The Hartman Risk Evaluator for Real Estate Investing
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Transcript of The Hartman Risk Evaluator for Real Estate Investing
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The Hartman Risk Evaluator
By Jason Hartman
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Staying Power: The Key To Successful Investing
• Who knows someone who has made money in real estate? • Lost money? Why?• Investing is not about speculation (aka gambling) or a get-rich-
quick scheme• Investing is a legitimate process of creating value• Understand that anything without income / rent is NOT an
investment; but rather a speculation• Managing cash flow is key - Rule of thumb - Jason’s “RV Ratio™”
– Rent ÷ Value = “RV Ratio™”– $1,800 ÷ $600,000 = .3%
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The Hartman Risk Evaluator™
Land Value
Improvement Value
Improvement Value = Cost to Build +
Builders Profit
Factors Increasing Improvement Value•Environmentalism / building restrictions
•Industrialization of developing countries
•Raw materials cost
• 2004 Inflation 3.3%
• Steel and iron prices surged 34%, lumber was up nearly 17% and prices of gypsum, or wallboard, were up 20%
•Labor and energy costs
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Land Value
Improvement Value
$815,000
100%
$156,000
19%
$660,000
81%Land Value
Improvement Value
$1,300,000
100%
$ _______
___%
$ __________%
Risk Area
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The Hartman Risk Evaluator™
Land Value
Improvement Value
Improvement Value = Cost to Build + Builders Profit
Risk Area
![Page 7: The Hartman Risk Evaluator for Real Estate Investing](https://reader036.fdocuments.in/reader036/viewer/2022062704/55616f67d8b42a72118b46c7/html5/thumbnails/7.jpg)
Land Value
Land Value
Improvement Value
Improvement Value
Improvement Value = Actual
Replacement Cost + Builders Profit
The Hartman Risk Evaluator™Our Recommendation – Have a “Floor”
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Asset Deflation Monetary Inflation
Land Improvement Rent OverallMortgage
PaymentBalance
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Free Podcasthttp://www.JasonHartman.com/podcast/ or on iTunes
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A Long Term Relationship
The Jason Hartman Team Is Here To
Help
Meet With Any Of Our Investment Counselors
For A Complimentary One-On-One
Consultation
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Financial
Self-Defense In Uncertain
Times
Get Your Free Copy At:
JasonHartman.com
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“Don’t wait to buy real estate,
buy real estate then wait!”- Robert Allen
www.JasonHartman.com