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30 houses. So we’re not talking small change here. Your after-payoff income will then be:
So if you’re thinking, “I really want to own multi-family buildings,” pause for a moment and remember this:
Ten single-family homes can give you the same rental income as
a 10-unit apartment building. And in some areas you may be
able to charge a higher rent for your single-family home than
for an apartment in a multi-family apartment house.
What Types of Single-Family Homes Can Make Me Rich?
When we talk about single-family homes that can make you rich, we have six types in mind for you, namely:
1. Detached single-family homes—that is, a stand-alone building that’s a residential unit for one family.
2. A townhouse on one or two floors in a two- or multi-unit building with each unit a single-family residence.
3. A single apartment in a multi-unit building—usually having 10 or more units in the building.
4. A condominium single-family unit in a multi-family condo building designed for long-term living. Such a building may be in either a vacation or a non-vacation area of the country.
5. A mobile home in a multi-unit mobile-home park designed for semi-permanent living with electric, plumbing, and parking facilities.
6. A single-family vacation home of some type which you rent to others during the vacation season, and also—possibly—during the off-season.
Number of Houses 10 20 30
Annual Income ($) 76,829 153,660 230,489
For most of this chapter, we’ll get you up to speed on detached, or stand-alone, single-family homes. Once you understand them, the others will be easy for you to acquire and get rich from!
Now Let’s Get You Started Getting Rich
“So,” you ask, “what’s the best way for me to get rich in single-family home real estate today?” My answer to you is: YOUR WAY of getting rich in single-family homes depends on what you like to do, such as:
• Looking after your detached single-family home, doing needed maintenance work.
• Traveling to vacation areas and doing work related to properties you have in those areas.
• Buying properties at minimum money down—say $100—and flipping them after fix-up.
• Managing properties by having others take care of the grounds or the structure, for example.
To help you pick your way to single-family home wealth, we’ll put you into each of the types of properties listed above and show you the income and expenses you might expect. Then you can make your choice.
Detached Single-Family Home Wealth Building
To start building your real estate wealth in detached single-family homes, take these eight easy steps:
1. Decide on an area in which you want to invest. At the start, it is usually best to invest locally, if there are suitable properties available and rentals are a common way of life.
2. Look for suitable properties. Do this by looking in the Real Estate Section of your local Sunday newspaper for Homes for Sale. Also check any local weekly newspapers. Many of these will list lower-priced houses that are suitable for rental income for you.
3. Try to find homes having ads that say: Zero cash down, No money down, 0 down, or, Financing available. Most such ads are a tip-off to a motivated seller who would be willing to work with you to
Use Single-Family Homes for Your Quick Real Estate Start-Up
help you buy the property with minimum cash outlay—either from your own pocket or borrowed money.
4. Check the rental situation in the area. Do this by looking in your Sunday paper under Houses for Rent. Make notes of the rent charged for two-, three-, and four-bedroom homes. This is important because it is the rental income that will pay for the home you buy on borrowed money and give you a Positive Cash Flow EVERY MONTH.
5. Pick one or more homes you think will make good rental units at the going rent in the area you selected. Visit each home and get full information on it. Thus, you must get the following:
• Asking price.
• Down payment wanted.
• Annual real estate taxes.
• Annual fuel cost.
• Annual electric bill.
• Annual water charge—if any.
• All other expenses of the property.
6. Set up a Real Estate Riches Success Book with a file, such as that in Figure 5.1, for each house. Enter full data, as shown. Add any remarks concerning the
• Condition of the house
• Favorable or unfavorable aspects of its location
• Rental potential based on your study of the area and the particular property
• What deals you might make on the down payment
• Your analysis of whether the seller is anxious to sell, or willing to wait until he/she gets the asking price
• What the lowest down payment you think you could negotiate to get the property is
• Your rating, on a scale of 1 to 10, with 10 being the most desirable, of your opinion of the suitability of the house for your wealth-building
• Your personal thoughts on whether you really do or do not want the property in your portfolio of single-family income real estate.