My New 2.5 Million Dollar Retirement Strategy

I don't think most people understand the power of compounding interest. Anyone that has a mortgage or has actually looked at their Truth in Lending Statement should know. Banks make a ton of oney from mortgages. I've decided to become my own bank. I want to use the same strategy the banks use to make all that money. How can I do this? I need to own a home free and clear without a mortgage. I have an IRA. Can I use my IRA funds to buy an investment property? Yes, if you make your IRA self-directed.
There is the key. Most people do not know they can self-direct their own IRA's. Here's what I've decided to do. I am a Real Estate investor, I'm going to find deals that I can invest my IRA into and have my IRA act as the bank. I have 3 children and the fourth due any day. I want to retire in 17 years. How do I get there.
I'm going to take $180,000 of IRA funds ($90,000 from mine, $90,000 from my wife's) and invest in six rental properties. Affordable housing is always in demand, I can find brick 3 bedroom homes in Atlanta for under $20,000, add in the rehab and I can be in ready to rent for right at $30,000. I find deals like this every day. Most people do not believe me, but they are there. These homes will rent Section 8 for around $850 per month. After taxes, insurance, property management and vacancy I will cash flow approximately $600 per month per home. That money goes directly from my property manager back into my IRA. Once in the IRA, I reinvest the money into a growth mutual fund.
How to we get to $2,500,000? We're investing in the homes for $30,000. These homes sold for between $80,000-$120,000 5 years ago. I look 5 years back, because that is before there was any talk of a "bubble." I think it is a fair assumption, that in 17 years from now they will be worth at least that, we'll use $100,000. Six homes 100k each, we'll sell the homes for $600,000. What about the monthly rent we've been investing in the growth mutual fund? Historically these funds average 12% growth per year. I've decided to be a little conservative and go with 10%. We've invested on average $3600 per month ( 6 homes with an average cash flow of $600 per month). Over 17 years, assuming the 10% growth rate, that would be $1,926,684.28. Add the two together and presto, $2,526,684.28. Properly invested with a conservative return of 5%, that would produce around $126,000 of income annually. I would be able to live with that.
Keep in mind, I've assumed rent will stay the same and also assumed the homes will only be worth what they were 5 years ago. Rent typically goes up, and historically home values will rise over time.
For comparison, if I left the $180,000 in the IRA's, assumed a 10% return over the next 17 years, it would grow to be $909,804.65. That is a good amount as well, but I would rather have the 2.5 mil.
Why wouldn't you make this kind of investment? In this scenario, we are taking advantage of the depressed Real Estate market and using the cash flow from it to invest in the stock market. Your retirement will be growing in Real Estate and stocks. Traditionally both have performed very well. There is a great opportunity to to really grow your wealth in today's market. Those who take advantage of these investment opportunities and properly leverage their cash flow will be sittng pretty in years to come.

IRS Tax Code Cracked, Reserve Your Free Sneak Peak

The First time Homebuyer Tax Credit in the Recovery Act is huge. I'm shocked not that many people have explored everything it offers. Buyers can get up to $8000 to buy a house. That 8k opens up so many opportunities for buyers, sellers, agents and investors.

I can show a buyer how to convince a seller to owner finance a deal for them.
I can can show an agent how to get up to 10% more for their listings in a down market.
I can show a seller how to find more buyers for their homes.
I can show investors how they can get deals turned for retail prices in 90 days or less.

I've done extensive research into all the IRS rules and regulations regarding the credit. What I found was so profound, I've decided to team up with another seasoned expert and create an information series on how to take advantage of this amazing opportunity. This Tax Credit creates a win-win for everyone involved in the deal. The buyer wins because they get the home they've been dreaming about and can also get their credit repaired at no cost to them. The agent wins because this opens the door for them to close 10 times the deals they are closing now. The seller wins because they can get a qualified buyer for their home and get up to 10% more for their home in a buyers market. The investor wins because he can leverage his money into a position that turns his money in 90 days or less. These are unheard of opportunities in this market.

