My model for financial freedom

What does it take to have financial freedom? An interesting question, I guess if you asked 100 people, you’d probably get 100 different answers. One man’s idea of financial freedom wouldn’t necessarily satisfy another’s, so we all have our own definition of would make us financially free.

How much does it take to be financially free? The answer is of course personal to your own circumstances, which of course change from year to. Children, marriage, work, etc these will all affect your personal wealth and impact on your lifestyle.

The great thing about working towards this goal is that you have total control over everything you do and your decisions are entirely yours to make. Imagine working 1 hour at home for yourself. It’s the equivalent of working 8 hours for your boss! That’s how it feels to me.

My own goals are pretty modest in the scheme of things…..I want to be a property millionaire within 5 years. That is to say I want equity within my portfolio to exceed £1M. As for monthly cash flow, I figured that for every property I buy I can cash in £150 per month net profit from the rent. Now if I own 100 properties, that’s an income of £15,000 per month. Of course I will have to keep an eye on my investments and I may sell some from time to time, but I will have full control over all my investments.

I’ve always tried to do things by following a simple model: for every additional expense I have, whether a car loan or house move, I motivate myself to off set that extra debt with new investments. It helps me focus and keeps a consistent balance of cash flow and investments.

My advice to you is to ask yourself what you want personally. Maybe you want to build a portfolio; maybe you just want one or two properties to leave to the kids. Whatever you want, write it down. Open up Excel and start by putting down all your outgoings. If that’s the figure you need to live the lifestyle you want, and then work out how many investments you need to get there. Last of all put a timescale on it….before you know it, you’ll be well on your way to financial freedom.

PS: One last thought, most people fail to realise their goals or ambitions because of one thing…they fail to take action. Those people that do overcome the hurdle of inaction mostly tend to succeed. So take the first step and take action!

Am I allowed to buy property in the USA?

One of the most common questions we get in this business is: are foreigners allowed to buy properties in the US? This is partly due to well-publicized restrictions in certain countries and partly due to a lack of information on the subject.

Well the simple answer is YES, foreign nationals are perfectly able and legally permitted to purchase property in the US.

As it has always been US government policy to encourage inwards investment, the US authorities have not placed any restrictions on UK (or any other nationality) investors buying property. Whether through cash or financing, there are no restrictions.

But buying a property in the US does not entitle you to US citizenship or a green card, but it may help if this is your ultimate goal. You should obtain an International Tax ID (ITIN,) and this is very straightforward.

Travelling to the US is also pretty easy for nationals of EU countries with an online Visa waiver procedure applied which normally results in a visa being granted within seconds.

As UK and European property markets have crashed due to the global downturn, the US is becoming more and more attractive for potential property investments with high yields.

Credit cards or your home? – which would you prefer to hold on to?

I was reading a very interesting statistic the other day about borrowers in the US that use credit cards in every day life – that’s a lot of people.

The column went on to say that in a recent survey , since 2008, Americans would rather hold on to their plastic then their home.

“Since 2008 credit card delinquencies have been lower than mortgage payment delinquencies and that this “flip” is representative of the change in the conventional wisdom around the payment heirarchy.”

Basically, since the recession took hold, average Americans are devaluaing their own home in favour of their credit cards just to stay afloat. There is definately a shift in the way people think about repossessions and the stigma surrounding that. It seems that Americans are no longer afraid of being tarnished with the foreclosure brush.

Does this give us investors any advantage?
Well, if Americans want to walk away from their homes in favour of plastic it means there are a lot more foreclosures on the bank’s books, this much we already know. And as the banks are so desperate to release cash from these empty assets, it means bargain properties are available to us investors!

So long as we can keep renting these houses back to those defaulted owners – which we can as they will be seeking housing benefits to pay their rent, then we have a very unique situation.

Bargain basement prices & a market flooded with tenants looking for quality homes under the governments’ rental assistance scheme is a perfect scenario for investors.
Will house prices rise?

Of course they will. I can’t say exactly when but the signs are there. Obama’s 8k homebuyers credit is taking affect now, and more lenders are dipping there toes back into the markets.

The situation is like this:
• Owner defaults on their mortgage in favour of credit card payments and loses home.
• Investor buys home at bargain price as the banks are desperate to release funds.
• Defaulter seeks rental assistance from government.
• Rents rise in value as demand soars.
• Investor takes on tenant from a huge pool of available tenants.
• Obama’s 8k credit assistance goes into overdrive.
• More lenders move back into the market.
• As more people start to buy property again prices start to rise and a sellers market returns!

Investor has a high yield, tenanted property, increasing in value and with a solid exit strategy should they decide to sell.

A very unique cycle. And as they say “Only in America!”

USA ranks 12th most profitable housing market

A worldwide survey of the best (and worst) housing markets has been released by some economic boffins in a library somewhere and the USA ranks 12th overall.

Quarterly Rank: 12
Quarterly Price Change: 1.3%

The U.S. was mired in recession for most of 2008, spelling doom for its housing market. Vacancy rates skyrocketed, with Los Angeles reporting a rate of 10% at the end of last year. But the U.S. is starting to see signs of recovery. Asking prices in several housing markets across the country increased in August, particularly in San Jose and San Diego, which experienced jumps of 1.7% and 1.3%, respectively. What’s more, inventory levels declined in 22 of 26 markets, with San Francisco reporting a healthy contraction of 5.1%.

These findings marry up to our own. All the markets we invest in, Detroit, parts of Florida like Orlando, Naples, Kissimmee and others have all shown signs of recovery. Prices are stable and in many areas competition for investment property is driving values up.

Bottom line, whilst values are still extremely low and rental yields are high investors will continue to buy.

Is now the time to enter the Detroit market? Top real exec’s think so

Detroit (MI) – The Detroit housing market is losing its edge in the buyer’s eye. The rock bottom prices which have attracted buyers over the past few years are now starting to creep up.

Real estate executives around the country agree that now is the ideal time to enter the Detroit housing market. Excellent real estate resources for buying investment properties include USA Property (, a website which assists clients in purchasing hard-to-find Detroit housing investment opportunities.

Ollie Booth, CEO and founder of USA Property Investor says that “We have begun to see a slight increase in housing and investment property prices in the Detroit area. Getting into the market in the coming year could be a much costlier endeavor than right now.”

Property values in Detroit have been on a drastic decline since the automotive industry’s deterioration began decades ago. As Motor City’s auto industry has shrunk, the number of investment opportunities has risen. And now is an ideal time to invest in Detroit real estate.

Real estate firms such as USA Property Investor seek to help clients take advantage of Detroit real estate investment opportunities. By giving real estate and property investment advice, USA Property Investor has set itself aside from the competition.

“We offer low cost, high yield property investments in Detriot. All of our properties have a guaranteed 13% minimum net yield. We guide our clients through to completion and beyond including help with property insurance and property management – a real turn-key service.”

Mr. Booth’s positive outlook for future investors is not unique. However, he too knows that now is indeed the time enter the Detroit housing market before the once highly profitable investment prices rise.