Introduction

The American government has two good plans for retired people: Social Security that a reasonable sustainable income during the years of retirement for anyone who has worked during their lifetime and contributed to the Federal Social Security Trust Fund; and Medicare, a program of basic medical care for those 65 years of age and over.

However, when it comes to one of the most fundamental needs of mankind – namely, housing - there is no government plan or program available. Through Individual Retirement Accounts and other tax deferred savings programs an individual can save for expenses that will be incurred during their retirement years, but it is always assumed that retired people will have their own housing, unencumbered by debt, by the time they retire. There is no guarantee of housing for the retired.

When we retire, if we decide to relocate to a new area, we would sell off our home, in which we had raised our family and lived for many years, and then buy a home in the area where we want to relocate. As we near retirement, we assume that we could sell our house, buy a retirement home for a lesser value than the home we sold, and keep the rest in a CD or Mutual fund using the income for our everyday retirement expenses.

However, during times of real estate crash, like the one we are now facing, the values of our homes could drop significantly. Should that occur, we would no longer realize the values our homes held just a few years ago.

As I write this book, home values in many areas have come crashing down to more than 50% of their previous value. What’s worse, even if homeowners in these areas can sell, there’s no guarantee that a sale will take place quickly.

So what does one do when faced with such a harsh reality? Is there no other way to protect our retirement dreams? Are we stuck in our houses until the market turns around? Do we have to stay in our present homes and work till the last day? There must be a better way!

Have you thought about the life that you are going to lead after your retirement?

Did you ever have a clear vision of how you would like to spend your retirement years?

Well, if you haven't done so yet, it's high time you start thinking about it. Now is the right time for you to decide where you would like to spend your retirement years. Now is the time to make plans to acquire the home of your dreams. Retirement will happen sooner than you think, and you have to plan and strategize if you want to have a home that's free and clear when that day finally arrives.

Buying real estate can be a complex and challenging process. You might wonder where to start to look for that dream home of yours. It is highly possible that you get bewildered if you are looking for a property in a place with certain common facilities, because there will be literally hundreds of locations to choose from many of which offer the facilities you're looking for.

If you are savvy with computers, you can hunt for information on the internet. You will end up being flooded with hundreds of possible ideas that might appeal to you. Your search term and phrases would include options between retirement homes, active adult living, assisted living, nursing homes, etc. depending on what you're looking for.

If you study the recent trends in real estate, you will notice that the industry has changed direction. The age of the real estate generalist is gone. Today the industry is moving more and more toward catering to the needs of society's niche segments.

This is niche marketing and each niche market can either be small or large depending on the target segment. Some recent marketing models in the industry reveal that demand in the market has been changing drastically. As a result, different marketing strategies are being used to sell to different market segments. For example, medium priced homes are being sold using a marketing approach quite different from that used to sell million dollar homes.

New real estate products or concepts do not come every day. A really new concept only happens once in a decades.

Every new real estate product in the marketplace is based on a new concept, a new belief, or a new philosophy. Each concept has its own fundamental feature, which over the course of time brings about noticeable change in the industry.

Real estate as a business has assumed new dimensions with internet advertising and selling new concepts. As a means of owning private property, real estate has a wide scope of investment potential.

Here's a real life example of how drastically the real estate industry has changed. As part of my WEBPAK Company (which creates high-end web portals for businesses) , I recently created a website for a Michigan based real estate broker. This website allowed the brokers, real estate agents, and even individuals, to list their homes for sale online. The public views the listings and places bids for the property. Every Monday, the listing agent reviews the bids and determines in consultation with the owner whether the property can be sold to the highest bidder. If so, the property is sold; if not the bidding period is extended in order to attract other buyers and encourage original bidders to reconsider their offer. Think of it: real estate marketed and sold via technology that wasn't even available a decade or so ago! The point I am trying to make here is, there are many new ways real estate is bought and sold today.

Now consider this: whenever one thinks about purchasing a home what's the first descriptor that one thinks about? Square footage! How big a house do you want or need? How much space do you require based on your needs?

You have to decide whether you need a single bedroom with a living room and a separate kitchen, or a larger unit with many rooms to include guest rooms, an office, etc. in order to satisfy your individual needs and requirements.
But, as so often happens, the amount you are willing to spend doesn't always match the prices of the houses available in the market in the area you desire. It can also be the case that the quality of the homes is not up to your expectations.

