Finance Explained - Overview

Why has Real Estate always formed the foundation of wealth building?  Can I do it too?  What do I need to know about the financing?

The fundamentals of Real Estate are simple.  Buy a home.  Enjoy it.  Make your payments.  Sell it and invest in another one or cash out. It's hard to lose, but people find ways.  You need to establish a relationship with people you can trust.  We believe you'll choose us, because we empower you to make informed decisions that you will be happy with for years to come.

So let's talk finances.  You need a basic understanding of what we call TALC (Taxes, Appreciation, Leverage & the Calendar).

• Taxes-The government wants you to own your shelter, your home.  The pride-of-ownership contribute to everyone's quality-of-life.  To encourage ownership, the government created tax benefit that you only get if you own your home.

• Appreciation-Since 1968, when the National Association of Realtor's started tracking home values, the average price of a US home has never gone down.  Appreciation, the percentage increase your home achieves each year, varies but area like Chicago's suburbs have average between 5.7% to 10.7% per year, over the last 5 years.

• Leverage-If you thought 10.7% sounds good, keep in mind that if you put 20% down on your new home, your return is not 10.7% but 5 times 10.7% because you have only paid 1/5th of the total price for the home.  The appreciation rate of 10.7% was on the total price, not just you down payment.  Put down less, say 10% down, and your return would be 10 times 10.7% or 107% return for the year.  You can see why Real Estate represents such a vital share of the portfolio of the most affluent people in the world.

• Calendar-Your investment and savings continue day after day and never sleep.  Assuming a $200,000 home and the average owner tax profile, their home would increase in value by $950/month (5.7%) to $1783/month (10.7%) and they would have tax savings of $352/month.  All that and they would be paying approximately $1049/month.  So their net cost is $1049 minus $1783 minus $352, that's right, it's like someone showing up with a check made out to you $1086 and you get to live in your investment, rent free.

All this and the government, banks, relatives... are all conspiring to help you.  You can do it too!  We can show you how.

This is perhaps one of the few excepting to the rule that if it sounds too good ... We know time, leverage, and, unfortunately, taxes are a given.  Appreciation does and will very. 

It's vital that you work with a knowledgeable agent one who has the research and knowledge of local trends.  Paying too much or moving into a troubled priced neighborhood could take years to recover from.  The right agent will vastly increase your ability to make sound decisions.