1. AMERICA’S GREATEST REAL ESTATE TRAINING The James Smith Training Organization Retire in Style Creating Massive Passive Income Turn a $ 1.00 Investment into $ 5 Million Net Worth Within Five Years Even If You Have ▪ No Job ▪ No Money ▪ No Credit ▪ No Experience Gary A. Barnes, MBA Instructor gary@opmmentoring.com platinumedge@comcast.net

2. What is Retirement? Retirement has nothing to do with how you spend your time. Sitting in a rocking chair all day watching life go by is not retirement – That’s death in slow motion.

3. You can only spend so much time in leisure until it becomes boring. What is Retirement?

4. When you have enough passive income coming in every day to support whatever lifestyle you desire... Whether you decided to get out of bed that morning or not... - That Is Retirement! What is Retirement? Retirement is...

5. What Do You Do In Retirement? Anything you want to do: Keep Working – for the sheer joy of doing your job Volunteer Work Philanthropic Work Travel Hobbies Education

6. How Do You Become Retired? It is a 2-Step Process: 1) Meet Your Current Cash-Flow Needs. Replace your current pay check with income from passive sources. 2) Meet Your Long-Term Cash-Flow Needs. Generate continuing, on-going, passive income where your personal involvement is not needed to keep the money coming in.

7. Creating Passive Income Is some of the hardest work you will ever do! If It Was Easy Then everyone would be doing it! It’s just like panning for gold!

8. Panning for Gold It’s a lot of hard, back-braking work.

9. Panning for Gold Step # 1: Fill your pan with rocks, gravel, and sand.

10. Panning for Gold Swish and swirl away the lighter weight rocks, gravel and sand

11. Panning for Gold Find the tiny flake or grain of gold

12. Panning for Gold When panning for gold you have to literally sift through tons and tons of rocks... sand... gravel... silt... mud to find just one tiny nugget. But when found, that nugget is so valuable that it makes all the rocks, gravel, and sand worth the effort. Real Estate Investing is a lot like that.

13. Real Estate Investing is the Perfect Passive Income Generator Assumptions we will make: 1)Typical house costs $200,000 2)Typical apartment rent is $700 3)Appreciation Rate of 6.1% (National Average) 4)Annual rent increases of 5.3% (National Average) 5)Refinance at 60% - 80% LTV 6)Debt-Coverage Ratio 1.2 7)CAP Rate to Buy is 12% 8)CAP Rate to Refi is 7% Let’s examine eight scenarios for developing Passive Income.

14. Step # 1 Replace Your Current Pay Check Don’t quit your day-job yet ! Replacing your current pay check with Passive Income should be a well thought through, gradual transition. Begin the process on a part-time basis. 5-hours per week is enough to start. Gradually increase the time allocation as your circumstances allow.

15. How Are You Currently Paid? Annually 1 time per year Monthly 12 times per year Semi-monthly 24 times per year Every two weeks 26 times per year Every week 52 times per year When you started your current job did you become angry when they failed to pay you after working there for only one Hour?

16. How Are You Currently Paid? Annually 1 time per year Monthly 12 times per year Semi-monthly 24 times per year Every two weeks 26 times per year Every week 52 times per year When you started your current job did you become angry when they failed to pay you after working there for only one Hour? What about when they failed to pay you after two hours of work?

17. How Are You Currently Paid? Annually 1 time per year Monthly 12 times per year Semi-monthly 24 times per year Every two weeks 26 times per year Every week 52 times per year When you started your current job did you become angry when they failed to pay you after working there for only one Hour? What about when they failed to pay you after two hours of work? What about when they failed to pay you at the end of the day?

18. How Are You Currently Paid? You did not say, “ This job will never amount to anything. I’ve been working all day and they still haven’t paid me yet.” You probably had to work there for two weeks or more before you got paid. But you still kept working there, because you knew that eventually you would get paid.

19. Real Estate Investing is Much the Same Way You probably won’t get paid the first day. You probably won’t get paid the first week. You probably won’t get paid the first month. You probably won’t get paid the first quarter. But you WILL get paid ! You put in the time first – Then you get paid.

20. Don’t Give Up - It Really Works ! What if you worked 5 hours per week? What if you worked 4 weeks per month? What if you worked 12 months per year? Take two weeks off for Christmas and Thanksgiving. That equals 250 hours.

21. Don’t Give Up - It Really Works ! What if it took you an entire year to find, negotiate, buy, market, negotiate and close your first deal – and you made... $50,000 Would it be worth it?

