Think Like A Banker …. My 2 Million Dollar Goal

Think Like A Banker …. My 2 Million Dollar Goal

Michael Linton: Real Estate Investor | Founder Linton Global

Michael Linton: Real Estate Investor | Founder Linton Global

Think Like A Banker …. My 2 Million Dollar Goal by Michael Linton Managing Partner of Linton Global

After the real estate and financial crisis of 2008, I became very concerned about my financial future. Like so many real estate investors in Florida, a lot of my real estate flips ….FLOPPED! I needed change. This current investment strategy was not achieving my retirement goals.

I needed a breakout plan. Instead of giving up on real estate, I decided to take a short sabbatical from my real estate brokerage business to study why the financial crisis happened. I took investment banking classes, focusing on real estate financial modeling and structuring real estate finance. I also took classes towards working on a degree in legal studies. After much study and research to understand this financial mess of 2008, I realized that if I was going to rebuild my real estate business, I needed to think like a banker.

I began my journey to forever change my real estate career.  I mapped out a real estate investment plan that I am going to share with you below. What I ask from you are two things. First, let me help you build your real estate portfolio, as I have already done the ground work. Second, take a moment now to hit the social media Share buttons at the top of this page so others can take charge of their retirements.

My Personal Plan

The first thing I needed to do was to figure out how much income I wanted – not needed – each month when I retire. I am not interested in just existing during my retirement years. I want to enjoy my life with my wife Peggy without worry, so I decided that number was at least $100,000. I figured that I can live comfortably on roughly $8,333 a month AFTER taxes.

So now I had a starting place. To net this amount each month I calculated that I would need to gross $165,000 a year before paying taxes. Here are my numbers:

Gross income   $165,000
Qualified plan contributions $0
Adjusted gross income = $165,000
Standard/Itemized deductions $12,600
Personal exemptions $8,000
Taxable income = $144,400
Tax liability before credits   $27,688
Child tax credits $0
Estimated tax liability = $27,688

Now I know that some of you are grabbing your calculators and saying “$144,400 – $27,688 = $116,116,712”

The reason I am allowing this buffer is we all know that not everyone pays their bills on time, especially tenants. Things happen in life and that’s ok. I just need to make allowances for the bumps in life.

So how am I going to achieve a gross income of $165,000 a year in my golden years? At first (investment banking courses) I was going to build a complicated financial model but then the mortgage banker in me kicked in. I proceeded to pull out an amortization chart which you can download for free here. 

After playing around with the numbers, I calculated that I would need a personal real estate fund of $2,000,000 – yep 2 million dollars.

What Can $2,000,000 Can Do For My Retirement?

A $2,000,000 dollar private real estate fund will provide me with the income needed to live out my retirement years. It will allow me to make money just like the bank. Here is the breakdown. 

The goal is to purchase $2,000,000 dollars of real estate over the next 10 – 15 years and buy the properties for cash or finance with 15 year mortgages.

If I held mortgages on the properties and sold them with owner financing, an income stream will be created just like the banks create. For a 2 million dollar fund, the numbers look like this:

Values   Loan summary
  Sale Price $2,000,000.00        
  Loan amount  $2,000,000.00     Scheduled payment  $     13,984.29
  Annual interest rate 7.50 %     Scheduled number of payments 360
  Loan period in years 30     Actual number of payments 360
  Number of payments per year 12     Total early payments  $                –  
  Start date of loan       Total interest  $ 3,034,344.46

To summarize thus far, the goal is to create the $2,000,000 private real estate fund and lend the money out at a minimum of 7.5% amortized for 30 year. This will create a monthly income stream of $13,984.29 which is $167,811.48 annually.

Deal Summary For My Personal Investment Plan

  Sale Price #########
  Scheduled payment  $  13,984.29
  Scheduled number of payments 360
  Actual number of payments 360
  Total early payments  $             –  
  Total interest #########
Interest Received After 10 Years 1,414,014.56
Loan Balance After 10 Years 1,735,899.74

So after 10 years, my fund will receive $1,414,014.56 in interest alone and still have a principle balance of $1,735,899.74


Millionaire Real Estate Agent and Business Plan

Millionaire Real Estate Agent and Business Plan

One of my first strategies is to recruit a top notch team. So I created an entire career section on this website based on the business plan in the Millionaire Real Estate Agent authored by Gary Keller.

Download (XLSX, Unknown)



Earnings Disclaimer

As stipulated by law, though, we can not and do not make any guarantees about your ability to get results or earn any money with our ideas, information, tools or strategies. We don’t know you and, besides, your decisions and your results in life are up to you, don’t you agree? You must be aware that nothing on this page or in any of our content is a promise or guarantee of results or future earnings, and we do not offer any legal, tax or other professional advice.

Any financial numbers referenced here, or on any of our sites, are illustrative of concepts only and should not be considered average earnings, exact earnings, or promises for actual or future performance; our content is for illustrative and educational purposes only.

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