Make The Change Today

Our revised wealth-building principles emphasize homeownership and retirement planning

had wisely.”

Daphne and Gary have always considered DOFE Principle No. 1: To use homeownership to build wealth to be paramount. “If you’re not a property owner, you have nothing tangible to show for all your hard work,” says Daphne.

The Dixons lived economically and saved faithfully during their first year of marriage. They amassed $7,000 and purchased a brand new $42,000 home in Miami, Florida, in 1980. They sold the home 14 years later, making $24,000 on their investment, which was put toward the purchase of other properties.

The first investment property the Dixons bought was a $25,000 single-family home, which Gary refurbished top to bottom. “We refinanced and took the equity out of that house three times before we sold it. So we got our money’s worth,” says Daphne.

They eventually sold the house in 1996 for about $90,000 and the proceeds provided the 20% down payment on the home the Dixons currently live in, which cost them $160,000. That house is now worth $370,000.

Then they bought a $60,000 commercial property in the mid-80s with Gary’s brother James. Both brothers contributed half the cost, and Gary, James, and Gary’s stepfather converted the property into a grocery store/ produce stand/car wash. That property, which is run by James, is now worth about $400,000.

From 1993 to 2003, the Dixons purchased five other properties, repeating the pattern of buying below market value, fixing them up, and then selling them at a higher price. This includes a dilapidated 60-year-old house they purchased for $38,000 that is now worth $130,000.

The Dixons’ real estate investments proved to be a godsend two years ago when they lost $100,000 in the stock market. They had taken $60,000 in equity from their current residence and $40,000 from their rentals; they were investing the money to provide for their retirement. They lost the entire amount. “We were able to sell one of the houses, refinance the others, and we revamped [our portfolios],” says Daphne. “The properties saved us. Because we had [real estate] investments, we were able to start over.”

While the Dixons continue to invest in the stock market, their main plan is to pay off their home and liquidate or refinance their rental properties to provide income after they both retire. They stress the importance of maintaining good credit and offer these other suggestions for real estate success:

BUY LOW
The Dixons found their properties by “being watchdogs,” as Gary puts it. They read the papers, scouted neighborhoods, and kept their ears open for good deals. “We always paid under the market value, even for the new homes, because we bought them when there was nothing there but a trailer on empty land,” says Daphne. They tried to determine which areas would be the next to boom and have hit the jackpot several times. They purchased a home in Wellington, Florida, in April 2003 and six months later it was worth $70,000 more than they paid for it.

CONSIDER A 15-YEAR MORTGAGE
Getting a 15-year loan, rather than a 30-year one, will mean that

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