Extrait
CONTENTS
Introduction 1
Chapter One
Meeting the Automatic Millionaire Homeowner 19
Chapter Two
Why Smart Homeowners Finish Rich 37
Chapter Three
The Automatic Down Payment Solution 59
Chapter Four
How to Find a Mortgage Advisor You Can Trust 85
Chapter Five
The Automatic Millionaire Homeowner Right-Fit Mortgage Plan 101
Chapter Six
How to Get the Best Deal on Your Mortgage 129
Chapter Seven
Find Yourself a Home the Smart Way 147
Chapter Eight
How to Hire a Great Real Estate Coach 177
Chapter Nine
Make Your Mortgage Automatic and Save $106,000 on Your Home 191
Chapter Ten
From Ordinary Homeowner to Automatic Millionaire Homeowner 201
Chapter Eleven
How to “Bubble-Proof” Your Real Estate Plan–and Survive a Downturn 221
Chapter Twelve
Make a Difference–Help Someone Else Become a Homeowner 233
A Final Word: Your Journey Home Begins Today! 243
Acknowledgements 245
Index 248
CHAPTER ONE
MEETING THE AUTOMATIC MILLIONAIRE HOMEOWNER
I’ll never forget when I met my first Automatic Millionaire Homeowner. I was in my late twenties and was on one of my first book tours, giving a talk at a bookstore in San Jose, California.
After a long down period, the real estate market in California was starting to take off, and many of the people who had come to see me had questions about whether now was a good time to buy property. In the middle of discussing the benefits of homeownership, I called on a young woman named Karen, who seemed particularly excited. “David,” she asked, “what do you think about the idea of setting up an LLC for real estate? I’m trying to decide if I should put my property investments into an LLC or a Nevada corporation.”
An LLC, by the way, is a Limited Liability Corporation. Don’t worry if you don’t know what this is. Neither did Karen when she asked the question.
I told Karen there was no simple answer to her question. “It depends,” I said. “What type of real estate do you own?”
Karen blushed a little, then said, “Actually, I don’t own any yet, but I just read a book on real estate that said I should put my real estate in an LLC or Nevada corporation, because then my assets would be protected against frivolous lawsuits.” She shrugged helplessly. “It all sounded so complicated. I’m not sure where to start.”
“Well, let me ask you something else,” I replied. “Do you have a lot of assets right now?”
Karen shook her head. “Not really.”
I smiled at her. “You just read a book on real estate,” I said.
“Why? Is it owning real estate that matters to you or the financial freedom you’re hoping to get from it?”
“The financial freedom,” Karen said firmly. “I want to get out of debt, stop renting, and finally get ahead. I’m tired of living paycheck to paycheck.”
“That’s great. Congratulations on knowing what you want and making a decision to get there. You’ve already done the hard part–something that most people never do. Now, how about we focus on it one step at a time? Instead of worrying about whether or not you need a complicated LLC structure for your assets, let’s look at how you would go from renting to homeownership. That’s really your first step in building assets.”
Karen nodded enthusiastically. “I know,” she said. “My parents told me that I should focus on buying a home. The book I read said I should look at foreclosures and buy real estate with no money down. But the book didn’t really explain how to do it. It just said rich people do this all the time.”
LEARNING FROM THE REAL WORLD OF REAL PEOPLE
I knew the book Karen was talking about. At the time, it was very popular and I had read it myself. It contained some valuable ideas and information, so I didn’t want to single it out. Instead, I looked around at the audience and asked, “How many of you have seen one of those ‘No Money Down’ real estate infomercials?”
There were more than 100 people in the room and pretty much all of them raised their hands.
“Great,” I said. “Now, how many of you have actually bought a property with no money down?”
Out of the 100 people there, two raised their hands.
“OK, so we know it’s not impossible to buy real estate with no money down. But we also know it’s not very common, nor is it necessarily easy. Now, how many of you own property and have it in an LLC or Nevada corporation?”
Not one hand went up.
“Interesting,” I said. “Here’s another question for you. How many of you own your own homes or condos?”
About half the audience raised their hands.
“For those of you who own a home or condo, keep your hand up if it’s the best investment you ever made.”
Nearly every hand that was already up stayed up.
“OK, keep your hands up and let me put a question to the rest of you who don’t own your own homes. How many of you have had your parents or grandparents tell you that their home was their best investment they ever made?”
Now, nearly EVERY single hand in the room was raised.
“Isn’t that interesting?” I said. “What we just did was conduct a real-life test on real people about what seems to work in the real world. And you know what we’ve learned? We’ve learned that there’s a lot of ‘razzle-dazzle’ out there in real estate. ‘Buy real estate with no money down.’ ‘Protect your assets with an LLC.’ It’s not that you can’t do these things. It’s that they’re not what you should be focusing on.
“What we’ve just seen is that there is one thing that is being done over and over again that works like a charm consistently–and that is buying a home and owning it for a while.”
I turned back to Karen, who smiled and laughed. “Okay, I get it,” she said. “Stop renting and buy a home! That seems to make a lot of sense. Now if you could just help me with the down payment, I’d be all set.”
The audience laughed.
“I’ve got a better idea,” I said, laughing along with them. “How about I teach you how to save up the money you’ll need for a down payment and how to get the financing you’ll need from the bank. The truth is that there are many special loan programs for first-time homebuyers that can help you buy a place faster than you’d think.”
Karen’s smile widened. “Sounds good to me!” she said.
THE MOST IMPORTANT INVESTMENT YOU WILL EVER MAKE IS YOUR HOME
As Karen sat down, I caught sight of an older couple I had spotted earlier in the back of the room. They were sitting there with their arms crossed. When you’re speaking to an audience, crossed arms are usually a bad sign, but these two folks were both nodding and smiling.
After the question-and-answer session ended, I spent twenty minutes or so signing copies of my book. To my surprise, I noticed the older couple patiently waiting for me to finish. When I finally did, they came up to me. “David,” said the man, “do you have a few minutes for us to share a story with you?”
“Absolutely,” I replied. “All my books are based on the stories of real people. I love to listen–and learn.”
“WE’RE MILLIONAIRES BECAUSE OF THE HOMES WE BOUGHT”
Their names were John and Lucy Martin. They looked to be in their early sixties, but young for their ages–fit and athletic–and excited about life.
“I hope you won’t take this wrong,” John began, “but we didn’t actually come to the bookstore to hear you speak. We were just browsing when we heard the commotion in the back and thought we’d check it out. You were really engaging, so we decided to stay and listen.”
“You were right with the advice you gave that young woman Karen,” Lucy piped in. “A house is the best investment you’ll ever make.”
“And renting never makes sense if you can avoid it,” John added.
John and Lucy looked at each other and smiled. “We know from personal experience,” said John. “In fact, we’re millionaires today because of the homes we bought over the years.”
“Really?” I said.
“Now don’t misunderstand,” John continued. “I don’t mean to boast. It’s just that I think it’s really frightening how many of these young kids seem to be making so much money in the stock market so quickly. They don’t realize that all those dot-com profits are just on paper–and that until they sell their stock and invest in something like a home, it’s nothing but pure speculation.” This was the 1990s, and John was wise to be skeptical.
“WHAT MADE US RICH WAS HOMEOWNERSHIP”
Lucy nodded vigorously. “We’ve invested in the stock market ourselves over the years, but we’ve always been well-diversi-fied and in it for the long haul,” she said.
I nodded in agreement.
“But here’s the thing,” Lucy went on, “what made us rich was being homeowners. When we were young, we never thought we’d be able to e...
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