In my last entry to this series I explained instant equity capture and appreciation based on an actual property available in Sugar Land. In this section I will discuss cash flow and demonstrate the complete profit potential on this property.

REVIEW

I hope you are taking notes and applying this information. "Guru's" and "experts" charge hundreds or thousands of dollars to tell you this information. Here it is for free. Real local properties, real local specialist, real local results.

In the last entry we calculated a $45,000 profit in 3 years on the property from appreciation alone. Let me show you the additional cash flow and true expected profits of the property.

 WHAT IS CASH FLOW?

CASH FLOW is the net income generated from the rent collected after expenses. Expenses include the loan Principle, Interest, Taxes, and Insurance. To be profitable cash flow must exceed your expenses.

Back to our case study property. Calculating in rent, taxes, expenses, and a vacancy factor should net about $8,200 annually x 3 years = $24,600 in net rent collected. This is CASH FLOW which is Key #3.

+ $120,000 investment purchase price
 - $   5,000 repairs and improvement
+ $ 25,000 instant equity capture
+ $ 23,000 appreciation over 3 years at 5% annually
+ $ 24,600 net rent collected over 3 years after expenses

$125,000 investment = $187,600 value in 3 years. Potential profit = $62,200
Profit of $62,200 on $125,000 in 3 years is a 50% return on the initial investment.

THE RESULT = 50% RETURN ON INITIAL INVESTMENT

What other investment in today's market will give you a 50% return on your initial investment in 3 years?

Ladies and gentleman, I learned how to invest in the stock market in 8th grade. I got started with actual saved money in high school. I've seen REITS (Real Estate Investment Trusts) create phenomenal returns and then collapse. I've seen the international markets and funds such as India and China return as much as 300%, then collapse with the world wide recession. I lost when the tech bubble busted, and I lost in our current recession just like everyone else including Donald Trump, Bill Gates, and Warren Buffet.

I get emails and stock tips everyday. Since I'm not running the stock company I can't analyze the deal and thier numbers and products from within. Do you trust anyone who claims they can predict when the economy will actually recover?

I am however running a real estate business with access to 100s of millions of dollars of properties to analyze.  I'm an investor with a track record and have the tools to make money in this market when every other investment available out there right now is losing. Im quietly investing myself into real estate, and creating future millionaires. I've negotiated deals that created millionaires, and I plan to do more of those this year.

So ladies and gentlemen, if I check back with you in 3 years on May 17, 2012 will you have 50% more on your current investments?

Give me a call, it's time for a new strategy.