How to adjust plans to create wealth in Real Estate to get the life you want

Sometimes you have to adjust what you think you want and those plans by taking a different path to create the wealth and life you want…

This story is actually from a couple of years ago but a worth retelling. I find that whenever prices are high, people get depressed that they cannot buy a home or don’t know how to invest in property correctly. They feel “priced out of the market”. A couple of years ago, I had a young man come in to qualify for a house or condo. After crunching his number he was short $200,000 in buying power. The houses were $600,000 and he could afford $400,000. Single, no kids and had just started working in Engineering 2 years ago, he also didn’t have a lot of savings.

After talking to him, and listening to his goals. Here at Athena Paquette Mortgage Consulting, we suggested he buy a duplex (like I do to every person starting out in real estate). He didn’t like the idea of a duplex which at the time he could have gotten for $600,000 which he did qualify because of the rental income we could to use to qualify him.

So as an alternative, I asked him if there was anywhere he liked to vacation and he said Palm Springs for the golf, film festival, etc. So I suggested that he buy a property down there. At first, he said no I planned to buy my first home close to work. I want to be a homeowner. But after I showed him online listings and the prices in the desert, he relaxed a bit and was open to changing his plan and putting on hold owning a home.

He could buy on his own or even split it with a friend to start building equity and rent it out when he is not using it. So he bought a small house in the Palm Springs area for $250,000 put $25,000 down and got a great rate since he was a first-time buyer. His total mortgage taxes and insurance payment were $1394.

He was able to rent it out for $150+ per day when he wasn’t using it in high season which helped pay for the times he was there. He ended up making approx. $6000 his first year in short term rental fees.  And, yes, he got a friend to in on it with him. So he paid $697 per month. That’s not much more than a car payment for a lot of people.

If you know anyone who has been “priced out of the market” have them call me and I can help them create another plan. Sometimes sitting on the sidelines is the best plan.

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