Thread by @TihoBrkan

1) Real estate is an incredibly flexible asset.

One of the greatest "tricks" you can do in a value add strategy is to refinance your correctly rehabbed property & pull out 100% of your original capital.

Thus, you can recycle that same capital into another property immediately.

2) Repeating this strategy over & over again has INCREDIBLE compounding effects on your money.

Your original capital doesn't just earn an 8% or 12% return once — it might do it several times.

Depending on how successful you are at finding great deals or which part of the...

3) ...cycle we are in, you might be able to recycle the original capital multiple times in one year (undoubtedly, this was a lot easier in 2012/13 then it is today).

The compounding consequences on your capital invested become enormously positive as you achieve rates...

4) ...of return most stock, bond, private equity & even venture capital investors only dream about.

Every one of the properties rehabbed experiences forced appreciation, thus creating you additional rise in equity.

If all of the properties are correctly located, they will...

5) ...most likely rent at a premium with ease, a process where your tenant will be paying every single thing.

Your taxes & expenses, your interest to the bank, decreasing your debt (thus increasing your equity) & finally even leaving you additional cash flow in your pocket.

6) As the property increased in value via forced appreciation — not by market forces, but your smart & hard work — you now have the ability to re-appraise the property & go back to the bank for a refinance.

Pulling your 100% (or even more) of your original capital will be in...

7) ...debt form (you just got another loan), therefore another wonderful thing to mention is there won't be a tax event. Remember, only income or gains are taxes — debt isn't.

As you repeat this cycle several times, you will start to notice an insane increase in your...

8) ...net worth (this is what it's all about) as returns comes from all sides.

You'll actually need to employ an accountant to track just how much money all of your properties are actually making.

Remember, unlike the stock market, real estate has many wealth generators.

9) They are:

• market appreciation (normal price movements)
• forced appreciation (increasing equity via rehab)
• debt paydown (tenant increasing your equity)
• cash flow (tenant putting cash in your pocket)
• tax advantages (depreciation, write-offs & deferrals)

10) If you are experienced & wise, there is one additional wealth generation (return path) which is head & shoulders above the other five mentioned above.

It's called negotiation. And it can be used everywhere when doing real estate, as well as private asset deals in general.

11) There is an ability to negotiate everything:

• reducing your entry price (offering special terms)
• reducing your cost of debt (if you're a big guy)
• increasing your interest on debt (if you're lending)
• reducing your cost of materials (if you buy bulk)

12) Continued...

• reducing your contractor/builder fees
• reducing your underwriter fees (if you're co-investing)
• increasing your exit price (after the rehab)
• increasing your rent annually (if you're skillful)
• decreasing your agent/broker fees
• others things, etc

13) Whenever I hear "I don't have the capital to get into real estate" I know they haven't even bothered to educate themselves.

In the USA an FHA loan will let you get into real estate for around 3% down payment. In the UK, Buy To Help scheme with a 5% down. In AU, there is a...

14) ...first homeowner grants (cashback from the government) as well as builder grants on your first build (cashback from the builder, too). I'm sure Canada has its own version of this, too.

When it comes to wealth accumulation you’ll either find a way or you’ll find an excuse.

15) Is it going to be easy? No. Nothing ever is.

Are there risks? Yes. Plenty of them.

Will you need to work hard? Yes.

If you are afraid of elbow grease, you'll be stuck in your office cubical for the rest of your life.

What else? A bit of common sense wouldn't hurt.