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Well now you've got me curious. What is it you do?

And anything I can do that makes me and a fellow freeper more prosperous is good in my book.

A quick anecdotal story about real estate. My in-laws owned a townhome outside of Pensacola Florida. They were positions to sell it at a hefty profit in August of '04 and then retire. Hurrican Charley struck Florida and all insurance Co's with binding new business and the sale was put on hold. Before they could finalize, Ivan struck Pensacola and damaged both the property for sale and the condo they had just purchased as it's replacement.

In addition, my FIL's work project was struck and put on hold for over 6 months.

They expected to retire as soon as the sale was finalized. A year and a half later, they are still trying to sell the property (Hurricane Dennis damage to repair) and also recovering from the setback of a recent surgery for compressed disks in his back; a product of being a workaholic trying to maintain retirement goals while juggling the debt of buying real estate in Florida.

Their current expectation is that he'll need to work at least 3 or 4 more years to fully recover from the hits they took from the hurricane damage to their properties.

I'm not only debt-averse, I'm also adverse to the risk that is inherent to it.

What do I do?

I dont do anything these days.

Most FReepers know that I used to fly for the Navy then for Delta, but since then I have been buying up houses in the San Diego area and renting them out, letting my tenants pay the mortgages while I get all the deductions. I own 6 homes and am working on 2 more.

The trick, is not to flip homes, but to combine equity and tax breaks to profit from being in debt. You see, if I get enough rent to pay positive cash flow towards the mortgage + the cost of the annual property tax, that's great. But, if I don't get enough rent, since my properties are held by a holding company that I created, it would be a net loss, right? Well guess what? Business losses are......tax deductible! So, it doesn't really matter if I cant find someone to pay enough rent to cover me. I win either way.

When I get enough cash over debt, I refinance the property to put myself more into debt, while pocketing enough to finance the purchase of MORE property (or a bass boat)courtesy of current tax laws.

Look at it this way: If interest rates go up, I get more of a tax deduction from the payments. If they go down, I can afford more property to be in debt on, so I get a bigger deduction again. I pay for gardening and landscaping on my properties to keep them attractive, and my other business expense is a full time handyman keeping the properties in perfect condition for sale or appraisal.

I get no income from this, but should the market turn downwards, I can sell the properties, close the business and pocket all the money from the sales.

That is a simplified explanation, but the key is to not be afraid to use your money to make more money. If I were you,(Can I say that here?) I would make sure that my family was living as close to the vest as possible, so that I could put aside at least 20% of my net income. You would be amazed at what Banks are willing to loan you, if you don't really need the money. You don't go out and buy the biggest house, you go out and find the one most likely to grow in value based on location, neighbors and condition.

It is a very dry subject, so most people don't like to read up on tax laws, debt and other things like this. But if you do, you will be ahead of the game.

But, reality is that bad things happen, so you still need to have that nest-egg available should things go badly. SAVE YOUR MONEY. Then, when the time is right, use it to make more.