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The Best "Get Rich in Real Estate" Idea I Have Ever Seen
As a real estate agent, I have met my fair share of real estate investors. A few have made a lot of money at it. The investors that I’ve met, who have become “rich” in real estate had two traits in common.
- They manage their own properties (or their partner does).
- They bought property as a long term investment.
Shortly after losing money I couldn’t afford to lose on a fixer/ flipper condo in Phoenix I found a book that totally change how I looked at real estate investing.
“Buy and Hold”
That book was called "Buy and Hold" by David, Schumacher, Ph.D His investment philosophy is to buy rental property in the best, growth areas in town and then rent them out and hold onto them for the long term (“long term” being 20 years or longer). I won’t go too far into explaining this book, but I will say buy the book and read it.
Think back, what did homes sell for in your area 20 years ago? I bought a house in Denver in 1986 for $85,000. That house would sell now for $225,000 or more.
I know an investor in Denver, who as he got close to retiring, bought one or two Denver rental properties per year. After he retired, he lived in Phoenix during the winter months and bought one new Phoenix rental each winter. His son lived in Phoenix and managed the Phoenix properties in exchange for half the profits. The last time I talked to the dad (in 1998) he owned 3 homes, 2 triplexes, 3 condos, and a 17 unit apartment building. At that time, the apartment building was providing just under $10,000/month in positive cash flow He had never sold any of the properties. He just kept them fixed up, rented, and enjoyed the income and the winters in Phoenix.
I recently met an older couple who had purchased a home in St. George, Utah for about $20,000 in the late 1970’s. This couple lived in the home for about 6 years and then rented it out until July of 2004. In September, 2004, they put the home up for sale. Their real estate agent sold this home for $200,000. Not a bad return.
From my point of view, buying and holding seems to be the safest, surest way to real estate wealth.
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Links that you might find useful:
Apartment Realty & Financial Group - www.apartmentcashflow.com is a network of contacts and resources in helping to assist investors who are searching to expand their current apartment building portfolio. Please see our website for additional information.
Learn To Be Rich - Learn the secret investment strategies of the rich: real estate, stocks, commodities, businesses and more via a fun interactive game!
BiggerPockets.com - Real Estate Investing Community
John T. Reed's Real Estate Investment Home Page
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