A lot of people come to me talking about the ‘gross rental multiplier’ on a single family home, or about how important it is to get maximum cash flow, or how they won’t look at properties under a certain capitalization rate.
Poor planning is the downfall of many would be investors. Maybe they don’t know what to look for in an investment property. Sometimes they don’t have their criteria nailed down. More often than not, they have a basic misunderstanding of wealth building.
One of the first things you need to do before you build your real estate portfolio is determine whether or not you should be following the Growth model for investing, or the Income model for investing.
Which model you choose will depend on a number of factors, mainly the size of the gap between how much equity you have, and how much equity you’ll need in retirement.
As we discussed yesterday, the income you receive in retirement is directly tied to how much equity you have. Your income is based on the return you make on your equity. The more equity, the more income.
In the Growth model, you are trying to accumulate as many assets as you can, in order to benefit from the appreciation and principle debt reduction over a large portfolio. In the Income model you are primarily investing your equity in order to receive cash flow to live on (or use for other business ventures).
What this means is, unless you already have a few million in equity, you should focus on Growth, rather than Income.
If you only have $100,000 in equity, it would be detrimental to look for an investment that will maximize your cash flow. What I would do is leverage that 100K into a portfolio of real estate in the Kitchener Waterloo area that is positioned to appreciate over the next several years (and your individual situation will determine the holding time).
In real estate, you benefit from owning more real estate, not from owning more of one piece of real estate. Leverage, used in combination with due diligence and a solid educational base, will allow you to accelerate the growth of your equity considerably.
Call me now @ 519 570 4447 for a free no obligation consultation about how your equity can be growing faster.

Benjamin Bach is passionate about helping people build wealth for an abundant retirement. He works with investors from across North America, helping them Retire Rich, and earlier than they thought possible!
Call or email Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 – 2008) today to learn how you can start your Real Estate Investment portfolio.
Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property.
You can reach Benjamin at benjamin(AT)benjaminbach.com or call him at 519 570 4447. More info on Benjamin can be found at http://www.kitchenerwaterloorealestateinvestments.com/