This is where the concept of One Square Foot Plan (OSFP) comes in. Are you aware of this new real estate concept that is bound to take the real estate market by storm? This is a novel concept in real estate ownership, where you can acquire ownership of real estate property in small bits and pieces. However, for it to be really successful, it needs to be implemented properly with lots of care and expertise.

Does this sound too good to be true?

Well, it's not! In fact, not only is it true, it's on the horizon and coming very soon!

Without having a thing to worry about, the owners of real estate property under this concept can enjoy the rights and happiness of being an owner like any other real estate owner. They don't have to bear any maintenance cost or worry about things like taxes, insurance, etc. And at the same time their real estate investment keeps on appreciating in value!

By now you must be highly intrigued to know more details of how this novel plan really works. How can you own a home or any other real estate without any of the normal headaches that come with the ownership of property? How can you pay for property at today's price and yet can get a brand new property whenever you decide to move at any time in the future? Almost sounds too good to be true!

Real estate laws vary from country to country and also from state to state. In many countries, foreign ownership of real estate property is prohibited. In the US there are no laws regulating the ownership of real estate based on one's citizenship. This opens up the market to foreign investors.

Places like New York, Chicago, and Orlando, for example, are in high demand by some foreign investors. Since real estate has always been known to appreciate in these areas (except during the bubble burst of the past few years), these are very attractive investment areas.

Let's consider how traditional real estate ownership and its value works. The value of real estate, in terms of actual brick and mortar, depreciates over time. Most people have to go execute mortgage loans to purchase or improve their property, whether it's land or building. These loans result in a lien on the underlying real estate .

If the borrower fails to make timely payments in accordance with the terms of the mortgage, the lender is entitled to foreclose on the property. A relatively simple legal action by the lender will give him the legal authority to sell the property at auction and recover the value of the mortgage plus the legal costs of the lender.

Also, while owning property in the traditional way, in addition to mortgage payments, the owner has to pay for maintenance, taxes, insurances, etc. for that property. And while the owner does “enjoy” the property while they own it, and while the price of the property may appreciate during the term of the ownership, the actual remaining life of the building will continually depreciate and decrease in value.

With OSFP you'll never experience depreciation in the value of property. Moreover, the OSFP method enables you to acquire real estate property in small pieces according to your financial capabilities over a period of many years. This system of acquiring property also relieves you of the burden of maintaining and managing it.

With traditional methods of owning real estate, it's not possible to own a property without also being liable for maintaining it or managing it. Until now, there has not been a viable mechanism allowing you to buy a property in small bits and pieces. Until now, you have had no other alternative than to buy an entire home for cash (and usually a mortgage) with all of its costs and obligations, or wait until you accumulate the required amount of money to do so.

The traditional method of purchasing real estate can also lead to disappointment. As is so often the case, by the time you're ready to buy your dream home, the price of the home has become so high that it's beyond your reach. The sad fact is that one's dream home always seems to be a moving target.

Then there's another reality that we don't like to think about, but one that happens far too often. After years of saving for our dream home tragedy strikes (death in the family, illness, etc) and suddenly we find ourselves using our savings for something other than its original purpose.

Currently the only way to own a small part of a real estate (fractional ownership) property is one that you get in a Time Share ownership. (Incidentally, I used to be one of the pioneers of the Time Sharing industry in India during the eighties and nineties).

Many of you already know what Time Share is all about. Many of you have learned the hard way while on a vacation! Those who have been psyched into buying a Time Share while on vacation with family, especially with young kids, will find out after a few years, the cost of owning the Time Share is something they can do without!

Time Share in real estate refers to the ownership of a particular property that an individual can buy for a specific period of time during the year and enjoy the right to use that property, for a fixed number of years or in perpetuity. The basic idea behind this concept is to enable you to enjoy a vacation home on a temporary and partial ownership basis rather than on a rental basis. This works best for those who can go to the same place every year during a fixed period for several years. Of course that kind of ownership isn't practical or even wise for many people. So the Time Sharing industry has introduced the concept of exchange (atr an additional cost).

