When putting the 3+1 Plan into place, how do I pay off the mortgages?

When putting the 3+1 Plan into place, how do I pay off the mortgages?

bjbj Hey guys, Brette Alegre-Wood here, author
of The 3+1 Plan, and chairman of YPC group, where we help you to build a thriving property
portfolio so you can live the lifestyle you ve always dreamed of, but in such a way that
you re not creating a 2nd job, or actually working yourself into an early grave. So what
I wanted to today, was just, we ve been running the webinars for a while and we ve compiled
hundreds of questions that you guys been asking, so I want to take those, and what I ve done
is I ve broken them down into a number of really key questions that most of you guys
are repeatedly asking and what I ve done is I want to present them to you so you get that
level of education. I ve always been a massive, massive supporter of free education, so that
s what I want to do for you guys today, is really give you what most people out there
are concerned about in the market now about property investment, about strategies, about
structures, about all sorts of things, the questions that you guys have been asking.
It s not now me telling you what you should be thinking, it s you guys actually feeding
back and I love that about the social media and I love that about webinars.

So sit back,
relax, and let s get started. One of the questions I m often asked is, How am I going to pay
down my mortgages, or, How am I going to pay off my mortgages? I m going to buy all this
property, this 3+1 Plan, how do I actually, once I ve got the 3 properties, how do I pay
them off to zero? And it might be more than 3 properties.

The point here is if we re looking
just purely at the 3+1 Plan, how do you actually achieve it if you want to do it. You ve got
3 properties, you start off with mortgages. You re going to have to for the most part
because very few people will achieve 3 properties by buying one and paying it down with cash,
buying another, pay down with cash, buying It doesn t work that way. That s not how money
works and if you really think that, you need to come in and meet with us just so I can
explain in detail why that doesn t work and why that s going to take about 10 lifetimes.
The odds are totally stacked in your favor to do that, it just doesn t work. But the
point is, let s get back to the question, for me, how do you pay your mortgages off?
If we re going to build a portfolio, now let s say we re bought our 3 properties, we ve
got a million-pound portfolio, so we ve got that portfolio, it s worth a million pounds,
the mortgages on that, are say, 800,000.

They might be 700,000 or whatever, let s just use
800,000. The point here is if we leave it, the property will double. Now the assumptions
that we make that is 7-10 years, the property will double. Has done for the previous, really,
recorded history and there s no reason why it won t continue to, cause when you understand
and when you look at it and you look at why property doubles and why it continues to go
up, what it s based on is supply and demand.

And supply and demand, if you look down and
dirty and you get down and dirty with it, it s just human nature, and by our very nature,
we create this doubling effect. We have done, and prices continue to go up. The point is
here, we ve got the million pound portfolio, let s say it doubles. Now interestingly, even
if it doesn t take 7-10 years, it takes 20 years, it s still going to double, and when
it does, obviously it s going to take a bit longer, 20, 10 years extra, but it ll go to
2 mil. At that stage if you look at the debt against that, assuming you ve only been doing
interest only which is what I would recommend on your investment properties, then your debt
still going to be 800,000. Now because of that, what you can do at this point, really,
is sell off a million pounds worth of it, so you might sell off half of the portfolio,
and then use that money you raise to pay all that off.

What happens to the extra 200,000?
We re probably going to have some capital gains tax and some bits and pieces there,
so it will go somewhere. So it s not necessary to say, Just sell 800 off and 800 there because
then you re probably you re going to sell another one to cover taxes and things like
that. The bottom line is when you ve done that, you re left with a million pounds, no
mortgages, which really is what 3+1 Plan is all about.

