Easy Money

 

By now most of us have a decent understanding of how the subprime mortgage mess came to a meltdown.

Easy money caught up with us when borrowers could no longer afford their minimum payments, which were usually their mortgages, which had been refinanced(or leveraged with home-equity loans) to pay off unsecured credit cards which had been used to finance liabilities like cars, boats, college, home improvements etc.

But can you really blame someone for being handed easy money?

I mean think about it.. The media pushes the message because it is bought and paid for, just like the political parties and currency systems, and by the same people.

The message is to spend money you don’t have.

The government does that, why shouldn’t you?

And now, four years past Ground Zero of the recession, and easy money is still available. How can this be? And who can still qualify?

I saw a commercial today for mortgage rates at 3%. My flight instructor told me this morning that he has an interest rate of 3 1/2%. Yesterday my pool guy told me he had an interest rate of 3 1/2% too.

The reality is that it is a huge market and there are people who can borrow.

The difference, not “everyone” still can, at least not conventionally.

Okay so FHA financing or conventional financing might be out, but is your primary residence really an asset? I don’t think so. If it doesn’t put cash in your pocket, it’s not an asset.

Cash flow, combined with capital growth, depreciation, and other tax advantages that the government incentivizes real estate investors with, make real estate the best vehicle for investing.

So where is that you give money now?

We have so much information(content), that I don’t think it has been easier in the history of the world for anyone to get rich. No longer does it take land or capital to get started.

Don’t get me wrong, the gap between the rich and poor is greatly widening, with most of the middle class moving towards the poor. But, for those willing to invest in their financial education, the opportunity has never been so prime.

Easy money is still available, as our global economy is on life-support from quantitative easing and other stimulus provided from central banks like the Federal Reserve. It can’t last forever, and when they start just simply canceling out that debt, the system will crumble, unless they come up with another system before that.

They’ve done a good job of averting a severe depression, but if they don’t make changes now to start advancing technology and energy, as well as investing in our financial education as a generation, the system does not stand a chance.

Here in Arizona we are combining financial education with real estate and providing a platform for investors around the world to invest in their financial education and real estate.

Finding deals is easy once you have the education, and then the money is easy too.

Debt can be a good thing, if you can use it to acquire assets that put cash in your pocket.

We have seen what spending the money on liabilities has done, both on the neighborhood level, as well as with our government..

What are you waiting for? Get started now, we’re ready to get you going!

Why is it we so often put off the things that are really most important to us?

Not you, not anymore!

Written by: Joshua Gayman

Sent from my iPhone

Cash flow or equity? Arizona has both

When it comes to real estate investing I always look at two things first: how much, if any, can I cash flow the property? and 2. Is there any built in equity with the deal?

Let’s explore cash flow. Cash flow is my favorite part about real estate investing.. Actually, cash flow is my favorite part about investing in any asset! The reason is simple, we all need a couple bucks in our pocket. There are two ways to accomplish this. We can either work for money, or have our money work for us. Logic would say that to build a nice retirement or lifestyle, one would want to choose the latter.

Cash flow, or passive income as viewed by the IRS, is also taxed at a lower rate than earned income. The reason for this is also not too complex, the government gives incentives for people to invest in housing. The government needs housing, so by investing in something that they need, you can take advantage of these incentives they offer.

Cash flow is also a solid foundation and can weather the storm of a housing first. We saw in recent years many so-called real estate investors getting slaughtered when the market took a turn as housing loans collapsed. The investors who had built their portfolio on cash flow were fine, in fact they actually thrived as rental rates took off from a growing demand of renters who could not afford the loans on their own property any longer.

When you invest for cash flow, it does not matter whether the value of the property goes up or down or remains constant. You have calculated your return based on how much cash it puts in your pocket on a monthly or yearly basis in comparison to how much you initially put into the asset to acquire it.

Many successful real estate investors have found ways to acquire cash flowing properties without using any of their own money initially. This is what rich dad Robert Kiyosaki refers to as printing your own money. There are many strategies of doing this, some that include having money partners or private lenders or other types of financing, and others that include going out and finding motivated sellers.

Now let’s talk built in equity. Built-in equity is nice as you obviously increase your net worth as soon as you acquire that asset. The thing about equity however is that it does not provide any cash flow directly. You might have increased cash flow with the more equity you have, as a result of lower loan costs each month, but simply acquiring a house that is worth more than you buy it for in and of itself does not put cash in your pocket on a regular basis. However, properties with built in equity are usually much easier to cash flow, and worst-case scenario are always prime opportunities to create some earned income by wholesaling or flipping, which can also be done using other peoples money or financing.

If you are interested in building or expanding your real estate investing portfolio, head over to our investors page. We are happy to assist investors from around the world to invest in real estate in Arizona no matter how little or how much they have to invest!

Phoenix boomtown! Great place for real estate investors

Phoenix housing boomed with the housing market and then crashed hard with the subprime mortgage crisis. Now things are looking up again in the state. It seems as though when the national markets go up, Phoenix goes higher, and when they go down, Phoenix goes lower..

This makes Phoenix one of, if not, THE best place to invest in real estate. You can buy properties for cheap when the market is rough, then rent them for amazing cash flow and tax breaks, all the while riding it out to realize some significant gains from appreciation.

Phoenix is volatile, but for the cash flow investor, that’s good news!

Click here for to get started investing in Arizona real estate!