Example Email of Foreclosed Properties We Send to Members

• Asking price: $66,900
• List Price / Sq. Ft. = 51.70
• Built 2003
• 1294 Sq. Ft.
• 3 bed / 2.5 bath / 2 car garage
• No HOA

Sales comps for past 6 months, in the same subdivision, starting from 1/27/08 (today's date = 6/27/08). This gives us accurate market prices (i.e. what other people have recently paid for similar Sq. Ft. and Bed/Bath/Garage houses). The average sales comp = $78.00 / Sq. Ft! Notice that all the comps are 3/2/2, making our 3/2.5/2 more valuable:

Rental Comps are $1000 / mo in this subdivision. We use the same technique as above except that we look for previous Rentals for the past 12 months (also within the same subdivision and with similar house characteristics).

Using Rental Property Analyzer 2008 (RPA 2008), take a look at these numbers! The offered price probably doesn't even pay for the materials alone! The beauty of this particular property is that the price is so cheap that the cash flow is very high. Total out of pocket costs is $12,000. Cash flow / year = $4,200. Equity is $40,000. Will $12,000 in stock like GE or PG, give you back $4,200 each year that you can increase each year? I don't think so!

Before you laugh at the $350 / month of cash flow for the above house, stop thinking small and start thinking BIG:

1. Imagine you bought 100 of these houses.
2. You'd pay 1.2 million ($12k / house * 100 houses. If 1.2 million sounds daunting, you could always sell a few of your houses, capture the equity, and buy several more houses with the proceeds.)
3. You'd be sitting on $4 million of equity ($40k * 100 houses)
4. You'd have $35,000 / month of cash flow ($350 * 100 houses)
5. If you had someone manage your houses for you while you remain away for months at a time, you'd have $29k / month ($35k - 6% mgmt fee * $1000 rent * 100 houses)
6. Don't forget if property values go down, your taxes will be less, so you'd have even more cash flow / month (ex. 40k / month?). And this is why we don't care about property values, per se (and actually sort of prefer the property values to go down).
7. Also, don't forget the huge tax benefits you'd be getting.

We can see that there's a 333% ROE and a 35% Cash ROI. Here's what you start thinking:

• I need to diversify away from corporate fraud and Wall Street CDO securitizing gimmicks that have created this credit crisis, bear market (as of 1-1-08) and possible recession.
• I need to own my own business and not be a stupid shareholder with no say into how business is done and not to pad yet another CEO's lifestyle.
• I should also buy real estate as a hedge against inflation.
• 35% return is way better than the dividend yield of any stock I can think of!
• Plus there's definitely a lot of equity in this deal if we can get it at $61k.
• Wow, real estate done the mylifechanger.com way is really easy.
• Let's buy it, rent it out, get the cash flow, tax benefits, amortization (i.e. tenant pays off loan so I have even more equity/money when I finally sell), and then buy 99 more houses and hire a property manager!
• I'm glad I joined mylifechanger.com!

$39.95 for 1-year membership

P.S. - I was just kidding about trashing stocks above. Stocks are actually an important part of one's portfolio. But real estate, the way we do it, has a higher Net Present Value (NPV) due to the larger amounts of passive income up-front and also tax benefits compared to most stocks.