Investment Real Estate and Einstein’s Theory of Relativity

To My Friends interested in Investment Real Estate

A highly simplified version of Einstein’s theory of relativity says that in order for low to exist, there must be also be high.  In order for Winter to exist, there must be Spring.  One extreme cannot exist without the existence of its opposite.  As the great Jim Rohn says, “How often does Spring follow Winter?  Every time! ”  This means that if we are living in an economic Winter, Spring MUST be around the corner.

As inflation and interest rates increase, rents are very likely to increase at the same rate.  If you acquire positive cash flow investment properties using today’s long term low interest rates,  your ownership costs should stay the same while rental income should increase with inflation.  Now is the perfect time to set yourself up to receive very high investment yields from positive cash flow real estate.

Investment Real Estate Money Making Action Items:

1) DO acquire positive cash flow properties with cheap long term financing.
2) DON’T sit on cash for too long as its buying power will soon be eroded with inflation.
3) DON’T sit out of the real estate market waiting prices to come down.  Interest rates are eventually going up and the cost of a $125,000 mortgage payment at 5% is LESS than a $100,000 mortgage payment at 6.75%
4) If you already own negative cash flow real estate with no equity, consider buying more positive cash flow properties using your currently good credit, and AFTER you’ve monetized your good credit, you can consider doing a short sale on your negative cash flow / negative equity properties.

5) If you own negative cash flow real estate WITH equity, consider using your equity as the down payment on a positive cash flow or neutral cash flow asset.  You can stimulate the sale of your property and probably achieve a premium price for it by being a buyer of someone else’s property. As a condition of purchasing the Seller’s property require that the Seller must purchase the property you want to get rid of.  This is called a “must take” in equity marketing and is a great way if you are trading up in asset value and adding cash to the transaction.  For example, if you have a $100,000 property that is negative cash flow but has $25,000 of equity, you can buy a $300,000 positive cash flow property by bringing in additional cash and financing to the table.   The person buying your property will get $275,000 cash and $25,000 of equity in your “must take” house.

I enjoy coaching investors. If you want to schedule a time to talk about your unique situation, you can book an appointment with me online:  https://my.timedriver.com/WBYTQ

Warm regards,

David Campbell
Professional Investor / Author / Real Estate Developer

Investment Real Estate Specialist