According to Kioyaski, over a million or so of flippers or speculators are being killed with their real estate investments. These are the people who bought a home for $250,000, put some money into it and then tried to sell for $500,000. What he advised is become a cash-flow guy, his example is go to areas where there's a number of jobs (maybe not the best paying) but alot of low paying jobs where people are going to need alot of low cost housing. Kioyaski usually pays around $65,000 per unit. Where in this country is there growth with that kind of scenario?
Saturday, August 18, 2007
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4 comments:
The "cash cow" thinking is how good investors make money in real estate. Pay down the morg, receive some cash every month and have a paper loss. Great way to do it. However, on Long Island real estate is too much compared to rents to get cash flow.
Camille, I read Robert's book and took action. Within a year I had twelve "lease purchase" properties. I decided that I would rather "finance" homes than become a landlord having to keep the properties up. By lease purchasing, I was not responsible for the upkeep of the home, but I did get cashflow every month
I have been toying with idea myself. If 30% of homeowners are going to be renters within the next 2 years it seems there is some money to be made with rentals...
I have a client who refinanced non-owner occupied properties here in Tucson where the mortgage had been paid down substantially. He used the cash as down payments to purchase rental SFRs in Iowa, where the price of homes is such that he has a positive cash flow in spite of the mortgage payment.
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