Wednesday, February 05, 2014

My CDs

I've rediscovered all my old CDs. They aren't music albums but 1000's of hours of business leaders, self help, motivational speakers and business gurus.

Right now I'm listening to Robert Kiyosaki. He talks about the velocity of investing how some people go slow and steady while others constantly propel their money to greater rewards.

It made me think of one of the first houses Todd and I bought in Edmonton. It's a suited bungalow in an EXCELLENT area:

Main - 3 bedroom 1 bath
Basement 2 bedroom 1 bath
Beautiful (only an investor or mechanic thinks like this) Double Detached Garage

We bought it in 2005 for $225,000 with $25,000 down payment. We haven't accerated our mortgage and we haven't always gotten the best rates. It's just been slow and steady with this property.

Current specs
Total income $2315/month
Total expenses $1942/month
NET CASH FLOW $373 per month

It's not grand cash flow but that's pretty good. We use a rule of a minimum of $150 a door to be a good rental property.

The best part is the equity and the appreciation over the last 9 years. That house with the suite would sell for $350,000 (modest estimate) in this market. My mortgage balance is $145,000.

We have over $205,000k equity in that house. Of course some say the value could drop, the rents could decrease the sky could fall. They did in 2007 but I still have that house.

I have many outs (ways to leave an investment) with this property.
1. I could sell it
2. I could pay it down and live off income
3. I could give it to my children - an incredible gift
4. I could refinance it  and buy a new investment = two streams of income.
5. I could do nothing

We've done nothing special, just paid the mortgage and  plodded on with this property. Yet the velocity and growth of that initial $25k is phenomenal.

Do you see the value in real estate? Now imagine if you buy 3 or 5?

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