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Api Presentation Transcript

  • 1. Welcomes You… We help Grow Your Wealth
  • 2. Who is Affordable Property Investments?
    • Affordable Property Investments is a company owned and operated by Rohan Birmingham.
    • My mission is to ignite the drive and determination within all the people who’s lives I have the privilege to touch.
    • My objective is to get people to take massive action; to shape their destinies towards the direction of their dreams and achieve their goals.
  • 3. Who is Rohan Birmingham?
    • Grew up in Government Housing
    • Ex Chippy and Builder for 10 years
    • 9 years with James Hardie
    • Worked within the property industry as a land wholesaler with LJ Hooker for 5 years with over 700 sales
    • Married for 17 and a half years with 2 children
    • Owns a substantial amount of investment properties, as well as own home, 3 cars, 2 bikes, a boat and a jet ski
    • TODAY - Lives a semi retired lifestyle
    • Rohan’s goal?
    • To have a network of people who are actively investing in
    • property, this will allow us to create buying power and
    • address the affordability issue in property ownership.
  • 4.
    • We are a network of experienced investors, property professionals and finance specialists.
    • Our goal
    • Is to create wealth for our members, keep them informed with the latest information & provide knowledge, services and opportunities to our clients.
    • We aim to create wealth as individuals but collectively share our tools, research, knowledge, information & use the group to help each other succeed.
    Who is Affordable Property Investments?
  • 5. What do we do?
    • We are “ Introducers”.
    • We are not financial planners
    • As “Introducers” we “Introduce” people to Property investment.
    • … and then “Introduce” them to “ Professional People ” and Services
    • Thus providing you with a team of professionals to assist you in growing your wealth.
    We help Grow Your Wealth
  • 6.
            • provides you with the benefits of:
      • Professional Property Research
      • Education
      • Tennant support and Property Management
      • Quality control & Quality Properties
      • Correct financial structure
      • Wealth Strategies
    • We support you through the whole process
    Affordable Property Investments Support System
  • 7. What are our Investing Rules?
    • We follow our rules. We are investors in our own right
    • We are always learning & researching the market
    • Plan the work and work the plan
    • No surprises – Communication is the key
    Long term capital Growth Components of a Solid Investment Foundation Cash Flow Education
  • 8. How do we get paid? Our Commissions are paid by the Developers. So you Don’t Pay us Anything
  • 9. What is the reality out there?
      • Media Information
      • Not enough cash flow
      • Lack of knowledge
      • Superannuation Losses
      • Real Estate Agents & brokers giving advice?
      • Advisers – are they licensed to provide advice?
      • Procrastination
  • 10. The key to financial success: If you want financial freedom, the key is to find someone who has it and duplicate what they do!! Do not “work for money”, have your money “ work for you”.
  • 11. Why do you need financial freedom?
  • 12. FACTS
    • According to the Australian Government Bureau of Statistics, more than 30% of Australian retirees on the pension have less than $1000 in their bank account
    • 26% of the Australian population will retire in the next 20 years
    • Less than 20 % of Australian baby boomers have adequate superannuation and private insurance cover to fund their health care in retirement
    • 60% of the people surveyed did not have private health insurance and many simply did not know how they would pay for medical care in their old age
    • SCARY, HUH?
    Did you know…
  • 13. Building Towards the Aged Pension
    • 95% Do This ….
    Save money Spend money Save a small deposit for a home Forever paying off your home Small nest egg Small Pension Working Years Retirement Years
  • 14. Income of Retired Persons – 65 and over Source: Australian Bureau of Statistics - Census 50.5% $3,000 - $8,000 29.1% $8,000 - $12,000 8.8% $12,000 - $16,000 3.8% $16,000 - $20,000 3.0% $20,000 - $25,000 1.7% $25,000 - $30,000 1.6% $30,000 - $40,000 1.4% $40,000 + Percentage Retirement Income
  • 15.  
  • 16. RETIREMENT CALCULATOR Capitial Required To Provide Desired Retirement Income. Investment Return @ 4.5%. Inflation @ 2.5%
  • 17. What are your options?
    • Keep doing what you are currently doing?
    • “ Because they way you are today is a direct reflection of your “ACTIONS”
    • OR
    • Team your self with people who are doing something different, and start doing what the wealthy are doing?
  • 18. FACTS
    • 10% of the population ( the “Wealthy” )
    • increase their tax deductible debt, they invest in capital growth and never sell.
    • They do not invest in consumption and lifestyle
    • They understand the strength of leverage and gearing and know the difference between good and bad DEBT.
    • This is a Generational Problem – Unrelated to income. Most Lottery winners end up worse off than before their win.
    We Help Grow Your Wealth
  • 19. How Most People Save
    • Income Minus Expenses -
    • Save what’s left, right?? $$$$$$
    • The Problem usually is, NOTHING IS LEFT !!!!!!
    • Solution… Borrow more money and get deeper into debt….? Usually a credit card or a small loan….?
    • NO!
