Buy Discounted Property - All Over the USA

Buy Discounted Property – All Over the United States

How much “value” decrease can stocks handle and still produce positive cash flow?

The short answer, they can’t. Sad, but true. That’s why I buy discounted property all over the United States to avoid this unfortunate reality.

Buy Discounted Property - All Over the USA

I’m curious to know how many of your stock brokers or account managers have told you that you made a “gain” of 5% after you experienced a  “loss” of 10% and said that you have nothing to worry about and that this was good?

Many of you most likely.

Unfortunately, when stocks crash, principal is often lost.

When principal is lost you are officially in the hole or negative in your investment.

The only way for you to be positive again is if the stock recovers up to the principal base then beyond. If you really want to get technical then you’ll have to factor in the loss of any previous growth too.

Let’s say you have $100 worth of stock and it fell to $75 in value; it would actually need to rebound a minimum of 25% just to get you back to your original $100 bucks or break even point.

It can sure be misleading when your broker tells you that your account has gone up 5% since the last time it fell.

You better make sure you determine where your starting place was and take into account principle losses.

Though it sure feels nice hearing you gained 5%, you would still be down 5% if you originally lost 10%.

Real Estate is a different story.

On the other hand, I can buy a house for 100k with 20k down.

Then mortgage the property for $500 a month payment. I can then rent that house for $750-$900 and make positive cash flow.

Even if the market value of the house goes down to 90k, I’m still clearing my expenses and remaining positive and growing.

Real Estate

Unlike stocks where growth stops or reverses during a market hiccup, real estate is more stable in providing ongoing cash flow to weather the storms of the market no matter if the “value” goes up or down.

Many people fret when property values fluctuate but in my book it doesn’t matter because my income is greater than my expenses every month and the market value of the property won’t affect that.

This is a huge comfort and relief to real estate investors because the principle/capital they put into the asset is typically 20-40% for the total value at purchase.

This means the market value of the house would have to literally flat-line for it to start eating away at your initial money down or principle.

Better yet, buy some quality discounted property in the best markets and your bank account will be thanking you for years to come.

If you purchase homes below the market value in the first place then you have an added hedge or cushion for market fluctuations and it also helps with maintaining your cash flow each month like I mentioned above.

Business man with bag on head.

You could say investing this way is recession proof because you are still making a profit.

 

But, you might be thinking to yourself,”How can I buy these discounted properties? I don’t know how to analyze a market or research a property etc…and what about financing?”.

Well to get your feet wet here is a little video about market cycles and what we are currently in right now!

If there are some stock junkies reading this you may be interested in this website InvestmentU.com about the stock market.

Leave a comment below!

Buy Discounted Property All Over The USA By Joe Nielsen

13 Comments

  1. This is some great info. My husband keeps pointing out properties for sale in our town (and there are some amazing ones) that can be turned easily into condos for rent. I was always a bit less of a risk taker, but it definitely is something we will do in the future, so this site is really helpful. Thanks for sharing

    • Hi Sarah,
      You make a very good point; that is there are plenty of great money making deals out there even in your own backyard. Just a quick note about “risk”. Risk is simply a manifestation of a lack of education. So if you are properly educated about a certain task or job the risk plummets and your ability and confidence grows.
      Keep your eye opens for more deals!

  2. This was a very informative and educational article. I appreciate you posting for us.

    • Hey Kevin,
      Thanks for taking the time to read and comment!

    • Hello there, just became aware of your blog tuhorgh Google, and found that it’s truly informative. I will appreciate if you continue this in future. Lots of people will be benefited from your writing. Cheers!

      • Great to hear you liked the content here on the site!
        I try to open up the idea that investing in and owning cash producing real estate is really a possibility for anyone and that it makes tremendous financial sense to do so.
        Hope to see you again!

      • Thanks for your comment and encouragement! I’ll be writing more articles soon!

  3. Wow! I learned a lot from this article. Thank you! One of the things I really appreciate is the fact that while this can be a difficult topic to follow, you made it easy to read, and I didn’t feel as though I was being talked down to. Very well done!

    • Hi Maddie,
      Thanks for taking the time to read and comment!
      Yes this topic is intimidating to many but I try to boil it down so that folks can see and begin to understand the power that is real estate investing. Thanks again!

  4. Thank you for this informative article. I have been hearing for awhile about investing in real estate but it is hard finding information on exactly how to go about doing that. I will definitely be checking back here often as you are providing quality information here

    • Hi Forrest,
      Yes I can add my voice to yours that it is particularly difficult to find actionable information on this topic. I am pleased you found the content useful and educating.

    • Hi! Someone in my Facebook group shared this site with us so I came to take a look. I’m deiinftely loving the information. I’m book-marking and will be tweeting this to my followers! Terrific blog and excellent design.

      • Hi Jyostna,
        Glad to hear you enjoyed the site and content!

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