Time Shares are created by developers by purchasing or building condominium type of units in popular vacation destinations. Time Share arrangements can be deeded or non-deeded.

Deeded Time Share arrangements are called Fixed Time or Fixed Unit. They have a specific period of stay (usually a particular week each year, which can only be exchanged through an exchange Company) mentioned for a particular unit.

Non-Deeded Time Share can be of two types:

1. Floating Time arrangement.
2. Seasonal Time arrangement.

In the Floating Time arrangement, the purchaser has to make reservations for the exact period of time for which he requires the property. He can do so by purchasing a lease, license, or club membership for using the property during a specific amount of time each year for a stated number of years. The system of working in the case of Seasonal Time is the same as the Floating Time, the only difference being that the owner can reserve time for only within a particular season.

This is a very expensive proposition in terms of the original cost and annual maintenance. Most Time Shares are sold for 50 to 100 times the cost of each unit. With the Time Share prices so high, most buyers require a mortgage to purchase the unit. This seems to be fine during the initial years of ownership because the usage rate will be high, and in comparison to rental units the mortgage payments may seem cheaper. However, as years pass and children become older, the concept of a family vacation together gets less attractive to many members of the family. That's when the monthly mortgage payments and the annual maintenance costs start to pinch the budget. At that time families desperately try to offload their Timeshare units, often at pennies on the dollar.

When purchasing a regular home, one normally puts down a down payment and gets a mortgage for the balance of the purchase price. The typical down payment is 20% (except during the subprime fiasco). The buyer runs the risk of losing their 20% down payment if anything should occur that would cause forclosure.

Now think about this: What if it were possible to purchase ly 20% of the home with the down payment money and not take delivery of the home? What if there was a way to lock- in 20% (or any other percentage) of the home price and then slowly acquire the rest of the property over time?

This is is the magic of OSFP!

The concept of OSFP is best suited for buying retirement homes. That's because one knows when one is going to retire and can also plan for it years in advance.

Retirement communities are usually located outside the hustle and bustle of the main (read expensive) residential areas. They could consist of single family homes, condominiums, or co-ops. Some of the units may also be available for rental from developers or owners.

The concept of retirement communities was developed with the aim of providing a proper social ambience and community life for the elderly who long to live their own independent lives within their own circle of friends. The need for quiet living without the children around, led to the Federal government enacting the law authorizing age-restricted communities and allowing developers to build these communities and market them only to those who are 55 years and older, and without worrying about the allegations of discrimination as defined by the Fair Housing Act. Later as many single senior Americans started to remarry younger spouses, the law had to be amended to allow for at least one of the residents in the household to be over 55 years of age in an age-restricted community.

Most seniors live on a fixed income and would rather live in a fully paid-off home without the hassles and insecurities that come with a monthly mortgage payment. Taxes in age-restricted communities tend to be much lower than regular homes, because by definition the residents in these communities do not requiret educational facilities for their residents.

Through OSFP you can buy your dream home where you can spend the rest of your life in peace and happiness. As the name suggests, this concept will enable you to buy your retirement home in any part of the world you desire, by buying the home in small pieces of one -- or a few -- square feet at a time.

You can initially select the location where you would like to have your home, and then slowly work toward acquiring the required number of square feet that you need over a period of years. You will not take delivery of the home until you are ready. Until then you own a home equivalent in size to the number of square feet that you have purchased.

One obvious question that comes to mind is what if the Company does not have homes in the location of your choice. This could happen if your choice of location is not where there is a lot of demand. No developer can build a community if there are not enough potential buyers. In these circumstances, for only a minimal service charge, you can exchange the square feet you have purchased for square feet in a new location.. As this concept grows in popularity, developers will open new destinations and locations for new communities.

By this time you must be swelling with curiosity and ask, ‘How does this system work?”

Be patient. As we proceed the process will unfold itself little by little.

When you think of any house, what is the first thought that comes to your mind? Don't you wonder how big it is?

We all do that.

The first thing that we do while renting or buying a real estate property, is that we measure it in terms of square feet. This is an important aspect of buying property because square feet determines whether the property will be sufficient for our needs.

