Archives For Real Estate

I remember attending my first real estate seminar and having that “aha” moment when I was able to understand how I could actually achieve financial freedom through real estate. At that time I was a broke college student with a negative networth and yet I was so excited and lit up to start investing in real estate.

aha titleMy passion for financial education has only increased, not only for myself as a student, but also as an educator & coach.

I started teaching courses on how to invest in real estate just a few months

after I purchased my first investment property.

Of course, I could only teach someone how to buy their first investment property as that was all I had done at that point.


I loved teaching that “Real Estate 101″ weekend course.


It was so fulfilling to see the students go out and take action and make the leap and become real estate investors.


And it was also really frustrating to see the other students, who had access to the same information not take any action.


I decided to reach out to the non action takers and ask why they didn’t take action.


I got a variety of responses but basically it boiled down to fear…fear of making a mistake, fear of losing money.


To
overcome this fear some students asked me to work with them 1 on 1, hold their hand and walk them through their first deal.

This was the birth of my initial real estate coaching program.


Out of all of the content and programs I have created, the
1 on 1 coaching program has always been my favorite.

I love being able to work intimately with other like minded people who have a strong commitment and desire for financial freedom.


Being able to work with individuals, one on one, I get to see them overcome obstacles they once thought were insurmountable. I get to witness them taking intentional action that is in alignment with
their dreams. I get to see them face their fears head on and have the courage to move forward even when they want to give up. I get to watch them transform and become the person they want to be, that produces the financial results they are looking for.

Being a catalyst for this process really is a privilege and is one of the things I am most grateful for
in my life.

Next week I will be releasing a 4 part training series designed for you to get the year started off right so that you can achieve your real estate goals in 2013.


This training series also gives you a glimpse into The REI Accelerator, which is my 1 on 1 coaching program.


At the end of the 4 part training series, for those of you that are interested in working 1 on 1 with me there will be an opportunity to fill out an application for the REI Accelerator.


And for those that are not interested, you
will still get tremendous value from the free 4 part training series.

If you haven’t signed up for our newsletter/mailing list yet make sure you do, so you receive the free training next week.  


There are many different ways to invest in real estate and many reasons why individuals choose to invest in real estate.

You can often tell why an investor chooses to invest in real estate by how he invests and the assets he acquires.

In this post I’m going to share with you our philosophy on investing in real estate and specifically why we invest in real estate the way we do.

There are 6 primary reasons why we invest this way and more importantly it’s the synergy of these 6 reasons that make it an extraordinary investment.

Why We Invest In Real Estate
1. Control – we can directly improve the value of our investment
2. Demographics – we provide a solution to a problem
3. Tax Benefits – we make money and pay zero taxes or very little taxes (less than 5%)
4. Cashflow & Appreciation – we receive steady cashflow and capital gains appreciation
5. Leverage – we use leverage (the bank will give us 7 or 8 dollars for every 10 we need)
6. Infinite Wealth – we  protect our principal and recoup our initial investment in 12-36 months

Control
We invest in distressed real estate assets where we control the asset. With control ,we don’t have to rely on outside sources to increase the value of the asset. We are able to directly add value by making improvements to the property which enable us to increase rent rolls and maximize the value of the asset.

Demographics
We only invest in real estate assets where demographics reveal a problem that we are able to provide solutions for. For example, one favorable demographic we have been providing solutions for is the Student Housing demographic. Colleges and universities can only house 30% of its current enrollment and over the next 10 years 80 million echo boomers will be turning the age of 18 and ready to enter college. Clearly the demographics show a current need for housing college students and that it will remain a need for many years to come.

Tax Benefits
One of the best tax advantages of owning real estate is the phantom depreciation you are able to write off each year. On paper, you get to depreciate a portion of the building each year, as an expense and reduce your taxable income. In our case where we are acquiring properties that actually produce positive cashflow and make money, we are able to receive all or a portion of that money tax free, thanks to the phantom expense of depreciation.

Cashflow & Appreciation
Newly renovated buildings and effective property management combined with favorable demographics is what allows for both steady cashflow and appreciation. By renovating the properties and bringing them up to their most efficient use we are able to increase the cashflow as well as create appreciation, as opposed to hoping for appreciation.

Leverage
The beautiful things about real estate is that banks like lending to real estate investments and typically lend 70-75% of the value of the asset. Leverage allows us to maximize our cash on cash returns while reaping 100% of the depreciation expenses and appreciation benefits.

Infinite Wealth
We structure our investment to produce the results of the Infinite Wealth Triangle. The end goal of our real estate investments is to receive an infinite return on our money. We acquire the asset, improve the building, raise the rents, increase the value and then re-finance and recoup the initial cash investment. Once this cycle is complete the end result of the investment looks like this.
1. 20-30% Equity in the deal
2. Cashflow coming in every month
3. All partner capital returned = None of our capital in the deal = infinite return of investment

Infinite Wealth Process

November 29, 2012 — Leave a comment

The Infinite Wealth ProcessTM was designed to give you greater clarity & confidence when it comes to your wealth and your money. It’s a process that allows you to be in control, create extraordinary returns with your money and time and use the tax laws to keep as much of your money as possible.

assets

The Infinite Wealth ProcessTM has 4 phases:

  • Asset Criteria – Infinite Wealth TriangleTM
  • Asset Acquisition
  • Value Maximizer
  • Re-Finance

Here is how we have specifically applied the Infinite Wealth ProcessTM to real estate:

Asset Criteria – We start with the end in mind, making sure that our asset will produce the results mentioned in the Infinite Wealth Triangle. For our real estate deals we want to make sure that the property will create cashflow and that we have a minimum of 25% equity in the deal. We use the Investing In Cashflow Tool to help us analyze our real estate deals to determine whether or not the deal fits within the Infinite Wealth Triangle.

Asset Acquisition – During this phase we deal with everything that has to do with acquiring the asset. This will include everything from simply finding a deal, to putting it under agreement, doing our due diligence, arranging financing all the way through closing on the piece of property.

Value Maximizer – The purpose of this phase is to do what we can to maximize the value of the asset. Often times with real estate we are able to maximize the value of the asset by increasing income. This can include renovating the building and putting in tenants at market rent. It can also include adding coin laundry facilities or other amenities that will enable you to increase your Net Operating Income.

Re-Finance – Once you have maximized the value of the building, you should have created enough additional value that you can re-finance and receive your initial capital contribution back.
Now you own the asset, are receiving cashflow every month, have equity in the asset and don’t have any of your own money in the deal.

As if that weren’t good enough one of the things I love about real estate are the tax benefits you receive.  When you combine the Infinite Wealth ProcessTM  with real estate, we are able to receive tax free money every year, thanks depreciation.  I will get more into the tax benefits of real estate in a later post.

In the meantime, would love to hear how/why the Infinite Wealth ProcessTM would be helpful or not helpful to you in your current endeavors.   Leave your comments below.  Feel free to share your struggles as well as your successes.