    • According to ABS Statistics
    • The Average Australian spends
    • 121% of their wage! Source ABS
    We Help Grow Your Wealth
  • 20. In order to have a stronger financial position, you must strive to understand what 90% of Australian’s population is doing – then do the opposite. 90% of the population have a JOB or have bought a JOB (a small business) and live below or just above their income. They Struggle To Save Break the Pack
  • 21. You Need a Plan Life is not Subtractive, it is Additive Goal Plan Execute your Plan Measure Correct Re-execute your plan Remember: Determination gets you what you want
  • 22. Stop Pimping your Ride!!!!!!!! Financial Planners recommend that you set aside between 5% and 15% of your Gross Income for Your Future If you spend every dollar you make, you will never get want you want $ Your Gross Income 5% 15% ?
  • 23. PLEASURE OR PAIN If we gave every Australian $10,000 today, in one years time:
      • 80% would have spent it
      • 16% would now have $10,300
      • because they put it in the bank
      • 3% would have made 100% or $20,000
      • 1% could potentially make up to $1,000,000
    Two Emotions Control Your Life's Decisions
  • 24. Financial Intelligence 101
    • Everyone has a balance sheet and income statement to their lives.
    • Assets – Liabilities = Net worth
    • Definition of Assets and Liabilities:
    • Assets feed you
    • Liabilities eat you
    • Your Net worth is what is left after you have paid all your bills.
    • If your Assets exceed your Liabilities your net worth is a positive
    If your Liabilities exceed your Assets your net worth is a negative … This is a bad thing!
  • 25. Financial Intelligence 101
    • Financial Freedom is not how much money you make, it’s how much you keep.
    • The best way to determine your position is to count the number of days, weeks or years you can live without having your job.
  • 26. Why Residential Property?
    • High Capital Growth
    • High Security
    • (Real Property)
    • Accessible
    • Tax Advantages
    • Income Producing
    • Regular Cash Flow
    • Leverage and Compounding
  • 27. House Values 1985 home loans 13% 1989 home loans 17% 1991 First Gulf War rates fall to 7% 2000 GST introduced and five interest rates rises 2001 Second Gulf War
  • 28.
    • Car/Boat Super Gearing/Property
    What the 10% know about Benefits of Leverage & Gearing 300,000 3 0,000 3 0,000 Year 1 Year 10 15 ,000 6 0,000 (2 7 0,000) 3 0,000 (cash or available equity) 600,000 (2 7 0,000) Year 20 5 ,000 12 0,000 1,200,000 (2 7 0,000) Source: Chan & Naylor 3 3 0,000 9 3 0,000
  • 29. How does Compounding let you retire?
  • 30. Investment Properties are like Sheep
    • Look after them, let them mate and duplicate. One becomes two, two becomes four and four becomes eight, let them compound in growth.
    • Wait for the wool to grow, shear your sheep and live off the processes of the wool.
    • Never kill the sheep and try to make money from their meat.
    • Real estate is not a get rich quick system, it is a get rich slowly process.
    • Start small and you grow your wealth. Real estate is a vehicle that you look at for a minimum of 10 years, you never sell. You use the equity.
  • 31. What is Compounding? Statistics show quality properties double in value every 7 to 10 years Value $300K Value$600K + 10 Years = EQUITY $300K
  • 32. The more properties you have, the better the Compounding After 10 years properties have doubled in value, to $2,100,000 equity = $1,100,000 After 20 years properties have doubled again in value to $4,200,000 equity = $3,200,000 + + Portfolio’s value today = $1.1 million dollars Benefits of a Property Portfolio
  • 33. Benefits of a Property Portfolio PPR $400,000 Year 1 Year 3 Year 4 Year 6 Year 10 $750,000 $1,307,000 $2,388,000 $3,441,000 $5,760,000 Available Funds 80% of Equity $160,000 $220,000 $322,000 $684,000 $2,016,000
  • 34. According To RP Data The average house price increased in 2008 by $45,370 If you own1 house you made $45,370 in equity for the year. If you own 5 houses you made $226,850 in equity for the year. If you own 10 houses you made $453,700 in equity for the year.
  • 35. How To Invest In Property… Use equity in your home to purchase an investment property Borrow against the equity in your property to buy a 2 nd property Continue to borrow to buy more and more investment properties Duplicate Again and again buying more investment properties Live off the equity Retirement Years Property can pass to your children Working Years
  • 36. Purchase in a Buyers Market It has never been a better time to purchase an investment property. Market conditions have not been better in the last 45 years
  • 37. These are the three main concerns people usually have about purchasing an Investment Property?
    • Will it be Rented all the time?
    • Will it Grow in value?
    • Will it be Value for money?
  • 38.
    • The simple answer is “No” you can never expect 100% occupancy , however a suitable safeguard against losing Rental Income would be to have “ Landlords Insurance ” in the event of the tenant breaking the lease.
    • Preventative Measures - the best strategy is to select – The Right Property The Right Location The Right Price
    • This will attract, The Right Tenants .
    1. Will it be Rented all the time ? Affordable Property Investments directs all their clients to SAS property management as they specialise in getting the right Tenants
  • 39.
