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Thursday, January 15, 2015

Financial Leverage -- Your road to wealth


Using real estate to demonstrate the way to financial success and wealth using financial leverage.
It boils down to three very simple rules:
1. Find out where people are going.....people make price.
2. Get there first
3. Buy up parcels of land
Location--Location --Location  
Services, transportation--not in a swamp or environmental hazard area will provide the safest investment.

How do the RICH GUYS do it?
Financial Leverage...The Keys to Financial Freedom

To put it simple:
Take the smallest amount of money to control the largest value in a real estate investment. Take a duplex valued at $100,000. {This low figure is for demonstration purposes, of course property values tend higher.} if it is purchased with 10% down, that 10% is the financial leverage used to control not the $10,000, but 10 times as much, the whole $100,000.

****You don't have to be a tax attorney or an accountant to realize the government is subsidizing your ownership by allowing certain business expenses such as taxes, insurance, mortgage interest deductions and depreciation during property ownership. **** {Warning to understand the full federal and state government tax benefits a good tax attorney or accountant is Necessary. Better be safe and well informed now, than sorry later.}

Rental Income could well pay for the property, possibly furnish some cash flow at the same time. So What! Having renters buy a property is just the smallest benefit. Building up equity is not the end of the story.

INFLATION, APPRECIATION in property value provides the real wealth. Owning the property for only 10 years at the average inflation rate of 5% per year is not unrealistic. Purchasing in a good growth location will produce much more and at the end of a 10 year period check how much is the property worth?

Financial Leverage, the secret to wealth, using borrowed money to control the resource, in this case real estate, while the value soars. At 5% appreciation at the end of ten years your $10,000 original investment has grown five times. The investment is now worth $150,000 plus from the value of $100,000 controlled at the time of purchase.

The big secret to financial leverage is the small original investment used to control the largest amount of value. Other benefits accrue at the same time such as cash flow and equity build up, just more frosting on the cake.

No puzzle, no mystery...just using money plus time...and the correct pick of investments of course.     
APPRECIATION-LEVERAGE-TIMING



Basic:  Private Money for Investing  Click Here   
3 different ways to structure Private Money Deals
Learn More about "Private Money"   Click Here   
6 Ways to Structure Private Money Deals!

The lesson is to take the smallest effort to multiply and expand your resource.



REAL ESTATE INVESTING
                         

All material herein © '2007-2014 "Harvey Akeson Tucson Calling" Reprint right by permission: harvey@harveyakeson.com