The 10 Fundamentals to Make YOU a Property Mogul

The Property Accumulator System: How to retire from property investment in 10 years on $100,000+ per annum

Why Australians Retire Poor

How to Pay off Your Home in 10 Years or Less

6% interest rate$30K per annum in interest$600 p/m in principal

0 15 years 30 years

$500k

20%

Interest only$150 p/w

Cash flow for investing

IP1 $500K 10 years $1M

IP2 $500K 10 years $1M

Home $500k 10 years $1M

SELL I.P’s TO PAY OUT HOME:$2M - $1.5M = $500KCGT = approx $250KCash left over = $250KOwn home = debt free

#RentVesting VS Owning

#RentVesting: $600 p/w Owning: $1M

$600 p/w X 52 = $31,200 p/aCash Flow= $27,800IP1= $500K/$5000 p/a holding costsIP2= $500K/$5000 p/a holding costsIP3= $500K/$5000 p/a holding costs

Cash flow difference=$27,800-$15,000=$12,800

Portfolio Value=$1.5MOwn 3 properties$500K more compounding p/aSaving $12,800 p/aSignificant cash flow to invest and enjoy life

Interest 6% ($900K debt/10% deposit)$900K x 6%= $54K p/aRates,Water,Insurance= $5k p/a (cons)$59,000-$31,200= $27,800 DIFFERENCE

Cash flow difference=$27,800-$15,000=$12,800

Portfolio Value =$1M

How to use Equity to Invest in Property Without Putting your Home at Risk

How to use Equity to Invest in Property Without Putting your Home at Risk

Monster Tax Returns

Monster Tax Returns1. No I.P Roger earns $100K Tax $27K2. With I.P Roger earns $100K Rental Income $420 p/w-$21,480 p/a

Total annual income = $100k + $21,480

Land $200K = $121,480 Tax $27kI.P $400K House $200KInterest Rate 6% = $24K Interest p/aProperty Costs= $5K p/a (property management, rates, insurance, water)Total Deductions= $29K

1 Structure: 90% of house costs= .9x200K=$180k@2.5%=$4.5K p/aDepreciation= 2 Fixtures and Fittings:10% of house costs over 10 years= $4K in first year

= $8,500 in first yearTotal Deductions= $37,500 in year 1

Rogers new taxable income: total income - total deductions ($121,480 - $37,500) = $83,980Tax payable on $83,980 = $20,700 | Tax paid on $100k income = $27k

Tax refund = Old tax paid – new tax payable$27k - $20,700 = $6,300 Tax return!

Why Build New?

Tax and Depreciation = $70 pw

No maintenance = $30 pw

Superior rental returns = $100 pw

Tenancy appeal = no vacancy > lower h/c’s

Minimising stamp duty = less to get in

Adding value to land = equity gain

Creating the developers margin = equity gain

Leverage and Duplication• Property is the only asset class that allows you borrow 10x the amount you have

to contribute yourself

• You should only have to save up for a deposit once. Your future deposits should be funded by growth through your properties

• The idea is to leverage or borrow as much of other peoples money (the bank) as possible to make your cash/equity go further

• Once a property grows in value you use that equity growth as a deposit for the next property. Now you have 2 properties growing in value and after time you’ll have 2 more deposits available to buy 2 more properties. Continue to repeat this process

• This is a very powerful & effective

system to build a successful portfolio

Leveraging and Duplication

Diversification

Sydney Melbourne Brisbane Perth

$ $ $ $ Spreads risk by not putting all your eggs in one basket/market Doesn't’t have you sitting around for 3-5 years for your properties to grow in value Allows you to ride the capital growth wave year on year Helps you purchase properties at a faster rate Minimizes land tax issues Gives you a tax deduction when you want to holiday Australia wide!

Compound Growth Examples

Apple Seed Yr1 Apple Trees Yr2 Apple Orchid

Invest $100 @ 10%= $110Yr 1

Invest $110 @ 10%= $121Yr 2

Invest $121 @ 10%= $133.10Yr 3

Yr1 Yr 3 Yr 5 Yr 10

$450K @7% = $31.5K growth Yr 1

$5M @7% = $350K growth in Yr 1

Mass Wealth

• People think you have to sell your properties to make money and profit –this is UNTRUE

• To build a successful portfolio you need to be accumulating properties

• Buying properties and holding them in a portfolio for the long term is where real wealth is created

• Rent continues to rise creating additional cashflow in day to day life whilst your portfolio of properties grows year on year

• Wealth is measured by the assets you hold not your income

Mass WealthMass Wealth Scenario 1

Garth chooses to sell his properties after growth within 1 year and makes $100k per sale.

He then pays capital gains tax of approximately $37k based on an income of 100k. Therefore his net result is $63k profit.

He repeats this process 10 times over 10 years resulting in $630k cash in his bank account.

Garth after 10 years chooses to purchase 1 of his properties outright which produces $30k a year in rental income and 7% growth per year ($630k x 7% = $44k)

Mass Wealth Scenario 2

Kym also earns $100k a year and chooses to hold her properties after growth and uses the equity each year to buy another property.

She repeats this process for 10 years and ends up with a property portfolio worth $5 Million and with $3 Million debt.

She has paid no capital gains tax to date.She also receives $30k a year in tax refunds by holding property.

Kym also receives rental income of $50k a year allowing her to choose whether to work or not.She also receives compound growth on her portfolio each at 7% per annum meaning she achieves $350k of equity growth in year 1 that increases 7% every year.The Conclusion

Kym has over 3x net wealth than Garth ($2million vs $630k) Kym has over 2 ½ x the rental income than Garth (80k p.a. vs $30k)Kym receives an average of $20k per year over 10 years in tax refunds ($200k total)Kym achieves equity growth of 8x more than Garth p.a. increasing year on year ($350k vs $44k)Kym’s ‘Buy & Hold’ strategy can be repeated through Superannuation. Garths can’t.

Property Development

Existing 3 bedroom house

Driveway Garage

700+m2 block

Subdivide into 3 lots and construct two additional dwellings and sell on completion or hold

Existing 3 bedroom house

Driveway

G1 G2

G3

New Dwelling 2 New Dwelling 3

3 individual titles with full new service connections and the ability to sell off each property individually to maximise profits

Property Development

Existing 3 bedroom house

Driveway

G1 G2

G3

New Dwelling 2 New Dwelling 3

Original Purchase Price: $450-$650k

$380k GRV $410k GRV $410k GRV

*figures are estimates only and vary slightly between projects. This example is based on $450k purchase price.

$350 per week rent $400 per week rent $400 per week rent

Gross Realised Value = $1.16mTotal Debt = $854kProjected Profit = $306k

Project timeframe: 18 months approximately not including finance and settlement for initial purchase

Average development has positive cashflowafter all costs by $10k per annum

So if you combine…

The 10 fundamentals of the Property Accumulator System Buy and Hold formula to lay a solid foundation for compound growthWITH

Property Development StrategyYOU CAN SEE HOW YOU CAN EASILY RETIRE ON

A bare minimum of $100,000 per annum in the next 10 years!!!

So how do we start?

Contact me via the following:

• Email: Sash@theateampg.com.au

• Mobile: 0431 277 853 / 1300 283 267

• Website: www.theateampg.com.au

DISCLAIMER

The information contained in this document is not financial, legal or taxation advice. We encourage you to seek independent advice from a

qualified professional. Should you require an introduction to a qualified professional we are more than happy to assist.