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College Payment Plan that Pays for Itself

by Nate Martinez

College Payment Plan that Pays for Itself 

It's a college payment plan you may not have considered, but more and more people are finding real estate investing to be the perfect solution.

The idea is to purchase a house as an investment property when a child is born or very young. Ideally, a 15-year fixed rate mortgage is used for a property that cash flows in the first year. By the time the child has reached college age the property is paid for and the parents can sell the asset and use the gain to fund college. Not only has the equity in the property grown over 18 years, but they've benefitted from the yearly cash flow as well.

Here's how the scenario might play out:

Let's say our fictional parents purchase a $100,000 house with $20,000 as a down payment. They take out a 15-year mortgage for the balance at 6.75 percent interest. Their mortgage payments are roughly $8,945 for the year (or $708 per month).

If they rent the house out for $1,200 a month and have around $325 per month in expenses (taxes, insurance, repairs), they should see about $2,005 in cash per year from rental income for the first 15 years. From years 16-18, the expense of the mortgage is eliminated, yielding them $10,500 in cash flow annually. Over 18 years the total cash flow equates to $61,575. Note that this conservative estimate does not include potential rent increases that will increase cash flow and will help offset additional property taxes. Nor does it include interest earned if the parents decide to reinvest cash flow.

In 18 years the property will have appreciated, too. If we use a 3 percent rate of appreciation, which is less than the 5 percent appreciation real estate has averaged over the past 40 years, the $100,000 property they bought would be worth $170,243 at the time of sale.

The initial $20,000 investment would have earned $150,243 over 18 years - a return of over 13%. Including cash flow, the return is 15%!

While it is difficult to determine what future tuition will be-increases in tuition have spiked dramatically in recent years-a $230,000 ($170,000 sales price + $60,000 in cash flow) cushion should be enough to soften the tuition blow.

Investors aren't limited to purchasing real estate to fund college; many choose to purchase property during the college years to provide their children with a home and save on room and board. Purchasing a home with multiple bedrooms, gives you the option to lease the additional bedrooms to help pay for the mortgage. When your child no longer needs the house, you can plan to sell. 

In the long run, these savvy parents are saving money and helping to provide their children with a stable place to live during their college careers. If you are interested in learning more about investing in our market today, please give me a call. Nate

www.NatesHomes.com
602-942-7000

Real Estate as a Vehicle for Building Wealth: The Cash Flow Advantage 

Real estate is one of the best investment vehicles to create financial security for yourself and your family, and with today’s low home prices, record–low fixed–rate mortgages, and increasing rental prices, now is one of, if not the best time in history to invest in real estate.

The real estate market has long operated in cycles of rapid and slow appreciation. In times of great appreciation, the property—or asset—earns money in equity. Yet while appreciation is great, it’s really just a bonus. The right way to invest in real estate is for cash flow!

Cash flow is your return on investment in the form of rent after the mortgage and expenses have been paid. A property’s cash flow is immediate, steady and builds wealth over time, and today’s market provides incredible opportunities for investing for cash flow. In fact, according to Trulia, rent prices increased 5.1% nationwide from 2011 to 2012.

Click here to download this month’s Investor Report.

As a Certified Investor Agent Specialist (CIAS), I specialize in helping people like you build wealth through real estate. I have a team of advisors ready to guide you step-by-step along the way. If you’re even the slightest bit interested in real estate as investment, I would love to discuss your options with you. There is a real estate investment option for every investor, and I’ll work tirelessly to find the right one for you! Call or email me today.

602-942-7000
Nate@NatesHomes.com 

Building Generation Wealth - with Real Estate

by Nate Martinez

Building Generation Wealth – with Real Estate

People invest for an array of reasons, but among them is the desire to secure comfortable and stable futures for their families. Wealth secured for future generations—one’s children and children’s children—is known as “generational wealth.” Building generational wealth, however, takes prudent and careful investing. For many, real estate is an enticing investment option for its unique and lucrative benefits such as cash flow, appreciation, and leverage.

Unlike other investments, such as stocks, bonds and CDs, where quick returns are rare or nonexistent, the returns from a real estate investment property are immediate, steady and build wealth over time. In real estate, it’s called cash flow, the return on investment in the form of rent after the mortgage and expenses have been paid.

Today’s market provides incredible investment opportunities with great cash flow potential. In fact, rent prices increased 5.1% nationwide from 2011 to 20121, while interest rates and the median existing home sales price remained low, providing investors with even greater cash flow returns.