When you're buying your home, you always consider a few facts before making the deal. You'll always ask how many bedrooms there are, whether all the rooms and the bathrooms are large enough, and you'll ask about the size of the garage, especially if your household has more than one car. You'll also want to know about the neighborhood as well as the kinds of facilities located nearby..

Buying your home through OSFP will provide you the opportunity of buying the house that meets all your needs one square foot at a time. Does that sound incredible to you? Indeed it is.

What actually happens is that, you buy the RIGHT to the property at today's price and take possession later. Each year the Company will announce the price per square feet, so that you can make your financial plans accordingly and acquire as many square feet as you can afford at that given price.

The price per square feet is called the Price per Standard Square Foot. This price will usually be applicable to the main location where the Company is located. Later on I will explain how this will work when you want to buy a home in a more expensive or cheaper location.

You might wonder whether the Company will keep the promises that it makes to you Do not worry at all. There are multiple protections built into this concept. First, the Company will issue certificates to you, which will be proof of the contract between you and the Company. It's like holding stock certificates. Secondly, a responsible OSFP Company will also utilize the services of a reputable Escrow Agent who will handle all the money. The Company does not get your money at any point except for the service charges.

You will pay your money to an Escrow Agent, who will guarantee the safe keeping of your money andr your property. All transactions between you and the Company will be carried out through the Escrow Agent. And just in case you lose your certificates, you can contact the Escrow Agent anytime to verify your holdings and have duplicate certificates issued.

You will understand the entire process in detail, step by step, in the ensuing chapters.

Soon you'll find yourself thinking about the many ways you can buy square feet under this plan in areas that you'd most like to spend your retirement years.

Most people have several sources of extra income that can be directed to their OSFP plan. You get bonuses, cash gifts and you might even have an extra little bit of savings stashed away somewhere. You may not want to spend them on anything else! Simply accumulate OSFP certificates and go in for buying the dream home that you have been nurturing deep inside your heart.

What about giving a surprise gift to your spouse? Instead of giving gifts on various occasions, gifts that fade in a few days or weeks, give your spouse one or more square feet in the OSFP plan. Your spouse might even get into that habit! Before long you'll have enough square feet accumulated for the home of your dreams.

How many times have you received gift cards, only to let them expire, or worse yet, lose them or even forget you have them. I remember when I left my contract position at General Motors; my colleagues gave me a gift card from a book store. And while packing up I totally forgot where I had put that gift card! I'm sure it's in one of the sealed boxes from my desk, now lying in my basement. So the money spent by my friends at General Motors on that gift card winds up being a gift to the Company whose card they purchased. Interestingly millions of dollars in gift cards go unused each year. Just think about the many different ways your gifts are lost forever.

But if I was given even a one square foot certificate as my parting gift, even if I had lost the certificate, I could always log into the Company website and check my account online. Or I write to the Escrow Agent for my account statement and even get a duplicate certificate..

Instead of spending the money that you receive as a gift on something else, you can buy the home of your dreams one square foot at a time. Just imagine, your near and dear ones give you a gift of just a few square feet each year, and you acquire some square feet on your own over a span of 15 to 20 years, and WOW!!! Before you know it, your dream home has become a reality!

Once this concept becomes popular with the masses, I can foresee that parents, grandparents, uncles and aunts will have the option of giving a square foot certificate as the preferred gift to their nephews, nieces, children and grand children. Before the kid turns 18, it might even have enough square feet to own a home! It is almost like putting money away in an education trust account for the child's education.

You get the idea. There are no limitations on how these square feet can be acquired and accumulated.

Are you beginning to get convinced that this is an out of this world concept?

But still a doubt or two seems to lurk in your mind. And it's nothing other than the viability of OSFP as an investment. If you are thinking about why you should opt for OSFP rather than investing in banks or stocks and bonds, let me explain.

Putting the money in the bank and letting it grow until you're ready to buy your retirement home is the safest option that exists. But unfortunately, it's not the best option for you.

How many times have you saved for one reason and later found it necessary to use your savings for some other purpose?

And did it ever occur to you that investing in banks or stocks have their own risks especially in a wildly fluctuating market. Just look at what's happened to the stock market recently. Many have lost their life savings, and consequently the dreams they represented.

