# Entrepreneur of the week Gil Torielpost 5 Happy Holidays to everyone "Have fun and dine" Hello, and today is the difference…
# Initiated week Age of Toriel
Post 5
Happy holiday to everyone
"Feel like home and eat well"
Greetings,??
And today
The difference between a sophisticated investor and an average investor -
What are the common mistakes that most "return" investors make? What is the definition of real estate, what is an aggregate return, current return, increase in value, savings of the loan principal, leverage / loans, legitimate tax planning, re-leverage, savings plan…
What is the average investor looking for? Usually a return, I call them dream chasers, by the way, who goes to bed at night mostly dreamers, I prefer to stay awake and fulfill my dreams, there is enough time to sleep when I go to a better world.
Most return investors buy property because of the net return on equity and the story ends, the higher the return, the easier it is for them to decide whether or not to invest.
Is it enough when we come to do real estate?
personal opinion:
It is important to understand that there are no gifts in real estate, a higher return than the market return embodies a great deal of risk and, of course, the possibility of losing part of the investment fund in times of crisis in the real estate market. Cheap properties in price ranges of $ 30,00-$ 60,000 are old properties in general, in hard-to-reach areas and the population with which we will be managed on a regular basis here is a rainbow from a socio-economic, demographic point of view. The rent will range from $ 400- $ 800. Usually the annual maintenance is higher over time than the income, the long-term return from these garbage cans is negative. In a large proportion of these properties there will always be evictions of reluctant tenants who will incur many costs and destroy the property and therefore these transactions embody a great deal of risk over time. The potential for a note increase in these properties is extremely low, and future buyers will be investors. Many people are tempted and invest in these properties because of the funny entry threshold in relation to the country and then realize very quickly that the dream is not the reality to say the least. In addition, US banks refuse to give these assets bank financing by definition as junk assets.
Anyone will do as they please, I speak from a bitter personal experience of holding such assets, the dream becomes traumatized and distressed over time. Highly recommend escaping these junk properties.
A sophisticated investor will look for current returns, value rises, loan fund savings, tax benefits, savings plan, the possibility of leverage and the return of invested equity.
Going forward in full steam, for pension we were born:
Real estate is a broad term and includes many additional components when it comes to investing
Producers "aggregate return"
Below is an orderly list of the components of the aggregate return according to which it is important to invest in real estate in the long term.
I highly recommend always incorporating all of these components into a long-term real estate transaction and minimizing risks
Aggregate yield What is:
??Current return / return on equity
?? Future value increase
?? Loan fund savings
?? Tax advantages, aggressive tax planning
?? Leverage / Mortgage, Equal Fund, Spitzer Board, Balloon Loan…
?? Loan repayment cycle
?? Compound Interest
?? Savings plan for retirement age
?? Future value increase
?? Loan fund savings
?? Tax advantages, aggressive tax planning
?? Leverage / Mortgage, Equal Fund, Spitzer Board, Balloon Loan…
?? Loan repayment cycle
?? Compound Interest
?? Savings plan for retirement age
Net current yield - The expected gross income from rent minus all expenses (fixed / variable / unexpected / financing expenses) / invested equity
ROI - Return on Investments
Future value increase- Real estate consists of the value of the property, over the years historically long-term properties increase in value, one must analyze the market in which we want to invest and see how the real estate "behaved" over the last 10/15 years and draw conclusions on annual percentage expectation
appreciation
Loan fund savings - When we take out financing to buy a property, there is usually a component of principal and interest throughout the life of the loan, each year we will reduce the loan fund by monthly mortgage payments, thereby creating a savings plan that increases the equity invested regardless of the annual value increase component and when the asset is realized. And or we will repay the loan These loan fund payments will be back in our pocket.
Principle Reduction
example: We bought a home for $ 230,000, $ 100,000 invested, $ 130,000 for 15 years, 5% interest, $ 1,028 monthly repayment, annual loan savings are about $ 6,000, ie about 6% return on invested equity ( Good savings plan)
example: A house with $ 100,000 purchased in cash, a current yield of about 7% per year, ie about $ 7,000, a rent tax of about 15% cumulative in the US and Israel, that is, $ 5,950 net, so the yield drops to 5.95%
The value of the property increased by 3% per year which is $ 3,000
Aggregate return on invested equity: $ 5,950 + $ 3,000 = $ 8,950
Cash Return on Investment - 8.95%
Now that $ 100,000 equity is invested in a $ 230,000 house, we'll take 30 years of funding
Return on Equity After Mortgage Payments 6%, Annual Loan Fund Savings 2%, Annual Value Increase is 3% Per Year ie $ 6,900, Now Let's Analyze the Deal
Expected Current Income - $ 6,000
Annual average loan fund savings - $ 2,000
Expect annual value increase - $ 6,900
Expect French return on invested equity = $ 14,900
Tax payments All income from rent - zero, the fixed / variable expenses + financing expenses + depreciation produce a "financial loss" on paper and therefore there are no taxes and even the loss is accumulated from year to year.
Aggregate return on leveraged investment of $ 100,000 equity - 14.9%
In 6-7 years we will double the equity invested in a leveraged transaction, in a cash deal 11/12 years.
Well worth buying a property without leverage?
Tax Benefits - In investing cash we will pay rents on the tax rate, in a leveraged transaction, the property can be treated as a business for everything and offset by financing expenses, depreciation, fixed and variable expenses such as building insurance, property taxes, management fees, tenant finding fees, ongoing maintenance, and a neighborhood committee. And generate negative tax extensions throughout the life of the asset and therefore the return is higher than a cash transaction.
