Editor’s Note: Thanks for taking part in “Pledge Week 2016,” where we’re featuring the best ideas for getting healthier, wealthier, and wiser in the New Year. Yesterday, Mark showed you one of his favorite ways to grow richer: starting businesses and establishing ancillary income streams.
Today, Mark features one of his favorite ways to grow lasting wealth (and collect 12 more paychecks next year). It’s one of his all-time favorite strategies. See if you might pledge to add it to your own portfolio…
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From Mark Ford, founder, Palm Beach Research Group: Do you invest in real estate?
I’m not talking about your home. Owning a home has more to do with security (emotional and personal) than it has to do with building wealth.
I’m talking about rental real estate.
If you aren’t investing in rental properties, you should think about doing so today.
I love real estate. It’s not without its problems, but it’s the best way I’ve found to accumulate a good deal of wealth on a part-time basis.
In the many years I’ve been actively investing in real estate, it’s given me returns much better than the stock market. In fact, my average return has been between 5% and 8%, without leverage. When I use bank financing, those numbers are in the 12-15% range.
I’ve tried all sorts of real estate investing. But I’ve had the best results by sticking to this plan: direct investments in income-producing properties… either residential or commercial.
You receive something with rental properties you don’t get with many other real estate deals: guaranteed income. Sure, you get appreciation, too. But I’ve come to see that as secondary to having dozens of extra, ongoing income streams. (And did I mention it’s money that comes with little to no extra work for you?)
Which Palm Beach Research Group team member is pledging today?
Wouldn’t it be nice to wake up one day and realize you don’t need to work anymore? Imagine how it’d feel to have checks sent to you each month? Checks that, in total, were enough to pay all your bills?
It’s an attractive prospect, don’t you think? You can make it happen by building a substantial real estate retirement portfolio.
If you’re relatively young (meaning retirement is 20-plus years away), you can do it easily. If you’re closer to retirement—or already retired—you can enjoy the benefits as well… though you’ll need to work a bit harder and/or invest a bit more money.
I made more than 500% on a house my brother rented from me. He and his family stayed in it for three years, paying below-market rent (which he appreciated). Yet I was able to make consistent income… and I was able to sell it for more than twice what I paid for it.
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Recommended Link For the “Not Yet Wealthy” If you don’t have enough income or savings for retirement… this will be the most important message you read all day.
Mark Ford is conducting an online wealth-building training event all this week. He’s going to share with you his strategy for creating a sizable net worth in 7 years or less… without touching stocks, bonds, or options. Or needing a lot of startup capital. You get to attend free, courtesy of your subscription… |
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Tom Dyson is traveling to Caracas over the New Year to do some research on Venezuela.
Do you have any insights you’d like to share with him about Venezuela’s economy/currency/real estate/investments? Please email him your feedback, right here. |
Since I financed it at 80%, my return in the end was huge… even when you take into account all the costs. These include the cost of borrowing, the maintenance, and the theoretical loss of income by charging a modest rent.
I netted something like $10,000 per year on a condo I bought for $65,000. That was a return of roughly 15%, cash on cash.
[Cash-on-cash return = annual dollar income / total dollar investment.]
Had I used bank financing, I would’ve made more—without any significant increase in risk.
I own dozens of individual properties like this. They send me checks—usually thousands of dollars—on the first of every month. That’s a nice way to begin your month.
Mark on his favorite day of the month: the first.
On my credenza in front of me are 24 small red binders. Each represents a separate real estate investment I’m involved in.
Some are individual properties I own myself. Some are properties I own with friends. Some are direct investments. Some are in partnerships or corporations. Some are rental plays. Some are build-and-sells.
If you decide this is the year to begin a real estate portfolio, start slowly.
My first real estate investment was a bad one. I’ve written about it before. It was a rental unit in Washington, D.C. (It was overpriced and occupied by a prostitute who would neither pay me rent nor do her business elsewhere.)
It took me years to dig myself out of that mistake. I emerged a smarter (but not-yet-smart-enough) real estate investor.
Take your time. Be selective. Educate yourself. Some of what’s on the bookshelves is full of misguided advice.
My best advice is to subscribe to our rental real estate program. It’s part of the Palm Beach Wealth Builders Club. That, you can trust.
You can also take adult education classes… if you can find them. Be leery of free seminars—they’re likely to be selling traps.
Here’s a promise: If you start investing in rental real estate this year, you’ll be glad you did. If you keep investing—buying at least one new property per year (which will be easy once you get going)—you will be a real estate multimillionaire in no time (not counting your other assets).
And you’ll be well on your way to retiring as a multimillionaire.
When you look back on all the wealth you acquired, you may feel the way I do now: that real estate was the easiest and—next to your personal business—most lucrative wealth-building activity you ever got involved in.
“In late 2014, I pledged—with my wife—to buy and own two single-family investment properties by the end of 2015. Truth be told, by the end of the year, we will own four properties with 20 total rental units. And that’s just the beginning. My Pledge for 2016 is to own my first $1 million of investment property. Thank you, and merry Christmas to everyone at PBRG!” — Club member Tim McRae |
Reeves’ Note: Mark’s made more than $15 million worth of real estate deals and—excluding his very first one—hasn’t lost a dime. It’s no surprise real estate is the second largest contributor to his wealth.
It’s just one of the topics he covers in his upcoming—100% free—24-hour-only webinar presentation: “How to Add a Million Dollars to Your Net Worth—Without Touching Stocks.” Be sure to tune in this coming Tuesday.
If you’re ready to start collecting those rent checks (median U.S. rent is now $1,584) each month, click here for instant access to Mark’s free special report.