Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Four Key Elements in the Solution

Why does this Solution break the cycle? Because of four key elements.

Key Element Number 1

First, you are no longer limited in your earning potential by your salary or by your professional endeavors; rather, you have become an investor. You have converted active income into passive income. When you sleep at night, when you go on a vacation, you continue to make money. Your assets appreciate (hopefully) in value over time and in the normal course of events each month you build equity by paying down the principal on your mortgage. A mortgage usually contains an amortization feature; therefore a portion of each payment reduces the outstanding loan balance and consequently increases your equity, everything else being unchanged.

Usually the individual caught in the cycle is employed, earning a good living, but his livelihood is based upon his own individual capacity to do a job and get paid for that work. The basis of The Solution is a move to a business model that has the capacity to create wealth, not only from individual effort, but also based upon market forces. If you correctly analyze the market and correctly perceive that capitalization rates or cap rates (the rate of return an investor requires to induce him to purchase a property for all cash without regard to financing) will likely fall from 10 percent to 7 percent, then, even if no other change occurs in the real property investment, your property value will increase significantly. Market ...