Building wealth one house at a time

242 Pages·2005·1.886 MB·English

by  Schaub, John

Building Wealth
One House
at a Time
JOHN W. SCHAUB
McGraw-Hill
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Copyright © 2005 by John W. Schaub. All rights reserved. Manufactured in the United States
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DOI: 10.1036/0071466495
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This book is dedicated to conscientious landlords who invest their time
and capital to provide affordable housing.
And to the dedicated volunteers, staff, and homeowners of Habitat for
Humanity who are working together to eliminate poverty housing.
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Contents
Introduction vii
1 How Buying One House at a Time Can Make You Wealthy 1
2 Buying the Right House 16
3 Finding Good Deals 27
4 Knowing How You Are Going to Pay for a House Before You
Make an Offer 35
5 Making the Offer 54
6 Borrowing to Increase Your Profits 64
7 Understanding and Using Real Estate Contracts 83
8 Secrets of Professional Negotiators 95
9 Buying and Selling with Agents 108
10 Buying and Selling Houses to Produce Cash Flow—Now 115
11 Selling on Lease/Options to Generate the Largest Profits 124
12 Finding and Buying Preforeclosures and Foreclosures 133
13 Attracting and Training Long-Term, Low-Maintenance Tenants 146
14 Knowing When to Sell and How to Sell 170
15 Eight Steps to Quitting Your Day Job 176
16 How to Own the House of Your Dreams Free and Clear 187
v
Contents
17 Take Charge of Your Retirement Income 200
18 Getting Your Houses Free and Clear 205
19 Buying and Owning Out-of-Town Property 212
20 Making It Big on Little Deals 219
21 Habitat for Humanity: Helping Others Build Wealth,
One House at a Time 223
Index 226
vi
Introduction
T
ens of thousands of ordinary people have made millions of dollars
investing in the most humble of real estate investments, the single-
family house. I am one of them, and I have a unique perspective because
I have helped thousands of others make their first million by buying houses.
Buying, renting, and selling houses is not only highly profitable but
also helps people in your community. By treating people fairly, you
develop a reputation for helping others, and many will refer to you their
friends and family when they need to sell, buy, or rent.
By providing a supply of decent, affordable housing, you help young
families live near their work while they save enough to buy their own
homes. When you buy a house from someone who needs to get rid of it,
you relieve him of a burden. When you sell a house and finance it, you
often can help someone buy their first home.
Many ordinary people are now millionaires not by winning the lottery
but by systematically buying houses. Rather than put their trust in a com-
pany pension plan or the government, they have taken control of their
financial destiny. By doing what they have done, you can change your life
become financially independent, and be in control of your financial future.
It takes less time than you think. Simply follow the advice in this book.
HOW INVESTING IN HOUSES CAN MAKE
YOU RICH
You don’t need a lot of education to make a lot of money in real estate.
It’s not that complicated. In fact too much education can cause you to
overthink and develop analysis-paralysis.
vii
Copyright © 2005 by John W. Schaub. Click here for terms of use.
Introduction
The one thing that keeps most people poor is the fear of buying that
first house. Some of my most successful students have taken a year or
more to buy their first house. That’s fine, as long as you buy it. The sec-
ond house will be easier, and as you get better at it, you will really enjoy
the process of finding and buying a good deal.
MY FIRST HOUSE
It’s not even important that your first house is a great deal. The first
house I bought I paid retail price for and made a 20 percent down pay-
ment. The good news is that I could rent it for a high enough amount to
pay the expenses and pay the loan. The reason it has been one of my best
investments is that I still have it. Thirty years have past, the house is paid
for, and it is worth several times what I paid for it.
An investor with a doctorate in finance would never have bought
that house, and he would have never held it for 30 years without refi-
nancing it. He would have been concerned with his rate of return, his
lack of leverage, and his running out of depreciation. He would have
never turned a $7,000 investment into more than $300,000, not count-
ing the rent that was collected for 30 years and will continue to be col-
lected for the next 30 years. The annual rent I collect today is about
twice my entire down payment 30 years ago.
Building wealth one house at a time does not require a lot of edu-
cation, money, or even time. It does require one thing—that you buy
a house and hold it until it makes you some serious money. This book
will show you step-by-step how you can build your fortune one house
at a time.
viii