22. Don’t Give Up - It Really Works ! Divide $50,000 by the 250 hours you worked and you will find that you earned $200 per hour. $50,000 ÷ 250 hrs = $200/hr

23. Don’t Give Up - It Really Works ! Divide $50,000 by the 250 hours you worked and you will find that you earned $200 per hour. Do You Currently Earn $200 Per Hour? Now do you think it would be worth it?

24. Don’t Give Up - It Really Works ! I’ll make you an iron clad guarantee. You will succeed in NOT buying 100% of the houses on which you make no offers !

25. Don’t Give Up - It Really Works ! You’ve got to take action. Go make offers ! Real Estate Investing is a Contact Sport Not a Spectator Sport !

26. Step # 1 Focus on replacing your current pay check.

27. How To Replace Your Pay Check

28. Could You Quit Your Job ? You now have $50,000 CASH in the bank. You have an entire year’s income in the bank. Wouldn’t you now feel more secure in quitting your job? I’m not suggesting that anyone quit their job. I’m just pointing out that at this point, if you wanted to, you could do so and not worry about how you were going to live. And if you earned $50,000 part-time, don’t you think that you could earn several times that amount if you did investing on a full-time basis?

29. Now that Your Paycheck is Replaced Start Planning Your Retirement ! The amount of money you have increases over time when it is put to work earning interest, or when invested in a project that appreciates. The amount of money you end up with is simply a function of the passage of time and the rate at which it grows.

30. 3 Ways to Make Money Work for You With Real Estate Investing. 1) Buy/Sell, Buy/Sell, Buy/Sell Buy a property at a discount, sell it for a profit. Use the profits to buy more discounted property. Which will be sold for more profits. Repeat over, and over, and over, as needed.

31. 3 Ways to Make Money Work for You With Real Estate Investing. 1) Buy/Sell, Buy/Sell, Buy/Sell: Buy a property, sell it for a profit, use the profits to buy more property, which will be sold for more profits, etc. 2) Buy and Hold: Buy a property and then never sell or refinance it. It will be paid off by the renters while its value increases due to appreciation.

32. 3 Ways to Make Money Work for You With Real Estate Investing. 1) Buy/Sell, Buy/Sell, Buy/Sell: Buy a property, sell it for a profit, use the profits to buy more property, which will be sold for more profits, etc. 2) Buy and Hold: Buy a property and then never sell or refinance it. It will be paid off by the renters and its value increases due to appreciation. 3) Buy / Strip Equity / Leverage / Reinvest: Buy a property and hold it for a minimal period of time. Refinance it to strip out its equity which can be leveraged for reinvestment.

33. Basic Retirement Strategy The day you were born your parents should have created a self directed Roth IRA for you and deposited $2,400 into it. Your parents should have continued to deposit $200 per month. Your parents should have taught you the time-value of money. At age 18 you should have taken over depositing $200 per month. At age 65 you could retire with $158,400 contributed to your IRA. But after it’s been invested... How much will it grow to for your retirement? Parent’s Contribution $ 43,200 Your Contribution $ 115,200 Total Contributions $ 158,400

34. Basic Retirement Strategy Interest RateTotal Retirement Nest Egg 3 % $ 502,000 5 % $ 1,200,000 8 % $ 5,000,000 10 % $ 13,500,000 20 % $ 2,100,000,000 30 % $ 273,000,000,000 50 % $ 2,000,000,000,000,000 How much will you have for your retirement? How many of you had parents that did that for you? How many of you are doing that for your children? Time-Value of Money with 65-Years of Investment Growth

35. Retirement Strategy # 1 30-Year Plan No Special Training Needed

36. Strategy # 1 30-Year Buy & Hold Buy 1 house every year for each of 30 Years Never Sell them Never Refinance them End Up Owning 30 Houses

37. Strategy # 1 30-year Buy & Hold Rental Income Vs Refinancing Future Rent: * A home that rents for $1,200 per month today will rent for approximately $6,890 per month within thirty years. That is $82,721 per year. * Based upon 5.3% annual rent increases and 6.1% annual appreciation

38. Strategy # 1 30-Year Buy & Hold Rental Income Vs Refinancing Future Rent: * A home that rents for $1,200 per month today will rent for approximately $6,890 per month within thirty years. That is $82,721 per year. A home valued at $200,000 today will be worth approximately $1.3 Million within thirty years. Refinancing: * * Based upon 5.3% annual rent increases and 6.1% annual appreciation

