Building Your Net Worth With Real Estate

The Fed released it’s Survey of Consumer Finances on Monday which showed a tremendous drop in net worth for American households. The Median net worth of families in 2010 was $77,300 compared to $126,400 in 2007.

This represents a nearly 40% decline in just 3 short years.
As you may have guessed it, the collapse in home values accounted for 75% of the loss.

So how do we get that back?

Well, the one asset class that hurt us all the most will likely be the one to benefit families the most in the next few years.
As reluctant as one might be to trust the housing market after the devastating blow it rendered all of us in the past decade one must objectively examine the situation and act accordingly.

We’ve all heard the expression “Buy low, Sell high” yet many of us have been burned when we bought high thinking it was headed higher and refuse to beleive that current values aren’t going to head lower. Even when everyone, and I mean everyone that “counts” is telling you that right now cannot get any better to buy.
(When I say everyone that “Counts”, I really mean, experts in the industry such as Bank and Home Builder CEO’s, Wealthy Businessmen and Investors, Real Estate Professionals of course and on and on and on. Who am I excluding? Quite frankly, the media. The news. Doom and gloom is what gets our attention and they know it. They twist any data they can to get you concerned and tuned in. I welcome anyone to call me about a story they heard to discuss it and get some perspective on the matter.)

The fact is the opportunity for wealth is tremendous right now.
Just yesterday I showed a client of mine a 3 bedroom 2 bath condo in Chula Vista, California priced at $140,000. That translates into a total monthly payment of $1,168. When I say total I mean everything from Principal, Interest, Taxes, Insurance and HOA Fees. Now, I don’t know about you but try renting the same unit and I would be surprised if you could find it for under $1,600 a month.

Besides the tremendous value and affordability currently available, think about the overwhelming opportunity this presents to the current home buyer. A low payment for the next 30 years with the option to rent it out for a net profit of almost $450 every single month. Could you use an extra $450 every month?
This is the reality of today real estate market!

Home buyers have unknowingly the ability to become real estate investors and significantly increase their family’s net worth within a few years simply by having the wherewithal to take advantage of the housing market as it stands.

Will you pass up this opportunity? Please share your thoughts, questions or concerns.