Buy and Hold?

Good Evening Friends,

I had such a great answer to my blog from yesterday, I decided to write about it...
The questions was...

Am I correct to say that "buy now" and hold only works in a place that doesn't have double digit devaluation going on? Some places have 13% to 17% and even more, in declining house values. A place like Iowa is a better place to "buy and hold?"


My answer...

As I said, Bill and I "buy and hold" in Iowa for several reasons. The main one being that the property values hold, year after year. Even if the property values dropped 5% this year, it wouldn't make a difference in the long run because values typically climb 5% a year....year after year. Every two years, values have climbed 10%. It doesn't take many years to see appreciation on your investment.

We buy and hold for long-term, and we mean...long-term. The Bible says it is a blessing to leave a legacy to your grandchildren. We are buying and holding for us, our kids, and their kids. It is our goal to set our family up in a business that can be passed down through generations. Owning lots of property would be a blessing to us and our families. They don't make any more land, so owning lots of it is our goal.

If you are in a area that is dropping with double digits...you must learn to short sale. If you can buy properties at 50% of the current value, even if the values drop another 20%, you still own properties below market. If you do a short sale, you would have to secure financing, which is a problem for a lot of folks right now. We have a company we are working with that only charges $500 to fix your credit - I don't want to turn this into a sales pitch, but this really works. If you have late payments, foreclosures, or even a bankruptcy...they can get it off. Take a look at: http://ieu.fixcreditbiz.com

If buying with your credit is not an option ... you'll have to do "Subject To's" - having a homeowner deed their house to you. Once the deed is transferred, the property becomes yours. The homeowners name is still on the mortgage - so make the payments on time. If you make a late payment, you hurt the homeowners credit.

Some states are making "subject to's" illegal because investors are taking advantage of distressed sellers. Check with your local attorney to see if you can do a subject to.

We recently invested in four rentals in Iowa. All four of them are worth $50,000 to $57,000 and we got each one for $30,000 or under. That is not a huge amount of equity, but they rent for $550 or more each. We took over payments and each one cash flows. Our total out of pocket expense was only $2,000. As each one climbs 5% a year in value, it won't take long for them to be worth $100,000 and the payments are under $300 each. They will be huge cash cows.

We always pay a little extra on our rentals to get them paid off as soon as possible. We bought a lot of properties in Florida back when the market was down. As the markets went up, we owned properties at 20% of the value. We sold a few and paid off others and ended up sitting good when the market dropped again.

It is important to plan ahead and watch markets. The hard part is knowing who to listen to. The news stations say not to buy now and I say...buy as much as you can. I have said many times that millionaires are born in times like these. People who understand how to help sellers while getting a good deal themselves will see the fruit of their labor pay off. The people who do it right, will come out on top at the end of all this.

I am doing a four part series of teleconference calls in May called -

Surviving The Crashing Market and Coming Out on Top!

Make sure you tune into it. With a little guidance...ALL of you can become super wealthy right now...

Ok...I have to watch American Idol now. I am a fan of David Cook - too cute!

Have a Blessed Day,

Dwan
www.theieu.com