By Dave Lindahl
Three years from now you could be living in a water-front property, sleeping in on Monday mornings, doing only the things you want to do and excitedly walking to the mailbox everyday ready to gather that days set of cash flow checks the Postman dropped off .
It’s those cash flow checks that allow you to live this life of leisure and it never stops to amaze you how they have gotten as high as they are and they keep increasing!!
…Or…you could wake up on Monday morning three years from now, living the same life your living now… and if that’s OK with you, that’s OK with me. But if you want to change your life in any way, that change will probably require money… And here’s the deal.…you have about two and a half years to stake your claim and get your share of a lot of wealth that’s about to be created during this big property grab.
What the heck am I talking about? I’m talking about the multi-family real estate market. If you will do for the next three years what most people won’t do, you will be able to do for the rest of your life, what most people can’t.
I’m not talking about becoming a landlord! God no!! Leave that to the qualified management companies who love to handle tenants, trash and toilets. I’m talking about investing in multi-family properties while the prices and cash flows are at historic lows and watching your wealth and cash flow skyrocket as the economy gets better.
How do I know this is going to happen? It happened to me, this is how I made my first real estate fortune, and the economy is lined up perfectly to have the same thing happen again.
I remember when I first started teaching, at the time I owned just under 1,500 units. People would say, “Oh, that Dave Lindahl is so successful because he bought at the right time”….which was partly true.
In the seven years that I’ve been teaching other investors these methods, I have accumulated an additional 5,800 units…but the naysayers do not acknowledge that, they just focused on the fact that I started out in the right place at the right time. Which was true.
But now everyone has the chance to “be in the right place and buy at the right time” and here is why…Over the last few years the economy has been devastated by this recession. A lot of people lost a lot of jobs, a lot of unsavvy investors have lost a lot of properties, and a lot of banks have lost a lot of money!
Because of this, as everyone well knows, the banks virtually stopped lending. Not only for buying investment properties but especially for the new construction of those investment properties.
Because of this, there has been almost no new multi-family properties built in the last four years.
OK so why is now such a good time to be buying? Well, there is this group called “Echo Boomers”, they are the babies of the Baby Boomers, there are over 74 million of them and they just started hitting the age of 18 last year.
Why is this important? Because they have just started coming into the renting age, it is estimated it will take 10 to 12 years for the Echo Boomers to go through the marketplace, just like there were 14 years of Baby Boomers.
So now we are in a situation where there has been no new supply added to the marketplace but a heck of a lot of demand. It’s going to take the construction industry at least a couple of years to catch up!
So you start buying apartment buildings today at today’s lower rents and lower occupancies (remember when buying cash-flowing properties, we ALWAYS buy based on current cash flow), you buy using conservative formulas and you buy with at least a 10% cash on cash return. With cash flowing properties, we ALWAYS buy based on current cash flow), you buy using conservative formulas and you buy with at least a 10% cash on cash return. Which means your properties cash flow now.
Then you hold on to these properties, let the management companies collect the rent, deal with tenants, and deal with the maintenance and repairs. You oversee the numbers and cash checks.
As you accumulate more….you cash more checks. Your primary job as an investor is to get into more cash flowing deals. And right now is one of the best times to do this because the rest of the population still thinks real estate sucks because that’s all you hear in the news. There is not much competition.
As you start moving forward, the market starts to change. We start coming out of this recession, more Echo Boomers enter the market, rents begin to rise, which makes values rise and this makes YOUR monthly checks rise and YOUR equity (your wealth) rise.
This continues for a couple of years and all of a sudden, we are into an economic recovery, housing prices and multi-family prices start to rise substantially and the news media starts talking about the “comeback” of real estate and by this time….you are unplugged and living the life of leisure….you are rich.
If you wait until that point to start investing, it’s to late! At that point, prices have risen much higher than they were today and there are many more people competing with you to get those deals!
Now is the time to stake your claim, now is the time to secure your future…..now is the big “Property Grab”. Go out and grab as much as you can and in two and a half years write me and tell me how much better your life is!
Dave Lindahl is a national investor who owns over 7,000 apartment units. He is also the principle owner of REMentor.com, a real estate investing education company. He can be reached at firstname.lastname@example.org