for free. Your tenants are making mortgage payments on all the houses you own. At this point, I know what is going through your mind. You’re thinking of dozens of ifs and buts. That’s not important. Take this formula, change it and tweak it until it works for you! This formula works. It works for me and thousands before me and thousands before you! Good luck and happy house hunting.