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Good Debt vs Bad Debt and Real Estate Investment
February 12th, 2008 4:00 PM

Do You Believe The Dire Media-Predictions?

There will always be cynics and skeptics who will tell you that the real estate market is going to crash - these kind of people have always been around

Meanwhile, the successful investors are still "in the game" buying and holding onto their properties as they continue appreciating in value.

Here's an example of how (for years) the media has criticized real estate investing…

Dire Media-Predictions:

"The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline." - Time Magazine, 1947

"Houses cost too much for the mass market. Today's average price is around $8,000 - out of the reach for two-thirds of all buyers." - Science Digest, 1948

"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000." - Business Week, 1969

"You might well be suspicious of 'common wisdom' that tells you, 'Don't wait, buy now…continuing inflation will force home prices and rents higher and higher." -NEA Journal, 1970

"The median price of a home today is approaching $50,000… Housing experts predict price rises in the future won't be that great."- Nations Business, 1977

"The era of easy profits in real estate may be
drawing to a close." - Money Magazine, 1981

"The golden-age of risk-free run-ups in
home prices is gone." - Money Magazine, 1985

"Most economists agree…[a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980's." - Money Magazine, 1986

"Financial planners agree that houses will
continue to be a poor investment." -
Kiplinger's Personal Financial Magazine, 1993

"A home is where the bad investment is." -
San Francisco Examiner, 1996

Ignore The Critics!

In spite of all of these so called "predictions", people continue to build wealth with investment properties and save a lot of money on their taxes each year…

If you want to succeed, find someone who is already doing it and model them. You don't need to re-invent the wheel because the wealth-building system that I follow is a proven, tried and true investment-property strategy that WORKS!

The Benefits Of Investing In Real Estate

Interest rates are historically low.  An economic stimulus package is around the corner.  Prices have dropped in some cases.  More people are returning to renting vs buying because of tighteting credit standards, which helps you as an investor.  With all of the mixed-media messages surrounding us these days, it's confusing for people to know where to invest their money (be it stocks, bonds, a 401K or real estate).

In my experience there's no better way to save a bundle on your taxes (while simultaneously building your wealth) than through investing in real estate…

Here's why…

· Huge Tax Benefits - Properties typically appreciate while the IRS allows you to write your properties off as depreciating.

(This one benefit alone allows me to write off thousands every year!)

· Using "Good Debt" to Build Wealth - "Good Debt" is debt that makes you money where as "bad debt" does not, it just makes your further in debt… The benefit of "good debt" is LEVERAGE because you don't need to have a lot of money to get started - you can start with the equity from your home.

· A Balanced Investment Portfolio - You've heard the expression, "don't put all your eggs in one basket", well the same applies to investing. By investing in real estate (in addition to other investments such as your IRA, 401K, stocks and bonds) you will have a stronger and more stable investment portfolio…

· A Personal Retirement Plan - Can we even count on Social Security as a retirement option any more? When managed correctly, investment properties are a very good potential source of passive income for when you retire.

· Deferment of Capital Gains Tax - When you sell an investment property, if you made more money than you bought it for, that's called your "Capital Gains" and Uncle Sam will tax you on that gain. However, the government allows you to transfer that gain into another "like kind" property by using a 1031 tax exchange. This allows you to bypass taxation by deferring the financial gain into your next investment.

· Instant Equity - It's possible to find investment properties that are $5k, $10k, $15k (or more) below market value. When an investor buys properties like this, he or she can instantly use the equity from this for additional buying leverage.

· Long Term Growth - My method for real estate investing is about buying and holding properties for the future because I know that their value will almost invariably continue to increase!

Don't Listen To Anyone That Tells You -
You Can't Succeed By Investing In Real Estate!

Maybe you've seen the late-night TV infomercials on "How to Get Rich Quick by Investing in Real Estate" and thought to yourself, "Is this stuff for real?". In my opinion, most of these campaigns are just designed to sell you a bunch of expensive information - rather than real world investment properties.



The key to winning at the "game of real estate investing" is to surround yourself with positive, forward-thinking people who are already doing it themselves. People who will support your vision for building wealth - and "coach you" to succeed.



You and I have a responsibility to prepare for our retirement by making our money work for us - and buying investment property is one of the most effective, long-term, tried and true ways to do this (provided you make wise investment decisions and manage them properly).

My job is helping regular people (just like you) - to successfully find, purchase, and maintain high-quality, "wealth-building" investment properties - making sure that we carefully evaluate your financial needs first, so that the next investment you make - makes sense for you!


Posted by Alex Gonta on February 12th, 2008 4:00 PMPost a Comment (0)

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