I get calls or emails everyday about fixer uppers in London Ontario. It is usually after someone has watched reality shows on TV or read a get rich quick book with no money down or a book about how easy it is.
What if you bought a fixer upper to live in for a few years and then repeat the process?
What about a couple who are handy or even want to be handy and who do not have to keep up with the Jones’s for appearance sake? Instead of buying that $200,000 or $300,000 home with the finished basement, nice schools, close to work, 2 car garage and then busting your butt to ensure all your monthly bills are paid? And, hoping that your home will increase in value in 5-10 years.
What about the couple who buy a small home outside the city for cash or 5-10% down, are prepared to drive a bit to get to work and have a 1-2 year plan to fix the place up and sell it and repeat this 4-5 times in 10 years?
Look at the math. Instead of a $1000 plus going to interest every month, you buy something where that interest goes perhaps $600-$800 goes to fixing your place up. after 1-2 years you sell it, you may earn $10,000 plus but lets say you only net $15,000? That’s low but stay with me here.
You do that 5 times or more? If you compared the couple who has had only one house after 10 years, mortgage poor or to keep up with their friends, go deeper in debt and get a bigger home, or the couple who uses their sweat equity and common sense after 10 years?
I have 14 couples now who followed this plan and let me give you 3 scenarios:
- Couple number 1 lives in a $260,000 home, no mortgage and are under 35 years old and have no debt
- Couple number 2 live in a condo now, no mortgage and are living off the rental income of their last 7 homes they bought, and instead of selling, they rent out
- Couple number 3 are into house 3, it’s worth about $275,000, they owe just under $100,000 on it and their first home they bought, they scraped, borrowed and begged to come up with a $5, 281 down payment!
Are the above 3 different than most? Yes. you see, they are willing to pay the price in time, effort and ego to build their financial stability. Now, at the end of the day, 10 years from now, who is living the good life?
Is it easy? Safe? Nope! Is it wise and financially prudent? You bet! So I ask, do you have what it takes or are you going to go through the rest of your life in debt and looking well off or no debt and feeling well?