Job + real estate = wealth half hour
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Transcript of Job + real estate = wealth half hour
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Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
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Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
Don’t Have the Time
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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
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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
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The Process Wheel
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Business Scalability is the systematic (process-oriented) ability to replicate or duplicate the desired economic outcome of an initiative over and over
again
Scalability
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Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
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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
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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
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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
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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
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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
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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
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Leading Your Success Team
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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
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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
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Basic Information
Income
Operating Expenses
Underwriting Proforma
Performance Metrics
PROFORMA
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Basic InformationPROFORMA
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IncomePROFORMA
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Operating ExpensesPROFORMA
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Performance MetricsPROFORMA
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Don’t Have the Time
Don’t Know How to
Don’t Appreciate the Value of a JOB
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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
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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