The 'Freedom' Game Plan
Investment Solutions that help set you Free!

How much money do you need for the passive income you want?...

Most couples need or want on average $2,000 p/w. For most individuals $1,000 - $1500 p/w

How much money do you need invested to get the passive income you want?

The Formula. Desired annual income divided by your 'annual return rate' gives you your lump sum required invested.

• 5% net return. $200,000 pa / 0.05 = $2,000,000 cash needed

• 10% net return. $200,000 pa / 0.10 = $1,000,000 cash needed

• 20% net return. $200,000 pa / 0.20 = $500,ooo cash needed

Top Tip: Understand the numbers so you know what investments and strategies will work for you.

Force 1 - Leverage for 10x Returns!

No leverage: $100,000 x 5% = $5,000
Leverage: $100,000 x 5% = $50,000

Force 2 - Compounding Reinvesting Speeds up Outcomes

Reinvest profits to buy more faster over time with equity not your cash.

Key Take Aways: Investing in Australian Property using 90% leverage gives you '10x' returns.

• Only 8% of all Australians own '1' investment property

• Only 1.4% of all Australians own 'multiple' properties

• Less than 1% of investors own more than '6' properties. Works out 0.07 of Australians. (1 in 1500 people)

The trends tell us people are moving from homes to smaller dwellings...

• Focus on purchasing assets based on demand and under supply to lock in your equity before you buy

• Research what areas will have government and private investment injected to help create jobs

• Look at forecasted population growth with supply for the next few years. This determines shortfalls and increases in property prices and investor wealth

Phase 1: Build a Solid Base & HOLD (Growth, Positive, Max Tax offsets, Set and Forget)

• Buy to hold and leverage (Bulk deals and group discounts)

• Leverage debt 90% LVR & I/O (10x your profits)

• Revalue/refinance 6mths - 1 year later acquisition ($50-100K equity uplift to duplicate)

• Buy more property with your manufactured equity

Pro Tip: Buy under market new properties that pay you each week before tax offsets.

Phase 2: Mini-Developments & SELL (Increase income/servicing, expand phase 1 and 2)

• Splitters to develop to sell and increase borrowing capacity

• Joint ventures and/or partnership

Pro Tip: Manufacture profits from cutting up the pie and selling slices.

Phase 3: Multi-Property & HOLD (Groups of properties and development sites)

• Lending determined by the development not the individual

• Commerical finance

• Larger scale Joint Ventures

Pro Tip: Phase 2 and 3 help service and deliver capital to buy more phase 1 properties.

1. Use Leverage and Compounding: User other people's money (OPM) to reinvest profits for growth. Maximum leverage from the banks and deposit using equity, not your cash where possible

2. Never Pay full Price: (-$40/50K). Bulk buy where possible. Time is money for developers and value pre-sales. Group negotiated deals to cut out the agents. (Boutique and exclusive) We negotiate and invest in each deal to have skin in the game (Negotiated under today's market price not the future)

3. Cashflow is King. Target yields 4.7 and 6.5%, choose locations in proven areas. New are 15-25% higher in cashflow, max tax deductions improve the overall returns

4. Legally Reduce Tax: Over 200 items to claim, use power of depreciation, target net returns $5-$9K pa

5. Use Expert Research and trends to Maximise Returns: High growth area and stable rental returns. Look at the ripple effect. For opportunities, look at median prices and see suburbs around them which are more and view other factors as in rejuvenations

6. Buy in Places where demand is High and Supply is Limited: See supply data and ideal to form a predictive view. Population growing. Infrastructure investment as in airports etc. Employment and economy. Rental yields. Affordability look to see the ripple effect for other opportunities. People are moving now interstate e.g. QLD. Vacancy rates, see dropping, look for 2% and under.

At what stages do you suggest I buy and invest over 10 years? Keep reading...

1. The primary strategy is to leverage each properties manufactured equity as a deposit to then buy the next one

2. The secondary strategy is to do mini-developments to increase your cashflow for serviceability to get more loans to buy more foundational properties

See below 3 common investment strategies to compare against looking at cash on cash returns for a $70,000 investment.

Note: Nett calculation estimates are inclusive of tax offsets, capital growth, income and a tax rate of 30%.

Scenario 1: Invest in Passive Income Funds

Description: Invest $70,000 in income funds paying a fixed 20% return pa.

Nett Profit Centres

1. Income: $188 p/w. $9,800 pa (based on 20% pa return $14,000, less 30% tax)

2. Tax Offsets: $0

3. Capital Growth: 0%
   -----------------------------------------
   TOTAL NETT BENEFIT: $9,800
   CASH ON CASH NETT RETURN: $70,000 / $9,800 = 14% p.a. (Once-off only)
   LEVERAGE: N/A
   CASH ON CASH LIFETIME VALUE(5yrs) = 14% ROI

Scenario 2: Invest and Sell Australian Property

Description: Invest $70K to build and sell a new $500K property, 90% LVR, interest only after 12mths.

Nett Profit Centres

1. Rental Income: $0 (no tenants as there was no occupational certificate)

2. Tax Offsets: $0 (can only claim from when was available for rent not from construction)

3. Capital Growth: Added into the below

4. New Factor: $30,000 (premium for new properties $50,000 less agents commissions, legals, capital gains tax with 50% discount)
   -----------------------------------------
   TOTAL NETT BENEFIT: $30,000
   CASH ON CASH NETT RETURN: $70,000 / $30,000 = 42% p.a. (Once-off only)
   LEVERAGE: N/A
   LIFETIME VALUE (5yrs) = 42% ROI

Scenario 3: Invest and Hold Australian Property

Description: Purchase and hold a new $500K property, 90% LVR, interest only, paying $500p/w rent.

Nett Profit Centres

1. Rental Income: $150 p/w. $7,800 pa (based $26,000 rent less 50% costs plus $100p/w upkeep)

2. Tax Offsets: $8,000 pa (depreciation, costs and $100p/w upkeep at 30% tax rate)

3. Capital Growth: 2.5%. $12,500 pa (national avg 6%)
   -----------------------------------------
   TOTAL NETT BENEFIT: $23,800 pa
   CASH ON CASH NETT RETURN: $70,000 / $23,800 = 34% pa (Ongoing)
   LEVERAGE: Up to 90% (bank valuation every year)
   CASH ON CASH LIFETIME VALUE (5yrs) = 170% ROI

• Leverage and compounding is the key to reaching your goals

• Bulk deals where they negotiate (under market 40-50K)

• Let time work for you. Invest and hold for 5-10 years (2-3mil goal)

• Buy new discounted properties with positive cashflow and maximum tax offsets

• Build foundation phase 1 and step up to phases 2-3

• Eliminate debt be selling down properties gradually over time

• Development for cashflow to meet serviceability with goals to double your money within 18-24 mths

1. Decide you want to make a change for the better

2. Consider how much passive income you and/or your family needs

3. Agree on your LUMP SUM target

4. Position yourself to invest. To buy something aim for a minimum of $70-$80K pa income + $70K-$80K in cash or equity

5. Reach out and make contact with us and our team