If you thought that the only way to make money in today's market was with foreclosures, you're wrong. We discovered ways to get retail buyers into homes at retail prices. This is the first step to stopping the declining home values found across the Country. We cannot do it single handedly, that's why we are working relentlessly to get this information series put together and ready to be put in your hands. If you want to be one of the first to get this amazing information, go to www.virtualinvestoragent.com and opt in now to get on my email list. In the meantime you will receive free information from me on how to make more money, with less risk and no sweat in Real Estate. No obligation, no commitment, no subscription, Nada. Free from me to you.

Make sure you go to www.virtualinvestoragent.com now, do not miss the chance to be one of the first to get this ground breaking information. This information will change the way you buy, sell or invest.This material is time sensitive, do not wait. Once the government pulls the plug on this program it will be gone forever. Don't be one of the ones who regret not being able to take advantage of this once in a lifetime opportunity.

Getting Back to the Basics.

What made the United States great? Pretty good question. It seems like President Obama forgets what made us great. He can't stop preaching on "change" and "reinventing." Why do we have to do that? Why can't we just get back to what made us great? We've become a nation of consumers rather than producers. We need to begin producing again. The problem with that, is it cost too much for a lot of companies to do business here. Plus, who would want to do business in the United States when the President himself calls out any company that is profitable and portrays them as greedy and evil. I certainly wouldn't. The President obviously doesn't have an Economics degree or he would know that companies exist to make a profit. Profitable companies employ people, are innovative and spend on research and development. Profitable companies are needed to support a strong and healthy economy.
What are we doing to encourage companies to come back to the U.S.? The President is supporting the Cap and Trade Bill, which basically translates into the largest tax increase in U.S. history. The President supports taking over Health care, which would force businesses to provide Health Insurance for employees or pay a penalty (tax) to Uncle Sam. The President supports taking over and dumping taxpayer money into businesses that have failed. How would you feel (Ford, for example), if you did everything in your power to conduct your business to make a profit, and your competitor who has failed to generate a profit gets bailed out by the Government. Hmmm, get rewarded for failure, seems like a fantastic idea.
How does anyone expect new businesses to want to be here? The deck is stacked against them. They have higher costs of doing business, get demonized if they earn a profit and have unfair competition against Government owned and subsidized companies.
We need to get back to the basics, get back to producing goods. The only way we are ever going to get there is for the President and Congress to step back and get out of the way. We need them to have as little involvement as possible so the Economy can revitalize. We need less Government and more entrepreneurs. Lets get some legislation passed that would actually encourage business, rather than chasing it away. Lets applaud successful companies rather than make them the villain. Exxon/Mobile has been crucified the last couple years for making record profits. Do you realize, they also paid record taxes. Do you also realize it is a publically owned company, what about all the American share holders who benefited. They invested in a company that did what it was supposed to do, EARN A PROFIT!
America doesn't need to reinvent itself, it needs to elect some politicians who understand what kind of environment business needs to thrive.

My Momma Even Said it Was Too Good To Be True!

Actually my mother-in-law, it sounds better saying momma though. My mother-in-law approached me in May looking to invest $100,000. She had the money in a CD and uses the money to pay for her monthly health insurance premium. The CD rates had dropped dramatically and if she renewed she wouldn't earn enough to pay the premium. She's on a fixed income and has to earn at least 3% on those funds to have enough to pay the bill. She asked me what to do. How bad is it when you have to scramble to find an investment paying 3%?

I explained to her what we did and how she could earn at least 8.5% on the money or could use the money to do wholesale deals. Initially she was thrilled because she would be more than doubling what she made last year. Then the inevitable occurred. She started asking family and friends. They acted predictably, just like the media. They told her that it was too good to be true. They told her that it was too risky. They told her that there was no money in Real Estate and that she'd be making a huge mistake. She ended up investing half the money in a CD and the other half as an unsecured personal loan at 6% to, of all people, one of the family members that said the Real Estate (which, by the way, is a secured investment) option was too risky. Unbelievable!! She'll most likely never see that money again. I pray that when that time comes, I will be compassionate enough not to gloat and say "I told you so."

