The hardest part about saving for tomorrow is that there are all sorts of things that you want today: the fire-engine-red BMW; the luxury apartment on the beach; cool clothes, shoes, expensive dinners. Saving for tomorrow doesn’t offer such glitzy images. It’s hard to define its purpose unless you consider your long-term goals and what it will take to finance them. Whatever these may be, it’s a lot easier to say no to spending today when you can picture in your mind’s eye what you want and you know how much you want it. Jot down your goals — and make them as unique as you are. A long-term goal for some is a comfortable retirement, but that may not be what moves you. Research realistic estimates and plan.
The amount of revenue you pull in if you keep your occupancy rate at or above a certain level (see the James Fales YouTube video for minimum occupancy rates) allows you to realize more revenue now, as well as higher gains later. Think about it: once you go to sell your property, the markup is going to be exponential to that of a single-dwelling property. At the same rate of return, more money invested means more money returned. It’s investing 101 all over again. If you invest 0,000 at a 10% rate of return, that’s a ,000 gain. If you invest ,000,000 at that same 10% rate of return, that’s a 0,000 profit. Makes sense to me.
Then there are stocks. And let me tell you, there are more stocks out there to invest in than Carter has liver pills. Just check with the NYSE to see how many stocks are actively being traded. Stocks are much riskier than bonds. A stock can sell for a share one day and drop down to a share the next day. Imagine investing in 1000 shares. You would have lost ,000 in just one day. Conversely stocks can give you a big windfall literally overnight. The key to stock investing is to get a good broker who knows the market. And don’t worry, he WILL have your best interests in mind because he wants to make money too, as he gets a percentage of any gain you make on the stocks you invest in.
I’ve advised thousands of clients over the last 17 years for some of Wall Streets largest firms. I’ve seen a lot of things and a lot of different client situations. One thing I haven’t seen is a lot of happiness from stock investors. In fact I’ve seen far more discontent and anxiety.
In other words, they want a ‘cut’ of the bulk REO sale and are hoping to put you together with the people up the ladder. The only trouble is, there are a line of people that are lining up around the list, and it is unlikely a deal can be made this way.
Contractors- These contacts can make or break a flip. If the work is good, fast, and appropriately priced it is well worth paying to have it done. Saving a few hundred dollars and spending a few thousand in carrying costs while you wait for a contractor that is behind schedule is not a good trade. Saving a few thousand, and then having to spend money to fix what wasn’t done well is also not a good trade. especially when you have to carry the property that much longer to get everything done.
Just as Murphy’s Law states, you will inevitably encounter road blocks along the way, some minor and some major. It is important not to give up or allow set backs to derail your progress.