the positive property formula · people like you generate more wealth by paying down your home loan...

THE POSITIVE

PROPERTY FORMULA

How to Eliminate Your Mortgage and Buy 10 Positive Cash Flow Properties in Ten Years or Less

2 © The Positive Property Solution www.positivepropertysolution.com.au

Disclaimer

All rights reserved. No part of this publication may be reproduced, stored in a retrieval

system, or transmitted in any form or by any means electronically, mechanically, or

otherwise, without the expressed written consent of the publisher. The Positive Property

Solution will not be held responsible for any actions taken by any person or organization

relating to any information contained herein.

The Positive Property Solution are not accountants, real estate agents, financial advisors

or solicitors.

The Positive Property Solution is not giving you legal, accounting, investment, real estate,

valuation or financial advice. The details contained in this booklet are for informational

purposes. Property investment is a complex field. Readers should always conduct their own

due diligence and seek independent, professional advice for their investment decisions.

The Positive Property Solution is not liable for any financial loss incurred related to the

information in this document. Investment decisions made by the readers are theirs alone.

Copyright © 2014



Introduction

Thinking of getting rich quickly? If so, you have come to the

wrong place.

The Positive Property Formula is not a fast-track to fortune.

It is not the latest fad or investment tip that promises to make

you a millionaire overnight.

Instead, we focus on building wealth based on sound investment principles. We believe that

financial freedom begins with solid planning, sensible decision-making, and a focus on

growing investments slowly. Wealth requires diligence, practicality, and hard work. There are

no short cuts.

Do you want to cut down your home mortgage?

Do you want to build a property portfolio?

Do you want to build wealth and obtain financial freedom?

If so, The Positive Property Formula has the information you are looking for.

The Positive Property Formula makes investing in real estate accessible to the average

Australian. That’s our mission. How? We share our sensible secrets for building wealth

through rapid mortgage reduction and positive cash flow real estate. We can guide you on

how to grow your asset base and improve your long-term financial outlook.

Our sensible, logical method to property investment can help you reach your financial goals.

We do this systematically, limiting the risk for making financial miscues. We take the anxiety

out of investing.

For far too many people, fear is the only thing holding them back from taking the plunge and

buying their first investment property – but once you know the secrets, fear will never hold

you back again!



Tired of Get Rich Quick Schemes?

If you are tired of another “get rich quick” scheme, The Positive Property Formula can

help. The Positive Property Formula can reduce your home mortgage and help you create

a sustainable passive rental income and improve your lifestyle. It won’t make you rich

overnight, but it will provide you with a safe, consistent pathway towards creating real wealth

through real estate investing.

Are the Banks Unhelpful?

Does this sound familiar?

You are all set to purchase an additional investment property. The bank calls to say that they

cannot give you the loan you need because you are too highly leveraged. You are too much

of a risk for them.

This is bad news and a big obstacle to your investment goals.

You know that you can afford to make repayments. The banks, however, are hesitant.

Believe it or not, this is a common scenario. But it does not have to be the end. Chin-up! You

are not alone. Yet, few people know that you can continue with your investment strategy by

making a small adjustment to your approach. That’s where The Positive Property Formula

comes in. You are about to learn about how.

Grow Your Wealth

Our objective is to help you keep purchasing

property and expanding your asset base. How?

We know that as long as you keep buying one

positive cash flow property for every capital

growth property, the banks should give you



financial support. This allows you to grow your property portfolio and take control of your

financial life.

Ready, Set, Growth!

To begin, we focus on helping you eliminate your home mortgage in

the shortest time possible. This is easier than you think. Who wouldn’t

want to pay off their home 5, 10, or 15 years sooner? Freeing yourself

from this payment allows you to buy many more investment properties

on your investment journey. That’s great financial mobility.

The key is to reduce your mortgage, or what we call bad debt. The

Positive Property Formula takes debt that’s not tax deductible and

exchanges it for investment debt which is tax deductible. This helps

people like you generate more wealth by paying down your home loan and accruing cash

flow positive properties for your portfolio. The objective is to package this strategy together in

the right way by speaking to the right people who can get you results.

The Case of Dan and Mary

Dan and Mary, a married couple, have a

house worth $400,000, they have a home

loan on their home house worth $300,000.

Like most people, they’ve been chipping

away at it month after month. They are

paying it the old fashioned way (principle

and interest) at 7%. That’s just over

$2,000 a month in interest payments, to

pay off the house entirely.

