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Investor Summit     2008POWER OF THE GROUP ™     INVESTMENTSUsing Group Investments to Ladder Your Wealth    David Campbell
David Campbell     •   Professional Investor     •   Real Estate Developer     •   Real Estate Broker     •   Author / Pub...
If you have questionsabout anything in this presentation please contact          David Campbell           (707) 373-9966  ...
Your Role as an InvestorActive or Passive?
The Challenges of    Owning Individual Properties   Individual Properties are Always Active       even w/ professional p...
The Challenges of  Owning IndividualPotential for negative cash flowPotential for negative equityPotential for personal ...
Group InvestingSeveral individual investors combining their financial resources into a single investment that is managed by...
The Power of the Group™    Deals Attract Dollars    Dollars Attract Deals    Together Everyone Achieves More    Bigger...
Who Should Consider Group              Deals?   Busy People: “Hands Off” Investing   New Investors: Earn While You Learn...
Advantages of Group         Projects1. Limited Liability2. Force Equity without Effort3. No Loan on Your Credit Report4. E...
Deal TypesPassive Equity / Passive Cash Flow    Market Appreciation / Rental income from operationsFound Equity   Purchase...
Investment Objective      Varies Per Project Direct Ownership (TIC) or Entity (LLC)Equity Growth   – Proforma 14-30% annua...
Ownership Structure          Varies per Project   Member of LLC       Active (Managing Member) / Passive (Limited       ...
The A-B-C Development            Concept  A                B                     C                 DControl          Acqui...
Laddered investmentsStagger entry and exit points into multiple investments to create variable liquidity intervals based o...
Laddering: Staggered    Entrance PointsAssumptions: ~$480,000 to place 8Q Cash to Asset to Cash Cycle 20% Annualized Retur...
Ladder to Generate Cash Flow$60K x 8Qs = $6,000 / month                                Profit
=
Invest
               Liqu...
Ladder to Generate Net Worth       $60K x 8Q repositioned 15 times =Q1       $   60,000   Q9     $ 24,000   $   6,000   $ ...
Ladder to Generate IRA Wealth       $60K x 8Q repositioned 15 times =Investment
Date   Principal     Reinvestment
Date   P...
Ladder to Generate DownPayment Machine $60K x 8Qs                                Profit
=
Invest
               Liquid
   ...
Down PaymentUse LADDERED group investments to generate CASH for regular down payments on individual properties without dep...
Down Payment Machine$ 72,000   $ 72,000   $ 72,000   $ 72,000   $ 72,000   $ 72,000 1          2          3          4    ...
Down Payment Machine
Laddered exit pointsto hit a cash flow target           $300,000           $225,000           $150,000                     ...
If you have questionsabout anything in this presentation please contact          David Campbell           (707) 373-9966  ...
disclaimersNOT AN OFFER TO SELL SECURITIES: This is neither an offer to sell nor an offer to   buy or securitize securitie...
disclaimersNO GUARANTEE OF ACCURACY: While reasonable efforts have been made to   include accurate information in this pre...
disclaimersFORWARD LOOKING STATEMENTS: The Presenter, its related companies, this   written presentation, and its related ...
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Using the Power of Group Investments to Build Wealth

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David Campbell, professional real estate investor and developer explains how group investments are great ways to build wealth in your profolio. Learn about the different investment structures within group investing that are available.

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Transcript of "Using the Power of Group Investments to Build Wealth"

  1. 1. Investor Summit 2008POWER OF THE GROUP ™ INVESTMENTSUsing Group Investments to Ladder Your Wealth David Campbell
  2. 2. David Campbell • Professional Investor • Real Estate Developer • Real Estate Broker • Author / Public Speaker Hassle-Free Cash Flow Investing • Specialist
  3. 3. If you have questionsabout anything in this presentation please contact David Campbell (707) 373-9966 David@HassleFreeCashFlowInvesting.com
  4. 4. Your Role as an InvestorActive or Passive?
