{"id":155,"date":"2006-07-29T23:59:28","date_gmt":"2006-07-30T06:59:28","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=155"},"modified":"2006-07-30T00:21:15","modified_gmt":"2006-07-30T07:21:15","slug":"how-to-turn-100-into-27000-in-eight-years","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/155\/how-to-turn-100-into-27000-in-eight-years\/","title":{"rendered":"How to turn $1.00 into $27,000 in eight years . . ."},"content":{"rendered":"

That sounds like a late-night TV pitch, but it’s actually possible in residential real estate. Housing is distinct from other investment vehicles in important respects. Unlike securities, real estate is a hard asset with an enduring intrinsic value. There are huge tax benefits accruing from owning real property, either as an owner-occupant or an investor. Most significantly, real estate can be leveraged up to 100% of its value.<\/p>\n

Yes, you can<\/i> buy a home with “nothing down.” Through the masquerade of a seller concession, you can even roll the closing costs into the loan, so that you can take possession of a rental property with absolutely no money out of pocket.<\/p>\n

Why would you want to do this? Because the purpose of investing your money in real estate is not to own it but to profit from it. Real estate investment books are filled with bad ideas — never buy a cash-flow negative property, buy the cheapest home you can find, buy four-plexes in challenged neighborhoods, pay ahead on your mortgage to increase your equity. These are all terrible ideas because your sole objective should be cash-on-cash return: How much money did you take out of your pocket at the start of the investment, and how much money did you put back into your pocket at the end.<\/p>\n

Is a cash-flow positive property a bad thing? No, but a home that is cash-flow negative — if you can afford the negatives out of other sources of income — can be a much better cash-on-cash investment.<\/p>\n

Buying cheap is usually a terrible idea. The money from real estate investing comes from appreciation, not rents. Unless you convert the property to a higher and better use, what starts cheap usually stays cheap.<\/p>\n

In the same way, buying multi-family properties or other homes in bad neighborhoods is unlikely to be a winning strategy. Your ratio of rents to costs may be better, but your appreciation will almost certainly be worse than buying in a more-avidly-desired neighborhood.<\/p>\n

And paying ahead on your mortgage is just dumb no matter where you buy. With a 100% leveraged property, every penny of appreciation is Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

That sounds like a late-night TV pitch, but it’s actually possible in residential real estate. Housing is distinct from other investment vehicles in important respects. Unlike securities, real estate is a hard asset with an enduring intrinsic value. There are huge tax benefits accruing from owning real property, either as an owner-occupant or an investor. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,5],"tags":[],"class_list":{"0":"post-155","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-marketing","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1685,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1685\/real-estate-investing-vs-stock-market-investing-is-there-a-clear-winner\/","url_meta":{"origin":155,"position":0},"title":"Real Estate Investing vs. Stock Market Investing- Is there a Clear Winner?","author":"Cooksquared","date":"July 23, 2007","format":false,"excerpt":"Real estate enthusiasts have been sounding their trumpet during the latest run in the real estate market. Many real estate focused investors truly believe real estate outperforms every other investment by a wide margin and even go as far as to wonder why investors would choose any other investment vehicle.\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13288,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13288\/real-estate-investment-tips\/","url_meta":{"origin":155,"position":1},"title":"Real Estate Investment Tips","author":"Tony Sena","date":"September 20, 2010","format":false,"excerpt":"Finding a \u201cbargain\u201d property to purchase for rental purposes takes some analytical skills, market knowledge, and a real estate agent who is in sync with your investment goals. Some investors would consider the ideal rental property to be a three- bedroom, two-bath house in good repair, or needing minor touch-ups\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3923,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3923\/what-went-wrong-in-the-real-estate-market-we-told-homeowners-to-treat-their-homes-like-securities-investments-and-they-did\/","url_meta":{"origin":155,"position":2},"title":"What went wrong in the real estate market? We told homeowners to treat their homes like securities investments — and they did…","author":"Greg Swann","date":"August 16, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link). As a matter of eating crow, I will attest that I publicly denied that housing prices could ever behave like securities prices, falling far below their fundamental value. The market has proved me wrong. We're writing contracts\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":645,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/645\/home-buyer-always-liable-for-mortgage\/","url_meta":{"origin":155,"position":3},"title":"Home buyer always liable for mortgage . . .","author":"Greg Swann","date":"November 17, 2006","format":false,"excerpt":"This is my column from today's Arizona Republic (permanent link). No fireworks, today, just real estate. Home buyer always liable for mortgage I got a great question by e-mail. It's really a lender question, but it introduces a number of interesting topics. \"Are homeowners personally liable for their mortgages? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":602,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/602\/ask-the-broker-who-is-responsible-for-the-mortgage\/","url_meta":{"origin":155,"position":4},"title":"Ask the Broker: Who is responsible for the mortgage . . . ?","author":"Greg Swann","date":"November 4, 2006","format":false,"excerpt":"Holy smokes! I get questions for appraisers, for inspectors, for real estate attorneys, for everyone involved in a real estate transaction except the ding-dong Realtor. Here comes a question for mortgage lenders, who are entreated to chime in with better answers:Generally speaking, are homeowners personally liable for their mortgage? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":679,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/679\/content-piracy-on-the-renet\/","url_meta":{"origin":155,"position":5},"title":"Content piracy on the RE.net . . .","author":"Greg Swann","date":"November 25, 2006","format":false,"excerpt":"An aggregator weblog called Real Estate Chatter is resyndicating the feeds of these 25 real estate weblogs:Altos Research Real Estate InsightsAppraisal ScoopCarnival of Real EstateMike's Corner Web 2.0 For Real Estate ProsNAR in the Newsrealestate.com.au News & ViewsOverseas Property Blog :: guide to international real estate investmentPressReal.comSeattle's Rain City Real\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=155"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/155\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}