The interesting thing about Strait Path™ real estate is that even though profit is just one of six considered factors, it’s still far more profitable than other forms of investing.
This is because the system offers five profit centers, whereas others only offer one or a couple. The five profit centers include the following:
- Bargain Equity
- Cash flow
- Down payment
- Appreciation
- Tax benefits
1. Bargain Equity
This is the equity secured upon purchasing an investment. Fifteen percent or more is the target. Depending upon the size of the home and its discount, you may make more on one purchase than you make all year in your job.
2. Cash Flow
Cash flow is the monthly amount you receive from your tenants greater than you pay on your mortgage.
3. Down Payment
The technical term for this is “option consideration,” which is given by tenants to secure their opportunity to purchase the home within a specified period of time. This is non-refundable and we receive $5,000 down on average.
4. Appreciation
Appreciation is obviously the rise in value of your properties due to increased demand over time. What’s notable about Strait Path™ real estate is that we don’t count on appreciation, though we do account for it.
5. Tax Benefits
It has been our experience that tax law allows most homeowners to deduct mortgage interest from their taxes.* This is a huge advantage in Strait Path™ real estate, since the goal is to purchase as many homes as possible.
*Please consult your tax professional to confirm if you are able to claim this deduction.
With a fixer-upper, investors receive the first and, if they’re lucky, the fourth. They have no cash flow, they do not get a down payment, and capital gains taxes often wipe out any earnings.
With rentals, investors enjoy tax benefits and usually benefit from appreciation. They’re lucky if they get a good deal up front and receive a positive cash flow, and they receive no down payment.