Let me give you a personal example of what the recent financial meltdown has done. I am currently developing a retirement community in Tavares, Florida, about 30 miles northeast of Orlando. We had been working on obtaining approvals during the whole of 2008. At the same time we were marketing our condominiums.

By August, 2008, the list of people interested in buying our condos was more than the number of condos available. We patted ourselves on our backs and concentrated on the approval process.

Then came the financial meltdown from September through December, 2008. Unnumbered people lost more than 50% of their net worth. Those who were aggressive lost even more.

By January, 2009, we had all our approvals on hand and were ready to sign Purchase Agreements with the buyers. Then came the shocking reality: almost 50% of the people who had indicated an interest in buying in our community wrote to us saying that their personal financial situation had deteriorated so dramatically that they werel no longer able to afford a condo in our community. Their dreams of peaceful retirement in a home of their dreams had vanished all because of a financial fiasco perpetrated by wall street and some of the nation's largest banks.

Many of those who could no longer afford to buy told me that they have to change their retirement plans by putting their retirement off by at least another 5 to 10 years.

The point I am trying to make here is that by keeping all your money in the stock market and hoping to cash it in just before your retirement, may not work out to your advantage. The current market crash has forced many to change their retirement plans, or giving them up altogether and facing the fact that they will never realize their dreams of retiring and enjoying their golden years.

Another problem could happen when planning to keep the money in the stock market and hoping to cash it later to buy the retirement home. During periods of extraordinary real estate bubble, the prices of homes rises more than normal. The appreciation in the stock market may not keep up with the growth in real estate prices. So when the time comes to cash in your stock market holdings and buy a retirement home, the cash may not be enough to buy the home of your dreams.

This is where OSFP has a major advantage. An investment in the OSFP is not subject to the ups and downs of the market. It has a built-in method by which such obstacles can be overcome. Once you have purchased the square feet from the Company, you have the right to get that number of square feet regardless of where the stock market heads. This means you leave the worries of the market ups and downs behind you. The OSFP plan will ensure that your ownership of real estate is guaranteed regardless of market fluctuations or conditions.

This enables you as the owner of OSFP certificates to safeguard your right on the number of square feet that you have bought. For sure, real estate appreciation will happen over time and the value of the property will always grow. OSFP overcomes the risk of abnormal real estate appreciation in some years and also takes care of the maintenance and management of the property. This situation will continue until you are ready to take delivery of your dream home.

How does OSFP take care of the maintenance and management of the properties?

The OSFP Company employs various strategies to safeguard its position. It needs to keep on building homes equivalent to the square feet sold every year under the OSFP. However, not everyone buying the square feet will take delivery of their square feet. In fact it can be many years or even decades in some cases for the buyers to claim their home. This delay in claiming their homes by the OSFP buyers actually works in favor of the Company. Any new community or subdivision needs at least a few years for the preliminary site work to develop the land before the homes can be built. The Company uses this delay in claims by the OSFP buyers, to prepare the land for the construction and without having to invest any of their money .

One workable strategy is for the Company to build the square feet it sells every year so that it is not caught on the wrong foot if there is a real estate bubble. If real estate appreciation is normal, the Company can turn around and sell the homes that it has built for a profit and then rebuild the sold homes in the following year. It is a continuous process and cannot be delineated by years.

In those years when the real estate prices are beginning to unduly appreciate into a bubble, the Company can hold off selling the built homes and instead rent them out to those who want to rent the homes in the retirement community.

By doing this, the OSFP Company either sells the homes or rents them, and in either case makes a profit. This is both good for the Company and also the OSFP buyer, because when the Company becomes more profitable, their holdings in the Company become that much more secure.

During years of real estate bubble, the Company simply rents the houses they are building and collects the rent. This rent is used to pay taxes and insurances and to maintain the properties. The remainder of the money from the rent, after the expenses,are kept aside to subsidize the used houses which will be sold to a buyer once the bubble has ceased. I will explain what this means a little later in the book.

Whatever happens, you are going to get a brand new house equivalent to the square feet that you have accumulated. The real price of the property may cost you much more at that time compared to what you might have paid over the years. But the Company will guarantee you the home with the number of square feet that you have at no additional cost.

If you think about it, it is a win-win situation both for the Company and for you. The Company makes additional profits as you are enjoying the appreciation in the value of the real estate.

