I'm in Atlanta, but my mind is in St. Thomas!!

I just sat down trying to figure out what to blog about today, but can't seem to get my mind off the weather. Today is cold and rainy in Atlanta and I cannot wait to get on a plane on Sunday and fly to St. Thomas. There's nothing like the beach and I definitely need it. I'm recovering from Bronchitis which has since been diagnosed Pneumonia and need some sunny warm weather.

I really appreciate being able to take trips like this. Real Estate Investing has been a Blessing to my family. It's been rewarding financially and personally in that it allows me to travel freely without being tied down to a 9-5 job. My goal is to get out of town with the wife and kids every 5-6 weeks or so. It doesn't matter how long the trip is, it's always good to be able to just pick up and go. Last weekend we went to Pigeon Forge, TN to see the Christmas lights and shows at Dollywood. We ended up getting snowed into our cabin and just had an amazing time with the kids sledding and having snowball fights. Fortunately the cabin didn't lose power and we had heat, food, Internet, even a hot tub and a pool table. The cabin was amazing, I couldn't imagine being "stuck" any place better. We didn't make it to Dollywood, but it was a fantastic trip regardless. We're unpacking the cold weather gear and digging out the beach gear.

The best part of getting away is that we still were able to check messages and email and conduct our Real Estate business. It doesn't matter if we're home or in Orlando or in St. Thomas, we can work from anywhere. All I need is Internet access and I'm home free. There's not many resorts around that don't offer Internet access. Being in this business allows me the freedom to set my own schedule and earn the money my family deserves.

Even when I'm home I sometimes feel like I'm on vacation. Let's look at what I have done so far today. Today, I woke up, got the kids out the door for the bus at 7:35, had some quiet time reading Scripture with my coffee. I then checked email, posted some Tweets and was at the kids school by 11 to read to my son's first grade class. I had lunch with my second grade daughter then went to Chile's with my wife (I don't really eat lunch with my daughter, just sit and talk to her while she eats). I got back home around 2:30, checked the mail and am now writing this blog post. It's 3:37, the bus just pulled up so the kids are home. They'll sit down, do their homework and then I'll do something with each of them. I think Preston wants to put together another one of the Star Wars Lego's he got for his birthday, not sure what Peyton wants to do. After that, we're having my parents and Christa's grandparents over for dinner then the wife and I are going to see a movie (I think the new one with Sandra Bullock in it).

I used to get up at 4am to deliver potato chips. My life was scripted by my job. Not anymore! We make more money than we ever have (there are always Real Estate deals in EVERY market) and pretty much work less. I don't see why more people don't do what we do, it boggles my mind. There's nothing holding you back but yourself. Stop making excuses and take your life back.

Go to our website, www.richandchrista.com, check it out. There's a ton of free information there to sift through. Educate yourself and then make a deal. We don't sell anything except deals. Most of the Real Estate "Gurus" sell products, that's how they make their money. We make our money doing the deals they talk about. I'm not going to try and sell you something you do not need. I make money when you make money. The more deals we all do, the more money we all make.

As always, feel free to comment or shoot me an email. I look forward to helping you reach your goals.

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.

Cash Flow is What Matters

I had a nice chat last week with one of my investors from the Midwest. He invests in Atlanta and has many associates who only invest in their local markets. I had to ask, WHY? If you are a Real Estate Investor, why would it matter where you invest. Shouldn't you be looking at cash flow, cap rate, equity, stuff like that? He told me that they felt they had to be able to put their hands on it and touch it. That concept confuses me. Why would you want to do that? We hire property managers to manage the properties. We have contractors to handle any maintenance issues. We have video to be able to see the property. If you own stock or a mutual fund, do you go to the front door of the company to see it? No, you look at the prospectus and look at quarterly reports. You're only interested in the bottom line, is the fund or stock performing. That is the same way to look at Real Estate. It is an investment, you invest because you expect it make you money. You do not invest so you can drive by and say "look, I own that." I see investors every day looking at deals in California or New Mexico spending $150-250k on deals that rent for $1200-1500 per month. They look at these deals because they feel comfortable because they know the street the home is on and live in the area. We have deals in Metro Atlanta that are literally $35-55k that rent for $900-1100 per month. Do the math. You can triple your cash flow by simply investing in the Metro Atlanta area. I urge you to treat Real Estate Investing just like any other type of investing you may do. Look at the deal. Look at the numbers. If you do that, take the emotions out of it, you'll make a ton of money and be successful. There's never been a better time to get in the game and expand or start your Real Estate portfolio. Find an experienced agent to find you deals and get started. We find money making deals everyday. They are definitely out there waiting for you to pull the trigger and start making money. Good luck and please feel free to contact me with any questions you may have., I'd love to help you.