News From Jamie Thompson
Well, 2020 is halfway over, let that sink in! For some, it might feel like this year is going by slowly with everything happening in the world, while for others it might seem like January was yesterday. The official day of summer is June 20th, but I have a strange feeling this summer might be a little different from the past. I hope to see more signs indicating a return to our old ’normal’ way of living of course, but how can you take advantage of the current situation how it is?
Last month we spoke about Inflation, and I hope you extracted some value from that. This month we will cover the final part out of the 3 part series, Passive Income vs Active Income & The Risk of Investing (or not investing) Let’s take a look.
We should all know the difference between passive and active income. Not only does it get taxed differently, but passive income can make a huge difference in your lifestyle! Active income is trading your time for money, while passive income is reaping rewards time and time again by doing something once. When it comes to real estate investing, passive income is ideal! As someone with money (most likely from a HELOC), how can you make your money work for you?
The stock market might be a good idea if you have a plan, you know how to invest in it, and don’t mind keeping your eyes glued to the tv or phone all day long in a state of anxiety, wondering what is going to happen to the market from hour to hour. You might walk away with a decent return on your money after paying commissions and taxes, but you might also lose it due to a lack of control in this kind of investing. You could put your money in a savings account at the bank and collect 1%-2% interest on it. Remember the rate of inflation from earlier? What if it goes to 5%? This means that if you are collecting 2% from the bank and losing 5% to interest, you’re actually losing 3% of your money overall, year after year. Let’s rule that one out as simply not smart.
Now let’s look at real estate. First off, the bank will let you buy real estate with only 20% of its current value. You cannot buy an apple stock for 20% of its current value. So say you were to partner up with someone who knows what they’re doing when it comes to investing in real estate, like myself. The only thing you need to do is bring the money for a deal that my team and I search for, and show to you. Maybe you help qualify for a mortgage if needed. You become a partner on the title where you collect 50% of the cashflow from month to month. Along with benefitting from the other profit centres of this type of investing, like; Forced Appreciation, Tax Benefits, Leverage, Mortgage Paydown, Market Appreciation, etc. This could have a passive return of 10%-15% on your money year after year, while essentially doing very little work!
The plan is to pay you back all of your investment as quickly as possible, while you continue to get 50% of the equity and cashflow each month, even after you break even. Imagine making an extra $15,000 per year, if not more on just one investment? Not only that, but once your original investment is paid back, you can use it all over again on another deal! That’s the power of compounding rewards, and that’s real passive income! Now, of course any investment presents some sort of risk, but take a minute to consider the risks involved with not taking advantage of this information in a time full of massive opportunity. Will a lost opportunity become a regret? Only you can truly answer that for yourself.
Real Estate Leverage
Leverage is the use of various financial instruments or borrowed capital (e.g., debt) to increase an investment’s potential return. A 20% down payment on a mortgage, for example, gets you 100% of the house you want to buy—that’s leverage. Because real estate is a tangible asset and one that can serve as collateral, financing is readily available.
Competitive Risk-Adjusted Returns
Real estate returns vary, depending on factors such as location, asset class, and management. Still, a number that many investors aim for is to beat the average returns of the S&P 500—what many people refer to when they say, “the market.” The average annual return over the past 50 years is about 11%
About Jamie Thompson:
Jamie Thompson is a real estate investor. He’s been actively involved in Southern Ontario including the GTA, Durham, and Barrie area real estate investing for a number of years. His mission is to provide quality housing for quality tenants, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!
Jamie offers his investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without a hassle of being a landlord, please contact Jamie.
For more information about Jamie and his investment program,
please call 289-716-0718. or visit https://investwithjamie.com/