The real estate market can be tricky, but at the same time filled with so much opportunity for wealth. Unfortunately you have to be very careful with your purchase or you could end up being another victim of the increasing foreclosure rate in the U.S. There's your average two income family($75,000 - 100,000) who both work hard to keep their mortgage paid each month on their home. Year one ends with thousands of dollars invested in their home. Eventually year four comes along and thousands of more dollars are paid toward their interest accruing loan. Year five comes along and one or both of the income earners gets laid off. Soon, they can't keep up with payments and lose their home in a foreclosure. I quickly learned as a multiple property owner in California that the bank is not your friend. Ironically I hear people talking about job security. What about home security? It is wonderful not to have the burden of paying on a note or rent every month. We own 4 pieces of properties out right, with no mortgages, which includes 1 commercial property. By the end of this year those property numbers will be 8 total and 2 commercial, and still no mortgages.Owning property without a mortgage is not hard, but in most cases it is not easy. By this I mean, no one is going to walk up and give you their house in most cases. It does take work and persistence, but it is possible. I recently purchased a house for $100. The previous owner was in a another state and did not want to deal with the burden of taking care of it any more. Yes, the house needs a lot of work but the homes on either side of my $100 house worth over $100,000, and have been appraised as such.While that was a special case, there are still a lot of homes especially on the east coast that are under $50,000. I am very perplexed as to why people rent. With a little discipline the renters here can own their homes in 1-2 years or less. Scriptually we are only suppose to have loans for 7 years or less. Unfortunately we have been brainwashed into believing that it is ok to have a 15 year or 30 year mortgage and that it is an investment. The truth is that when the loan is paid off all of the thousands of dollars that have been invested would eventually be a wash with the depreciating dollar. By this I mean, let's say you purchase a home with $200,000 30 year mortgage. At the end of the 30 years, you would have paid approximately 600,000 plus on average, to pay off the mortgage. Your house will be worth about $600,000. So your house has really tripled in value, unfortunately you paid $600,000 to own it. Not $200,000. There are ways around this. There are many ways of creative financing out there. For example land contracts are popular on the east coast. With land contracts you pay the owner directly every month instead of the bank. In most cases you can pay the property off within 7 years if you arrange it correctly. Or, you can do what I like to do, which is to find an abandoned house that has a lot of potential, but needs work, and contact the owner directly to see if you can work out a great deal.For those that find them selves in a house that has appreciated significantly [by 100,000 or more], this would be the perfect opportunity for that person or family to sell it and take the money to buy another home outright. There are a lot of people in West Virginia who are from New York. They moved from one state where they were struggling, working hard every day to keep up from being left behind or stepped on, to a state where they can live like a king and queen in a big house.This week's challenge is to look at your mortgage or rent statement, and figure out if you are benefiting from having a mortgage or renting, or if it is holding you back. You can do this by calculating how much money you are spending each year to rent or buy your house. Use the example above(purchasing a home for $200,000) to compare to your current situation. If you are having trouble figuring out what to do next, please contact me(antiquesandfinearts4everyone.synthasite.com). Todah (Thank-you) for reading this blog and have a blessed rest of the week.Shalom,Tamar
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