How To Turn $100K Into $300K In Five Years – Keith Weinhold
Do you want to build durable wealth? Here’s an actionable 5-year plan to help you on your path towards more wealth. This is what I do for people! Let’s go!
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Turn $100K into $300K in just FIVE years. How? Create monthly passive income. If you really put your mind to it you can even turn your $100K into cash-flowing million-dollar apartment building in the same five years. Here’s how:
1. Invest $100K by making five 20% down payments on five $100K turnkey cash-flowing single family properties. If you don’t know where or how, go to GREturnkey.com. You’ll find specific addresses there.
2.The historic appreciation rate of real estate is 6%. Compounded, each of your $100K properties is worth $134K within five years. That’s $34K of appreciation in each of your five properties
– Equity is the difference between what a property is worth and how much is owed on that property’s loan.
– Cash flow is your passive income. It’s your monthly rent income minus mortgage, property tax, property insurance, maintenance, professional management, and a factor for vacancy.
3. So now for each property: you have $20K of original equity as the down payment, plus the $34K in equity from appreciation. That’s $54K in equity.
4. And see, your tenant is also paying down your loan for you every month for five years. At today’s interest rates, that another $6K to add to your $54K. That’s a grand total of $60K of equity for each property over five years!
5. You now have $300K of total equity over your five properties, just five years after you began with $100K.
This is the magic of financial leverage. This wealth happens after achieving a rate of appreciation on both your downpayment and the money you borrowed from the bank. Compound interest is slow and does not create wealth on it’s own. However, when compound interest in leveraged this way, it will create wealth. After the five years go by, you can continue to hold on to your five properties or you can sell them to collect cash.
In the scenario that you sell your five properties, you won’t be able to get $300Kin equity cashed out. Instead, you will pay agent commissions and property make-ready costs. Your money will shrink yo $250K. With your $250K, you will not pay taxes on your capital gain if you invest it as a down payment for another property. What this means is that you can put 25% down payment on a one-million dollar apartment building and take advantage of its monthly income production. Now you have created financial leverage on an even larger property and continue to grow you wealth with the same method.
I have been doing this for fifteen years now, and with that experience I have learned about the risks and limitations this method implies. The example above has been simplified.
Risks & Limitations:
- We didn’t include any mortgage loan closing costs when you bought the five $100K properties. However, you can ask the seller to pay some of these for you in exchange for your full-price offer.
- The 6% appreciation rate could be lower or higher. Let’s assume that they are lower and that the properties even lost some value. In this case, you’re not sunk as long as your property stays rented and cash-flowing. That’s why we carefully pick markets and cities that hedge against downturns, like stable-price and job growth markets, at GREturnkey.com.
- Some things surely will go wrong and you will have bumps on the road over the five years. However, think long-term.
- There are no guarantees in investing, and the whole thing might not work out.
Keep in mind, real estate pays you in five different ways at the same time. When you are growing $100K to $300K in five years, we only wen over two of the ways that you will get paid with a residential, cash-flowing real estate. Appreciation and loan pay-down are made by others, There exist cash flow, tax benefits, and inflation-hedging as well.
Remember, with a turnkey investment property, someone else manages the property for you. This means that you are an investor, not a landlord. Your time is too valuable to be spent replacing floors, fixing faucets, and badgering people to pay their rents.
Don’t think that this is a “zero-money-down-get-rich-quick” blueprint. This plan is all about learning how to invest your money over time to leverage other people’s money in order to build durable, lasting wealth for your future. Put everything that you just learned into action, because knowledge isn’t power, action plus knowledge is power.
This is not a “zero-money-down-get-rich-quick” plan. This is about smartly investing your money over time to leverage other people’s money to build durable, lasting wealth for you and your future.
Take action and visit GREturnkey.com to leverage your way to financial freedom.
Here’s to your wealth and success!
Keith’s new #1 International Best-Selling Book reveals the 7 Money Myths That Are Killing Your Wealth Potential, including the epiphany that getting your money to work for you will NOT create wealth! You can now get this e-book FREE at GetRichEducation.com/Book