39. Strategy # 1 30-Year Buy & Hold Rental Income Vs Refinancing Future Rent: * A home that rents for $1,200 per month today will rent for approximately $6,890 per month within thirty years. That is $82,721 per year. A home valued at $200,000 today will be worth approximately $1.3 Million within thirty years. Thirty years from today, which would you rather have: $82,721 per month for life, or $1.3 Million in a lump-sum payment? Refinancing: * Future Income: * Based upon 5.3% annual rent increases and 6.1% annual appreciation

41. Strategy # 1: 30-Year Buy & Hold 4-Ways to Make Money Strategy # 1 – Four Ways to Make Money: 1) Collect the Rent In 30-Years you will be able to collect annual rents of: 31 Years $ 1,400,000 32 Years $ 1,600,000 33 Years $ 1,800,000 34 Years $ 2,000,000 35 Years $ 2,200,000 36 Years $ 2,400,000 Get a $200,000 raise every year after you Retire.

42. Strategy # 1: 30-Year Buy & Hold 4-Ways to Make Money Strategy # 1 – Four Ways to Make Money: 1) Collect the Rent 2) Refinance One House per Year In 30-Years you could start refinancing each house as it becomes totally paid off. Your annual income would be: 31 Years $ 2,700,000 32 Years $ 3,000,000 33 Years $ 3,300,000 34 Years $ 3,600,000 35 Years $ 3,900,000 36 Years $ 4,000,000 Get a $300,000 raise every year after you Retire.

43. Strategy # 1: 30-Year Buy & Hold 4-Ways to Make Money Strategy # 1 – Four Ways to Make Money: 1) Collect the Rent 2) Refinance One House per Year 3) Sell 10 Houses and Pay off the Other 20 All of your properties would be owned free and clear. Your annual rental income would be: 31 Years $ 2,250,000 32 Years $ 2,400,000 33 Years $ 2,500,000 34 Years $ 2,650,000 35 Years $ 2,800,000 36 Years $ 3,000,000 Get a $150,000 raise every year after you Retire.

44. Strategy # 1: 30-Year Buy & Hold 4-Ways to Make Money Strategy # 1 – Four Ways to Make Money: 1) Rent 2) Refinance One House per Year 3) Sell 10 Houses and Pay off the Other 20 4) Refinance All of the Properties Every 5 years Your CASH-BACK at closing each time would be: 31 Years $ 37 Million 35 Years $ 28 Million 40 Years $ 46 Million 45 Years $ 69 Million Get a $5 to $7 Million raise every year after you Retire.

45. Retirement Strategy # 2 10-Year Plan No Special Training Needed

46. Strategy # 2 10-Year Buy & Hold Buy 2 houses every year for each of 10 Years Never Sell them Never Refinance them End Up Owning 20 Houses

47. Strategy # 2 10-Year Buy & Hold You may buy as many properties as you desire for meeting your cash flow needs, but buy two properties per year that are held in reserve for your retirement program.

48. Strategy # 2 10-Year Buy & Hold Property Won’t Cash-Flow: If you live in an area where you cannot rent out a property for enough to cover the mortgage payment then simply buy two for one. Example: FMV = $ 600,000 Mortgage = $ 4,500 Rent = $ 3,200 Monthly Loss $ 1,300 It won’t take many of these kinds of deals to destroy you financially. Buy a property at 10% under FMV and then resell it at 5% above FMV. Use the profits to subsidize the mortgage payments on a second house bought 60-days later. You have no money involved in the deals. Common Excuses

49. Strategy # 2 10-Year Buy & Hold Property In Negative Appreciation: If you live in an area where property values are declining at a rapid rate then buy a property in Short-Sale, sell it and reinvest the profits into another Short-Sale for retirement. Example: FMV = $ 600,000 Short-Sale Amt = $ 400,000 Resell for = $ 475,000 Total Cash Profit = $ 75,000 Buy a property at 40% under FMV and then resell it at 15% under FMV. Use the profits to subsidize the mortgage payments on a second house bought 60-days later. You have no money involved in the deals. Common Excuses

50. Retirement Strategy # 3 10-Year Plan Becoming a True Investor

51. Strategy # 3 10-Year Multi-Unit Investing Equity in a property does you no good. Equity is like money stuffed in your mattress. It will always be there for a rainy day. But it never works to earn you more money. Strip the equity out, Leverage it and put it to work. Make your money work for you.

