The J. Hartman Company Presents a 12 Year Wealth Building Plan

People who supposedly know about this kind of stuff say it’s dangerous to include numbers when you write. That may be true but in my opinion, numbers can be pretty exciting. The following set of numbers is visual proof that unique real estate investing strategies through refinancing is a powerful road to riches.

Roughly put, you can double your money in real estate every 12 years. While that sounds great, it’s not even the most exciting part. If you use my strategy and put the equity in your house to use, when you refinance at the end of that 12 year span, you will have an $800,000 gain in income. That works out to about $67,000 a year! Re-invest it in more real estate or retire and repeat the 12 year process.
Enough of a lead in? Here’s what you do.

Most of my clients come to me with about $300,000 in unused equity gathering dust in their home. Actually, it’s worse than gathering dust. It’s losing money, being nibbled voraciously away by inflation. I advise them to refinance their home loan and put that money to use by purchasing either two 4-plex or four 2-plex housing units in diverse geographical markets. Why diverse? It’s built-in portfolio protection if one of the local markets takes a tumble.

A Twelve Year Example:

Once you have refinanced your home and took out the equity here is a guide to investing it wisely:

1. Purchase either 2 or 4 housing units for one million dollars. To do this, you only need to put 20% of that amount down in hard cash. The bank will loan you the rest. Closing costs run about $35,000. We suggest you keep a $40,000 cash reserve in the bank to cover any initial negative cash flow in the early years.
2. Now wait 12 years.
3. After this amount of time passes, using history as our guide, your real estate portfolio will have increased in value to $2 million. It’s time to refinance again.


Here’s where it gets exciting and the true power of this refinancing strategy shines. You can now refinance the $2 million value of your properties at an 80% loan-to-value ratio. The initial 20% down payment you put on the purchase of $1 million has grown to $400,000 and will function as the down payment on the $2 million loan. 80% of $2 million is $1.6 million. You pay off the original $800,000 loan with that and have $800,000 left over.

At this point you could decide to retire and live on the $800,000 for the next 12 year cycle while you’re waiting for your properties to double again. Divide by 12 and that equals about $67,000 per year. Not a princely income but if you’re tired of working, it’s an option. On the other hand, you could take that nice little sum and leverage it (with 20% down) to purchase an additional $4 million dollars worth of properties in diverse geographical markets.

Can you imagine the sweet financial situation you’re going to find yourself in at the end of the next 12 year cycle? But let’s ignore that for now and pick up the original example where we left off.

Let’s say you decided to quit your job and live on the $800,000 for the next 12 years. Over that span of time your income property portfolio has increased in value from $2 million to $4 million. You do the refinancing process again, only this time you walk off with $1.6 million to live on for the NEXT 12 years. That averages about $133,000 a year. Nice raise, huh? Give it 12 more years and you take $3.2 million off the table for living expenses. Now you’re up to $250,000 per year. Start early enough and this is an amazing retirement plan. Don’t forget, in addition to the chunk of income cash, you also own a property portfolio worth $8 million.

And you will be renting these properties out as you go along, so your monthly mortgage payment should be covered by rent from tenants. What’s not to like about this? You only put down 20% while the bank assumes the majority of the risk. Your tenant pays off the mortgage and you own the asset free and clear at the end. This is why we encourage everyone to get off the crooked, non-returns of Wall Street stocks and mutual funds and put your money into the best investment ever created.

Real estate. They’re not making any more of it.

How do you find the right markets? That goes beyond the scope of this article but you can find every single little detail for free at my website.

Jason Hartmann is the president of Platinum Properties Investor Network for real estate investors and entrepreneurs. Through podcasts, educational events, referrals, mentoring and software, investors can easily locate, finance and purchase income properties in any market with peace of mind.

The J. Hartman Company 10 Commandments of Real Estate Investing

Real Estate Investments should be part of everyone’s investment portfolio. Sure, like any investments, there is risk involved; however, the risk is greatly minimized by those who are properly prepared to make wise real estate investments.

Jason’s Ten Commandments of Successful Investing™

1. Thou shalt become educated
a. Knowledge is a powerful tool. Do your due diligence so that you are your own best advisor.
2. Thou shalt have a professional counselor.
a. Only invest with investment professionals who stay with you for the long-term so that you have a single point of contact to coordinate your entire investment plan. Advisors should buy for themselves what they sell, putting their money where their mouth is, and get paid for producing results rather than simply for advice.
3. Thou shalt maintain control
a. Never leave your financial future in the hands of incompetent, unethical or greedy brokerage houses, fund managers or corporations. Always be a direct investor.
4. Thou shalt use prudent financial planning techniques.
a. Always invest with your goals in mind (retirement, financial freedom, creating wealth) and abide by your risk tolerance and investing style.
5. Thou shalt not gamble.
a. Be a prudent long-term value investor, never a get-rich-quick gambler, speculator or flipper by investing only in properties that make good financial sense the day you buy them.
6. Thou shalt diversify.
a. Reduce your risk and maximize returns by investing in several areas as every market is different.
7. Thou shalt be Area Agnostic™
a. Only invest with an advisor who is not partial to any one area or investment to avoid a conflict of interest. Consider a variety of opportunities.
8. Thou shalt borrow to maximize leverage and accelerate wealth creation.
a. Use as much borrowed money and as little of your own money as possible so long as the borrowed money can be repaid by the tenant. Let other people’s money work for you, reduce your risk and make you wealthy.
9. Thou shalt only invest where there is universal need.
a. No one needs stocks, bonds or gold but EVERYONE needs a place to live and with growing affluence around the world, consumption of raw materials will continue to cause upward price pressure on improved real estate.
10. Thou shalt invest only in tax-favored assets.
a. Non-cash write-offs and deductions are money in your pocket and income property offers the best of both.

Jason Hartman is the CEO of Platinum Properties Investor Network, a comprehensive solution to providing real estate investors with education, research, resources and technology to deal with all areas of their income-property investment needs.

Advice from The J. Hartman Company: The Rule of 72

Real Estate Investments will always have the potential to offer a good financial return. Savvy investors set their financial goals using a simple, but powerful calculation to estimate what their financial status will look like in the future.

The Rule of 72

The Rule of 72 is a common calculation used by investors to determine how long it will take their investment to double in value given a certain rate of return. Obviously, this is not a mathematical theory set in stone which can never fail and always is correct to the third decimal place. Having said that, the Rule of 72 has shown to be fairly reliable over the years at giving you a ballpark estimate of how an investment might play out.

Let’s look at a few examples

The calculation itself is so simple, even a caveman…never mind. It really is simple. You divide 72 by the rate of return to arrive at the estimate (in years) of how long to double your investment. What if you expect a 2% rate of return? Using the Rule of 72, how long will it take to double your money?
72 divided by .02 = 36 years.

Remember to move the decimal over after you do the math. If you’re expecting a 2% return from any investment, you REALLY need to check out The Complete Solution For Real Estate Investors™, the innovative method Platinum Properties Investor Network uses to invest in income property. If our returns dip below 36%, we’re not happy campers.

Speaking of 36%, let’s do another example using the Rule of 72.

72 divided by .36 = 2 years! Yes, you read that correctly. Two years is how long it would take your investment to double if you maintained a 36% annual rate of return. How would you like them apples?

Jason Hartman, Founder of Platinum Properties Investor Network, and the J. Hartman company offers the Complete Solution for Real Estate Investors. Jason helps individuals secure their financial future by investing in income-producing properties in 41 markets throughout the US.