  5. 5. The Challenges of Owning Individual Properties Individual Properties are Always Active  even w/ professional property management. YOUR TIME = YOUR MONEY High ROIs Require Use of Leverage  Loans are Difficult to Acquire Using Retirement Funds  Loans Requires Good Credit and Cash Flow  Loan Cost & Transactional Costs Affect Net ROI
  6. 6. The Challenges of Owning IndividualPotential for negative cash flowPotential for negative equityPotential for personal liability
  7. 7. Group InvestingSeveral individual investors combining their financial resources into a single investment that is managed by a team of professionals.
  8. 8. The Power of the Group™  Deals Attract Dollars  Dollars Attract Deals  Together Everyone Achieves More  Bigger and Better Opportunities  Leverage  Time  Money  Knowledge  Relationships
  9. 9. Who Should Consider Group Deals? Busy People: “Hands Off” Investing New Investors: Earn While You Learn Retirement Funds: IRA, 401k Those Interested in Bigger Deals More interesting projects / Higher net margins Lifestyle Investors Active vs. passive diversification Marketplace diversification Product type diversification
  10. 10. Advantages of Group Projects1. Limited Liability2. Force Equity without Effort3. No Loan on Your Credit Report4. Easier for IRAs than Individual Properties5. Cash Flow Security6. Shorter Timeframes & Predictable Liquidity Points
  11. 11. Deal TypesPassive Equity / Passive Cash Flow Market Appreciation / Rental income from operationsFound Equity Purchase through strategic relationship or don’t wanterPhased Equity Purchase in early phases of a developmentForced Equity Add Value through Construction / Rehab / Subdivision
  12. 12. Investment Objective Varies Per Project Direct Ownership (TIC) or Entity (LLC)Equity Growth – Proforma 14-30% annualizedCash Flow – Proforma 10 – 14% annualizedBlend of Cash Flow & Equity Growth - Proforma % cash flow + % appreciation
  13. 13. Ownership Structure Varies per Project Member of LLC  Active (Managing Member) / Passive (Limited Member) Co-Tenant in TIC  Active (manager) / Passive (co-tenant) Corporation  Shareholder (passive) Trust  Trustee (active) / Beneficiary (passive) Lienholder
  14. 14. The A-B-C Development Concept A B C DControl Acquisition Development Finished Product• Contract •Investors Hold the •Investors Fund •Sold to End Users Land During Pre- Development• Relationship •May or May Not Development •Return Varies Provide Inventory• Ownership •Specific Entry & Based on for Investors Exit Price Performance
  15. 15. Laddered investmentsStagger entry and exit points into multiple investments to create variable liquidity intervals based on estimated project completion dates.
  16. 16. Laddering: Staggered Entrance PointsAssumptions: ~$480,000 to place 8Q Cash to Asset to Cash Cycle 20% Annualized Return Q1 $60,000 x 1.40 = $84,000 due Q9 Q2 $60,000 x 1.40 = $84,000 due Q10 Q3 $60,000 x 1.40 = $84,000 due
  17. 17. Ladder to Generate Cash Flow$60K x 8Qs = $6,000 / month Profit
=
Invest
 Liquid
 Capital
Gains
 Monthly
 Reinvest
Date principal date 20%
x
2
years Tax
=
25% After
Tax
Profit Income PrincipalQ1 $ 60,000 Q9 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q2 $ 60,000 Q10 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q3 $ 60,000 Q11 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q4 $ 60,000 Q12 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q5 $ 60,000 Q13 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q6 $ 60,000 Q14 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q7 $ 60,000 Q15 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q8 $ 60,000 Q16 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q9 $ 60,000 Q9 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q10 $ 60,000 Q10 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q11 $ 60,000 Q11 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q12 $ 60,000 Q12 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q13 $ 60,000 Q13 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q14 $ 60,000 Q14 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q15 $ 60,000 Q15 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000Q16 $ 60,000 Q16 $ 24,000 $ 6,000 $ 18,000 $ 6,000 $ 60,000