 While one should always invest for cash flow, appreciation is still a very lucrative benefit of real estate and an incredible opportunity for investors looking to secure long-term, generational wealth. The real estate market has long operated in cycles of rapid and slow appreciation, and even with the recent fluctuation in the housing market, median home prices have still risen at a rate of 5.2% every year when adjusted for inflation. That means a home purchased in 1969 for $21,800 (which was the median sales price that year), would have been worth $172,900 at the end of 2010. Not bad, huh?

If you are someone you know would like to learn more about how you can start investing in our real estate market, today, please give me a call at 602-942-7000 or via email at NateM@remax.net. By investing carefully and for the long-term, you can build a financial legacy and ensure that future generations of your family have secure, comfortable futures and increased opportunities available to them. I look forward to hearing from you soon – Nate

Certified Investor Agent Specialist (CIAS)
http://invest.cias.com/arizona-investor-resource

Investing = Cash Flow

by Nate Martinez

Investing = Cash Flow

I wanted to remind those you who are reading this blog, that there are some excellent real estate investment opportunities in our area. If you’ve ever thought about investing in real estate, now is a great time, and I can help.

The housing market has really turned around, and it seems everyone wants to invest in single-family homes now. Even former Wall Street traders have moved into residential real estate for the first time! When you compare the returns you can get from the stock market with the returns from an investment property, well, there’s really no comparison.

Because real estate investing is all about cash flow, you get monthly returns regardless of appreciation. You simply can’t get that from the stock market. Plus, real estate puts you in the driver’s seat - you have control over your investment and can even increase its value yourself if you’d like!

As an agent with specialized training in real estate for investing, I can show you how to invest the right way. There are a lot of great deals in our market, but the best ones have been going quickly, and I don’t want you to miss out!

I’ve created a report with more information about the incredible returns you can get from real estate that you can find here:
www.Arizona-Investor-Resource.com

If you have any questions or you are ready to started, contact me today! Looking forward to hearing from you soon – Nate

Real Estate Investing is Getting HOT!

by Nate Martinez

Real Estate Investing is Getting HOT! 

I was reading about our current market conditions online the other day, and it seems everywhere I look, the conditions are prime for investing in real estate. Home prices are low, average fixed-rate mortgages are low, more people are renting, and rents are rising - real estate investing is getting HOT!

Smart investors know this, and investment properties in our area have been going fast. Once you understand the math behind it, you’ll see why real estate is a wise investment. Investing the right way is about cash flow, not appreciation. Cash flow - in the form of rent - is the money you pocket after your expenses. It’s immediate, steady, and builds wealth over time!

Of course, there are plenty of factors to consider, and a thorough property evaluation is necessary, but that’s what I’m here for! As an agent with specialized training in real estate as an investment, I can show you properties that make sense for investing and help you invest with assurance. Don’t let all these hot deals pass you by!

I’ve created a report with more details you can find here: www.Arizona-Investor-Resource.com. If you have any questions or just want to get started, contact me today at 602-942-7000. Nate

3 Most Common Pitfalls in Real Estate Investing

by Nate Martinez

3 Most Common Pitfalls in Real Estate Investing 

New real estate investors can sometimes get caught up in common pitfalls that end up costing them time and money and, ultimately, turning an investment into a bad deal. But not all of these pitfalls are self-evident. Being aware of the potential risks and knowing how to prevent them will help keep you from falling into these traps.

Emotion verses Logic: Buying on emotion, not math
Most business transactions and investment decisions are based on numbers and whether they make logical sense. Buying a home, however, is an emotional experience - it’s where lives are lived, families are raised, and memories are created.

It’s natural for us to hold great emotional value in our dwellings, and we look for homes that are a good fit emotionally. When purchasing a home as an investment, however, it’s important to treat it as such and keep emotions at bay. To be successful in real estate investing, it’s best to think of the purchase as a business transaction or investment - focus on the returns. Calculating the numbers, such as the cash-on-cash return, for example, and determining if a property overall is a logical investment are the most important factors to consider.

Dealitis: Thinking that every property is a good deal
There are plenty of inexpensive properties in the current market. Home prices have dropped drastically since 2007. Just because a home is significantly underpriced doesn’t mean it’s a good investment. You need to take the same cautionary steps to evaluate the value of a property listed at $40,000 as you do for a property listed at $400,000.