52. Strategy # 3 10-Year Multi-Unit Investing Simple Leverage: Pull the equity out and reinvest it Laterally: Example – Buy a Similar Property FMV of property $ 200,000 Current Equity $ 50,000. Use the equity as a down payment to buy another property valued at $ 200,000. (25% Down Payment)

53. Strategy # 3 10-Year Multi-Unit Investing Simple Leverage: Power Leverage: Pull the equity out and reinvest it Laterally: Pull the equity out and reinvest it Vertically: Example – Buy a Similar Property FMV of property $ 200,000 Current Equity $ 50,000. Use the equity as a down payment to buy another property valued at $ 200,000. (25% Down Payment) Example – Buy a Bigger and Better Property FMV of property $ 200,000 Current Equity $ 50,000. Use the equity as a down payment to buy a commercial property valued at $ 1,000,000. (5% Down Payment)

54. Strategy # 3 10-Year Multi-Unit Investing Year # 1 - Buy House: Buy a house at 10% Under FMV. 2 years later resell for 10% above current FMV. FMV = $ 200,000 Buy for $ 180,000 Sell for $ 220,000 Profit $ 40,000

55. Strategy # 3 10-Year Multi-Unit Investing Year # 1 - Buy House: Buy a house at 10% Under FMV. 2 years later resell for 10% above current FMV. FMV = $ 200,000 Buy for $ 180,000 Sell for $ 220,000 Profit $ 40,000 Year # 3 - Buy 8-Unit Apartment: Use equity from house as down payment On a 35-Unit apartment house.

56. Strategy # 3 10-Year Multi-Unit Investing Year # 1 - Buy House: Buy a house at 10% Under FMV. 2 years later resell for 10% above current FMV. FMV = $ 200,000 Buy for $ 180,000 Sell for $ 220,000 Profit $ 40,000 Year # 3 - Buy 8-Unit Apartment: Use equity from house as down payment On a 35-Unit apartment house. Year # 5 - Buy 35-Unit Apartment: Two years later refinance the 8-Unit, Power-Leverage the equity as a down payment on a 35-Unit apartment. Refi at 60% LTV.

57. Strategy # 3 10-Year Multi-Unit Investing Year # 1 - Buy House: Buy a house at 10% Under FMV. 2 years later resell for 10% above current FMV. FMV = $ 200,000 Buy for $ 180,000 Sell for $ 220,000 Profit $ 40,000 Year # 3 - Buy 8-Unit Apartment: Use equity from house as down payment on a 35-Unit apartment house. Year # 5 - Buy 35-Unit Apartment: Refinance 8-Unit, Power-Leverage the equity as a down payment on a 35-Unit apartment. Refi at 60% LTV. Year # 7 - Buy 135-Unit Apartment: Refinance 8-Unit and 35-Unit, Power-Leverage the equity as a down payment on a 135-Unit apartment. Refi at 60% LTV.

58. Strategy # 3 10-Year Multi-Unit Investing Year # 10 – Refinance ALL UNITS: (at 60% LTV) Pull out Cash Back at Closing in the amount of: $ 5,500,000 Go and enjoy your retirement. And all this was done on a $1.00 initial investment.

60. Retirement Strategy # 4 10-Year Plan Combining Strategies 2 & 3 Compounding Multi-Unit Properties

61. Strategy # 4 10-Year Compound Multi-Unit Combine Strategies # 2 and # 3: Buy one house every year for the next 10 years (Strategy # 2) 2 years later sell the house and buy an 8-Plex apartment. 2 years later refinance the 8-Plex and buy a 35-Plex apartment. 2 years later refinance the 35-Plex and buy a 135-Plex apartment. You will end up owning 10 of each of these property types. Always Refinancing at only 60% LTV.

62. Strategy # 4 10-Year Compound Multi-Unit Year ABCDEFGHIJ Cash Back 1H-1 2H-2 38P-1H-3 48P-2H-4 535P-18P-3H-5 635P-28P-4H-6 7135P-135P-38P-5H-7 8135P-235P-48P-6H-8 9135P-335P-58P-7H-9 10135P-435P-68P-8H-10 11Refi135P-535P-78P-96.7 M 12Refi135P-635P-88P-107.4 M 13Refi135P-735P-98.1 M 14Refi135P-835P-108.9 M 15Refi135P-99.8 M 16Refi 135P10 23.7 M

