All of the credit goes to Larry Kendall, the founder of The Group in Fort Collins. He calls it "Give your kid a chance” and I learned of it 25 years ago.
The simple concept is to buy an investment property when your child is young, rent it and let the principal reduction and appreciation pay for their college education.
When my son Peter was born, we immediately started saving for college, like all parents do.
When he was about 14, I realized that none of the accounts would get us there. And the worst account was the college invest account.
So, Peter’s Dad and I liquidated all of Peter's accounts and bought a house.
We bought the best house we could afford in the best neighborhood and in the best condition. I did not mind managing it.
Because it was a nice house ,we had quality tenants and maintained it well. Even in the recession, it held its value.
We operated our venture as Wall College Fund LLC.
Long story short:
Peter was fortunate to get great scholarship money to a private university out of state.
We did not have to liquidate to pay for it.
After we had owned the home for 12 years, we sold it and used an tax exchange to buy a new property. The equity was had was amazing, thanks to Denver Real estate market!
The new property has a healthy cash flow.
This is Peter’s nest egg now.
The money invested was intended for him and by buying real estate with it—he has a head start in life.
This works if you start day one or in middle school like we did or even in when they are in college. Let the roommates pay your mortgage and sell in 4 years. Most college towns have a good market and the profit can pay for college loans.
I can show you how the numbers work. There is no better way to save for College than buying your child a house!