Tax Advantages
Leverage / Mortgage - When we come to invest in real estate, we must check where to get financing, a bank in the US. By the way, I helped dozens of investors last year in the amount of NIS 25,000,000 to get mortgages in the US without tax for 15 and 30 year loans. On top of your financial strength, at the expense of executive insurance, provident fund, study fund, etc.
Leverage / Finance / Mortgage
I will not elaborate here on the types of loans (apply to this distinguished forum readers) but everything is accessible online with the click of a button, loan according to the Spitzer Schedule, Equal Fund, interest payments only and more.
You can get a loan for 15/20/30 years usually. You can repay part of the loan, the entire loan and reduce the number of years.
A small tip that changes lives - today you can get loans up to 80% on open provident funds, executive insurance, study fund, pension funds, the loan is up to 7 years and sometimes you can only pay interest, a wise investment in real estate allows you to double equity within 7- 8 years and thus basically double our pension savings, crazy !!!! Compulsory financial education, early childhood education.??
Loan cycle for further investment- After several years of assuming work that the property has increased in value and reducing the loan fund payments, you can return to the bank and repurchase the existing loan at current market value and settle the existing loan
Interest rate de interest- If we retire equity after the loan cycle and invest the money again then there will actually be a de-interest effect on the original invested equity.
Example: If I deposit NIS 100 and the interest rate is 9% per year, at the end of the first year I will have NIS 109. At the end of the second year there will be NIS 118.81, at the end of the third year the interest will be calculated at the amount of NIS 118.81 and thus at the end I will have NIS 129.5, at the end of the tenth year slightly more than NIS 235 and so on.
Future value - is a value that will come in the future, a sum of money deposited at present in an interest-bearing deposit. The future value is higher than the present value at the cumulative interest rate for that period. Future value is one of the key tools in finance theory that deals with, among other things, choosing between investment or financing alternatives.
The more common case is when interest is accrued as interest.
Retirement savings plan - Real estate is a crazy tool for saving for retirement, in loans for a period of 15-20 years you can create an amazing savings plan where the tenant pays the loan and actually produces a savings plan for us at retirement age, many Americans take loans for only 15 years and do not generate passive income By the way, if the investor does not need a current cash flow, then it is definitely worth leveraging the equity for short-term loans and producing a savings plan / equity increase component, Equity Thus generating future passive income that is independent of our future occupation and place of work.
Below is a link to a house I recently finished building for investment
It's always fun to build your pension on reinforced concrete foundations rather than light waterfalls.
For retirement we were born at an earlier age???? ♂️
Remember "Genius is in the making"(I.e.
Whoever sits on the fence when the train passes "burns" his buttocks??
Long-term planning / strategy will extract all of us from freedom labs?? Financial
Remember "Genius is in the making"(I.e.
Whoever sits on the fence when the train passes "burns" his buttocks??
Long-term planning / strategy will extract all of us from freedom labs?? Financial
Attaches you 2 short videos
pleasant viewing
Best regards,
Age of Toriel??
— 
feeling blessed.
Link to the original post on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)
Name Blaustein
Championship !!! Learn and apply ????????????????
How much information and one post knowledge!
Amazing!????
Asaf Bar Merav Bar
Alon Sumagin
Excellent post age ????????????
You explained it very well.
The most lucrative to the banker with banking leverage this way is to offset expenses and not pay taxes on profit.
Compared to those who buy cash and pay income taxes and have almost nothing to offset.
At the leverage rate, bringing about 25% to 30% of the value of the asset and the rest from the bank, so on almost a third of our money we have an asset that over time, and more can be bought for 2 more assets than paying cash and saving our money.
Well done to the great posts, definitely a pro!
What an in-depth and invested post, well done ????????
Beautiful and informed writing. ????
Depreciation is a deferred tax, in the sale you will pay it off as capital gains tax, how do you deal with it in a private property?
Thanks so much, fascinating!
Very nice! I did not understand why you happen to repay the fund - a savings plan. Can you explain again?
How much value there is in this post is simply amazing.
Anyone who could read through the lines and internalize this information is worth a lot of money and can even bring it to a state of economic freedom.
How did someone smart ever tell me? "We were born for retirement" 😉
Gili's persuasion to read the posts, are you a real professional ????
Really fun to read and enriching ????
Most impressive and inspiring! Thanks.
Well done, a pleasure to read, learn and be impressed with the activities you do.
Hey Gil
Thanks for the informative and interesting posts
Two issues that bother me for a long time:
First of all, I've been digging on the issue for a few months but I can't get a negative tax as a result of expenses as you say, even when I do the calculation with a loan from the bank.
Secondly, regarding loans, I found no way to get a loan either as a company and without a draconian interest rate.
I would love to know where I am wrong
Thank you very much
Super cannon :))
The smartest thing to do is invest through SafeFutuer
One who really knows what he's talking about! Fun to read
Great.
Thanks Gil.
Does it make sense to expect the same increase in value over a hundred property and a property of two hundred and fifty?
How did you get into calculating a $ 6000 loan fund savings?
Well done age
Simple explanations that really make knowledge accessible
I would be happy if you would give your experience tips or information
For Israelis who live in Israel and are interested in leveraging their money by buying properties in the United States
Sing-er Yosef
Moshe Orange
????????
The posts you wrote from the best written in the forum
I really connect with everything you wrote. Curious to know what areas do you believe there is another value increase?
Exactly, well done for the road and the road.
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