Ten Commandments

Income Producing Real Estate Property (Program) â„¢

1. Investor’s  Retirement Investment Policy must be long-term:

• When do you want to retire? Five years, ten years, fifteenth years, or longer? Need a “Date Specific Retirement Plan.â€
• Select the Investment Time Horizon or Investment period between 5 to 30 years.
• What is the dollar amount available for the investment program? A single Investment amount? The periodic or yearly investment amounts over the Investors – Investment Time Horizon?
• The investor must recognize that the funds to be invested are for retirement fund growth and are not for current discretionary expenses. Instead, the funds are strictly for long-term investment or asset-related payments. 

2. Employ the Theory of Compounding:

• Time exerts the most significant influence on your investment portfolio than any other force, including taxes and inflation.
• With the reinvestment, you earn a return, an additional return on that return, and so on.
• It is essential to start investment savings early to benefit from the power of compounding.

3. Adopt the Strategy of Preservation of Capital:

• An investment strategy is to prevent the loss of the total investment capital.
• For the investor to use the capital preservation strategy to achieve its goal, the investor must ensure that their investment portfolio produces a return that equals inflation.

4. Each investment must have a well-defined exit strategy:

• Return of Capital Is the date of an investor’s total investment return (initial and subsequent Investments). 
• The investor must know when the investment will have the Investor’s  Return of Capital.
• Return on Capital investment is not income. Therefore, the return on Capital is not a profit gain. 
• The investor will need to plan subsequent investment alternatives (after initial investments) with the knowledge of the exit strategy for the ongoing or any new investment.  
• Return on Capital is the measure that quantifies how well an investment generates cash flow relative to Capital invested.
• Investor recognizes that an investment has two parts- Return on Capital and Return on Capital.

5. Investor needs to maintain a comfortable Risk to Reward Ratio: 

• Risk is the chance that an investment’s return will differ. Risk includes the possibility of losing some or all of the original investment.
• The more significant the investor’s amount of Risk is, the greater the potential return (reward). The investor will require additional compensation for taking on additional Risk.
• The investor needs to understand the outcome of Investment Risk. 

6. The investor needs to be comfortable with the Liquidity of the Investment:

• Liquidity is the ability to convert an asset into cash quickly. 
• The investor needs to understand the merits of the investment Liquidity.

7. Investor needs to understand the effects of inflation on investment:

• Inflation moves the retirement planning target date further out.
• How do we minimize the impact of inflation on the returns “on†and “of†the investment? 
• Can the investment be the index to reduce the effects of inflation? 

8. Investors need to minimize the effects of federal and state taxes.

• Taxes significantly affect returns on retirement investments by reducing the total returns over the investment period from 35% to 60%.
• Investors must know they can hold alternative investments, such as real estate, in their self-directed IRA or individual 401(k) account.
• Investors should use self-directed IRA accounts to allow tax-deferred or tax-free growth returns.

9. The investor and its consultants must make the necessary effort (due diligence) to evaluate the Investment Sponsor’s offering for the investment opportunity, including the Private Placement Memorandum (PPM) and all other solicitation documentation. In addition, there needs to be full disclosure of the investment opportunity and meet all state and Federal legal requirements.

10. Select a Sponsor who is professionally trained and dedicated to implementing the Commandments.

For Additional Information:

Theodore N. Deuel, MBA, CCIM, CIPS, Realtor and Financial Engineerâ„¢

Web Site: www.cainvestnow..com

Cell: (949) 300-1922E– mail: [email protected]