If you think that the claim that I am making in my title is impossible, you are wrong.
Anything is possible if you put your mind to it. You just have to find ways to get things done.
Unless someone has a very successful business that they own and run, or unless they invest in real estate, it would be quite difficult to save $450,000 in 10 years.
If someone made $45,000/year net, they would have to save their entire salary, without spending anything for 10 years straight.
Not going to happen!
The strategy that I am about to share with you is a strategy that is used by some people. However,the minority of people use this strategy, and as a result, it is the minority of people that are able to build this wealth.
I have personally witnessed people use this strategy with success.
If you want to use this strategy, all you have to do is the following.
1) Buy a new house before it is constructed (buy it off of the plans)
2) Wait for the house to be built
3) Live in the house for a while
4) Sell the house after it has gone up in value
5) Repeate
In Canada, you can sell the house that you live in, your principal residence and pay no tax to the government on the capital appreciation. This is by far the greatest aspect of home ownership in Canada, with respect to one’s principal residence.
In the 1990s, I had one neighbour that used this strategy. He bought a house in the neighbourhood at the time for around $200,000. He moved 4 times. He never spent more than 2 years in a single home. He had young children. His children were never displaced nor were they sad that they were moving, as they attended the same school. All of the moves occured within the neighbourhood, so they never ended up moving out of the school district. By the 4th move, I began to lose track of this person as we fell out of touch with him. At the time though, the house that he purchased was valued at $600,000, which was 3 times more expensive than house number 1 that he purchased.
Today, I was visiting with my real estate lawyer, Bob Rose. I was into see Bob as I was signing off on the paperwork for a new rental property purchase. Bob is an extremely knowledgeable real estate lawyer who has been servicing the Oakville, Ontario, Canada and Halton, Ontario, Canada area for many years.
Bob and I were discussing this very same strategy and he shared with me a couple of stories that have inspired me to really believe in this strategy and use it through out my life.
We were discussing the Oakville real estate market and the fact that Oakville is one of the remaining towns in the Greater Toronto Area, where there is still land to build homes. As a result, the demand for these homes is very high.
Bob said it best himself, “Oakville is home to Toronto Maple Leafs and Bank Executives.”
He shared with me a story of one of his clients. This client has moved homes 10 times in the past 14 years. During this time the client has bought all new homes, that have yet to be constructed. With each subsequent home, the client was able to make a profit on each home so that eventually, he had no mortgage at all on his current property, and the home that he was living in was valued at $1 million dollars.
Another story that he shared with me, reminded me of my neighbour from the 1990s. This particular client of Bob’s served as the inspiration for my title to this article.
Over 10 years, this particular client moved 3 times. He did not move far each time, in fact each time, he only moved to the next street over from his current one. He first purchased a new home in a new development. He lived in the home for a while, and then bought a new home off of the plans from the builder. While he waited for this newer home to be constructed, the value of his existing home that he was living in continued to rise. By the time the newer home was ready, he sold his existing home, and moved in just one street over. He did this a total of 3 times. Over these 10 years, he was able to make $450,000 tax free profit. Also, over these 10 years, because of his careful planning, his home was now free and clear with no mortgage.
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