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Build Income and Wealth with Residential Proper ties

What action? There are two proven strategies:

1. Pay less than the property is worth.
2. Maximize returns through strategic management.

Let’s look at each in turn.

Pay Less Than the Property Is Worth

When you develop entrepreneurial insight, you see possibilities and probabil-
ities that others miss. This skill plays a special role when you fi gure out how
much a property is worth—and how to negotiate a bargain price. When I say
buy at a “bargain price,” did you think to yourself, “Pay less than market
value”? If so, you are only partly right. Generally speaking, if you pay less
than market value for a property, you have scored a good deal, but you can
also pay less than a property is worth in other ways that rely on entrepreneur-
ial talent. Here are several possibilities:

• Find unused (or underutilized) space: Have you seen ads for the

California Closet Company? As this innovative firm (now copied
by many imitators) has shown, you can increase (and even multiply)
the space within a property without adding even one square foot of
floor area. Through creative design, this company converts under-

used (or underutilized) closets, kitchens, garages, carports, attics, and
so on to yield more benefi ts.
Apply the same techniques as you value properties. Note the mul-
tiple ways that you can make existing space work more productively.
Can you “rightsize” rooms, add cleverly designed shelves or cabinetry,
or convert low-quality space (e.g., basements, attics, garages) into
clean, dry, and convenient storage areas—or perhaps even additional
living space?
Remember, tenants choose properties that offer the greatest ben-

efits for the amount of rent they’re asked to pay. At very little cost, you
can enhance the appeal and livability of most properties—when
you envision possibilities.
• Improve aesthetics: Nearly everyone knows that aesthetically chal-
lenged properties sell at prices well below their GQ brethren. Find
this ugly duckling. Pay market value. Improve it. You now own a
property that’s worth far more than the amounts that you invested.

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