Robert Kiyosaki’s books saved me from a life of struggle during my retirement age. His message was that you have to have passive income from either a business or an investment. I had a business at the time (sole proprietor, not really a business) and thought okay now I need to invest in real estate like Robert Kiyosaki. That was a life changing decision.
Everything he said made sense. Buy property based on cash flow not on appreciation. I started reading everything I could on real estate investing and decided a condo or small single family home make sense as investments.
His books provided a solution for financing our first investment property. The first challenge was where will the down payment come from? Fortunately my boyfriend/now husband had paid off our home so there was equity available to use for down payments. The next step was to research the rental market in the area we were going to invest in. This information is available on the internet. (See rentometer.com) You can also go into the city department of economic development and see what is going to happen in the future in the area you are considering.
He described how he found his investment property in his neighborhood which made me more aware of what was going on in my neighborhood. I found our first rental in the neighborhood where we live. I passed the house everyday and it did not sell. This was strange since the rest of the homes in the area were selling pretty swiftly. Six months later that home was still for sale so I decided it must be mine. We closed on the property one month later. That home turned out to be the best single rental we had.
His books taught me how to evaluate property to determine if it is a good investment for me. We had to calculate the cash flow of the property before we purchased it. The important to remember is you do not want to use your money to pay off your mortgage. You want the tenants to pay for it. So, I know you are asking yourself “how do I know what the cash flow is?” The information below gives you the basic calculations that you will need to make a decision to buy a property.
Purchase Price: $100,000
Monthly Rent (income): $1,000
Homeowner’s Association Dues $120
Snow Removal $0
Anything else $100
Total Monthly Expenses $420
Remaining Cash to Pay Debt $580
Debt: Principle, Interest, Taxes $575
Cash Flow $5
Okay, the cash flow is $5.00. It looks like a pittance, which it is. You would need to be able to raise the rent to $1,200 per month. Then you would be making $205 per month. That is cash flow. The cool thing is the renter is paying off your mortgage and taxes and you can deduct the taxes, interest, and expenses from your income tax. Oh Yeah and you are allowed to deduct depreciation. What a gonga!
Back to why I love Robert Kiyosaki. If he had not written his books, had his seminars, etc. we would not have had the guts to venture into the real estate investment arena. We would not own a mobile home park with 17 homes (we own them all) that will be free and clear in three years. At that point all of the income comes to us for our retirement.
We are now working on a business venture of direct sales of internet marketing training so that we can buy more real estate. My husband says he is going to buy a really big park this time.
If you are lost and are not sure where to turn read Robert Kiyosaki’s books you cannot go wrong if you follow his advice.
Thank you Robert Kiyosaki!