A low-priced property could have serious structural issues, the relative property values in the area could be low, or the property’s expenses could be too high to provide cash flow. Many people wanting to take advantage of the current market’s low home prices have been burned because they didn’t do their homework and acted too quickly. It pays to consider all elements of a real estate investment property. The return will dictate whether the price is right for you.

Analysis Paralysis: Spending too much time analyzing and missing opportunities
The flip side of Dealitis is Analysis Paralysis. Doing your due diligence is important, but you don’t want to take too long to make a decision. With a properly written contract, you’re allowed adequate time to back out if you decide the deal isn’t right. This is what contingency/ inspection periods are for - a thorough inspection and analysis. If you hesitate too long, you might miss a good opportunity.

Even experienced investors can fall into these traps, which is why it can be helpful to work with an agent who specializes in investment properties. There are risks involved with all types of investments, and real estate is no different. But being aware of the 3 most common pitfalls and having a knowledgeable real estate agent on your side, along with my team of professional advisors, will help keep you safe.

I have been a Valley REALTOR for over twenty-five years – I have the local knowledge and experience to help you avoid the 3 most common pitfalls in real estate investing. Give me a call today. Don’t miss out on a great opportunity to be investing in today’s real estate market – Nate. 

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Why 2012 is a Great Time to Start Investing?

by Nate Martinez

Why 2012 is a Great Time to Start Investing?

According to a new TransUnion Report on the rental market, 48 percent of property managers stated that overall rental prices are up and vacancy rates are less than 5 percent. This market is creating fantastic opportunities for investors to purchase rental properties! Check out this quick video to learn more - then call me to get started investing before 2012 is over!

Secure Your Future - Invest in Real Estate

by Nate Martinez

Secure Your Future - Invest in Real Estate

Did you know that nearly half of Americans aren't saving a dime for retirement? According to a recent survey conducted by financial services trade association LIMRA, about 49% of Americans say they aren't contributing to any retirement plan. This trend is disturbing, especially considering that millions of Americans are relying on Social Security and other government programs to provide retirement income. The reality is that these programs just won't be able to provide the retirement you deserve.

Unfortunately, many people have shied away from investing in real estate because of the housing market’s activity in recent years. Savvy investors, however, have taken advantage of the new opportunities and continue to find great deals. Many have even invested their retirement funds in real estate and are slated for a secure, comfortable future, while building generational wealth. The little known self-directed IRA option allows for this, and as its name implies, allows the investor to direct his or her investment account activity—real estate included!

In times of increasing retirement living costs and widespread retirement planning oversight, it pays to research your options and take control of your finances—and secure your future. As a Certified Investor Agent Specialist (CIAS) designated real estate professional, I can easily help you navigate the investment real estate market. Don't get caught with low or no retirement funds - start planning your future now! It is more important than you think. Take advantage of the record-low home prices and fixed mortgage rates. Secure your future - invest in real estate - today!

NAR Announces Rise in Real Estate Investment Purchases

by Nate Martinez

NAR Announces Rise in Real Estate Investment Purchases

In a recent report, the National Association of REALTORS (NAR) announced that investment purchases totaled 27 percent of the real estate market. In this quick video, Alex Charfen, founder of the Certified Investor Agent Specialist Designation (CIAS) shares his thoughts on this report. 

As an agent with the CIAS Designation, I have access to relevant market conditions and the training you need to help make a smart investment. Whether you are a seasoned investor or just getting started, I can assist you. Please visit me online at http://invest.cias.com/arizona-investor-resource for this month's free investment report. 

Think like a Billionaire

by Nate Martinez

Think like a Billionare

The other day I caught an interesting interview with Warren Buffett on TV. He was talking about what he felt was the smartest investment in today’s market. Mr. Buffett, a man who is known for building billions of dollars of wealth for himself and his investors in the stock market, actually thinks residential real estate is the best place to put your money these days!

To watch the video, click here: Warren Buffett Interview

It’s incredible how today’s low mortgage rates and prices have created an environment where investing in real estate is so affordable. The good news is that you can take advantage of the opportunity, and I can show you how. Never has there been a better time to build wealth through real estate.

I’ve created a report with all the details that you can find here: http://Arizona-Investor-Resource.com. Please check it out and then give me a call to set up an appointment to discuss your personal investing goals - 602-942-7000 or email me at Nate@NatesHomes.com.


Displaying blog entries 1-10 of 14

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Nate Martinez
RE/MAX Professionals
20241 North 67th Avenue, Suite A1
Glendale AZ 85308
623-643-1010
602-430-5226
Fax: 602-532-7352

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