Back to the deal I had found for her. I found two brick ranches in Metro Atlanta. One was a 3 bedroom/ 1 bath, the other a 3br/2ba. We found another investor who decided it was an amazing deal. He purchased the homes for $14,300 and $14,742. He choose to have us try and wholesale the deals rather than rehabbing them and renting them. We ended up selling both homes for him in less than 30 days. The sale prices were $24,000, the other for $24,375. That would be a gross profit of $19,333. I'll admit, it does sound too good to be true. But it is not. We find deals like this every day. We had a bit of luck, being able to sell them both in such a short span, but it is not that uncommon. Most of our investors choose to do the rehab and rent the homes. Those homes would each rent for at least $900/month. One of the homes had around $15,000 in rehab, the other around $9,000. If the investor chose that route, he would have had $53,042 invested total in the two homes, generating around $1800/month cash flow. Not too shabby. Considering the homes will most likely be worth $90,000 in 3-5 years, I'd say a very smart investment.

Moral of the story, DON'T BELIEVE THE HYPE! These deals are real and are out there. Those who take advantage will be reaping the benefits, while everyone else will be scrambling to earn their measly 3% in a CD. I hope you will be one of the few that get in the game and take advantage of these amazing deals.

Where are all the good deals?

Over the weekend I gave some thought to where to find all the good deals. I've found that all the best deals we find come from the MLS listings. People are telling you to go after short sales, go to auctions do this do that. Blah, blah, blah, blah. I don't understand why you would do any of that. The deals we are buying and finding are bank owned properties. It doesn't get better than that. If you buy from the bank, you are buying from the source. I see short sales listied in the MLS everyday. They are still priced high. I've gone back and done property history reports on deals we've purchased and found that most of the ones we've bought were once listed as short sales prior to being foreclosed. We just made an offer on one that expired on July 1 and was listed for $89,900 as a short sale. We're getting it for $24,900 as a foreclosure. That is quite a difference, wouldn't you agree. What can you do with an extra $65,000 in your account? If you follow my advice, you can invest in two or three additional deals.
My experience with banks is horrible. Have you tried contacting them these days? I have, and I've waited on hold for hours trying to get through. We own a dozen rental properties which we've aquired steadily over the past nine years or so.We buy and sell as the market dictates. We have several right now that we are upside down in because of the falling house values in the market. I've attempted to reach the Lender with the intention of doing a short sale. I've had absolutley no luck. My intent is to sell these and use that money to get into better deals. We have homes that have $125,000 mortgaged against that rent for $1100 per month. Great deal at the time. Now that is a horrible deal in this market. In the Metro Atlanta market, we're gettting deals under $45,000 that all rent between $900 and $1200 per month. The point is that, the banks do not have the man power to handle the flood of calls they receive each day. They get calls from people wanting to modify their loans, do short sales, make payment deals, you name it. You wait on hold and finally get someone who can't help you. The banks have no choice but to foreclose because they cannot properly assist their customers. Thats why the foreclosure, bank owned REO is the only way to buy these days.
I suggest, you find a good Realtor in your market, tell them what you are looking for and buy some deals. Tell them to stay away from short sales, you don't have the time to waste dealing with these. Tell them to stay away from auctioned homes, they have the prices artificially inflated because all rookie investors bid on them. Most of these auctioned deals get put back on the MLS anyway because they winning bidder typically cannot close. You get a rookie investor bidding these deals up, who think they can go get a loan and buy the deal with no money out of their pocket. Not in this market! You need cash or funds from your IRA or 401k. We'll get into that in another time. The point is that we see deals go off the market and at some point they come back. We just saw one that we lost to an auction in April. It was listed in the MLS for $34,900. We offered $29,000 for it. Didn't get it, the listing agent told me it had been moved to an auction site. Guess what, it came back on the market last week. It wasn't listed for $34,900. It was newly listed for $24,900. We bid and got it for $21,000. The banks have no clue what they are doing. If you are patient and don't get personal with these deals, you'll come out ahead. We got that particulat deal for $8,000 less than we committed to just 3 months prior.
This market is amazing and will continue to be for awhile, not forever though. There are many fortunes that will be made here during the next 18 months or so. I hope you "get off your Donkey" and get in this game while you can make yours.