Build Wealth... thats the name of the game

Build wealth. Thats what I have been after. I have been reading "how to" books for over 20 years. None of them spill the beans and in fact all of them tend to be more about "how to sell there book". I find most lacking real substance towards what I'm actually trying to do.

Most wealth building books and seminars are dreadfully lacking in the details. So I figured I would at least place out there what I do and why it works. The difference is that I will provide the details.

I purchase properties at foreclosure auction. Since the banks have a liquidity crisis and the properties are purchased "as is" there is considerable discount given at auction. I never pay more then 68% "loan to value". So if I think after fix-up the property is worth 100k. Then my total purchase cost is 68k. Now that is total cost including any cost to cure liens, or our fee we pay to purchase properties. My total out the door is 68 ltv.

So working a deal backwards its important to know I am always looking for a profit level of 30k. I take my sales price and minus 30k. Take that number and back off seller fees (we round at 12k). Take your number and back off anticipated construction costs (we always expect 12k in construction).

If the final number you get minus all fees, construction, commissions and cost to cure, if your final number is below 68% the anticipated sales price then its a deal. The above formula provides you a blueprint to help you implement a solid conservative buying strategy.

Build Wealth