Aaron sat atop a small mound of sand at the water's edge when an old soda bottle washed ashore, settling near his feet. The mid-afternoon sun highlighted what looked to be a small piece of paper curled up inside. He reached forward and held it in his hand, reminded of the many fantasies he'd read as a child of tiny bottles harboring maps of treasure, turning paupers into privateers.
He pulled the cork and unfurled the paper. Written by hand were three rows of numbers. The top line was a series of numbers separated by a hyphen. Beneath it another set of what looked like a combination of some sort, followed by the number twelve circled in red. The bottom line was simply a numeral one, followed by six zeroes.
Aaron strolled along the boardwalk, clutching his newfound treasure map, wondering what that first row of numbers could possibly be. To his left were kids tumbling in the sand, up ahead was a long pier where a string of people shuffled back and forth, and to his right a couple walked side by side, staring into their phones. That's when the idea struck him. He opened the browser on his phone and typed the first row of numbers. The spotty signal tested Aaron's patience when a shirtless, leathery old man pedaled past with Stevie Wonder singing from an old boom box strapped to the back of his beach cruiser.
According to the internet, they weren't lottery numbers as Aaron had hoped. Rather, it was a routing number indicating the location of a bank, like the kind printed on the bottom of checks. Apparently, this one was an hour's drive up the coast.
Forty five minutes later, Aaron stepped into the bank and asked to access lockbox number twelve. Indeed there was a lock box number twelve and Aaron released a masked sigh of relief as the teller escorted him to the vault. He slowly turned the dial, careful to line up the numbers exactly. First left, then right, then left again. Visions of debt sprouting wings and flying away entered his mind. There went his car payment, his student loans and those nagging back taxes. Up, up in the air. Maybe he could finally move out of his dank, two room apartment.
He yanked on the drawer handle. It opened. He mouthed the words Oh my gawd. Inside, were neatly wrapped bricks of hundred dollar bills, each stacked on top of another. Aaron shook his head in disbelief. He looked sharply over each shoulder and put both hands on his head. His eyes darted in all directions until he quickly removed his jacket and laid it flat on the floor. He swept the money into one large pile. The cameras overhead captured a grainy man with a sack hoisted over his shoulder, like Santa Claus on Christmas Eve, striding toward the exit. Avoiding all eye contact, Aaron leaned into the exit door with the opposite shoulder, triggering a deafening bell that blasted through the room. It was the alarm.
"Shut it off." An elbow jabbed Aaron in the back. "Shut it off Aaron!" He felt a knee to the back of his thigh. Darla was having a dream of her own and she wasn't ready to let it go. Aaron shut off the alarm, pulled the covers off him and fixed his eyes on a crack in the ceiling.
When Winning the Lottery is Not an Option
Like Aaron, most of us don't have a road map we can follow after college. We obediently finish our studies, apply for a job and hope for the best. But the days of staying in one place and buying a dream home where you can raise your kids and still have enough money for retirement are long gone. We all know what happened in 2008 - millions of people lost their life savings to an unpredictable stock market and many others lost their homes, because they didn't understand how the American Dream works.
Since then, a lot has changed with regards to home buying, but the unreliability and unpredictability of the stock market has largely remained the same. Yet, many Americans still have their futures confined to company 401(k)'s. Why? Because you don't know what you don't know. The truth is, there is a much better way to improve your current income, while building a nest egg for retirement at minimal risk, if you have a plan.
It’s called Buy-and-Hold Rental Property Investing. And it’s been around since ancient times, when farmers paid Kings with crops in exchange for the opportunity to live and farm on their land. It also contradicts the American dream most of us are taught – to buy a home of your own in which you can create beautiful memories and pass on to your children.
The problem with this “dream” is in order to have it, you need to get into lifelong debt. The kind of debt that puts a stranglehold on your dreams of having new experiences and seeing the world. Because not only will you need to put a substantial down payment upfront, but you’re then obligated to contribute a large portion of your paycheck toward your monthly mortgage. One sudden emergency or unexpected life event and your dream is now keeping you up all night. Especially when you see that after a good ten years of consistent loan payments, you’ve hardly made a scratch on the principal, because it’s mostly gone toward interest. A bank has to make its money somehow.
Make Your Own Treasure Map
The solution? Buy a home and rent it out. Here’s how it works.
You pay the initial down payment, your tenants pay the rest. In short, when the balance is paid in full, the house is all yours and all you invested was the money you put upfront. In the meantime, you still benefited from all the tax advantages that a regular homeowner has, but you also built up a nice little nest egg with the money left over after applying your tenant’s rent toward the mortgage.
Of course, this is a very simplified explanation, but millions of people around the world have planted their seeds of a few thousand dollars and seen their investment grow into much more over time.
The key is education.
Investing money you’ve worked so hard for can be intimidating when first getting started. Like anything in life, that fear stems from the unknown. That’s why it’s important to have access to a resource that presents this information in a clear, digestible way, so you can apply them to fit your needs.
We’re a team of rental property investors who have dedicated ourselves to building our wealth through passive income over the years, and have one purpose in mind: to share our experiences, good and bad, with you, so you can avoid the stumbling blocks and devise your own plan for achieving your short-term and long-term goals.
Sign up for a 30-day free trial with access to our extensive library of educational articles, updated analytics of cities across the country, interactive forums, our customizable rental property calculators, and links to additional resources. After all, getting where you want to be is a lot easier when you have someone showing you the way.
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