What is the safest real estate strategy?

image_thumb[10]Most people buy their first home thinking they will “be there for a while”, but almost all first time home buyers in San Diego know they aren’t buying their LAST house when they buy their FIRST. Strategically, this creates a problem. Especially with all the heavy expenses associated with a real estate transaction. What if you could eliminate some of that risk? What if you could create a more flexible opportunity while maintaining all the benefits of owning San Diego real estate?

I give you, the “Retirement Home First” real estate strategy. In The Life Plan, step 8 is about designing a real estate strategy. The reason it’s the last step is because too many people do it first, leaving them no available capital to do anything else. This is a huge mistake. With the “Retirement Home First” strategy or RHF, you put down 20% on your retirement home, then have someone else pay it off (tenant) over the next 20-30 years. Brilliant!

Here are some of the questions that came up today around this strategy:
What if I don’t know where I want to retire?
Just buy one somewhere you think would be good for retirement. If you’re wrong, you will have to decide whether to continue taking the rental income or sell the house and use the cash to buy elsewhere. It will be one of two really good things for you. Win/Win!

What if I want two retirement homes?
Buy them both with this strategy! If you change your mind on the location of one or the other, then you’ll still have two properties that you can sell for cash. Maybe you take both and buy one big one in Aspen or La Jolla!

What if I’m not cut out to be a landlord?
Always use a property management company and factor that cost in with your down payment so the rent is more than covering your mortgage, taxes, insurance, management fees, etc. You should easily be cash-flowing on your retirement home while it’s still an investment property, but set that money aside or send it in as a principle payment each month. Either way, don’t use it for personal income or anything else.

Other topics discussed today:
– Top 10 tips on how to succeed in today’s Seller’s-Market by Mike Cameron
– How to eliminate mortgage insurance (PMI) as quickly as possible
– What the banks are doing behind your back while you are in a Loan Mod
– The decision to short sale, do not take it lightly and have your ducks in a row before you miss a payment

Today’s On-Air Guests:
Jon Jerotz, VP of Mortgage Lending at Guaranteed Rate and San Diego Mortgage Expert
Mike Cameron, San Diego Realtor with Keller Williams in Carmel Valley
Bekah Stone, Head Negotiator with the Loss Mitigation NetworkShort Sale Expert

Listen to hour 1 with Mike and JJ here: 
Listen to hour 2 with Bekah Stone here: 

Categories: Bankruptcy, Buying Real Estate, Financial Planning, Mortgages, Radio Shows, San Diego Real Estate Market, Short Sale, The Life Plan

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