Some Good Ideas on Retirement
by Jim Scott

Two Great Ideas
Several months ago in this column I wrote that I had an easy way to send your kids through college and create a lucrative retirement vehicle with the same cash. Sound too good to be true? Read on. 

Investing in Location 
The purpose of this column is to discuss how two properties I have for sale schould achieve those goals in 15 years. (the past is not guarantee of future performance as there is an element of risk in any investment). There are two components to the program, The Product and The Method.

The Product 
The most important decision you will make is the purchase. I have just listed two properties in Mission Hills that are very well suited for this program. The first is the triplex pictured to the right. It has all the right elements for success; charm, views and location. This investment will require an initial outlay of $125,000. You should break even for the first three years of the investment before tax. The investment is a net positive when you calculate in principal reduction and income tax savings. 

The Method
The second most important part is the financial discipline not to spend the cash flow. You must apply all cash flows to the existing mortgage.You may also add additional funds monthly-it acts as a lucrative savings account. For example, if your mortgage is 8% and savings accounts yield only 3%, applying extra cash to the mortgage in effect doubles your interest income on those additional deposits. 

By year 15 or 16 this property should be free and clear. At that point, the positive cash flow will easily send your child to college. But the best part is that when that obligation is finished, you still have the free and clear asset and monthly cash flow! This is very different from an investment account that is used for college expenses and is exhausted at graduation.

If you are still not a believer, just call me for more details. I have a triplex "dedicated" to my 6 year old and a 5-plex "dedicated" to my 4 year old. I am through saving for college. When they are finished with their higher education, I can comfortably retire on the cash flow or maybe buy a Ferrari. 

Another Good Deal 
The shopping center at 1111 Fort Stockton Drive is available for $1,075,000. This investment will require $350,000 but will have immediate cash flow. It will yield, in today's dollars, about $80,000 per year in 15 years. Why not put a few friends together and form a neighborhood partnership? I can help you with this process. The property is very easy to manage and is surely a trophy property. 

You can reach Jim Scott by email or at his office at 1111 Fort Stockton Drive. Jim's direct line is 885-9511. 

Jim has been a homeowner in Mission Hills since 1976. Scott & Quinn is the oldest full service real estate company in Mission Hills. There is also a professional property management team on staff.