The Equity WellThe Equity Well

Presented by Robert RatimorszkyPresented by Robert Ratimorszky

GSF Mortgage GSF Mortgage

Expanding Your Business

According to Jay Abraham (corporate advisor to Microsoft, Merrill Lynch and Century 21), there are only 3 ways to grow your business

• Increase your number of clients • Increase your average sale per client• Increase the number of times your clients

return and buy again.

Increase Your Average Sale

Presenting your clients with unrealized opportunities is what identifies YOU as the expert, and their trusted advisor.

Client’s Mortgage Mentality

The traditional “Rules” of homeownership

• Take out the smallest mortgage you can afford

• Pay it down whenever you have extra cash

• Pay it off as soon as possible.

• Don’t involve your advisor Why does this “Rule”

exist? Is this sound advice?

Client’s Mortgage Mentality

View their equity as a “savings account”

Perceive it as easily accessible

Understand their mortgage as a

“loan against their house”

Net Result

Today’s Equity Truths

Job CrisisGainfully Employed

Poor HealthGood Health

Unexpected DebtLow Debt Load

Difficult to access when:

Easy to access when:

If your clients have sudden health issues, lose their job, or have some other sudden crisis, accessing this equity can be expensive or impossible.

In other words, when they need it the most!

Dead Equity

The rate of return of home equity, under the best of situations is 0%

If the housing market experiences even a slight pullback, that rate of return turns to the negative.

How hard would you have to work to find your clients a better return on investment than that?

+

0

-

The Equity Well Vision

The days of mortgage-burning parties are over.

Having an offsetting asset that earns more than their mortgage costs enables your clients to outperform investors with no mortgage debt.

The Equity Well vs. Traditional Thinking

Cash

Reserves

Car Debt

Credit Card

Debt

Liquidity

Home Equity

Traditional

Better

The Equity Well Timeline

Fund PaymentBucket`

Refinanceto access

additional equity

Home appreciates

over time

Liberate a large quantity

of income

Fund saferinvestments

with an actual ROI

Step Two: Payment Bucket

That equity is placed in a “Payment Bucket”–An easily accessible savings account from which their mortgage payment is automatically deducted.–Under ideal situations, this can remove the burden of paying their mortgage payment for 2 years.

If there is some “leftover” equity to be realigned, it would be best distributed based on their individual goals.

–Reduction of “Bad Debt”–Investment property

These options either create additional sources of income, or liberate existing income previously bound to service debts.

Step Three: Liberated Income

The income that was previously locked up in funding the mortgage payment is now liberated, an effective pay raise of tens of thousands of dollars per year for your client.

Let’s look at the numbers:

Average Family with an income of $70,000

Net pay of ~$4100 per month

Liberate $1000 of that income previously servicing the mortgage

Over two years, this family would have an additional $24,000 diversified among multiple higher yielding and safer investments.

Step Four: Liberated Income Reallocation

You are now able to conservatively reallocate this Liberated Income – Retirement / College

Funding– Disability Insurance– Etc..

Action Steps

Calculate the Impact.– If you could free up tens of thousands in additional

investable income for your clients, what would that mean to your bottom line?

– What would that mean for your client? Formulate a plan.

– Together we can identify clients who have dangerously unbalanced assets

– Coordinate our marketing efforts Execute.