  18. 18. Ladder to Generate Net Worth $60K x 8Q repositioned 15 times =Q1 $ 60,000 Q9 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q2 $ 60,000 Q10 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q3 $ 60,000 Q11 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q4 $ 60,000 Q12 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q5 $ 60,000 Q13 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q6 $ 60,000 Q14 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q7 $ 60,000 Q15 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q8 $ 60,000 Q16 $ 24,000 $ 6,000 $ 18,000 $ 78,000Q9 $ 78,000 Q17 $ 31,200 $ 7,800 $ 23,400 $ 101,400Q17 $ 101,400 Q25 $ 40,560 $ 10,140 $ 30,420 $ 131,820Q25 $ 131,820 Q33 $ 52,728 $ 13,182 $ 39,546 $ 171,366Q33 $ 171,366 Q41 $ 68,546 $ 17,137 $ 51,410 $ 222,776Q41 $ 222,776 Q49 $ 89,110 $ 22,278 $ 66,833 $ 289,609Q49 $ 289,609 Q57 $115,843 $ 28,961 $ 86,883 $ 376,491Q57 $ 376,491 Q65 $150,596 $ 37,649 $112,947 $ 489,438Q65 $ 489,438 Q73 $195,775 $ 48,944 $146,832 $ 636,270Q73 $ 636,270 Q81 $254,508 $ 63,627 $190,881 $ 827,151Q81 $ 827,151 Q89 $330,860 $ 82,715 $248,145 $ 1,075,296Q89 $1,075,296 Q97 $430,118 $107,530 $322,589 $ 1,397,885Q97 $1,397,885 Q105 $559,154 $139,789 $419,366 $ 1,817,251Q105 $1,817,251 Q113 $726,900 $181,725 $545,175 $ 2,362,426Q113 $2,362,426 Q121 $944,970 $236,243 $708,728 $ 3,071,154
  19. 19. Ladder to Generate IRA Wealth $60K x 8Q repositioned 15 times =Investment
Date Principal Reinvestment
Date Profit
=
20%
x
2
years Reinvestment
CapitalQ1 $ 60,000 Q9 $ 24,000 $ 84,000Q2 $ 60,000 Q10 $ 24,000 $ 84,000Q3 $ 60,000 Q11 $ 24,000 $ 84,000Q4 $ 60,000 Q12 $ 24,000 $ 84,000Q5 $ 60,000 Q13 $ 24,000 $ 84,000Q6 $ 60,000 Q14 $ 24,000 $ 84,000Q7 $ 60,000 Q15 $ 24,000 $ 84,000Q8 $ 60,000 Q16 $ 24,000 $ 84,000Q9 $ 84,000 Q9 $ 33,600 $ 117,600Q17 $ 117,600 Q25 $ 47,040 $ 164,640Q25 $ 164,640 Q33 $ 65,856 $ 230,496Q33 $ 230,496 Q41 $ 92,198 $ 322,694Q41 $ 322,694 Q49 $ 129,078 $ 451,772Q49 $ 451,772 Q57 $ 180,709 $ 632,481Q57 $ 632,481 Q65 $ 252,992 $ 885,473Q65 $ 885,473 Q73 $ 354,189 $ 1,239,663Q73 $1,239,663 Q81 $ 495,865 $ 1,735,528Q81 $1,735,528 Q89 $ 694,211 $ 2,429,739Q89 $2,429,739 Q97 $ 971,896 $ 3,401,635Q97 $3,401,635 Q105 $ 1,360,654 $ 4,762,289Q105 $4,762,289 Q113 $ 1,904,915 $ 6,667,204
  20. 20. Ladder to Generate DownPayment Machine $60K x 8Qs Profit
=
Invest
 Liquid
 Capital
Gains
 Reinvest
Date principal date 20%
x
2
years Tax
=
25% After
Tax
Profit PrincipalQ1 $ 60,000 Q9 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q2 $ 60,000 Q10 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q3 $ 60,000 Q11 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q4 $ 60,000 Q12 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q5 $ 60,000 Q13 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q6 $ 60,000 Q14 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q7 $ 60,000 Q15 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q8 $ 60,000 Q16 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q9 $ 60,000 Q9 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q10 $ 60,000 Q10 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q11 $ 60,000 Q11 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q12 $ 60,000 Q12 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q13 $ 60,000 Q13 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q14 $ 60,000 Q14 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q15 $ 60,000 Q15 $ 24,000 $ 6,000 $ 18,000 $ 60,000Q16 $ 60,000 Q16 $ 24,000 $ 6,000 $ 18,000 $ 60,000