This old-fashioned way of paying a house

down is outdated. The problem is that the



value of our properties is much more than it used to be a couple of generations ago. Our

parents wanted to get ahead in life just like us. They did it by going to school, getting a good

job, buying a home, then working hard for decades to pay it off.

With the old way, when you retire you’ll have your house paid off but no income and no other

assets.

That’s not much of a dream is it? Dan and Mary didn’t think so either.

Property investors strive to continue to move forward and create wealth for retirement, for

their families, and for a better lifestyle. Paying off ‘bad debt’ is crucial. Unburdening

ourselves from these debts can help you increase your investment power and magnify your

positive outcomes.

Okay, so using the old fashioned way of paying the principal and interest to pay a house off

can take up to 30+ years! Who in their right mind would want to work hard, so all their hard

earned cash gets swallowed up to pay of a mortgage?

So, what can you do?



The Solution

All right, here’s a very simple strategy. Instead of paying principal and interest we pay

interest only. Okay?

By setting up an offset account and paying the interest only, your payment would drop from

$2000 to $1700 a month. You might think, hey, hang on, aren’t we meant to be paying our

house off? Yes, but this is the smart way.

Instead of wasting that $300 on indulgences, here is our strategy.

First, ensure you need to speak to a finance broker and set up the right account. This might

be called an offset account or a redraw. By setting up this loan structure, it allows you to put

extra money against your home loan, but the difference is that you can access this money at

any time.

When you talk to a good quality finance broker, they’ll explain this. It’s either a redraw or an

offset account. You will always pay your $2,000 into your home loan but the $1700 goes in to

pay for the interest. Therefore, you have an extra $300 sitting there in your offset account.



This will continue to offset or save you interest in the future. Now that compounding effect

over a period of time is massive. And now your money is working for you.

How can we speed up this process? There is a couple of extra ways we can speed this up.

We can put more money into our offset account. For example, you get paid a wage either

monthly of weekly salary, you go and put 100% of that wage into your offset account.

Because our interest is calculated daily, you are saving yourself interest with putting that

money in there.

At this point, you may wonder, hang on a second “How am I going to live?” That’s the next

step. By acquiring a credit card with 55-day interest free period (see figure, above), and just

live off the credit card for 55-days. Of course, this requires discipline. We told you there’d be

some “hard work” involved didn’t we? But this is worth it. At the end of the 55-day interest

free period the money comes out of the offset account and brings the credit card balance

back to zero.

Now, let’s say you’ve got an extra $5,000 - $7,000 sitting against your loan for 55 days, then

this will be saving you much more on the interest. Now you can pay your home loan off a lot

sooner.



Take a look at the next example (see figure below). You could potentially pay your home

loan off in five, seven or ten years. It applies to any loan amount but the timeframe’s are

going to be a little bit different. If your loan is smaller you could pay it off quicker. A bigger

one will take longer. However, you’re still paying it off much faster.

How do we excel this so we get a double benefit? Let’s say we don’t just want to only pay off

our home loan but we want to buy some investment properties.

What can you do? You can buy an investment property using the equity you have in your

property and from your savings. Then we take the rent from the investment property and put

it in the offset account now, too. Next, you take all the tax benefits from your investment

property, whether you’re paying them back weekly, monthly or fortnightly and put this money

in the offset account as well.

And what happens? Your savings on the interest are now magnified. This speeds up the

compounding process from the offset account. This operates very, very quickly. In turn, you

can own two or three properties and pay your home loan off much faster.



The concept is simple. Pay off your home quicker, own more investment properties for

wealth and have financial freedom for the future.

This is an easy concept to achieve. If you’re interested in more details about how you can

start implementing this strategy, book a complimentary one-on-one consultation with one of

our friendly and experienced team members. Just CLICK HERE to start slashing years off of

your mortgage.

Capital Growth Property 101

Capital growth properties are properties that are located in high-growth areas. These areas

reflect a constant, increasing demand for living accommodation but where the supply of

accommodation is limited. For instance, in inner cities, a vast majority of the land has been

developed. Therefore, no more properties can be built unless you knock down an existing

building or house and build apartments.

Capital growth properties, by definition, will increase in value at a faster rate than their

regional equivalents. As a result, buyers will pay a premium to access this opportunity for



growth. However, the cost of owning the property (including mortgage interest, council rates

and other expenses) can easily be more than the rental income that you will receive.

This is called negative gearing. The costs that you incur are not covered by the rental

income. This can be claimed as a deduction against your income tax.