    • One of the most accurate ways to determine the “Potential Growth” of an Investment Property in the future is to look at recent trends in the areas of:
    • Population Growth – Supply and Demand.
    • Growing Popularity for Investment in the area.
    • Levels of Infrastructure Growth
    • e.g. Shopping, Schools and Transport
    • Capital Growth “Hot Spots” e.g. South East Queensland
    2. Will it Grow in value enough? Affordable Property Investments provides a Service to help you determine these factors
  • 40. By using the services of Affordable Property Investments you can be assured that property is always purchased “ Subject to Finance” Finance can only be approved if it is accompanied by an appropriate, independent valuation that meets with the “ Lending Institution’s Criteria”. 3. Will it be value for money? Your Bank will decide if the Property meets with current market pricing.
  • 41. What about Cash Flow?
  • 42. Negative Gearing Worksheet Costs $416,425 TOTAL $2,500 Loan Cost $12,425 Stamp Duty $1,500 Solicitors Fees $400,000 Property 6% Interest Rate $416,425 Funds Required 0 Less Deposit $16,425 Total Purchase Costs
  • 43. Negative Gearing Worksheet $28,428 TOTAL Outgoings $1000 Insurance $1482 Management Fees $0 Body Corporate $ 2,000 Rates $24,000 Interest Repayments $ 548 Weekly Outgoings $ 380 $19,760 Weekly Rental Annual Rent $28,482 $19,760 $8,722 TOTAL Outgoings Less: Rental Income New Annual Shortfall $ 168 Weekly Shortfall
  • 44. Negative Gearing Worksheet Total Tax Deduction $8,722 Tax 1 – Actual Costs Annual Shortfall Balance $7,000 $ 2,500 Tax 2 – Paper Costs Depreciation Loan Costs $18,222 TOTAL TAX DEDUCTION
  • 45. Negative Gearing Worksheet Total Refund Calculation $100,000 $18,222 $81,778 Gross Salary Less Deductions New Salary
  • 46. Negative Gearing Worksheet Tax Refund Calculation $140 Weekly Tax Savings $28,600 $21,315 $7,285 Current Tax New Tax Annual Tax Saving
  • 47. Negative Gearing Worksheet Summary $548 $140 $380 Weekly Outgoings Less: Tax Savings Less: Rent
  • 48. Negative Gearing Worksheet $28 Your Investment
  • 49. This is How You Can afford to buy an Investment Property, for very little money. These Tax Dollars can be in Your Pay Packet, Weekly. Tax Variation:- Form --------------------------- Depreciation & Deductibles: Building Costs Fixtures & Fittings Stamp Duty Borrowing Costs Insurances Property Management Rates Etc. Investment Property Negative Gearing Diagram This Example:- Bank Payment $2,000 / Month $462 / Week ------------------------- Investment Property Payment Structure. Income:- Taxman $140 Tenant $380 You $28 Total $548/week Taxman $140/week Rental Income $380/week YOU $28/week
  • 50. This Was Me… Struggling to save and my FINANCIAL SECURITY COULD BE SERIOUSLY THREATENED at any time. Married with two children. With a financial position something like this: Probably never! $30 $2,500 $5,000 limit Credit Card 3 years $175 $10,000 $15,000 Car 17 years $600 plus an extra $100 $150,000 $350,000 Home Will have paid it out in: Repay per Fortnight Debt Value
  • 51. My Position 5 years later… Today I can handle the financial surprises that arise due to EQUITY and FINANCIAL SECURITY By Purchasing Investment Properties and entering into a mortgage reduction strategy, Julie and I were able to save considerable time and money: Normally 17 years In another 2.5 years Mortgage PAID OUT Including all personal loans, credit cards, car loans etc In 5 years All Bad Debts PAID OUT Would normally pay only $2,500 off Approx $13,000 Amount PAID OFF in 1 st year Normally no tax savings Approx $6,500 TAX SAVINGS in 1 st year Would normally pay $330,000 over 17 years Approx $180,000 Interest SAVINGS on our Mortgage
  • 52. Affordable Property Investments Our 5 step process
    • Contact Appointment and Introduction
    • Personal Assessment gaining an understanding
    • Finance Consultation (Tailored for Individual goal)
    • Property Consultation (Selecting the right Property )
    • Making an Informed Decision. The First Step Towards Achieving Your Goal (Simply put YES or NO)
  • 53. What’s next? Prognosis without diagnosis is ……….. malpractice
  • 54. Congratulations
    • You have taken the time tonight, you are not average.
    • Most people have never spent time thinking about how they can save tax, invest, and become financially free.
    • No wonder they are not financially free.
    • Financial freedom is like a relationship. If you ignore it, it will ignore you.
    • I have a favourite saying…
    • Most of us are all “WISH BONE” But only a few of us have “BACK BONE”
    • The first step is always the hardest.
  • 55. Conclusion
    • Thank you for listening.
    • Thank you for being part of our program tonight.
    • We look forward to being part of your team.
    • We look forward to us winning together.