  21. 21. Down PaymentUse LADDERED group investments to generate CASH for regular down payments on individual properties without depleting principal. $72,000
  22. 22. Down Payment Machine$ 72,000 $ 72,000 $ 72,000 $ 72,000 $ 72,000 $ 72,000 1 2 3 4 5 6$360,000 $360,000 $360,000 $360,000 $360,000 $360,000 What about Equity Optimization on the Properties?
  23. 23. Down Payment Machine
  24. 24. Laddered exit pointsto hit a cash flow target $300,000 $225,000 $150,000 Series1 $75,000 $0 1 2 3 4Investment
Term Principal Profit
at
20%
ROI 4 $ 58,750 $ 47,000 3 $ 78,334 $ 47,000 2 $ 117,500 $ 47,000 1 $ 235,000 $ 47,000 Total
Principal $ 489,584
  25. 25. If you have questionsabout anything in this presentation please contact David Campbell (707) 373-9966 David@HassleFreeCashFlowInvesting.com
  26. 26. disclaimersNOT AN OFFER TO SELL SECURITIES: This is neither an offer to sell nor an offer to buy or securitize securities.CONFIDENTIAL: The information contained in this presentation is a confidential communication for the intended recipient. If you are not the intended recipient, you are notified that any review, use, dissemination, distribution or copying of this presentation is strictly prohibited. This presentation and its educational content are the property of Fourth Dimension Real Estate, Inc. All rights reserved.CONSULT A PROFESSIONAL: The information contained in this presentation should not be deemed as personalized investment advice. Although the educational materials herein address general investment concepts, they are not intended to replace qualified real estate, legal and/or tax advice. This investment is not suitable for all investors. Prospective investors are encouraged to review any investment decision with qualified investment, legal and/or tax advisors.
  27. 27. disclaimersNO GUARANTEE OF ACCURACY: While reasonable efforts have been made to include accurate information in this presentation, errors or omissions will occur. No guarantee is expressed or implied regarding the accuracy of any information contained herein, including but not limited to statements regarding financial performance, valuations, actual or potential income, business strategy, legal effect, availability or suitability of financing strategies, and plans and objectives of future operations. All information in this presentation is provided "as is" and is subject to change without prior notice. Prospective investors are responsible for evaluating the accuracy, completeness or usefulness of any information or content available in this presentation. The Presenter and its affiliates expressly disclaim any liability, whether in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, punitive or special damages arising out of or in any way connected with your access to or use of this presentation, and/or any other information provided by Presenter or its affiliates.
  28. 28. disclaimersFORWARD LOOKING STATEMENTS: The Presenter, its related companies, this written presentation, and its related documents contain forward-looking statements and information related to future events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project”, “forecasted” or words of similar meaning. Such statements are based on assumptions that contain a high degree of subjectivity and are, therefore, subject to certain risks and uncertainties. Changes in general economic and business conditions, developments in the financial markets, including fluctuations in interest rates, inflation or deflation rates, and many other unforeseen risk factors will cause your actual investment results to vary materially from these forward-looking statements as expected, anticipated, intended, planned, believed, sought, estimated or projected. Presenter does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
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