How I made 900% return in 1 year...

[Matt H]

Something very interesting happened to me just recently. I bought a small apartment building this time last year. Kept it for just one year. Now I just sold it yesterday and made a 900% profit. Basically I turned $100k into $900k net/net spendable cash.

This was such a monumental gain that I had to sit down and analyzed exactly the circumstances surrounding it.

So here's how I did it.... (and how anyone can do this.)

STEP 1)

You look up to find where realestate is appreciating at the very highest rate. Perhaps you could find some kind of demographic map on the internet showing where. I lucked out because here in Alberta we just had that kind of spike happen in the market. Chances are that market might be a state or city outside of your area. Regardless that's where you have to buy. Besides it's not hard at all to buy in another area. It's no different than buying local other than you might need a property management company in the short term.

STEP 2)

You're goal now is to find properties that you could buy with little to no money down. Many lenders will lend 100% on property these days. Or if they'll only do say up to 90% then you just get the seller to carry a 10% second. The bottom line is you try to buy any property with little to no money down. And the bigger or more expensive the property the better.

STEP 3)

The kind of property you're looking for is one that makes for a good rental property. So ideally something that is or could be divided up into as many units as possible. So for example an old house that you could rent the main floor and create a separate entry into the basement to create one or more suites downstairs. Or best case scenario, try and find a small or even mid sized apartment building to buy, 6, 12, 20 or more units. The more the better.

STEP 4)

You make lots and lots of offers in that area. You pay list price but try to get it for very little down or no money down if possible. Then you get the renters in there and you sit on it for at least a year, possibly longer if you're cash flow is strong enough to support it.

STEP 5)

Keep tabs on the prices of homes and the demand in that area. You want to keep a pulse on the market. What's the vacancy rate like? Is the market almost peaked out and leveling off, or does the growth appear to remain strong. Then in about a year here's what could happen.

If you bought a home for say $200,000 and you only put down $10,000 to buy it, then if the value goes up to say $300,000 you've made ten times your money in just one year. That might not sound realistic, but the fact is that realestate went up in Alberta by 52% in 2006. I bought my apartment building for $725 and just sold it for $1.625. The mortgage is only $600k so my $100k has now magically overnight turned into a million bucks net net.

So if you want to powerfully leverage your money that's one strategy for you. Good luck.

....and on that note....I'm going shopping for a brand new Porsche baby!!!!