Millionaire: Step 2

A recap from a couple weeks ago...

We talked about a deal on Property 123 Abc Street

You bought this suited property for $330,000! 

You rented out the basement suite and you lived upstairs in this 3 bedroom 2 bathroom legally suited upstairs space for $78 dollars a month! How? By renting out the basement for $900 and living upstairs with 2 roommates plus you rented the double garage to either your upstairs or downstairs tenants@$200 for a combined monthly rental income of $2,200. (Rooms rented at $550 x2 = $1,100, garage rented at $200 plus the basement suite@$900 = $2,200)

123 Abc Street.

Listing price, $330,000.

Down payment:$16,500 

Property type- Legally suited house

Property taxes: $2,400 ($200 per month)

Mortgage: $1,477 per month 

Insurance:  $100 per month

Utilities $500 per month

Total EXPENSES= $2,278 per month

Total rental income = $2,200 per month

Total cost of living= $78

In my last blog post, I write out a detailed explanation of this: http://bit.ly/Homeownershipfor78dollars.

Right now I am going to assume you are paying rent somewhere, for around $550 to $1,600.

If you bought this 123 Abc property you are paying off your mortgage approximately $816 per month on your mortgage for signing a 5 year locked-in interest rate! 

You are now paying only $78 every month out of pocket. At the end of 5 years that is a $55,320 savings in real cash that you'd have had to pay in rent somewhere else.  Even if over the 5 years you saved $17,000 or $18,000 to buy another house, this home allowed you to save money to help you purchase your next home but that’s not all it does... Once you move out of your first home at 123 Abc Street, you can rent out the upstairs to one tenant and have cash flow coming from your basement suite, upstairs and garage all being rented out. 

Instead of it costing you -$78, you now cash flow +$172! 

Therefore, saved rent PLUS Mortgage pay down of $816 per month, for 5 years = $49,000 EQUALS cash savings of $55,320.

Getting excited yet?

Time to purchase house #2! 

456 Xyz Street

Purchase price $340,000   

(The basement suite was new! You can now rent it for $1,000)

Down payment: $17,000

Property type- Legally suited house

Mortgage: $1,531 per month

Taxes: $200 per month

Utilities: $500 per month

Insurance: $100 per month

Total EXPENSES= $2,331 per month

Total Rental income = $2,300 

Total cost : $31 per month

BUT WAIT!

Now 123 Abc is rented out and you have moved to  house #2.

Total Rental income from 123 Abc Street =  $2,450.

Total rental income from 456 Xyz Street = $2,300. 

Total combined expenses= $4,609.00

Total rental income = $4,750.00

Total living cost in your 2nd property, $0 (actually less than 0)

$4,750 - $4,609 = $141.00  You now live for free and have cash flow! 

Plus you have $49,000 in mortgage pay down on 123 Abc street & now you have #2 being paid down and you still aren't paying rent anywhere SO there is another $53,200 in savings.  That savings is based on $1,000/month being your rent. If you are currently a roommate paying $550 you'd only get $28,320! (You get the idea)

Too long? Didn’t read the whole blog?

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Here is the short and sweet: TLDR.

Buy a legally suited 3 bedroom property with a double garage with 5% down payment. Rent out the basement suite, rent the garage, rent out 2 rooms and live upstairs. Save $28,320-$55,320 in your own rent you'd be paying elsewhere. Use that money to buy house #2.

Live for free in house #2 while your mortgages are being paid by a combination of roommates and renters. Keep saving with your sights set on #3 and #4 and just like that...you'll be a millionaire!!

Don't wait...Give me a call and lets get you started now!

Bryce/Penny Kander

Realty Executives Alberta Elite

403-896-7331

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Peculiar

Peculiar = Purchased Possession. 

A deal on the market is peculiar to people... but once it has been bought for a price, it has value. 

A deal on the market is questionable, until it has been bought. Then people want to know the details how, what & why! It has an established value. 

You have been bought for a price.  You are a purchase "deal" that God saw value in! John 3:16 "for God so loved the world that he GAVE his one and only Son". You are a purchased possession with infinite value!

You're life will be a story people ask what, how and why! 

Home ownership for $78 a month!

This week I am going to show you an example of a deal and talk you through the numbers. 

123 Abc Street

Listing price, $330,000.

Down payment:$16,500 

Property type- Legally suited house

Property taxes: $2,400 ($200 per month)

Mortgage: $1,477 per month 

Insurance:  $100 per month

Utilities $500 per month

Total EXPENSES= $2,278 per month

Most of you will have heard of the terms "Mother in-in law suite" and "legally suited house". 

THERE IS A DIFFERENCE! 

A "legally suited property" is one that has been approved by the city. It is where the windows are large enough for egress (large enough for a firefighter to help you escape). among many other safety and building code upgrades. Legally suited homes are different from Mother-in-law suites because of one major thing… If you don't have your Mother-ln law or family members living in that suite, it is illegal and should not be rented out and does not help in any way with your buying power to purchase this home. 

 With a legally suited house, a portion of the rent from this legal basement suite will be added to your income and therefore help you qualify to buy this house. 

For example, you can rent your basement suite for $900 a month utilities included.

With a legally suited house, you can also rent out your upstairs suite for $1,350 a month utilities included.

Did you know...for extra income you can also rent out your garage to your tenants for an additional $100 a month per stall #DoubleCarGarage.

You can buy these properties for 20% downpayment if you are just buying for investment and not intending to live in the property.  Personally, I would rather buy 4 legally suited houses at 5% down payment than just buying one property at 20% downpayment.

In order to buy with only 5% down payment, you will need to move into one of the suites. 

