“Ninety percent of all millionaires become so through real estate”

Andrew Carnegie

Why should you choose real estate as your vehicle to build wealth??

Simply put, it’s one of the most solid, predictable means of building wealth available.

The main factors in building wealth through real estate come down three major factors that we refer to as the triangulation of wealth building in real estate.

Triangulation.Of.Wealth.Building

Consider the data below, built on the assumption of a $350k purchase, with 20% or $70k down payment, an 80% LTV first mortgage of $280k.

  1. Equity Pay Down – One of the most predictable ways to build wealth is through paying down the mortgage.The trend in the following chart shows how equity builds over 30 years.  You start out with the 70k that you originally put down on the home, and after 30 years you have the mortgage entirely paid off.This view does not assume the value of the home increases over time, which is captured below in the appreciation calculations.Real.Estate.Equity.Paydown
  2. Cashflow – Monthly cashflow is calculated as your total monthly revenue (i.e. rent) minus all expenses.Typically (but not always) this would include some budget for vacancies, maintenance and repairs.Real.Estate.Cashflow
  3. Appreciation – defined as how quickly real estate values are increasing in a given year.  This is not something that is a given.However, through picking the right markets based on solid market drivers, some appreciation is something to factor into the model.  As you can see, we use a very modest 2% appreciation calculation in our model:

Real.Estate.Appreciation

Looking at a five year view of the same data, it shows very strong returns, and wealth coming from all three areas of the triangulation of wealth building.

Real.Estate.Investing.ROI.v3

Profit.Breakdown

 

What makes us different?

In combination with the triangulation of wealth building cited above, we bring expertise to the table in terms of forcing appreciation through renovations and buying properties that are not available to the general public.  Please contact us to learn more about these two differentiators and how we use them to secure our products for our investors and ourselves.