63. Strategy # 4 10-Year Compound Multi-Unit Each year you can refinance a different grouping of properties. Your annual income continues to climb. (60% LTV) Year ABCDEFGHIJ Cash Back 17Refi 26.1 M 18Refi28.7 M 19Refi31.8 M 20Refi34.7 M 21Refi 41.8 M 22Refi 45.9 M 23Refi 50.3 M 24Refi 55.4 M 25Refi 61.0 M 26Refi 67.0 M 27Refi 73.7 M 28Refi 81.0 M 29Refi 89.2 M

64. Strategy # 4 10-Year Compound Multi-Unit Apartment Houses are only an Example: BillboardsPre-ConstructionOffice Buildings Storage UnitsCondo ConversionsStrip Malls Mobile Home ParksTax Liens/DeedsBusinesses Section 8 HousingREO’s/Short-SalesRaw Land Development WarehousingSpec-HomesHard Money Lending AirportsRestaurantsGolf Courses R.V. ParksProbateAdverse Possession You can invest in any aspect of real estate you desire. Variety can make your investing more enjoyable and diversified.

65. Strategy # 5 - Don’t Buy - Lease / Option Instead

66. Strategy # 5 10-Year Multi-Unit Lease / Option Lease / Option a 40-Unit Apartment Building: Seller must be willing to sell for ALL CASH, NOT a 1031-Tax Free Exchange.

67. Strategy # 5 10-Year Multi-Unit Lease / Option Lease / Option a 40-Unit Apartment Building: Seller must be willing to sell for ALL CASH, NOT a 1031-Tax Free Exchange. Average apartment building owner became an owner at about age 40. At age 65 to 70 they want to retire and do some traveling while they still have their health. (1 in 30 owners qualify) Retirement:

68. Strategy # 5 10-Year Multi-Unit Lease / Option Lease / Option a 40-Unit Apartment Building: Seller must be willing to sell for ALL CASH, NOT a 1031-Tax Free Exchange. Average apartment building owner became an owner at about Age 40. At age 65 to 70 they want to retire and do some traveling While they still have their health. (1 in 30 owners qualify) Retirement: Frustrated Investor: Tired of being a landlord – it’s a lot more work than they thought.

69. Strategy # 5 10-Year Multi-Unit Lease / Option Lease / Option a 40-Unit Apartment Building: Seller must be willing to sell for ALL CASH, NOT a 1031-Tax Free Exchange. Average apartment building owner became an owner at about Age 40. At age 65 to 70 they want to retire and do some traveling While they still have their health. (1 in 30 owners qualify) Retirement: Frustrated Investor: Tired of being a landlord – it’s a lot more work than they thought. Medical Emergencies / Other: Whatever their reasons for selling – They just want ALL CASH.

70. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 1: Show them the After-Tax income stream they will have if they sell their property for ALL CASH. Selling For All Cash (Original Purchase Price of $ 1,250,000) Asking Price Selling Price Less: Mortgage Pay off Less: Commissions & Closing Less: Capital Gains Tax (15%) Net Cash Amount Received $ 2,100,000 $ 2,000,000 - $ 1,000,000 - $ 200,000 - $ 112,500 - $ 687,500

71. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 2: Ask the seller what he/she is going to do with the $687,500 they received from the sale of the property. Stick it in a jar and place it on the fireplace mantle? Stuff it in their mattress? Burry it in the backyard? Invest it: Stock Market? Bank CD’s? Gold Bullion? Other?

72. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 3:Show them the tax consequences of ALL CASH. Selling For All Cash (Original Purchase Price of $ 1,250,000) Asking Price Selling Price Less: Mortgage Pay off Less: Realtor Commissions Less: Capital Gains Tax (15%) Net Amount Received Invested at 7% Per Year Less: Capital Gains Tax (15%) After Tax Annual Cash-Flow $ 2,100,000 $ 2,000,000 - $ 1,000,000 - $ 200,000 - $ 112,500 - $ 687,500 $ 48,125 - $ 7,219 $ 40,906

73. Strategy # 5 10-Year Multi-Unit Lease / Option They are trading their apartment house for a Cash-Flow stream. They will receive an annual dividend check of $40,906. ($3,409 per month on average) Do they really want to trade their apartment house for only $40,906? What if you could give them $100,000 After Tax per year instead? Wouldn’t $100,000 per year make them happier than $40,906? Step # 3:Show them the tax consequences of ALL CASH.

74. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 4: Show them the calculations for their current NOI (Net Operating Income) Current NOI (40-Unit Apartment Building) Annual Rental Income ($750 per unit per month times 40 units times 12 months per year) Less: Annual Expenses (40%) Net Operating Income (NOI) $ 360,000 $ 144,000 $ 216,000 The owners then must pay the $96,000 annual mortgage payment

75. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 5: Don’t Sell me the building - Lease it to me with a 10-Year Lease Option Owner No Longer Responsible For:Owner Can Now: Maintenance Repairs Vacancies Rent Collection Bill Paying Advertising Tenant Headaches Taxes Management Responsibility Retire Receive Passive Income Pay Mortgage Payment

76. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 6: Show Owner How Much He Will Be Paid to Lease to You. My Lease Payment each year will be 80% of his current NOI Net Operating Income$ 216,000 Times 80% X.80 Annual Lease Payment$ 172,800 Less Annual Mortgage$ 96,000 Before Tax Earnings$ 76,800 That’s a lot better than the $ 40,906 from an All Cash sale. But it gets even better.

77. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 7: Show Owner His AFTER TAX Earnings Original Purchase Price$ 1,250,000 Depreciation Rate X 3.6 % Annual Depreciation Expense$ 45,000 Before Tax Income$ 76,800 Less: Depreciation Expense - $ 45,000 Less: Interest Expense (Mortgage) - $ 74,800 Net Loss - $ 43,000 Losses applied against other income resulting in a tax savings of $15,050 on other income. Cash$ 76,800 Tax Savings $ 15,050 Total Income $ 91,850 That is 2.25 times as much After Tax Money compared to the All Cash sale. ($40,906 Vs $91,850)

78. Strategy # 5 10-Year Multi-Unit Lease / Option Step # 8:Show 10-Year After-Tax Comparison After Tax From Cash SaleAfter Tax From Lease/Option Annual Earnings$ 40,906Annual Earnings $ 91,850 X 10 X 10 10-Year Earnings$ 409,06010-Year Earnings $ 918,500 Initial After Tax Income$ 687,500Net Option Pmt. $ 1,413,062 Total 10-Year After Tax$ 1,096,560Total 10-Year $ 2,331,562 That is 2.13 times as much After Tax Money compared to the All Cash sale. Net Option Pmt calculated by after tax gain on sale added to the 10-Year principal pay down. Which do you think the owner would prefer?

79. Strategy # 5 10-Year Multi-Unit Lease / Option What’s in it for the Investor? 1) No Money Down. You won’t even need to pay a security deposit because all of the tenants already paid security deposits.

80. Strategy # 5 10-Year Multi-Unit Lease / Option What’s in it for the Investor? 1) No Money Down. 2) Immediate 1 st Year Salary of $43,200. You won’t even need to pay a security deposit because all of the tenants already paid security deposits. The difference between the NOI of $216,000 and the rent you pay to the owner of $176,800.

81. Strategy # 5 10-Year Multi-Unit Lease / Option What’s in it for the Investor? 1) No Money Down. 2) Immediate 1 st Year Salary of $43,200. You won’t even need to pay a security deposit because all of the tenants already paid security deposits. The difference between the NOI of $216,000 and the rent you pay to the owner of $176,800. 3 ) Annual Pay Raises of 5.3% of Total Rents. Annual Salary $ 43,200 $ 61,200 $ 80,100 $ 99,950 $ 120,780 $ 142,660 $ 165,630 $ 189,750 $ 215,080 $ 241,680 $ 1,360,030

82. Strategy # 5 10-Year Multi-Unit Lease / Option What’s in it for the Investor? 1) No Money Down. 2) Immediate 1 st Year Salary of $43,200. You won’t even need to pay a security deposit because all of the tenants already paid security deposits. The difference between the NOI of $216,000 and the rent you pay to the owner of $176,800. 3) Annual Pay Raises of 5.3% of Total Rents. Annual Salary $ 43,200 $ 61,200 $ 80,100 $ 99,950 $ 120,780 $ 142,660 $ 165,630 $ 189,750 $ 215,080 $ 241,680 $ 1,360,030 4) $2,650,000 Cash Back upon Refi in 10-Years. Total Salary$ 1,360,030 Cash Back$ 2,650,000 Equity$ 1,170,000 Total Profits$ 5,180,030 Not Bad for a No Money Down Deal! That’s 2.22 times what the seller got.

83. Strategy # 6 Why not retire in only 5 Years ? The time value of money and the effects of compound interest will not generate as much passive income because you don’t have as much time working in your behalf, but it’s still great.

84. Strategy # 6 5-Year Multi-Unit Apartments Step # 1 – Buy 2 Houses per year for 5 years. Step # 2 – Sell each house after 2 years. Buy an 8-Plex. Step # 3 – Refinance each 8-Plex after 2 years. Buy a 35-Plex.

