Job + real estate = wealth half hour
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Transcript of Job + real estate = wealth half hour
Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
Don’t Have the Time
People that do nothing
5 Personality Types
People that do nothing and over-analyze
People that do nothing and talk
People that simply do without any analysis
People that do nothing
People that do nothing and over-analyze
People that do nothing and talk
People that simply do without any analysis
5 Personality Types
The Blended-Business Personality
The Process Wheel
Business Scalability is the systematic (process-oriented) ability to replicate or duplicate the desired economic outcome of an initiative over and over
again
Scalability
Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
Facts: 6-unit apartment building Purchase Price = $360,000.00; Down payment = $72,000.00; Loan = $288,000.00;
Interest = 5% amortized over 25 yrs
Cash Flow
LeverageFacts: 6-unit apartment building
Purchase Price = $360,000.00; Down payment = $72,000.00; Loan = $288,000.00; Interest = 5% amortized over 25 yrs
Tax BenefitsFacts: 6-unit apartment building
Purchase Price = $360,000.00; Down payment = $72,000.00; Loan = $288,000.00; Interest = 5% amortized over 25 yrs
Total Revenue (Rents Received) = $67,400.00Vacancy Loss = $2,700.00Economic Loss = $2,950.00Adjusted Gross Revenue = $61,750.00
Operating Expenses = $24,700.00Net Operating Income = $37,050.00Mortgage Payments = $20,203.00
Cash Flow = $16,847.00
Cash Flow
Purchase Price = $360,000.00
Bank Financing = $288,000.00Owner Down Payment = $72,000.00
Cash Available = $72,000.00Choice = Stocks/CD or Rental Real Estate
Fair Assumption = 10% return on value for both the Stock/CD or Real Estate
Return: Rental Real Estate$360,000.00 x 10% = $36,000 return
+ $72,000.00 original investmentYear 1 Cash Out = $108,000.00
Return: Stock/CD$72,000.00 x 10% = $7,200.00 return
+$72,000.00 original investmentYear 1 Cash Out = $79,200.00
Leverage
Benefit We Received = $16,847.00
(cash flow) + $5,938.00 (principal
reduction) = $22,785.00
What we are Taxed on =
$26,141.00 - $14,265.00 =
$11,876.00
Tax Benefits
Building Value = $360,000.00 -
$60,000.00 (Building Value = Purchase
Price – Land Value) = $300,000.00
Depreciation of Building Value =
$300,000.00/27.5yrs = $10,909.00/year
Potential Tax Liability = NOI = $37,050.00
Depreciation Deduction = $37,050.00 -
$10,909.00 = $26,141.00
Mortgage Interest Deduction =
$14,265.00
Leading Your Success Team
Conventional Way
Showing
Showing
Showing
Showing
Showing
Search Bank
Financing
Bank Decides Title
Company
Shop for Insurance
Self Manage
Find the cheapest
Property Manager
The Buying Process
Offer/Reject
Offer/RejectOffer/Reject
Search Bank Financing
Search Bank
Financing
Offer/Accepted
Job + Real Estate = Wealth Way
Perform Job + Real Estate = Wealth Proforma
RE Agent – engagedBanker - engagedIns Co – engagedPr Mgr - engaged
Submit OfferInspect Property - insurance hat - deferred maint - lease expir units
Review requested documentation
The Buying Process
Basic Information
Income
Operating Expenses
Underwriting Proforma
Performance Metrics
PROFORMA
Basic InformationPROFORMA
IncomePROFORMA
Operating ExpensesPROFORMA
Performance MetricsPROFORMA
Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
1. Your JOB offers you the Dignity, Ability & Stability (DAS)
2. Be the Entrepreneur at Work
3. If you Love your JOB – keep it!
4. Layout your Assets
5. Show them the Money
5 Ways to View Your Job
5 Personality TypesThe Process WheelScalability within your Process
Leading Your Success TeamCash FlowLeverageTax BenefitsThe Buying ProcessPerform Property ProformaManage your Property ManagerSecure a great Insurance PolicyObtain aggressive Bank FinancingHave your Real Estate Agent show you properties that make sense 5 Ways to View your Job
Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB