Introduction to armchair investing
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Transcript of Introduction to armchair investing
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Off Market and Passive Real Estate
Investment Opportunities
Fourth Dimension Real Estate, Inc.David Campbell - CEO
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Begin with end in mind
My Philanthropy: helping other people live more abundant lives through hassle-free investments by giving the knowledge and support for our others to invest with
mental tranquility.
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Essential Resources
cash
cashflow
credit
equity
time
talent
strategic relationships
control of an opportunity
LIMITED
Yours is LIMITEDHarness other people = INFINITE
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Retirement Distributions at Any AgeNO early withdrawal penalty
Substantially equal payments for 5 years or until 59 ½ years old
Early withdrawal penalty EXEMPTION “IRS 72 t”
$500,000 principal x 20% ROI = $100,000 annual profit
$50,000 profit distributed and TAXED as ordinary income$50,000 income remains in IRA and is TAX DEFERRED
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Retiring Earlier Than You Thought Possible
Higher YieldsDistributions without depletion of principal
Avoiding the early withdrawal penalty before 59 1/2
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Rule #1
There is no such thing as a good property or bad property.
There is no such thing as a good investment or bad investment.
There is only appropriate and inappropriate ownership and timing.
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Your Role as an Investor
Active or Passive?
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Challenges of Individual Properties
✤ Individual Properties are Always Active ✤ even w/ professional property management.
✤ YOUR TIME = YOUR MONEY✤ High ROIs Require Use of Leverage
✤ Loans are Difficult to Acquire (Especially Retirement Funds)✤ Loans Requires Good Credit, Experience, and Cash✤ Low Interest Rates Require Personal Recourse
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Challenges of Owning Individual Properties
✤Potential for negative cash flow✤Potential for negative equity✤Potential for personal liability
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Group Investing
Several individual investors combining their financial resources into a single investment managed by a team of
professionals.
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✤ Deals Attract Dollars✤ Dollars Attract Deals✤ Together Everyone Achieves More✤ Bigger and Better Opportunities✤ Leverage
✤Other People’s Time✤Other People’s Money✤Other People’s Knowledge✤Other People’s Relationships✤Other People’s Credit
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Who Should Consider Group Deals?
✤ Busy People: “Hands Off” Investing✤ New Investors: Earn While You Learn✤ Retirement Funds: IRA, 401k✤ Those Interested in Bigger Deals✤ More interesting projects / Higher net margins✤ Active vs. passive diversification✤ Marketplace diversification✤ Product type diversification
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Advantages of Group Projects
1. Limited Liability2. Force Equity without Effort3. No Personal Guarantee on Loan4. Easier for IRAs than Individual Properties5. LESS TIME = LESS HASSLE6. Your manager has a vested interest in doing well7. Repeatable / duplicatable / scalable
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Deal TypesPassive Equity / Passive Cash Flow
Market Appreciation / Rental income from operations
Found Equity Purchase through strategic relationship or don’t wanter
Phased Equity Pre-determined rent increases Forced Equity Add Value through Construction / Rehab / Subdivision
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Investment Objective Varies Per Project
•Equity Growth 10-15% annualized
•Cash Flow 5-10% annualized
•Blend of Cash Flow & Equity Growth
•20% = 10% cash flow + 10% equity
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Ownership Structure
Members of LLCActive (Managing Member) Passive (Limited Member)
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“Main Stream” Sources of Passive Income are Not an Option
Bonds and CDs do not outpace inflation Stock market risky & unpredictable
(ERISA withdrawal/ manipulated) High risk of hyper-inflation
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WHY NOW?!?!?
Low Prices Low Interest Rates Flexible Sellers Looming Inflation Traditional Safe Havens for Passive Income
are Not an Option
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MARKET CYCLE
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BUY HERE
MARKET CYCLE
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MARKET CYCLE
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BUY HEREBUY HERE
MARKET CYCLE
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PASSIVE INVESTMENT OPPORTUNITY PRE-REQUISITES
AccreditedNon-accredited with pre-existing relationship
this is not a general solicitationyou’re here because you know me
You don’t need the liquidityYou can afford to lose your principal
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Investing Process
1. Sign NCND / Expression of Interest2. Receive email with PPM & document vault access3. Collect pledges & questions4. Paperwork 5. Fund investment contingent upon closing property6. Countersigned documents7. Periodic investor updates via email / webinar / phone8. Periodic distribution of dividends