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How to Live Your Best Life

How to Live Your Best Life

Cars, Boats, Vacations, Houses, and Dining out? Yes. Working hard? Not so much. Can you accomplish both, possibly if you have the right plan? Exactly what is that plan then and how do I get started, how long will it take and when do I get the vacation to Belize and the Ferrari?

 

If you’re what the marketing gurus call a “millennial” or “Gen Y”, (those born from the early eighties and into the nineties, sometimes called the echo generation) then “having it all” may be a major goal of yours. After all, you’re smarter than your Baby Boomer parents’ right, and certainly not going to make the same career and investment (mistakes) decisions they did. Well, they did do a couple of things right. One, they had you and two, they had real estate and with any luck that real estate will eventually be yours or at least shared between you and your siblings. Chances are good also, (because of time) that there is very little owing on that real estate so you’re going to have some equity to spend. Alright, here comes the vacation. But wait. You get the vacation, buy a new car and some other toys and what have you got, some memories and photos of a trip, some depreciating assets and no more equity. Too bad your parents didn’t have more real estate.

 

So here’s a thought. That equity that you have (this could also be any savings you’ve managed to hide away) could be leveraged. You know about leverage. It’s where you use a smaller amount of money to get a bigger amount of money. The real estate example is, you make a down payment on property and the bank gives you the rest via a mortgage. This isn’t math, its arithmetic. An Example:

 

    • Selling Price of Property                $ 200,000.00
    • Down Payment (25%)                    $ 50,000.00
    • Bank Finances                                 $ 150,000.00

 

It`s Simple. You just took $ 50,000 and turned it into $ 200,000. Not bad but, oh yeah, you have to make monthly payments on the banks money, and what about property taxes, condo fees (if it`s a condo) and maintenance and repairs. Well, what if you just rented out the property? Here’s what that could look like:

 

    • Monthly Rental Income                $ 1300.00
    • Monthly Mortgage Payment          $ 709.00
    • Monthly Property Taxes                 $ 120.00
    • Condo Fees                                      $ 225.00
    • Repairs and Maintenance              $ 100.00
    • Property Management                      $ 97.50 (7.5% of gross rent We added this to make it hassle free)
    • NET                                                       $ 48.50

 

Big Deal, Hey! $48.50 barely pays for dinner. However, if you look at what you have after 12 months, it gets better. $48.50 x 12 = $582. And, you reduced what you owe the bank by almost $5,000.00 over those 12 months. Plus, your property probably increased in value. Even at 2% increase that’s another $4,000.00. So close to $10,000 in the first year and you still control the property. That’s a 20% return on your investment. In five years, you’ve recouped your investment and you still have the property. Can you think of another investment where somebody else pays it off for you?

 

So, are you smarter than your parents? This is what we do, everyday, at Legacy Wealth Income Properties. And we’ve watched and are watching as baby boomers, generation X and millennials build wealth, and the lifestyle they want (including the cars, boats and vacations) with just what we showed you above. If you`re ready to go for it all then we should talk. We have solid real estate investment opportunities that will get you on the path to living your best life and working smarter, not harder.

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