Whether you want to be a landlord or not, you can still profit from every real estate deal.
Because in real estate, there are literally dozens of ways people can profit without being a landlord! I’ll be talking about the four ways any real estate property deal can generate income for multiple people – the 4 quadrants of real estate investing.
💬 Want to know more details about how all these four quadrants can benefit you? Schedule a chat with me at LayoverMoney.com/ChatwithMike.
WANT MORE VIDEO TIPS?
Hey, I’ve been in your shoes and I love sharing stories of my journey and how I got money working for me. I’ll show you how too!
JOIN THE GROUP!
My goal is to experience with you, what’s on the outside. By sharing what we learn, we can all do our part to keep doing what we love, flying, without the threat of loss of income.
Together we can fly because we are proud rather than fly to survive. Click the image below to join…
WHO’S MIKE AND HOW CAN HE HELP?
Pilots make excellent money and we love what we do. We are used to being in command and control in the flight deck. But it’s our financial future, managing cash flow, wealth and passive income that can often seem OUT of our control. It can be a risky gamble to put your money into retirement funds and the stock market. No one gets held accountable if there are significant losses. And so it feels like you run out of options.
After entering the world of Real Estate Investing, I’ve found a path to security, passive income and feel in control again.
Real estate investment stands on the solid foundation of homes and buildings, which is in high need. We have control of the tenants we have, screening them for reliability and long-term viability. We can take measures if someone isn’t working out. We create the system and safeguards for our investment, and all the income comes straight to us. Our return on investment (ROI) is high and steady.
As a pilot and real estate investor I am passionate about helping other aviation professionals fly towards financial freedom through investing in multi-family properties. Let me show you how to put your money to work for you.
Do you want to see your money multiply, creating financial freedom for your future? Are you interested in increasing your income through passive means? If so, book a briefing with me, and let’s talk.
Well, I’m here at Wells Fargo ’cause I’m saying goodbye, because after you hear what I have to say about the four quadrants of real estate investing, you too will never have to use a bank again.
All right, last week I gave this speech in front of 19 potential real estate investors, showing them the four ways every real estate property can produce money for not one but multiple people. I thought I’d share that with you today.
Now understanding this is critical for anyone who understands the potential of real estate investing and doesn’t want to be a landlord, or doesn’t have the capital just yet, or somebody who understands that by partnerships, you can have an unlimited amount of real estate investing potential. Now, after watching this one-to-one video you’re going to want to hear more detail. Or if you’re like me and it’s hard to think in compound interest, and you like to know real hard dollar amount, then book a chat with me at layovermoney.com/bookwithMike.
Whether you want to be a landlord or not, this is how everyone can profit with every real estate deal. By show of hands, how many of you have been confronted with a real estate investor asking if you’d like to participate in their deal? How did that make you feel? Indecisive? Unsure? Defensive? It’s really sad because Forbes magazine stated that 90% of today’s millionaires became millionaires from real estate investing. Now, does that mean every millionaire is a landlord? Absolutely not. I’m sure you can think of some off the top of your head, have nothing to do with being a landlord. That’s because real estate, there’s literally dozens of ways people can profit without being a landlord.
For instance, the paper boy can be part of the deal. He can be going out delivering his papers and call up an investment group and say, hey, I think I found something that might work out for you. That group can incorporate the paper boy into the deal. And now the paper boy is making a few dollars every month for the rest of his life. Now, if I told you the four ways real estate can profit multiple people, will that make you more confident the next time opportunity shows its head.
Now, let’s all go back two weeks ago, right? Thanksgiving dinner, everybody’s around the table. We just had our turkey. And now everyone is just staring at that beautiful pumpkin pie. Well, this is the pumpkin pie of real estate investors. These are the four ways any real estate property deal can generate income for multiple people. So let’s look at the first section of the pie. Appreciation. Now I’m sure everyone knows what appreciation is, that the value of something goes up.
But did you know that there’s five different types of appreciation? So the first one you’ll see here is found appreciation. Now found, I like to call buying cheap, right? If you buy something at a discount, the difference between the discount or the market value is your found appreciation. Forced appreciation, fix it up. You buy something, slap a coat of paint on it, update the interior. Obviously the market value has gone up. Three. Phased, phased, and on. Let’s say we decided to put a garage onto the side of the house. The market values increased by phase appreciation.
Now you’ll see and you’re probably wondering, why is inflated and passive red?
That’s because those two types of appreciation are market-driven, rather than what we can determine and influence as investors. Now inflated is what most people are probably seeing now. It’s based on supply and demand. You know now in Fort Collins, there’s a low supply of real estate up there and a high demand because everybody sees these low-interest rates offered by the bank. And finally passive. And this is the one I’m sure everyone is familiar with. And it’s based on time. On average, every real estate property around the country. On average, it generates about 5% appreciation every year.
Hmm, what else do we have in this pumpkin pie? Depreciation.
Now depreciation as you could see is a tax benefit. And I can go to details about this, but really it really depends on your financial situation and talking to your accountant. But I’ll give you in general. If you have a good accountant, you can generally expect between two and 3% annual return, not bad.
Section three, amortization. What is this?
Well, you just got to think, this is the bank. This is what we’re used to. If you were to go to a bank right now and get a loan for, let’s say a hundred thousand dollars, the rates are pretty low right now. If you were lucky, you’d probably get about 3% and that’s really good, right?
But boy, Aunt Sue’s at this table and you know she’s got a lot of money in the bank that’s only making 0.1% interest, and she really wants to give inheritance to her grandchildren. What if Aunt Susie helped us out, maybe she contributed a hundred thousand dollars to the deal. And let’s say this particular deal could generate 7% interest for her. Boy, she’s definitely happy. Her grandchildren are happy.
But you’re asking yourself, why would I spend 7% on Aunt Susie when I can go to the bank and get 3%? It’s because Aunt Susie is solving problems for us. One, now we don’t have to come up with a down payment. We don’t have to pay bankers fees, our closing costs are lower. And now we’re cash buyers, which goes back to appreciation. We can possibly buy the property at a lower price.
And our last one, cashflow. Cashflow is basically our rental income minus expenses. You’ll see over here minus DS, which is debt service. Now in this example, Aunt Susie is our debt service. So cashflow we’re paying Aunt Susie from this. And our end cashflow we’ll say for this example is $700 per month.
Now everybody’s just, all right, they’re getting ready for their piece of the pie, right? Well, Uncle Billy goes first. He takes that knife and he says, boy, I’m an airline pilot. I pay a lot of money in taxes. So that tax benefit, oh, that looks delicious. So he grabs his first piece of the pie. There he goes. But nobody grabs one piece of pie at Thanksgiving. We all know this. So Uncle Billy, he goes over here. He takes 20% of the cashflow and he wants 10% of appreciation. He could do that. He’s hungry.
Now let’s go back to Aunt Sue. Remember Aunt Sue wants a better life for her grandchildren. And first thing she grabs section three, amortization. Again, maybe she wants 10% of the cashflow and 10% appreciation. Absolutely. As you could see as just like Thanksgiving, as this pie goes around the table, everybody is benefiting, not just one landlord. So now the best part is when it’s your turn. Now, since you’re educated on the ways real estate can generate profit, I know what pieces I’m going to take.
Now, if you have any questions or would like more details about how all these four quadrants can benefit you, or perhaps you want to go through an example and see dollar amount, what can this provide you?
Feel free to contact me and book a call with me at layovermoney.com. Because just like my mentor says, the secret to wealth in it for net returns. It’s not about getting a whole piece of pie and just the five pies. It’s about getting a slice of thousands of pies without costing you a dime.