DON'T Buy A House!

Don't buy a house isn't personal. If you are like me then you have already bought a house. Now you are paying every week every month for the mortgage, fixing appliances, fixing leaks, getting solar, what?! I can tell you that you bought a house the wrong way. A house is put into two categories. An asset or a liability.

Liabilities

A house is only a liability when it takes money from you and doesn't put anything back long term or short term. Liabilities are all around us. And it is up to you to spot when you have a liability and not an asset. If you find yourself paying for a new roof, new water heater, new septic, new pipes, and so on then you have yourself a liability. I can assure you in 30 years unless you bought your house in the 80's you will not get that much of an ROI on your house. Especially after all of the costs that are associated with a home.

Yes, I bought myself a single family home. Told myself that I would rather own it in the end instead of paying someone else's mortgage. I can assure you this is the wrong mindset. I find myself saying, "Humm I wonder how much it would cost to pay someone to mow the lawn or push the snow." These are all the things you don't think about when buying the house. The work that has to go into it. All of the time that goes into it. It is not an overnight task nor do you have the necessary time and skills to complete it by yourself. I love you, but you don't. I know you think you do but it is going to take many many years, a lot of weekends, and surely a lot of cursing to complete these tasks. I know even those church goers are dropping a few F bombs by the end of the first project. They hate cursing. Don't sell yourself short but also don't over extend yourself. If you can afford rent, I can assure you a lower price tag now will not make up for the price tag later.

Assets

An asset is easy to spot with the right eye. A liability is easy to buy with a bad mind. Assets are all around us it is just a matter of being able to spot the opportunity when it comes. Multifamily homes or single family homes. You can start with either. You can turn a single family home into a multifamily or a duplex very easily. Just know that cashflow is king. I don't mean to sound cliché but if you buy 5-10 rental properties doesn't matter the family type. You charge $2,000 a month minimum for rent because honestly you have to if you offer certain utilities. Then that is $10,000-$20,000 a month. After you pay of the mortgages most of that is pure profit. Wouldn't you want to be making $6,000-$16,000 a month after retirement. 401K's and Roth IRA's aren't enough to retire on. All they do is provide you with a lump sum of money. You need cashflow. It doesn't have to be a ton of cashflow. It only has to be cashflow that gets you through life at a comfortable rate. The more you want the harder/smarter you will have to work for it.

Multifamily Properties

I ended up buying a single family home but with a little creativity I could more than likely turn it into a duplex and rent out two units and make close to $5,000 a month. My wife on the other hand hates the idea of making money and success so I'm stuck in the house until I can show her that 9-5 is not the only way to make money. If you wanted to actually make money in your first house then buying a multifamily home is the way to go. If you buy 5 multifamily homes you can easy make the predicted $20,000 a month within a relatively short period of time. Especially if you have the capital. There are tons of loans you can take out and get approved based on the equity and rental income you will produce from the property. Look up some videos and you will see what I mean. I haven't tried any of these techniques yet which is also why I won't go into specificities within this article. My aspirations are also a lot larger than a couple of single family homes. Apartment complex's are more what I will be going for in the next 5 years.

Apartment complex's

I did the math for an apartment complex that my friend stays at. They have 12 rooms on each floor. Each apartment building has 4 floors. That is 48 rooms per building. They have 3 buildings so far. If you take a minimum of $2000 a month that is $288,000 a month. Now, not all rooms are rented out and some are larger than others. I can assure you that $288,000 is probably not the minimum of they get most of the rooms rented. Also keep in mind these apartments are new builds. Which is huge. New builds are great for a new crowd looking for apartments, they will pay top dollar for new stuff. I know I would.

Keep in mind the scenario described above is not easy. It isn't an overnight project and especially if you are starting out small. This will take years of experience to negotiate that kind of deal. I can assure you that kind of project is at least a $20,000,000 project. One building is probably close to $5,000,000 to build, possibly more. Do not underestimate yourself in any situation, if you think you can't do something like that then you have already lost.

Real Estate As A Whole

Real Estate is a very lucrative and annoying business at this point. I would say it is just about as annoying as the online course market. It is so overused and over played. I can tell you exactly what to expect when it comes to Real Estate. It will be difficult, it will take you many many sleepless nights to finally realize that things will go wrong whether you like it or not. The best thing you can do for yourself especially if you are making investments, not just in Real Estate but anything.. Is to sit back, relax and try to find the best deal. The best deal doesn't come along often. So if it seems too good to be true it probably is. Assume the worst no matter what property you buy. There is nothing worse than getting your hopes up then getting thrashed down because there is a foundation problem.

The most important thing you can do is surround yourself with experts. Not just experts in Real Estate but experts in the field of building Real Estate. They can spot something like a foundation problem without even going inside of a house. They can see electrical problems from looking at one piece of wiring in the garage or attic. Trust me when I tell you outsource as much as you can. If you can afford a management company, do it.