If you already own your home, you can make money in real estate and never buy another property.
The reason is simply because your current home is one of the most valuable appreciating assets you will ever own.
You are making money by living in your own home, even if you never buy anything else.
I have been fascinated with real estate investing for many years, but it all started with a startling discovery in 1978.
In 1970 I bought a little house for my family in the Green Hills area of Nashville. It wasn't much, but it was adequate
and it was home.
In 1978, we decided to sell.
We sold that little house for $67,000.
That's when the light bulb went off in my head.
And this understanding led to the shocking discovery that made me fall in love with
real estate investing.
I suddenly realized that we had made $40,000 profit in 8 years JUST LIVING IN THAT HOUSE!
We had not painted it. We didn't add any rooms. We created no patio.
We just lived in it!!!
We had made $5000 a year simply living in that house.
I began to think to myself: if I had two houses for $10,000 a year profit, or 5 houses for $25,000, and on and on. At
the time, I began to think that the ideal plan would be to rent these houses and let my good tenants make the
mortgage payments. I began to wonder how much money I could make if I bought $1 million dollars worth of houses
like this, and rented them out.
That was my first plan.
In actuality, when I got started investing in real estate later, I bought $1 million dollars in rental houses in
the first year, and another million dollars in rental houses the second year. As the actual plan unfolded, I
built a million dollar net worth in only three years.
But that's not the point here. The rate of progression actually worked for creating cash flow and generating
significant net worth. But the concept all started with the realization that houses can appreciate in value.
Even if your only real estate investment is the current house where you live, you own a significant appreciating asset.
Even if you never make another real estate investment.
But that whopping $40,000 profit that went into my pocket at the closing when I sold my house in 1978 was just
the tip of the iceberg.
I still live in the Green Hills area of Nashville. I pass that same house we owned in the 1970s every day. It
recently went on the market again, and it quickly sold.
This time that same house sold for $200,000.
I don't know what's been done to improve the interior, if anything, but no exterior changes have been made to the
house. It's still about 2000 sq.ft. The lot is the same size. But the value has increased significantly.
And this concept is what makes real estate investing so exciting to me.
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