http://www.TwinCitiesUSA.com/video/Have-a-child-buy-a-house-pay-for-college

STEVE:  Hi, this is Steve Westmark.  Thanks for watching my video blog this week.  This is a continuance on investment in real estate.  One of the things that you can do is to have a child or a grandchild, buy a house, then sell the house after 18 years and pay for their college education.  I’ll show you a quick method of how to do it.  Now the hardest thing is to have a grandchild or a baby, but then second is you go buy a house.  And as I’ve said in the past, you buy a house or a 1% rental and if you bought one for approximately $100,000 and then put an 18-year mortgage on it at a 5% interest rate, then the next thing to do is go and rent the house.

You should be able to rent that house and I can show you for a cash flow.  And following that cash flow and having the tenant there paying your rent, you will then after an 18-year mortgage and your child graduating from high school, you then sell the house.  Now in the Twin Cities over the past 40 years, we’ve seen compounded increase in property values.  Even with the decline in prices over the last few years, it has gone up 5.3% interest appreciation per year over the last 40 years.

So if you bought a house for $100,000, 18 years later it would sell for $253,000.  You’d have approximately a $1,200 cash flow per year by putting it in a savings account at 2% and being very conservative here, you’d have about $25,700 after those 18 years.  You’d have a total of $279,000.  That would be about a 13.65% return on your investment.  So in conclusion, buy a house for your grandchild or your child.  Rent it out for the 18 years.  Sell it, have a great return, and your college education is pretty well paid for for your student.

Hope you enjoyed this quick video.  If you have any questions on this, please give me a call.  Have a great day!