In our December 11th 2007 newsletter we did a review of the book *"Why We Want You to be Rich", by Donald Trump and Robert Kiyosaki (you can read the article at our Newsletter archive at www.redevgroup.com). In their book they share their analysis of our economy and some steps we all can take to be able to prosper. In the chapter "Why Do You Invest In Real Estate?" they point out a number of advantages to real estate investing. In the next few newsletters I want to focus in on a few of the advantages they mention. Here is a quote from the book and the first advantage we will examine:
"In addition to control, real estate offers many other advantages. If a piece of real estate is purchased at the right price, is financed well, is in a good area and is well managed - then some of the advantages of real estate are the following:
1. Cash Flow: Checks come every month."
Why is cash flow so important to building wealth? If you have read any of Robert Kiyosaki's "Rich Dad Poor Dad" book series or played any of his educational games you can see the importance of cash flow. Robert demonstrated the benefit in his own life. He would find a good rental property and figure out all the expenses and loan payments and if he was left with a decent cash flow after all expenses he would buy the property. He would then take that positive cash flow and use that to purchase another property. As his holdings grew and the positive cash flow increased it enabled him to buy larger apartment buildings and further increase his cash flow. As loans were paid off by the income from the tenants then properties could be refinanced and that equity returned and put in to more property. One of the goals he encourages investors to have is to build this passive income to the point that the income is greater than all your expenditures so you don't have to work but can live off this passive income. You can then do what you want to do with your life, not what you have to do.
There are many investments in the marketplace that try to sell you on potential returns years down the road but don't give you anything now. Robert Kiyosaki has said that if an investment doesn't make sense for today he doesn't buy it.
We talk to people all the time who had invested in some new development that promised great returns only to have it go bust and they lost all their money. These bare land developments can have a large potential upside down the road if they succeed but they also have a very high failure rate too.
Those of you who have dealt with REDEV for a long time will have undoubtedly seen the phrase "Cash Flow is King" in our advertising material, seminar presentations and radio programs. Our REIG (Real Estate Income Gain) program is built on the principle that cash flow is king.
As an example, with the current REIG program we are offering you are able to get a tax refund for the 2008 tax year. You also start receiving quarterly cash disbursements right away. The third way you receive cash flow comes as a result of the mortgage being paid down. Each month the mortgage payment is made from the rental income which reduces the amount of the prinipal and increases your equity. At the end of five years when the mortgage is up for renewal the plan is to put the mortgage back at the original amount and return that equity to the investors. The projected return from these three income sources is 14.25% average annual return.
The fourth way that you can be paid from this investment is the capital appreciation you would receive when the property sells in the future and that amount is in addition to the 14.25% average I have mentioned.
From our experience we see many of you who understand the concepts that Robert Kiyosaki teaches in his books and have put them into practice using the REIG program. That is why we have such a high reinvestment rate from our clients as they take cash flow and return of equity and use that to purchase more REIG investments as they come available.
*Why We Want You To Be Rich - Donald Trump & Robert T. Kiyosaki
Copyright©2006 by Donald J. Trump and Robert T. Kiyosaki.
Published by Rich Publishing, LLC.
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In a recent press release by the Conference Board of Canada on Canada's fastest growing cities they said that "Calgary and Edmonton will remain in a league of their own in 2008." "With real gross domestic product (GDP) growth forcast to reach 4.2% this year, Calgary is expected to match its growth performance in 2007... Strong energy demand, furious construction activity and robust consumer spending growth will continue to drive Calgary's outlook."
