t to choose from； so the shopping was kind of fun。 Finally； we found a 3 bedroom 2 bath home in a prime neighborhood。 The owner had been downsized and needed to sell that day because he and his family were moving to California where another job waited。
He wanted 102；000； but we offered only 79；000。 He took it immediately。 The home had on it what is called a non…qualifying loan； which means even a bum without a job could buy it without a banker's approval。 The owner owed 72；000 so all my friend had to e up with was 7；000； the difference in price between what was owed and what it sold for。 As soon as the owner moved； my friend put the house up for rent。 After all expenses were paid； including the mortgage； he put about 125 in his pocket each month。
His plan was to keep the house for 12 years and let the mortgage get paid down faster； by applying the extra 125 to the principle each month。 We figured that in 12 years； a large portion of the mortgage would be paid off and he could possibly be clearing 800 a month by the time his first child went to college。 He could also sell the house if it had appreciated in value。
In 1994； the real estate market suddenly changed in Phoenix and he was offered 156；000 for the same house by the tenant who lived in it and loved it。 Again； he asked me what I thought； and I naturally said sell； on a 1031 tax…deferred exchange。
Suddenly； he had nearly 80；000 to operate with。 I called another friend in Austin； Texas who