Property Wealth Triangle

Property Report 2: Property Wealth Triangle 17/02/2008 , by Phil Jones
		Audio File
		The power of the Richmastery Property Wealth Triangle has existed for hundreds of years. It is the secret formula that draws investors to real estate as an investment medium but it is a concept that is poorly understood and rarely taught. In the current property market it is critical to understand the theory and benefits of the Property Wealth Triangle as it provides clear clues on how to invest now, why to invest now and what to expect when you do invest now. Put simply investors purchase real estate to attain one or more of the above three benefits being: Cashflow - Where the properties income exceeds its costs and delivers an annual profit Capital Growth - Where the properties value increases over time Equity - Being the immediate equity an investor banks when they purchase a property at a discount If investors cant get any of the 3 Wealth Triangle benefits they cease investing in the market because there is no possibility of getting a financial return. This rarely happens as even in a soft or receding market attractive returns can be made using the right strategies. Clue Number 1: If your don't know the right strategies your screwed. Every phase of the property cycle (Boom, Slump & Recovery) allows investors to achieve one or more of the above 3 financial results.... Immediate Equity, Cashflow or Capital Growth. And if the market didn't shift between phases then the Triangle would get out of balance with one corner having more expansion than the others. Here is an example: Lets rewind the clock back 18 to 36 months ago and look at the Richmastery Property Wealth Triangle. In that market lets see where the 3 corners were: > Capital Growth = Strong > Cashflow = Very hard to find and disappearing > Equity = Almost impossible to buy property at a discount because the market was so buoyant Rewind the clock back to 2001... > Capital Growth = Was dead, the market bearly had a capital growth pulse > Cashflow = Was easy to get, South Auckland was covered with positive cashflow properties earning $50 a week plus > Equity = Abounded, it was simple to buy property at large discounts So lets look at the current market, where are we at.... > Capital Growth = Flat and soft > Cashflow = Increasing due to lower available house prices > Equity = There is Truckloads of immediate equity available because property can easily be bought at a discount Intelligent investors like myself read the cycle, check the Property Wealth Pyramid and customise our investing tactics to harvest the profits using the strongest available corner of the Pyramid. In early December 2007 I taught this concept at the Blue Peak Licensee Launches around New Zealand and advised investors that the 2008 investing process will be.... Clue Number 2: Turning Immediate Equity (which is available in abundance) into Cashflow!!! You see the challenge is not that you cant made profits, the challenge for most investors is that in a flat market they don't know how to turn "Immediate Equity" into "Cashflow". So I'll let you ponder that and post your thoughts in the forum. I would appreciate hearing from you. Oh one last thing.... do you know there will be investors who didn't buy a single property in the last 2 years because the interest rates were too high, now they wont be buying a property because the markets too soft. My friends there will always be an excuse to sit on your arse and do nothing, after all that's what 99% of the population does! But in life the money is made by those who do what others are not prepared to. Do yourself a BIG favour this year, book for Richmasterys Property Negotiation course next weekend. If the secret to wealth in 2008 is turning Immediate Equity into Cashflow, the starting point for you is knowing how to get large portions of immediate equity through negotiating purchases at huge discounts. Become an expert at that and the world is your oyster.