So it s pretty simple. Don t think
that you need to work on paying this off because actually this will be paid off by inflation
and that s one of the key concepts in investment. Most investors don t understand. Eight hundred
thousand today will be worth considerably less than that 800,000, sorry. Eight hundred
thousand there will be worth considerably less than what 800,000 was here. If you think
about it, think back 20 years ago. Think back when you were in school. How many billionaires
were there? It wasn t a concept you ever heard of. You may have, there was a few billionaires,
but very few, probably less than 10.

buy-to-let

Now there s something like 300 of them in the Indonesian
capitol or something like that. It s some ridiculous amount anyway. But the bottom line
is over time, inflation degrades the value of the money. Let inflation pay down your
debt so when you do, if you do want to pay this off here, you re paying off a lesser
amount with money that s actually worth more. So that s the basic of it. What I d say here
is realistically, how many people do this, pay it off, and do this, it s a very few.
Very few people will pay it off. What they might do is sell some of their property and
pay off their home, which I ve got no problem with, absolutely no problem. Once your portfolio
is running off its own steam, and you can see that s it s growing in that, then by all
means, get rid of the home mortgage, because emotionally, it s such an emotionally charged
thing, the home mortgage.

The sooner you can pay that off, the better you, you effectively
feel freer and at the end of the day, that s what this is all about. But interestingly
what most people do here is they go, Why would I pay this off? I ll just continue to hold
those mortgages while the property continues to go up and rents continue to go up, and
all this sort of thing, because inflation will look after the debt for me. And in 25
years, 800,000 pounds will probably be a sandwich. Maybe not, maybe not that far, but it will
be a lot less. For me, let inflation pay the debt off. Use that to your advantage because
most people don t understand these concepts. Most people don t apply them. Most people
do exactly what the banks and the governments around the world want you to do which is to
get into spiraling debt and then be constantly focusing on trying to pull yourself out of
that. Not to live a freer, more fulfilling, better lifestyle, have lifestyle choices,
this sort of thing.

That s what this is really about. At the end of the day, that s what
I m passionate about. I could care less about two-bedroom properties in wherever and all
this sort of thing. For me, property is not the thing I m passionate about. The thing
I m passionate about is seeing the lifestyle changes that my investors get that I can get
for my family, that you can get for your family, and that s what this is all about. How do
you pay down your mortgages? Let somebody else do it. Let the function of the inflationary
society we live in do it for you. m sure you found that information really valuable.

The
first step really now is you need to get a plan. You need to actually work out exactly
how you re going to put this in place. So what I encourage you to do is come in and
sit down with us, talk to us, grab a coffee with us, and what we can do is we can start
mapping out what your plan is. But more importantly, not just give you a written bit of paper that
says, Go a buy a property, or Do this.

We can talk about structure, strategy, processes,
procedures. We can talk about all the things you need to put into that plan. We can talk
about why you want to achieve this, what you re actually looking to do about this. We can
talk about where you re starting from. What sort of limitations, what sort of emotional
barriers you re going to face. But more importantly, we can talk about how you re going to get
there. And with those 3 elements, you ve got yourself a really powerful plan. Then the
next thing is the motivation and the action. Nothing happens without actions, and this
is where the team can help you do this. In fact we can do it for you if that s what you
want. So I encourage you to come in and meet with us, grab a coffee or tea if you drink
it, and really just sit down and get that out. One of the things you re going to find
about the way we approach this is that most companies in this industry, what they ll do
is they will try and just sell you into a property.

The first phone call you make to
them, guaranteed, you re going to get sold a property. You re going to find we don t
do that. What we want to make sure is you get that plan in place, you get all the emotional
things sorted out and you re aware of those. And you really get a feel for who you re going
to be working with. Relationship is what it s all about. It s not just flog lots of property
because I m going to tell you it takes about 3 months to buy a property, but you re going
to own that property for 5, 10 years, maybe, so it s really important that you put a structure,
a strategy in place, a plan, and follow that plan. Because otherwise what s going to happen
is you can grow your portfolio very quickly but then if you re not aware of market cycles
and all these sort of things, interest rates rising, inflation and all those, what s going
to happen is you re going to be put at risk down the track.

It may look good now, but
the market changes and then all the sudden, all of your weaknesses in the portfolio you
ve built are going to be displayed. So getting a plan is going to enable you to get rid of
that totally. Guys, I m looking forward to meeting you real soon at either one of our
webinars or perhaps a seminar, or if you come to one of our office around the world. Have
a great day and remember, live with passion. h}T- h}T- :poe# [Content_Types].xml Iw}, $yi}
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