In my last post I talked about the ease at which anyone with a lick of sense can become a successful Michigan Income Property owner. As I was on a call with one of the REIA of Macomb & Wealth In REI members, Bernie Smith, I had a slight epiphany.
Bernie and I were going over a deal he's working in Eastpointe. He already has the lease option tenant committed to $4000 down and $1100 monthly. Not bad for net even having a house for the guy yet! After running down rough numbers it seemed as though Bernie would cashflow $250 monthly when taking into account the properties built-in wealth builder (his tenant) needed. At least a 4 bedroom house with a couple of bathrooms for him and his 5 children.
Whether it was Bernie, myself, or the Collective Genius that was synergized between us, I came up with a way to help Bernie reach wealth status in half the time. I knew coming into the conversation that Bernie and his wife both have great jobs, so cashflow isn't always the most important component of a deal to him. As I said earlier, in my head I was running some rough numbers and came up with a way for Bernie to cashflow some, but leverage his situation to the fullest. It's a simple concept called a
15 Year Mortgage!
You see, the numbers shook out to where he would be cashflowing $250 or so as I stated earlier. In knew that if he was willing to cut that cashflow in half, he would also cut his mortgage in half. Most investors and small, medium, and even large business owners can be quoted saying
"You will live or die with your cashflow".
In most investor's cases, they have a job that is feeding that cashflow need. So why not amortize over 15 instead of 30? Here is the difference on a $75,000 loan...
$75, 000 @ 8% over a 30 year amortization = $550.32
$75,000 @ 7.5% over a 15 year amortization = $695.26
Ask yourself,
"Is less than $150 a month worth 15 years of my life?"
~Make It Happen~
http://www.reiaofmacomb.com/
http://www.prettymihomes.com/
http://www.weoffertoday.com/
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