what is your number?

The material & information shown in this presentation is for general information purposes only. It should not be used as a substitute for specific professional advice and is not intended to be, nor should it be read as specific personal investment or risk advice. This information is given in summary form and does not claim to be complete.

Whilst all reasonable care has been taken in the preparation of this information, subsequent changes in circumstances may occur at any time and may impact on the accuracy of the information. No warranty is given or representation as to the accuracy, reliability, timeliness or completeness with respect to the information provided, and accordingly no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by Your Future Strategy, its directors, employees, representative members, third party or any organisation mentioned in this presentation.

Information in this presentation, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular, financial situation or needs. Before acting on any of the information contained in this presentation you should consider the appropriateness of the information and you should obtain independent financial advice, which is appropriate to your specific investment or risk needs, objectives and financial situation.

This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Your Property Tutor’s businesses and operations, market conditions, results of operation and financial condition, specific provisions and risk management practices. You are cautioned not to place undue reliance on these forward looking statements. While due care and every reasonable effort has been made to ensure the comments made this presentation are accurate and reliable, some facts and opinions may change without notice due to changing market conditions and actual results may vary from forecasts provided and may vary in a materially positive or negative manner. Information, including forecasts and hypothetical examples should not be considered as a recommendation and are subject to uncertainty and contingencies outside the control of Your Property Tutor.

Past performance is not an indication of future performance.

Disclaimer

1. YOUR Game Plan

2. YOUR Funding

3. YOUR R & D

4. YOUR A & D

5. YOUR Portfolio

6. YOUR Legacy

EMOTIONS

RESULTS

BELIEF

BEHAVIOR

3 Reasons You have What you have

•Too much time in negative emotional states

•Satisfaction with “Plateau” (Comfort Zone)

•Lack of clarity in your vision

i.e. What’s YOUR Why?

1. Control YOUR Equity

2. Maximise YOUR Cash Flow

3. Protect YOUR Security

Principal & Interest (P&I) loans are amortizing, which means you reduce the Principal owing over the life of the loan.

Reducing YOUR Principal means you increase your EQUITY. However, under P&I terms you cannot access that equity.

Interest Only means YOU have full access to YOUR equity

Home $600,000

Loan 80% $450,000

Equity $150,000

Repayments $2844 p/m

$ 656 p/w

Home $600,000

Loan 80% $450,000

Equity $150,000

Repayments $2437 p/m ($406)

$ 562 p/w ($93)

What is YOUR Equity worth when leveraged?

80% LVR 90% LVR

$ 50,000 $ 200,000 $ 333,000

$100,000 $ 400,000 $ 666,666

$200,000 $ 800,000 $1,333,000

$300,000 $1,200,000 $2,000,000

1. Control YOUR Equity

2. Maximise YOUR Cash Flow

3. Protect YOUR Security

1. Have a Cash Flow Plan (How you spend your money)

2. Cancel unnecessary memberships and rental agreements

3. Ensure you have the right Insurance Structure (SMSF, level of cover, unnecessary cover)

4. Salary Credit onto your mortgage and use Interest Free credit cards to pay expenses

5. Increase payments to O/O debt and pay minimum on investments

6. PAYG variations and Depreciation Schedules

7. Ask your Property Manager to pay rental income fortnightly instead of monthly

8. Consolidate bad debt. Do a balance transfer on credit cards to 0% interest

Five clients we have helped recently:

1. PAYG variation – client went from 46.5% tax to 18% tax. Increase cash flow $51,300 per

annum or $986.54 per week

2. Client who was paying P&I on investment property changed to I/O. Increase cashflow

$4,316 per annum or $83 per week

3. Assisted a client to swap to a 0% interest credit card. Cash flow saving $3,600 or $69 per

week

4. Lo Doc client did a product conversion and reduced interest by 2%. Saving $9,000 per

annum or $173 per week

5. Fixed their loan for 12 months reducing interest by 0.75% $3550 per annum or $68 per

week

1. Control YOUR Equity

2. Maximise YOUR Cash Flow

3. Protect YOUR Security

• Don’t get caught by the “YES” man

• “YES” men are

• Fair Weather Friends

Avoid Cross Securitising

The definition of cross-securitisation is simply where a loan is reliant upon more than one property as security.

It’s ok if you have multiple loans secured by one property, but not multiple properties securing more than one loan.

If your loans are cross-securitised and you sell a property, the bank can control your sale funds and demand that you use all the funds to repay debt, not just the debt associated with the property.

Case Study 1

Client thought she had $100,000 in equity after an investment purchase. However the bank declined her next finance application.

Value Loan Limit Owing Available Equity

Home $400,000 $320,000 $220,000 $100,000

Investment $365,000 $328,000 $328,000 $0

Home $400,000 $320,000 $170,000 $100,000

$365,000 $237,250 $328,000 -$90,500

Case Study 2

Clients purchased 16 investment properties valued at $4.5m with a debt of $3.6m at 80% all through the same lender.

Portfolio grew to $6m reducing the LVR to 60%. Clients wanted to release their owner occupied property valued at $700,000. Banks LVR increased to 67%.

Bank refused to release security leaving the clients with the only option but to refinance all 16 properties.

Client Study 3Clients had three investment properties decided to sell one. Bank revalued properties prior to settlement and refused to release the security, leaving the client subject to legal action as the contract was unconditional.

Value Loan Limit Revalue

$450,000 $385,000 $385,000

$500,000 $370,000 $360,000

$435,000 $435,000 $435,000

$1,385,000 $1,190,000 $1,180,000

85% 101%

Strategy Capital Growth & Discount

List Price $759,000

Purchase Price $580,000

Renting $650 p.w.

Structure S.M.S.F

Loan 80% LVR

Strategy NRAS & Cash flow positive

Purchase Price $299,000

Less Bulding Boost -$10,000

Renting $305 p.w.

Net Cash flow Cash flow positive$37 per week