Example A: You buy a house for $350,000 and the weekly cost for

mortgage interest, council rates, property management fees and

insurance is $525. The rental income is $450. Your shortfall is $75 per

week, which can be deducted against your income tax.

Positive cash flow properties operate exactly the opposite. They are usually situated in

regional towns. They are investments that actually generate more income for you each week

than they cost you to maintain.

Of course, any additional income that you receive must be declared on your tax return and

you will be required to pay income tax on those earnings.

Example B: You buy a house for $280,000 and the weekly cost for

mortgage interest, council rates, property management fees and

insurance is $340. The rent that you receive is $400. The property

generates a positive cash flow of $60 per week. You will be required to

pay tax on this income at end of the financial year.

As you can see, the type of property that you buy can have a huge impact on your lifestyle. If

you buy four negatively geared properties, you’ll be forking out hundreds of dollars per week

in order to finance your property portfolio. This is a more difficult and more stressful method

to accumulate wealth.

Compared to if you buy only positive cash flow properties. You’ll enjoy the immediate

benefits of the extra income, if selected in high growth areas you are also likely to reap the

benefits of capital growth at the same time.



You can have your investment wealth and enjoy it!

The reality is you need positive cash flow in your portfolio as well as capital growth

properties. These properties are out there. Just ask The Positive Property Solution team,

they will show you.

The Positive Property Formula is to create a portfolio that includes a balance of both

negative and positive properties, combining two strategies into one powerful combination.

The income generated from your positive cash flow properties cancels out the added

expenses that you need to pay for with your negatively geared properties. This creates a

neutrally or positively balanced portfolio, you will eventually replace your income with

passive positive cash flow properties, building wealth through the capital growth. Nice!

Did you know that 90% of the world’s millionaires have chosen property investment as their

method? Property is strongly supported by banks and governments. It fulfils one of our basic

human needs. Unlike other investments, it is a dynamic investment which means that you

are not just relying upon cash flow or growth. Property investment can provide both.



Reap What You Sew

The most powerful part of this approach is that it can be replicated indefinitely. Provided that

you continue to keep building your portfolio in a balanced fashion, you could continue adding

properties until you have 10, 12, or even 20 houses in your portfolio!

The Positive Property Formula provides a simple formula for your success. Making money

from property does not have to be difficult. However, like anything, you need to put in the

preparation and research to set yourself up for the best success. To start, let’s go over what

else you need to consider before incorporating our solution into your property investment

goals.

Consideration 1: Research

The average time a person spends researching and evaluating a potential property deal is

generally about 20 hours from beginning to end. Let’s say that, as a worst-case scenario,

you spend 40 hours tracking down your next investment. Can you spare less than 45

minutes per week to dedicate towards taking control of your financial independence?

The trick is to make the best use of this time. That’s how you find a top performing property

most efficiently.

Consideration 2: Finance

Many people, including seasoned investors, make the mistake of believing that purchasing

property is about the bricks and mortar. This is an illusion. Property investing is actually

about numbers, not concrete. If you can’t secure a bank loan, then you are stuck. That is

why this strategy works.

If you make a positive return from your portfolio the banks are much more likely to keep

lending you money. They’re smart. They know that if your income changes you will still be

able to meet your repayments.



Do you see why for each negatively geared property you should have a positive cash flow

property in your portfolio? This is to offset one investment with other. It’s that simple.

Next, you can choose to fund the deposit and associated costs with a mix of savings, tax

returns and equity. Conversely, you might like to buy high cash flow, high growth properties

and achieve far greater results in less time. The team at Positive Property Solution will

show you how to find these attractive properties and get your strategy rolling today.

Consideration 3: Plans Become Action

The Positive Property Formula encourages purchasing, at a minimum, one property per

year for 10 years. Let’s explore this further…

Case Example 1

Let’s say that each property you buy is worth $350,000. Ignoring interest rate fluctuations,

mortgages, rent, expenses and capital growth for now, let’s examine how this strategy really

works.

10 properties bought over 10 years

NOTE: If you purchase 10 properties over 10 years and pay them completely

down, you would be earning a significant rental income each year.



At a yield of 10%, your rental yield would be $350,000 per year.

At a yield of just 5%, your rental yield would be $175,000 per year.

After year 10, you will have developed a property portfolio worth $3.5m.

At this point, you can elect to sell several properties from your portfolio and use these funds

to pay off the balances on your remaining mortgages.

In general, a property will double in value within 7-10 years. As such, the properties that you

bought early on should be worth twice as much, by the time you reach your ninth and tenth

purchase.

At this point, how many properties you wish to sell will depend on the capital growth you’re

portfolio has accrued.

