real estate investing highlights

Bringing Homes and Families Together!

Office: 847-241-2287

Cell: 847-722-1911

Website: www.ILRealEstateInvestorConsultant.com

Email: [email protected]

“When you think of Real Estate, think of Dennis de Ramos!”

Dennis

Dennis

Dennis

Dennis

de RamosReal Estate Team

Investor Overview


Dennis

de Ramos

Real Estate Team

www.ILRealEstateInvestorConsultant.com

You can and should be investing in real estate!

Investing in real estate is an great option allowing you to fully

leverage your investment dollars to help take advantage of the

five main ways of making money in real estate:

• Appreciation

• Principle Pay Down via *OPM

• Depreciation

• Rental income

• Tax Benefits.

*OPM = Other Peoples Money!


Dennis

de Ramos

Real Estate Team


Leverage allows you to get the maximum out of your investment

dollars!

$7,908

$79,085

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Stock Real Estate

Initial Investment =

$10,000

Year 1 $10,000 $600 $6,000 $100,000

Year 2 $10,600 $636 $6,360 $106,000

Year 3 $11,236 $674 $6,742 $112,360

Year 4 $11,910 $715 $7,146 $119,102

Year 5 $12,625 $757 $7,575 $126,248

Year 6 $13,382 $803 $8,029 $133,823

Year 7 $14,185 $851 $8,511 $141,852

Year 8 $15,036 $902 $9,022 $150,363

Year 9 $15,938 $956 $9,563 $159,385

Year 10 $16,895 $1,014 $10,137 $168,948

Total Return on Investment: $7,908 $79,085

Stock Growth Real Estate Growth

Real estate allows you to get the maximum return via leverage. Let’s assume that you have

$20,000 to invest and you split it between a real estate investment and stocks. Let’s also

assume that they are both appreciating at 6%. With real estate, that $10,000 could be 10%

down towards a $100,000 property, so when the property appreciates by 6%, you are seeing a

$6000 return on your $10,000 investment. And this is only counting appreciation, not the

many other ways you make money from real estate investing.


Dennis

de Ramos

Real Estate Team


Appreciation is your highest potential for long term return.

2006Source: New York Times, August 26, 2006


Dennis

de Ramos

Real Estate Team


Real estate investing lets “other people” pay down your investment debt for you.

Pmt

No.

Payment

Date

Beginning

Balance

Scheduled

Payment

Extra

Payment

Total

Payment Principal Interest

Ending

Balance

1 11/1/2008 180,000.00$ 1,079.19$ -$ 1,079.19$ 179.19$ 900.00$ 179,820.81$

2 12/1/2008 179,820.81 1,079.19 - 1,079.19 180.09 899.10 179,640.72

3 1/1/2009 179,640.72 1,079.19 - 1,079.19 180.99 898.20 179,459.73

4 2/1/2009 179,459.73 1,079.19 - 1,079.19 181.89 897.30 179,277.84

5 3/1/2009 179,277.84 1,079.19 - 1,079.19 182.80 896.39 179,095.04

6 4/1/2009 179,095.04 1,079.19 - 1,079.19 183.72 895.48 178,911.33

7 5/1/2009 178,911.33 1,079.19 - 1,079.19 184.63 894.56 178,726.69

8 6/1/2009 178,726.69 1,079.19 - 1,079.19 185.56 893.63 178,541.13

9 7/1/2009 178,541.13 1,079.19 - 1,079.19 186.49 892.71 178,354.65

10 8/1/2009 178,354.65 1,079.19 - 1,079.19 187.42 891.77 178,167.23

11 9/1/2009 178,167.23 1,079.19 - 1,079.19 188.35 890.84 177,978.88

12 10/1/2009 177,978.88 1,079.19 - 1,079.19 189.30 889.89 177,789.58

13 11/1/2009 177,789.58 1,079.19 - 1,079.19 190.24 888.95 177,599.34

14 12/1/2009 177,599.34 1,079.19 - 1,079.19 191.19 888.00 177,408.14

15 1/1/2010 177,408.14 1,079.19 - 1,079.19 192.15 887.04 177,215.99

16 2/1/2010 177,215.99 1,079.19 - 1,079.19 193.11 886.08 177,022.88

17 3/1/2010 177,022.88 1,079.19 - 1,079.19 194.08 885.11 176,828.80

18 4/1/2010 176,828.80 1,079.19 - 1,079.19 195.05 884.14 176,633.76

19 5/1/2010 176,633.76 1,079.19 - 1,079.19 196.02 883.17 176,437.73

20 6/1/2010 176,437.73 1,079.19 - 1,079.19 197.00 882.19 176,240.73

21 7/1/2010 176,240.73 1,079.19 - 1,079.19 197.99 881.20 176,042.75

22 8/1/2010 176,042.75 1,079.19 - 1,079.19 198.98 880.21 175,843.77

23 9/1/2010 175,843.77 1,079.19 - 1,079.19 199.97 879.22 175,643.80

24 10/1/2010 175,643.80 1,079.19 - 1,079.19 200.97 878.22 175,442.82

(This example shows a $200K Investment, $180K Loan. After just 2 years, the tenant has paid $4,557 on

your behalf!) And this number keeps going up, i.e. at 5 years, a two year period, the number is $6,147.


Dennis

de Ramos

Real Estate Team


Depreciation of an asset that appreciates is a great

opportunity for you to lower your tax bill!

Depreciation is the loss in value of an asset / building over time due to wear

and tear, physical deterioration and age. Depreciation is treated as an

expense and is a line item on an income statement. Depreciation can only be

applied to the building and not the land, since land does not wear out over

time. Residential income property must be depreciated over a 27.5 year

period using straight line depreciation.

Example: a $200K property with land value at $40K would depreciate

$5,818/year until fully depreciated.

* It is important that you talk to an accountant/tax expert to fully understand the tax

consequences related to your unique situation.


Dennis

de Ramos

Real Estate Team


As a real estate investor / property manager, you now

own your own company and may be able to claim

certain write offs related to your business.

It is important to discuss with your accountant who can fully explain your options

here, but in general if you use things specifically for your business you may be able

to write them off as a business expense. These might include telephone charges,

internet, mileage for auto, postal expenses, property management expenses, etc. If it

is related to the support of your business, you may be able to reduce your overall tax

burden.


Dennis

de Ramos

Real Estate Team


A real estate investment example…Let’s make the following assumptions:• You purchased a $200K townhouse with 20% down

• Interest rate of 6.5% Int rate which results in a payment of $1,011/month.

• Lets assume taxes, insurance and repairs bring this to $1,400/month.

• You find a renter for $1,475.

• Annual appreciation averages out at 6% (for both stocks and real estate)

• Land value is 20% of market value

At the end of 10 years your ~40K investment has returned $245,230 in benefits, not

counting the tax benefits that you get from owning your own company!

$31,634

NA

NA

NA

$31,634

Stock Investment

$245,230Total

$9,000Rental Income

$58,182Depreciation

$19,878Principle Pay Down

$158,170Appreciation

Real Estate InvestmentType of Return

real estate investing highlights

Documents