The next logical question you will have is: how can the Company selling OSFP manage to offer you a house at a far higher value than what you have paid for it?

It is a very logical question and one that should be asked by every buyer of OSFP. I am going to answer that question with all the possible answers. Finally I will also explain to you what would be the best way any Company can deliver on its promises.

There are many different ways that a Company can achieve this objective. An important aspect of the OSFP program is sustainability and credibility of the Company that is offering this plan. You have to ask the Company selling the OSFP as to how they ensure the availability of the homes when you demand them. If the Company is genuine they will only resort to the methods of ensuring that you will always get what is promised to you.

How did the companies selling consumer products become a worldwide brand? Of course I can cite here examples of companies like Procter and Gamble, General Mills, and many more. Another group of companies that come to my mind are Amway, Avon etc.

The second set of companies did this with the help of Multi Level Marketing or MLM. They had started their businesses with an affiliate program. Then they proceeded to build up a large and strong network of down lines under them which has grown globally. This is how they built their brand name and credibility in the market.

There are two ways of building a brand name. One is to establish a wide supply chain network using traditional outlets. This works for traditional products that are used by everyone every day. Things like toothpaste, laundry detergent, household products etc.

Another way is to establish a wide network or peer-to-peer marketing. This method was successfully employed by companies like Amway and Avon, to name a few.

The most successful Company under this method is the Tupperware Company. Did you know that Tupperware was never sold in any regular stores? They sold only through informal gatherings at people's homes. House parties were coordinated by leaders who got one person in a community to hold a party at their house where others were invited to watch demonstrations of the Company's products and purchase them. Of course, above all the quality of Tupperware products was exceptional. The quality combined with their aggressive marketing strategy made them a leader in their industry.

The same peer-to-peer strategy of marketing can be successfully applied to the concept of OSFP, in a much more innovative way. As far as consumer products are concerned, their durability is time bound, and their utility is restricted on a single aspect. Hence, regardless of the strength of the branding and network, their effect is sure to wane with time.

But this will not be the case with OSFP. This innovative concept will increase in popularity over time simply because it's a long term product. Moreover, the business potential and investment opportunity of the concept of OSFP is remarkable. It offers its buyers something that no consumer product can offer: the opportunity of encashment. You cannot buy a Tupperware or Amway product today and hope to sell them at a higher price later.

The additional advantages of OSFP are:

• It offers a unique scope of buying real estate in increments as little as one square foot at a time.

• There are no minimums to buy each year. It allows you to buy as many square feet as you want, depending on your financial situation.

• You can pay for the cost of upgrades in the home you finally buy, with some extra square feet you might have to spare.

• There is the prospect of earning commissions by introducing a new buyer into the chain of OSFP's MLM marketing network.

These features will make this concept exciting to everyone.

In implementing OSFP, the Company builds-up its credibility by carrying out all its business transactions through the Escrow Agent. The Company maintains strict control over the funds by keeping them with an Escrow Agent. Here, all monetary transactions are carried out by the Escrow Agent on behalf of the Company and the buyers. The Company never handles the cash from the buyers of OSFP. This is a very secure protection for OSFP buyers.

The Escrow Agent involved in this project needs to be authorized by the government for carrying out escrow activities so that everyone is sure about the legitimacy of the Escrow Agent. It should be the responsibility of the Escrow Agent to provide the GUARANTEE to the buyers. In the unlikely event of the Company goes out of business, the Escrow Agent will take the responsibility of returning the money or the homes to the buyers. They will do so by selling the real estate property titles held in Escrow on behalf of the buyers. At any given time, the Escrow Agent will hold title to all the built homes and all the cash.

This book will try to explain, in very simple language, the various steps in implementing the OSFP concept. It can be very complex, yet very simple. If the Company follows all the principles of fair business, as explained in the ensuing chapters, it will be a win-win situation both for the Company and the buyers of OSFP. The next few chapters will attempt to explain how this concept can be turned into a profitable venture.

I have tried to use a fictional Seminar setting to lay out the various elements of this concept. This makes for interesting reading without getting overwhelmed by the intricate details. Just be aware that this is a fictional seminar you will be attending in the next several pages!

Back To Top