The IDEAL™ Wealth Building Principles of Investing
The
wealth building principles are associated in the acronym
IDEAL™
These
principles help us to indentify Real Estate we believe
is an IDEAL™ investment.
Income |
When a property is
rented out it produces income to pay for its own
investment. When more income is generated per month
than monthly expenses it produces positive cash
flow. |
| Deductions |
In addition to interest payments
and expense deductions we are also allowed to take
depreciation deductions as well, these combined
deductions can create significant tax benefits for
us. |
Equity |
As tenants make our mortgage payments
for us a portion of those payments go towards principle
reductions, this is equity build up for us. |
Appreciation |
Each year the value of Real Estate
goes up in value 25-year average is a 6% gain per
year. |
Leverage |
When we borrow money from the bank
to purchase Real estate (usually 95%) the 5% we
invest is leveraged to generate returns on the full
amount of the purchased property. Example (we put
$10K in to purchase a $200K property as that property
appreciates at 6% a year this is an increase of
200K x 6% =12K in appreciation. 12K from a 10K investment
is a 120% return on our $10K investment). |
As an investment encompasses each one
of the wealth building principles we give that investment
that star. (Exp) as an investment utilizes leverage
we give that investment A STAR for Leverage. As an investment
utilizes the deduction principle we give that investment
the Deductions star.
All of our properties will be identified
as having our IDEAL™
rating.
You can be comfortable knowing when
looking for investments EBG is providing you with good
sound investment opportunities.