Mitch Goldstein | Coach Mitch | September 4th, 2012NPR
June 7, 2012
Generation Rent: Slamming Door Of Homeownership
Neal Coleman and his wife, Rachel, are both in their 2012mid-20s and attend graduate school at Indiana University in Bloomington, Ind. They say renting makes more sense for them and their young daughter until their family is a bit more settled.
Taylor says she and her husband, Zach, 25, have lived in nine different places in the past five years, including stints back home with the parents — both his and hers — as they moved from place to place “chasing after jobs.”
Homeownership among younger adults has shown a steady decline since the mid-2000s, according to the latest available Census data.
Plagued by high unemployment, many have had to delay careers, marriage and having children. And the idea of owning a home is more often being put off or written off entirely…we may be witnessing the creation of a generation of renters.
Most lenders now require a rock-steady source of income and a substantial down payment before they will even look at potential borrowers. And many millennials won’t be able to reach that steep threshold…especially for entry-level workers and the crushing consequences of student loan debt.”
Communities Need To Prepare
In the short run, local officials need to prepare for more renters. “…communities need to do to ensure..there are sites where new multifamily housing can be built,” he says. “And the multifamily housing that gets built needs to go in communities with high opportunity“
The availability — or lack thereof — of quality rental housing will put communities in competition with one another as a more mobile workforce is able to vote with its feet, says Conway of Generation Opportunity.
“A question for local government leaders,” he says, “is that if you have a generation that is less committed to taking a risk and buying property in that area…then as a local official, you absolutely have a problem for your long-term commitments, your long-term budget, your long-term obligations to such things as pension funds.”
In theory, fewer homeowners will mean municipalities will rake in less revenue from property taxes. But Pendall believes local governments will simply adjust to make rental properties “a larger share of the tax pie.”
“When we finally graduate from college, we’re older than ever before. When we finally get married, we’re older than ever before; finally have our first child, we’re older. All of these things are pushing back,” says Dorsey, author of My Reality Check Bounced! “You’re freer when you own your own home, your own land. You’re not beholden to a renter’s contract, or lease,” Coleman says. “My feeling is that homeownership is an investment in being able to control your surroundings, to build a life for you and your family.”
See the entire article: An Entire Generation Renting And Not Buying Homes
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Coach Mitch’s REFLECTIONS™
This article both annoys me and makes me scared, but my answer is the same to both.
My Answer: Use your G-d given brains to figure out how to take advantage of this or any situation.
Why I’m annoyed
Let’s take the above situation where a couple is finding it hard to find affordable housing.
Ques. “I’m going to college and can’t afford to rent or buy; how can I do it?”
Ans 1. Find a four bedroom apartment to rent where you can sub-lease 3 bedrooms for the entire cost of the rent; you live rent free.
Ans 2. Find a four unit apartment building to rent and sub-lease 3 apartments for the entire cost of the rent; you live rent free.
Ans 3. The same seller may let you buy the four unit apartment building and hold the note because you are bringing in good rentals. If the 3 apartments pay for all expenses then you live rent free and can save all that money. EX $1000/m saved x 12m = $12K/y rental not paid – not bad. That $12K is a down payment toward another property.
Ans 4. Turn that four unit into condos (don’t pay lawyers, go to the Secretary of State and copy the paperwork from an existing condo project) and sell each bedroom to the parents of a student-child in college, who can, upon the student-child’s graduation, sell their 1 bedroom share, recouping their monies and perhaps making a profit. Best, let the student-child use his own money from his self-directed IRA to buy the condo and upon a sale, the profits can go back into his SD-IRA without any capital gains taxes.
This is not rocket science!
Why I’m scared
The general mentality in our society seems to be heading away from an entrepreneurial bent and is moving towards our using fewer critical thinking skills. Don’t you think that is scary?
One of the few classes of persons that I see as being clever in getting what it wants is the drug addict. Apparently necessity IS the mother of invention.
Another class of persons being clever are the scam artists, e.g. Madoff and other financial wizards, derivative investors, the Fed, Banks Too Big To Fail, politicians at all levels, lobbyists, government contractors, public unions, etc.
Do we see a pattern here?
These folks are all addicted to “easy money.”
It seems that if you want to take easy advantage, then more and more, people are choosing to become scum buckets; taking from someone, because you can. We all know it is wrong, but, we don’t care. The hedonistic self is stronger than the honorable self. The “better angles” are losing the battles for our souls.
One of the consequences of this nasty turn within society is that we don’t seek to be clever in substantial and good ways that build something constructive; rather, we seek to be clever in ways that prey successfully off of others.
The middleman
When was the last time you saw someone purposefully putting themselves into the middle of some transaction and bring two parties together, one who wants something and one who has that something; and in-so-doing he becomes the middleman, and earns a legitimate profit?
Being the middleman is a time honored method of making something out of nothing. Your ingenuity is at work and little else is needed.
Create a transaction – a blueprint
1. Coach Mitch’s “famous $1 Option.”™ is a great vehicle to utilize if wanting to create and insert yourself into a transaction. You have found someone that wants to sell. You option that property with $1; then you find someone else who will purchase the property so you can make a profit. Easy!
2. In any college town, ask the college for a list of the landlords catering to college students; that’s how I got my list. Some of the landlords will want out. They will be sick of dealing with students and they may let you option the property. At the least, you can get some tips how they each handle students successfully.
3. OR you can research for a list of multifamily properties near the college that are tax delinquent. The tax collector or the tax assessor will help you or you can utilize Coach Mitch’s “Ridiculously Simple System…”™ . Market to the landlords. Some of the landlords will want out of the landlording business and you are on the phone, ready to help; what a guy!
4. Some of the landlords will want even more student rental property. The properties you find that you don’t want for yourself can be offered to this set of landlords. Of course, only offer it to them after you have controlled the property with CM $1 Option. You are the middleman, having created something out of nothing.
5. OR lease option or option any property you think viable with Coach Mitch’s “famous $1 Option.”™. Then market for students by placing cheap ads in the school newspaper or, even more cheap, put posters in the schools’ cafeteria area. The students that would like to rent a nice room from you will call you. Easy.
6. You can keep the positive cash flow for yourself OR you can sell the property after it is rented up to one of those landlords who want more student rentals or to someone else, thus creating another transaction and more profit for yourself. You’ve created something out of nothing. Smart.
7. For the ultimate in creativity and cash-flow, turn the apartments into condos and sell each bedroom to the parents of a student. For a fee, you become the manager of the common areas, e.g. kitchen, living room, grounds, hallways, basement, maid service. For another fee, upon the student’s graduation, you find another student who wants to buy the bedroom condo. You have made yourself into the ultimate middleman – having used your ingenuity – and Coach Mitch’s “famous $1 Option.”™.
Solve someone’s problem and make money for yourself.
G-d Bless US – someone’s got to, before it’s too late.
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