Rich on Money

Real Estate and Investing


Why I Pay Cash for Real Estate

Here’s my background. I paid off my $280k mortgage is six years. $32k of student loan debt in a year. I’ve purchased several rental properties with cash while serving overseas in the military.

Why don’t I use financing? Why cash? How do I afford that? (Rich Uncle? No.)

Real estate is a powerful way to make money. Debt can be a powerful tool. With a chunk of money, let’s say $200,000, you could buy one property with cash.

You could also, with that same money, buy five houses worth $200k each with mortgages and 20% down.

Leverage gets you 4 extra houses!!

Some people find ways to use no money down and buy properties. Some even find a way to take cash out of these deals. These are obviously riskier than cash or 20% down.

Everyone makes the decision to invest in real estate somewhere along this spectrum of risk. There are pros and cons at both ends.

I want to share with you why I’m at one extreme end of the spectrum, and how it’s worked for me.

It’s worked despite the fact that I’ve been serving in the military over the last 16 years, moving every few years, and mostly living overseas (including currently).

Click here to continue reading this guest blog post.


Why I’m reading a Japanese book about tidying up

I just read an AMAZING book written by a 31- year old Japanese woman.  The book happens to be a New York Bestseller.

The author’s name is Marie Kondo, and she’s been obsessed with organizing ever since she was 5 years old.


I think I have a crush on her.

          Rich, what do you care about organizing?

I’m always looking for better ways to organize my life.

          What’s so special about this particular way?

The book is called The Life-changing magic of tidying up.

Essentially, it’s about throwing away stuff you don’t use anymore, and then reorganizing your house.

          I do that every few years, big deal!!!

I bet you don’t do it like she does!

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Bringing Structure to Investing in Real Estate

This is Rich, but I didn’t write this post!!  This is my first guest post.  It’s a big deal because I’ve turned down several offers for guest posting on my site.

I met Richelle from at FINCON16 and was impressed with her professionalism and liked her blog.  We chatted and decided we should guest post on each-other’s blogs.  Both she and her husband had their own real estate portfolios before they met, and now they are an awesome real estate team! It’s a great article.  Enjoy!

Bringing structure to investing in real estate

Understanding your preferences in investing will definitely help clarify your goals and path to success. Simply put, knowing the investing style that best suits your persona can turbocharge your investing because the distractions are removed. Some people refer to this idea as “knowing your lane”.

It is tempting to get caught up in the excitement of investing and the prospect of being in real estate. Often, however, budding investors end up spinning their wheels without gaining any traction. Taking the time to focus on your personal goals and identifying your investing style can be invaluable to your overall consistency and growth.

Real estate investing is similar to role playing

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You Are Not Awesome at Picking Stocks!

To illustrate how un-awesome you are, let me first share how awesome I am.

When I was just getting started out investing in 2001, I put all the money I had, $4,000, into an index fund. I called my bank and said put it in the S&P 500 index. Warren Buffett taught me well.

The savvy salesmen on the other end of the phone who was clearly more experienced than Warren told me I was crazy to invest in that. I could make money twice as fast if I invested in their aggressive growth fund.


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You did WHAT with your IRA?!?

How and Why I bought rental properties in my IRA

Yes, I may have done something stupid.

I certainly did something unique.

I sold all the investments in my IRA and bought rental properties! (My Wife’s too!)

The rental properties are held in the Roth IRA as investments, and the rental income accumulates as cash inside the IRA.

And I’ll show you how it made me FILTHY RICH!!!

I did it, and you can too!!!!!


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top secret

The One Secret to Buying Rental Properties Dirt Cheap!

The story of my third rental property in Alabama

A while ago, I met a fellow military member who owned six rental properties that he acquired over two years. I had him explain how he did it, and decided I would do it too!

I bought house #1 in cash for $30,000. It needed a lot of work and was quite the challenge to remodel (This is an understatement).

I bought house #2 in cash for $45,000, but this one was move-in ready! Didn’t even have to vacuum. Way easier.

How did I get an awesome deal on these and house #3??

It takes a certain personality to do this.   I was uncomfortable doing it at the beginning.

Truth be told, still am today. But it’s essential.

Luckily, my wife has no problem doing this:

The secret is:

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What Beer Teaches Us About Money

I’m going to reference two awesome books in this post. They are must-have’s if you want to know money.   They are books by finance blogger Jim Collins ( and a trader turned probability expert and essayist, Nassim Taleb.

Why would I talk about both of these books in the same post.


Reading both gives you almost everything you need to understand money. Damn close anyway.

Beer and Foam

Jim Collins book The Simple Path to Wealth has a section I love where he compares the stock market to a glass of beer. These glasses contain different amounts of beer and foam.

If you use a little skill to pour the beer, you can have a glass full of mostly beer with very little foam on top.

Pour the beer too quickly, you’ll have mostly foam and very little beer.

What if somebody else pours your beer into a mug that you can’t see through and then hands it to you. You have no way of knowing how much is beer and how much is foam.

The same problem exists with the stock market.

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How Lucky are the Richest Guys on Wall Street?

This post is based on and inspired by ideas from the book Fooled by Randomness by Nassim Taleb. It’s one of the most insightful books I’ve ever read.   It’s about the role of chance in life, and how we are often blind to and fooled by it.

Get it and read it.

It ESPECIALLY applies to money and the markets.

The points I make in this post are derived from his book.  Here we go:

Russian Roulette

Have you ever played Russian roulette?

I have.


I’m kidding. I haven’t.

          Why not?

 Because that’s stupid!

Because as exciting as it sounds, I just can’t stomach the worst possible outcome. It’s not an acceptable risk. Not even to play once.

No matter how smart I am (or how smart I think I am), the outcome is ruled by randomness. By chance.

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key to success

How Much Money Will I Make From My Rental Property?

This is going to be a short, simple, down-and-dirty tutorial to help you look for or make offers on rental properties.

Going from simple to complicated, the first thing to understand is the 1% rule, which is easy to do in your head, and can save you the trouble of breaking out the calculator for properties that are overpriced.

1% Rule

The 1% rule is quick and easy. Monthly rent should be at least 1% of the acquisition price. The acquisition price may be a higher number than the purchase price. It’s purchase price plus the money to get the house ready to rent.


$80,000          to purchase house                plus

$20,000          remodeling                            equals

$100,000        acquisition cost.

$100,000 home should rent out for at least $1,000 a month, or it would not be a good investment.

          What is the logic behind the 1% rule?

If a house will give you 1% of the purchase price each month in rent, then it gives you 12% of the purchase price each year.   That apparently means the investment makes 12% a year!!!!


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keep calm no

Prospective Tenant? When in Doubt, Just Say No!

I had a chance to avoid an eviction.  I don’t think you can avoid them all, but this one, yes.  I didn’t listen to the obvious warning signs.

My experience with purchasing my first rental property was scary enough to give up on real estate investing for the rest of my life!

Actually, my wife recently remarked to me that she was SHOCKED when, after going through the stress of purchasing the first rental property, she realized I wasn’t going to stop. She said she thought I had enough!!!

If you haven’t read about my first rental yet, read about it here.

After I bought this house, I discovered the seller had concealed the fact that something under the house had pushed up the floor almost two feet in the middle of one of the rooms. It was quite the ordeal figuring out what it was and how to fix it.

Also, while the house was vacant, someone decided to climb into the crawl space under the house and steal all the copper plumbing.

So I guess real estate investing isn’t for me!

  • But my love for real estate runs too deep!
  • My threshold for self-punishment still not met!

I had a desire to succeed in real estate.

I decided to get back on that horse and keep riding!

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