85. Strategy # 6 5-Year Multi-Unit Apartments Year ABCDE Cash Back 1H 1&2 2H 3&4 38P 1&2H 5&6 48P 3&4H 7&8 535P 1&28P 5&6H 9%10 6Refinance35P 3&48P 7&8$ 1.2 M 7Refinance35P 5&68P 9 & 10$ 1.3 M 8Refinance35P 7&8$ 1.4 M 9Refinance35P 9&10$ 1.6 M 10Refinance$ 1.7 M 11Refinance$ 4.8 M 12Refinance$ 5.3 M 13Refinance$ 5.8 M 14Refinance$ 6.4 M 15Refinance$ 7.1 M

86. Strategy # 7 Lazy Man’s 5-Year Retire Plan Can you fall off a log? It really is that easy

87. Strategy # 7 5-Year Lazy Man’s Plan Year ABCDE Cash Back 1House 1 2House 2 38-Plex 1House 3 48-Plex 2House 4 535-Plex 18-Plex 3House 5 6Refinance35-Plex 28-Plex 4$ 600,000 7Refinance35-Plex 38-Plex 5$ 650,000 8Refinance35-Plex 4$ 700,000 9Refinance35-Plex 5$ 800,000 10Refinance$ 900,000 11Refinance$ 2.4 M 12Refinance$ 2.6 M 13Refinance$ 2.9 M 14Refinance$ 3.2 M 15Refinance$ 3.5 M

88. Strategy # 8 What About a 1-Year Retire Plan Who wants to be fully retired in just 1 Year?

89. Strategy # 8 1-Year Multi-Unit Lease / Option Find A Property Under Bad Management High vacancy rate and expenses produces NOI of only $192,000. Based upon a CAP Rate of 12 you could buy or lease option it for only $1,600,000. If it is really poorly managed, you could get it for a CAP Rate of 15 and pay only $1,2800,000. These properties will take some work to find. You sometimes have to kiss a lot of toads to find a prince.

90. Strategy # 8 1-Year Multi-Unit Lease / Option Find A Property Under Bad Management High vacancy rate and expenses produces NOI of only $192,000. Based upon a CAP Rate of 12 you could buy or lease option it for only $1,600,000. You Provide Good Management Decrease Vacancy Rates Decrease Expenses Raise Rents

91. Strategy # 8 1-Year Multi-Unit Lease / Option Find A Property Under Bad Management High vacancy rate and expenses produces NOI of only $192,000. Based upon a CAP Rate of 12 you could buy or lease option it for only $1,600,000. You Provide Good Management Decrease Vacancy Rates Decrease Expenses Raise Rents New NOI of $ 300,000 New CAP Rate of 7 Sell or Refi for $ 4,285,714

92. Strategy # 8 1-Year Multi-Unit Lease / Option Find A Property Under Bad Management High vacancy rate and expenses produces NOI of only $192,000. Based upon a CAP Rate of 12 you could buy or lease option it for only $1,600,000. You Provide Good Management Decrease Vacancy Rates Decrease Expenses Raise Rents How long will it take you to earn $2.6 Million at your current job? New NOI of $ 300,000 New CAP Rate of 7 Sell or Refi for $ 4,285,714 You just made $ 2,685,714 in ONE YEAR. Now that you know the Cookie Cutter – Repeat it over and over

93. There’s only 2 reasons you will not Retire a Multi-Millionaire 1) Ignorance: No One Ever Showed You How To Do It. You have now been shown a few ways to do it, so you can no longer use this excuse.

94. There’s only 2 reasons you will not Retire a Multi-Millionaire 1) Ignorance: No One Ever Showed You How To Do It. 2) Laziness: You Did Not Apply What You Were Shown. You have now been shown a few ways to do it, so you can no longer use this excuse. Will you use these new tools to accomplish your dreams or will you continue to make excuses for your failure and not take personal responsibility for your situation? Your future is in your own hands – Seize the Day !

95. Net Worth Accumulation Vs. Equity Stripping There are two schools of thought amongst investors as to the best way to acquire wealth: 1)Net Worth Accumulation 1)Equity Stripping The two views are pretty much in opposition to each other.

