Del. Buying Real Estate at Fifty Cents on the Dollar

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?>There’s an old saying: “there’ll will come a time for countin’ when the dealin’s done.” Well the dealing is done and the counting is done as of today.

Filing My Taxes Was Enjoyable

You should have done your tax returns, they should be mailed by today. I sent mine in this morning, and I’ll tell you what… as always, it was an enjoyable event.

How can doing a tax return be an enjoyable event? Well it’s a completely different situation than the average person who is looking at their tax return saying, “Oh my gosh, look at how much money I’m paying to the government, look at how hard I’m working and how little I’m making and little I get to take home. Oh my gosh, I hope the government sends me a little check for a couple hundred dollars or a couple thousand dollars.”

It’s a Different Point of View

Funny enough, my daughter got a check back for $32 from the government…. but the difference is, when you’re sitting there looking at your tax return and you’re realizing that you’re making a tremendous amount of money… that you don’t work to make that money, in other words, it’s passive streams of income… you really have a different point of view… It’s “wow, I really enjoy this.”

Real estate is the most tax preferenced for-profit business that there is, it’s quite a delight to see the tax position that you’re in when you make money from real estate. It’s quite different to say, “wow, I made all this money and I get to keep it.”

What a great, great thing.

What Are You Going To Accomplish in ’09?

If you think about what you did this year and you’re not happy with what you did this year… It might be a good idea to start thinking about what you’re going to do this year. 2008 is gone, 2009 is upon us… What are you going to accomplish?

At the beginning of the year, I starting this thing with you where I said I’m going to get into shape and we’re going to make some money this year. I’ve already lost quite a few pounds and I’ve been working out. I’ve been getting my tan back again.

I’m a few weeks away from beach condition… and that’s the goal: to live life with an extremely high level of expectation. At the very same time, I’m increasing my income. I purchased two apartment complexes this year. I’ve got right now about five others that are set up in letters if intent and contracts and so forth that I’m working with… hope to bring a few of those home here in the next couple of weeks.

Twelve to Twenty-Four Months

…I intend to continue to do that for the rest of the year because I still see the market continuing to be a good place to invest for the next twelve to twenty-four months.

Believe-you-me though, at the end of that twelve to twenty four months, or somewhere in between. All these assets that we’re buying for fifty cents on the dollar are going to go back up in value again… nobody can predict the future, whether they’ll go back to where they were or whether they’ll go double what they were.

Just Like When I Was Buying in the ’80′s

When I bought houses back in the eighties during the recession, I was paying $25,000 for a median-price home, which at that time was $50k. When I got ready to sell those houses ten years later, they actually sold for $100,000 a piece.

So they didn’t just back up to the 50,000, they blew right by the 50,000… and it’s very likely that when this thing turns around, yeah there’ll be a few years moving back up to that… and then when it’s back up to where it was and people are seeing appreciation again, boom, they’re going to jump back in and you’re going to see massive inflation.

The Coming Mass Inflation

Interestingly enough, they’re already predicting massive inflation by almost every economist out there. FYI, they’re pumping so much money into the marketplace right now, that somewhere along the line, once this economy takes off, it’s going to blow up.

What should you be doing right now? Where there’s only one thing that I can think of and that’s be out there buying these distressed assets at 50 cents on the dollar. Whether it be single-family houses or multi-family properties.

…you know, speaking with my broker today, and we were discussing the the issue that we know exactly what’s going on, it’s the opposite of that. Because so many people are afraid, because they’re afraid of losing their jobs, because they’ve already lost money in the stock market and may lose more of it… they’re afraid. This depression leads to fear, and right now, as the stock market starts to go back up….

Your Fear-Based Roller Coaster Ride in the Stock Market

…by the way I just want to add, for those of you who listen to my shows, you can go back and check to see if this is true… I told you that the stock market was going to go into the 6000′s… it went into the 6000′s.

At 14,000, I told you it would go to the 6000′s. Somebody else told me it was going to go into the 3000′s, that was an economist that told me I was underestimating the depth of this recession, and it still could happen, so I’m not going to say that he was wrong, what I’m saying is that I was right, it went all the way down to the 6000′s.

When it was at 14 and it went to 12, everyone was thinking, “man if it would just get back up to 14, I’l get out.” Then, when it went from 12 to 10, everyone thought, “if it would just go back up to 12, I’ll get out.” Then when it went from 10 to 8, it was, “oh if it would just go back up to 10… and then when it went to 6, people thought, “if it would just go back up to 8.”

I don’t know if you remember making those promises to yourself, but my friends, you made em… and now, look, it’s back up to 8000… but are you getting out? no. because you still have fear.

Now you’re afraid you’re going to miss an upward move.

Fear-Based

You followed this thing down all the way into a crater, and now that it’s coming back up and you can peek over the edge of the crater again, now you want to fly… so you’re afraid to get out.

Everything you’re doing is fear based. There’s no intelligence to what you’re doing at all. Because you can take your money out right now and buy assets 50 cents on the dollar. At 50 cents on the dollar, that would be like when the stock market was at 12,000 and you can go back and buy shares at 6,000. That’s what’s happening.

Fifty Cents on the Dollar

The houses that were worth 100,000, we’re buying them for 50. We’re not buying $60,000 houses for 50. We’re buying $100,000 houses for 50. And we’re leveraged. We’re not the stock market, we’re leveraged… and so when it goes up $50,000 on a $10,000 investment, it’s a 500 percent return.

I heard someone call up on a radio show today and say, “I want to be rich. How can you help me become rich, and I have no money?”

Massive Wealth Requires Massive Gains

Well I’ll tell you what, if you’re starting with no money, you’re sure not going to get rich on some sort of a 10, 20, or 30 percent gain, or 1 or 2 percent in your savings account. You need massive gains. Massive gains come from taking wise shots at these great deals. That’s what it’s gonna take.

You’ve got to go after these great deals and nail them down.

Like I said, I intend to continue to do it for the rest of the year. I would hope that you’re going to get started, and if you are started that you’re going to continue for the rest of the year also.

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