This week’s success story is about investing. One of my first students to graduate from my new online beginner investor course, www.Mycashflowacademy.com closed on his first investment property with positive cash flow.
As he tells it he had entrusted friends in the past to invest his money and lost money. He has owned his own home twice now in his life but never bought investment property on his own. Newly divorced, he was re-examining his priorities. He was afraid to invest again because of his past losses with his friends who sold him hand over money to their investment, he was not sure what made a good deal versus bad and where to find the good deals.
He recently realized that he had not done very well at saving for retirement and had not much else than social security to count on. No pension and a small 401k.
He completed the 12 modules that include 20 hours of video lessons, graduated in May. June 29th he came on our Go See trip to Indianapolis with his $15,000 to invest. He almost didn’t come cause he thought it was too soon for him that he should save up more money.
But he came anyway thinking that at least he would be learning on the spot and see real examples of properties.
While there he saw things he would never touch and learned how they could be a good investment but then the unthinkable happened.
We did a walkthrough of a house that was $75,000 would need 20% down or $15,000, a tenant already there at below-market rent of $750.
He made an offer and less than 30 days later closed on that home with just $16,000 out of his pocket and $150 in monthly cash flow now (current rent is $750) with $350 in cash flow a year from now (new rent $1050) when the current tenant leaves. How does he know? The property manager on our team has 13 other homes in this “university area” that rent for that or more. If the numbers don’t make sense, then you might want to join us in the My Cash Flow Academy community!
So he is getting $350 per month x 12 = 4200 / $19,000 (16,000 invested plus $3000 fixing when tenant moves out) = 22.1% cash on cash return.
With the stock market bouncing around and warnings of possible recession consider investing in real estate for future stability in your cash flow.