A dear client has owned a home in another state (which was his home when he had a job there) for more than 10 years.

He got a great job offer in LA, but it was 2007, and the market was already softening. He purchased a property, but
little did he know that his property would go from being worth $250,000 down to $190,000 in a matter of 2 years.

He initially kept the property, thinking it would be a good rental.

Then he was trapped because the value went down, and he couldn’t sell even if he wanted to (or put in lots of cash to make up the difference or walk away and have a foreclosure on his record).

He did what was right by paying the debt and not walking away, kept renting it out even though he was negative $500 per month on a good day.

Now 10 years later, he wants to buy more rental property with cash flow.

During his investor consultation where we discussed where he could invest for positive cash flow and how to get ready, I suggested we look up recent sales, and it looks like the value is finally up to $290,000-$310,000.
He owes $240,000 and in the very near future can free up that cash (I always think of equity as a piggy bank) to create a positive income instead of taking out of his pocket every month.

We were able to identify 2 or 3 properties that would meet his cash flow goal and his comfort level in the risk he is taking (risk tolerance) with the money he has available now.

Do you know someone who has a rental that’s costing them every month?

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