You’ve heard it so many times in the last couple of months that it’s beginning to sound trite and worn out:  We are in the deepest financial crisis since the Great Depression.  Optimists predict that we will begin to climb out of this recession by Q4 2009, while more cautious analysts don’t predict any significant improvement until Q2 2010.  Whatever your personal opinion, or whatever the news anchor said on the last news segment, we can probably all agree that times are tough, but now is not the time to freak out.  Volatile markets and turbulent times provide a great opportunity to build significant wealth, for those who are willing and able to move beyond fear, and take calculated, measured steps to implementing their long-term financial goals.

One of the best strategies in a declining market is to maintain as much income as possible.  Generally speaking, our philosophy on real estate investments is to buy for the income, not for the value; in times of recession, the importance of cash flow is even more enormous.

Particularly in the last three months, it’s a pretty safe bet to say that nearly everyone has lost some value of their retirement accounts, stock holdings, etc.   Now that your purchase power is increasing dramatically, it is time to look at real estate in a larger perspective—as not only a tool to help you build wealth, but also a way to maintain your wealth, and a critical element of your retirement portfolio.

Now is the time to take advantage of a down market.  Prices are dropping, which means there are opportunities to pick up properties at discounted prices.  At the same time, rents are rising, which gives an even bigger injection of positive cash flow to your bottom line.  Stop waiting to lose even more wealth as the economy slides into a deeper recession.  Put your money to work in a valuable asset like real estate that will provide steady passive income and return your cash investment back as fast as possible.  And then repeat the process.  We have properties that can give you a 10% return on your cash for every $30,000 you use as a down payment on an investment property.  Please see the example below:
 
 
OKC New Construction Single Family Home Pro Forma

 Purchase Price:  $145,000

 20% Down Payment:  $29,000

 80% Financed:  $116,000

 Fully Amortized at 6.5%- 7.5%

 Estimated Monthly Mortgage:  $730- $810

 + Insurance:  $50

 + Management:  $90

 + Property Tax:  $120

 Estimated Monthly Expenses:  $990- $1070

 Actual Monthly Rent:  $1300

 Projected Monthly Cash Flow:  $230- $310

Questions?  Comments?  Contact Us!

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Ofer Goldenberg is the Owner and CEO of Capital Growth Investment.