Retirement Planning through Real Estate

[Rich Weese]

Many, many years ago I hit on the easiest, most beneficial strategy I've ever found. I've been lucky enuff to use this for 40 years or 2 full cycles. What is a cycle?

We always talk about buying or owning real estate on here, but most is just talk or ideas,concepts etc. I've always tried to use my past, actual experiences. I've always tried to make it easy to understand.

Many on BP are, young, hungry and newbies looking for answers and plans to achieve a better and different lifestyle. Here is one of the ways.

Awhile back, the avg rate of appreciation, or inflation (averaged for the last 59 years) was 6.39% annually. That has been reduced somewhat, due to the last couple downer years. Taking the above avg. into account, here is what I've done.

1. Buy a single SFR each year for 20 years.
2. Be aggressive in rent increases during the 20 years.
3. As rent passes the monthly expenses, use excess to pay prin.
4. After approx. 20 yrs, 1st home will be free and clear.
5. Continue day job to pay living expenses for the 20 yrs.
6. In year 21, REFI home #1 for 75% LTV.
7. RETIRE AND QUIT WORKING!!!!
8. Use the refi funds to live on.(tax free proceeds of a loan)
9. Refi home # 2 in yr 22 and continue yr after yr.
10. In yr 41, refi home # 1 and continue as above.
11. NEVER SELL AND NEVER PAY CAP GAIN TAXES!!!

Here are some clarifiers. I know that it requires extra effort to have loans on 20 properties. Loan terms change from time to time and will change again. You may still work this plan by building and using relationship formed with a local commercial bank, or do some with owner financing, until loan requirements change again, as they most assuredly will.

When your cost basis is low in relationship to equity/value of property , use a 1031 exchange to defer the taxes down the line, or pass on to the inheritors.
There is even possible way to avoid having to pay the estate taxes on this program. It doesn't even require any special IRA programs, etc .
If you take any 20 year period over the last 59 years, the above program will work for you in ANY average area of appreciation. Remember the 6.39% was AVERAGE. Some areas were more than the avg and some were below the avg. You should be able to figure the highly appreciable areas.

This is just a single, easy to understand program that will lead to financial well being, imo. Good luck. Rich.