Lets say you move into the upstairs suite... 3 bedrooms, 2 bathrooms, a great place to live!

Let's say the  basement is rented for $900 and the young couple downstairs wanted to rent both garage stalls from you for $100 each. 

(You are fine with parking your car outside because you always have.)

Rental income is 

$900 (basement suite) + 

$200 (double car garage)= $1,100 per month.

$2,278 (total expenses) - $1,100 (rental income) = $1,178 per month would be all you would have to pay per month to own this great property.

But it gets better…

Here's how you can live for $78 per month!

Your upstairs suite is 3 bedrooms and 2 bathrooms. If you rent out those 2 extra bedrooms for $550 EACH a month, you have an additional $1100 per month income.

Therefore...

Rental income 

$900 (legal basement suite) + 

$200 (garage) + 

$1,100 (Roommates) = $2,100 total rental income 

$2,278 (expenses) - $2,200 (rental income) = $78 per month!

This really works... 

When my mom bought her first property she was 18 years old. She bought a house with three bedrooms and rented out two rooms. The portion of mortgage payment she had to cover was only $5 a month! 

If while you are reading this your mind is playing the "what if" or "if only" game, let me encourage you on that...it is not too late!!

 That was 39 years ago, but it still works today. Okay, maybe inflation has taken over a bit and instead of $5 per month it is $78 per month.  

Can you make your payment of $78 a month? Even if you lost your job you could make that kind of payment on a paper route! 

Now more good news...

Every month, you are paying off The principal amount on your mortgage (every month the amount you owe on your mortgage is getting smaller and smaller) by an average of $816 per month over 5 years. 

$816 x 12 = $9,800 in equity paid off per year.

$9,800 (equity per year)  x 5 years = $49,000.  

At the end of 5 Years you have almost $50,000 in equity and hopefully by that time you've saved enough to buy another one since you're part of the mortgage payment was only $78! 

Next week I will show you how this first house, can buy you more houses!

Bryce Kander

https://www.facebook.com/teamkander/

Realty Executives Alberta Elite

403-896-7331

HOW TO TAKE OVER THE WORLD!

This week I had a great talk with four guys at Second Cup. By the end of the conversation they were so excited with the possibilities that they decided they should buy all of Red Deer and turn it into a "rent only city". They understood how to generate wealth!

We originally met because they had questions and wanted to learn information to move them towards their goals. They wanted to learn how to invest in real estate, what neighborhoods appreciate faster than others, and most importantly, where to begin.

I shared the basic steps with them. First, start by owning your own home that has a rental built into it; a legally suited house.

If all you ever did was buy 4 legally suited  homes,  in 25 years you would have a net worth of approximately $1.2 million with $8000 liquid cash flow coming in every month. 

Buying a suited house often seems scary to first-time buyers but in fact buying a single-family home can be more risky. If you buy a single-family house you have to pay for all of it yourself. For example, my brother wanted to buy his first home and had his eye on a condo. My mom said, "you can buy this lovely condo and pay $1300 per month or you can buy a legally suited home and end up paying only $300 per month." 

He chose the suited house and still has cash flow from it seven years later. 

Buy the legally suited house first! Live upstairs; rent out the basement. Then buy another, and another, and another, and you'll be set!

Two units are better than one! 

Two people paying towards the mortgage are better than one!

Don't be afraid to do things differently. 

It is good to grow. 

Change your mindset. 

Have a growth mindset. 

Ask questions!

If you want to know more, feel free to give me a call and I'll see you at Second Cup! 

https://www.facebook.com/teamkander/

Free House!

FREE HOUSE! Are you tired of using your own money to make your rent and car payments?? I have one friend who currently owns a condo that he paid $0 for, and now he has made almost $10,000 by being a landlord! This is commonly known as a rent-to-own. (I just lost half my readers because of those last 3 words.) A Rent-to-own is a great way to buy properties! It gets your foot in the door of the market. What is the hardest property to buy? THE FIRST ONE! Where do most people stop? BEFORE THEY START! How can you get your foot in the market? You get your foot in the market by finding a realtor who is knowledgeable and understands the process. You only need one Realtor to show you any property. The property can be listed with Realty Executives, C-21, ABC realty, or even a private seller, etc. Any property that is on Realtor.ca can be shown to you by whichever agent you choose. Most commonly, people will call the person with the sign on the lawn if they don't have someone working for them. If you find someone who you trust and is knowledgeable about all the various ways that you can get your foot in the market, be loyal to them. Then they will work in your best interest instead of just trying to sell you something. I can provide you with all the information you need and you get to make the decisions. I can show you the half duplex with the nice veranda, or if you're interested, I can show you how you can buy a house that will in turn make your car payment for life! How about you and I go see legally suited houses? I'll pick the best 3 and give you the grand tour. Legally suited homes typically rent for $1,300 upstairs & $900 downstairs. There's often 2 bedrooms downstairs and 3 on the main floor. Your payments will be around $2,200. Lets look at the rental income. $1,300 + $900 = $2,200... BUT WAIT! If you'd like to get in with only 5% down you will need to live there. If you live upstairs, and get two roommates for $550 each, your contribution to the payment is only $200/month. Now if you've made it this far I will give you the last part of the formula. Lets say your current rent is $550-$900/month. Your new investment is now $200/month. THERE'S YOUR FREE CAR! Oh and as an added bonus, you're paying off $500 a month on your mortgage. Therefore if we look at the numbers again, you're living in your own home and you're making $300 a month and you have no car payment. Is there any reason why you wouldn't want to get started on your first property right away? Don't Wait!!

Give me a call or message me right away and I'll be happy to walk you through the whole process!

Bryce Kander

Realty Executives Red Deer

403-896-7331

:)

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