Remember, the goal is to pay off all of your remaining mortgages. By doing this, you can

increase your cash flow. Who knows, you might even be able to quit your job and live off

your rental income.

If you are motivated and believe that you can buy more than one property per year using this

method, you can. Of course, you’ll develop a larger portfolio worth much more. When you

choose to sell properties, you’ll have a larger flow of rental income.

The truth is that anyone can learn this strategy with a little assistance. You can start by

booking a complimentary one-on-one consultation with one of our Positive Property

Solution team members today to discuss this strategy in more detail, personalized to your

financial goals.

Case Example 2

To review, let’s look at another realistic example.



You buy 10 properties over 10 years, with each property costing $350,000. Therefore you

have a portfolio worth $3.5m.

At this point, you want to sell 4 of your properties. Due to capital growth, the properties that

you bought early on are now worth $6-700,000 each. Great! This means that the proceeds of

4 property sales are enough to pay off ALL of the mortgages on your other 6 properties.

You now have no debt remaining on your entire portfolio of 6 properties, now worth around

$2.5m. Capital growth is your friend.

Best-case scenario: $2.5m @ 10% yield = $250,000 income/year.

Worst-case scenario: $1.25m @ 5% yield = $125,000 income/year.

Can you see the freedom this scenario gives you? No gimmicks. No get rich quick trickery.

This is just a methodical approach to building real wealth through real estate.

Create Wealth with a Risk-Free Formula

It is normal for property investors to feel anxious, especially new ones. This apprehension

stems from worrying about the size of the purchases you are facing. Let’s face it, most of us

are not used to overseeing transactions in the hundreds of thousands of dollars.

Remember the more you put into life the more you get out. Successful people are willing to

do what unsuccessful people are not. In the beginning, you may be hesitant about property

investing. That’s a natural response.

The best way to overcome this fear is through education and support. Then you can act

calmly, confidently, and with purpose. With the right information, mentoring, and support on

your side, you can eliminate any nerve-racking guess work. After all, we’ll help you make

decisions based on sound economic principles.

The old adage is true – there is never a perfect time to invest. However, in property, the



longer you wait, the more expensive starting up will be. Remember, it doesn’t matter when

you buy if you buy with a long-term focus. This way, you’ll always end up ahead.

But don’t just take anyone’s word for it. There are many sound risk-control tools that you can

implement to reduce uncertainty and alleviate any stress you might feel. Below are 3

common concerns of most property investors that the team at Positive Property Solution

help you understand and address.

Risk #1: What if I can’t find a tenant?

You’d be surprised how common this concern is. Millions of Australians rent each year.

Customers are always out there. Still, there are many simple steps you can take to

minimize the risk of vacancy. For instance, you might only buy property in areas that

have a strong rental population (this information is freely available from sources such

as the Australian Bureau of Statistics). Also, having a qualified, experienced property

manager on your team will help you to ensure your property is tenanted year-round.

Risk #2: What if my tenants destroy my property?

A solid Landlords Insurance policy is a vital tool for any property investor. For only a

few hundred dollars a year, you can buy the peace-of-mind that comes with knowing

that any damage will be covered. You’ll even receive loss-of-rent coverage as repairs

get made. It’s a worthwhile investment.

Risk #3: What if interest rates go up?

The Reserve Bank and individual lenders decide interest rates. This is one of the most

uncontrollable facets of property investment. What you can control is your own situation

– if rising interest rates are a concern, simply ensure you have a cash reserve to deal

with unexpected expenses. Alternatively, you could opt for a fixed rate mortgage for

increased predictability. Finally, you can increase your rent in line with the market. That

way, if interest rates go up, your rental income covers this accordingly.



Free Consultation

So, what can you expect by talking to one of our experienced, trained consultants? This

step-by-step consultation overviews our method as it relates to your financial and investment

goals. You’ll receive an expert evaluation and a personalized solution to start or add to your

investment property portfolio.

You’ll learn how to:

Eliminate your home loan in 5-6 Years

Accumulate a portfolio of 10 cash flow positive properties in 10 years

Enjoy capital growth and rental income from positive cash flow properties

Find undervalued, high performing properties

Maximize your rental income

Save money with new tax saving opportunities

Use risk minimization strategies

Avoid costly buying mistakes

Start Now

To get going, just click on the link below to book your first free appointment with a consultant.

The Positive Property Formula

To your success,

The Positive Property Solution Team

the positive property formula · people like you generate more wealth by paying down your home loan...

Documents