96. Net Worth Accumulation This school of thought employs the “Buy & Hold” philosophy: ▪ Buy property and never sell or refinance it. ▪ Let the renters pay off the mortgage. Advantages: ▪ Builds true wealth through equity accumulation. ▪ No matter what happens with the economy you can live off the rents. Disadvantages: ▪ Very Slow Growth... Requires 30 years to pay off property. ▪ First decade of ownership produces very little positive cash flow. ▪ Must wait many years to enjoy the fruits of your labors ▪ Requires massive capital for down payments. ▪ Hard to build large portfolio due to huge capital requirements. - Tried and tested through centuries of application – it works, albeit slowly -

97. Equity Stripping The “Equity Does You No Good” philosophy: ▪ Refinance regularly to pull out equity that sits dormant. ▪ Leverage equity to make it work for you. Advantages: ▪ Builds wealth through leveraged debt. ▪ Multiplies your efforts by stretching your initial investment. ▪ Eliminates need for huge personal capital investments. ▪ Builds massive real estate empires quickly. Disadvantages: ▪ If LTV is too great you could be upside-down if market drops. ▪ Produces minimal operating cash-flows. ▪ You receive advanced payment on future cash-flows. ▪ Can be somewhat risky if not properly managed.

98. Comparative Cash Withdrawal Analysis Strategy Net Worth Theory Equity Stripping Theory Years CashNet WorthCashNet Worth 123456789123456789 $ 1,400,000 $ 66,700 $ 213,600 $ 976,800 $ 1,360,00 $ 141,600 $ 70,800 $ 108,000 $ 550,000 $ 46,522,000 $ 2,628,500 $ 8,839,000 $ 24,223,200 $ 3,810,000 $ 4,658,400 $ 2,329,200 $ 2,492,000 $ 6,230,000 $ 36,700,000 $ 1,200,000 $ 5,500,000 $ 6,700,000 $ 4,000,000 $ 1,200,000 $ 600,000 $ 2,600,000 $ 780,000 $ 10,000,000 $ 1,428,500 $ 3,339,000 $ 18,500,000 $ 1,170,000 $ 3,600,000 $ 1,800,000 $ 0,000,000 $ 6,000,000 30 10 5 1 5 Well managed, leveraged, Equity-Stripping always out performs Net Worth Accumulation’s Cash-Flow.

99. Planning Your Retirement What does all this mean to YOUR retirement program ? Establish Your Personal Retirement Goals: ▪ When do you want to retire? Date or event. ▪ How much passive income have you created right now? Social Security. 401-K and other investments. ▪ How much do you want in passive income when you retire? ▪ How do you get from where you are to where you want to be? Discuss your retirement goals with your spouse and then write down the following information:

100. Example – Strategy # 2 Retirement Strategy # 2: Buy 2 Houses per year – Buy & Hold ▪ What is your “Closing Ratio” ? For most beginning investors it is 1:10. If you make 10 offers every 5 months you should buy 1 house. ▪ How many houses do you have to look at before you make an offer? Most beginners look at 2 (one appointment per week). ▪ How many phone calls do you have to make to set up an appointment? Most beginners make 15 – 20 (3-4 phone calls per day).

101. Focus on the Daily Goal Retirement Strategy # 2: Buy 2 Houses per year – Buy & Hold When you wake up in the morning: If the sun is shining- jump out of bed and make 3-4 phone calls. If it is raining - jump out of bed and make 3-4 phone calls. If it is snowing - jump out of bed and make 3-4 phone calls (You can make the calls any time during the day)

102. Focus on the Daily Goal Retirement Strategy # 2: Buy 2 Houses per year – Buy & Hold When you wake up in the morning: If the sun is shining- jump out of bed and make 3-4 phone calls. If it is raining - jump out of bed and make 3-4 phone calls. If it is snowing - jump out of bed and make 3-4 phone calls (You can make the calls any time during the day) ▪ 3 phone calls per day = 1 appointment per week ▪ 1 appointment per week= 2 offers per month ▪ 2 offers per month= 1 purchase every 5 months ▪ 1 purchase every 5 months= 2 purchases per year ▪ 2 purchases per year= 20 in 10 years.

103. Focus on the Daily Goal Failure is NOT an option! Focus on the Daily Goal and then do it religiously. Do not let anything prevent you from completing your daily goals. Doing this will automatically force the ultimate goal to be accomplished. Be specific about your ultimate goal. Break it down into realistic sub-goals: Monthly Weekly Daily Focus exclusively upon the Daily Goal. The rest will automatically take care of itself.

105. Question and Answer Session Send questions via “chat” I will answer live on the phone

106. How to Contact Me -Gary Barnes platinumedge@comcast.net gary@bluespringpress.com