ACTIVE

TURNKEY
THE BEST WAY TO BUY RENTALS

GOODSUCCESS.COM
Table of Contents
Financial Freedom ......................................3
The Five Wealth Generators ...................12
Safer With More Controls ........................20
The Active Turnkey Program .................24
From Recent Investors ..............................30
Conclusion .......................................................32

SHARING PRINCIPLES FOR

REAL ESTATE SUCCESS
Financial Freedom
It has been proven over and over that the easiest way to
financial freedom and long-term wealth is through real estate.
Let’s face it, we all want financial freedom. So before we get
into explaining a real-estate inves ng program, let me start by
explaining “financial freedom” or “financial independence.”

Financial freedom is when you make enough money without

you working to pay all your expenses…the Wikipedia defini on
of financial independence is: “…the state of having sufficient
personal wealth to live without having to work ac vely for basic
necessi es. For financially independent people, their assets
generate income and/or cash flow from dipping into the assets
that is at least as great as their expenses.”

What is financial freedom?

Financial freedom is much more than having money. It’s the

freedom to be who we really are and to do what we really want
to do with whom we want to do it. Far too o en many of us
lose sight of what is really most important to us by spending so
much of our precious li le me building other people’s dreams
instead of our own and by playing many different roles such as
parent, spouse, friend or employee and being a slave to a (just
over broke) JOB!

If you want to be financially-free, you need to change. You have

to become a different person than you are today. You must
let go of fear and doubt, disappointment and discouragement,
and replace those nega ve characteris cs with the posi ve
quali es of belief, hard work, integrity, and giving back.
Financial freedom is a process of personal growth allowing you
to gain spiritual and emo onal strength to become the most
grateful, successful, fulfilled “you” possible.
Financial Freedom
There are two ways in life to become rich:
1. Get everything you want.
or
2. Want what you have.

You see, money doesn’t make you rich. How o en have we

heard of Hollywood actors or actresses that have had millions
of dollars in the bank and lost it all? Eddie Murphy’s ex-wife
Nichole Murphy received $15 million in her divorce se lement
only to see her millions completely gone a er four years.
Unfortunately, there are tons of stories just like this that all
prove that just because you have a lot of money doesn’t make
you financially free. And if you have a lot of money, and you do
not know what to do with it, eventually it will all be gone. What a
shame! This is not what I want in my life. If you are someone like
me who would much rather have “Good Success” (the right kind
of success) or financial freedom instead of just a big pile of gold,
then please con nue reading.

I have broken down the process of reaching any goal you ever
have in life into five easy steps. I don’t care if you are trying
to lose weight or pass an exam. If you follow these steps, you
can succeed! In order to reach the goal of financial freedom,
you have to follow these five steps. I highly recommend doing
these steps in order. First you have to figure out “what.”

1. What
Figure out WHAT you want or WHAT you need in order to be
financially free. Take the me to write out your yearly expenses.
Don’t forget anything. Make sure you include giving, school,
ea ng out, debt, vaca ons, u li es, clothing, savings, birthday
and Christmas gi s etc. on your expense list.
Financial Freedom
I challenge you to write down not only what you spend today
but also what you think your dream lifestyle would look like for
you and how much you es mate it would cost to see that vision
of a dream lifestyle become a reality. Once you figure out this
number, then stop, close your eyes, and imagine the dream as
a reality. How would this make you feel? If you didn’t have to
rely on your (just over broke) JOB to provide for your family,
you could have peace; you could be less stressed; you may be
able to spend more of your me doing what God created you to
do; or you may be like me, feeling as though financial freedom
has given me the courage and the freedom to go and conquer
the world. Now that I am financially free I have an inner peace
that was never there before. For me, it’s not about si ng on a
beach somewhere sipping fruity drinks and soaking in the sun
from sun up ll sun down while being waited on hand and foot,
NO! it’s about the fact that if my life was a castle, I would be
secure because me had been spent building a moat around
my perimeter for my safety, security, and well-being. Financial
freedom for me is the fact that my moat is built; my castle is
taken care of with protec on and security, and I can now have
the liberty to go out and slay the dragon!
This is what excites me!

I have two goals in life:

1. To give away a billion dollars
and
2. To flip the city of Gary, Indiana turning it into a
thriving place in which people want to live; a city that
is flourishing with businesses and long-term growth

Once you figure out what goals you would like to meet,
make sure you write them down. Revisit your list as o en as
possible. Look at it. Think about it. Imagine it happening. Our
brain is so powerful that if we focus on our goals, we can trick
Financial Freedom
our brain into believing that we can achieve our goals, and our
brain will subconsciously take ac on on figuring out a way to
make it happen. You will see opportuni es that you have never
seen before because now you are focused. What you focus on
expands, and once you take ac on, things happen!! The most
important step to know is this step. You will never know what
path to take or what plan to put together unless you know
where you want go.

“ What you focus on expands, and

once you take action, things happen!!

Now once you have figured out WHAT you want, then go on
to step number two.

2. Where 
Figure out you are WHERE are now. How close are you to your
financial freedom today? Analyzing your situa on takes some
guts, and it takes honesty and integrity with yourself which I
know is very hard at mes.

Most people I work with have a financial freedom number

between $8,000-$16,000 per month, and when we start
analyzing their financial situa on, most people are $8,000-
$16,000 away from reaching this goal. So don’t feel bad if you
are in the same boat.

The WHERE step is not a very hard step, but it is crucial in

figuring out your pathway in order to get to your financial
freedom goal. So a er you have figured out WHAT you want
and WHERE you are, then go to step number three.
Financial Freedom

3. Why
Figure out WHY you want to achieve your goal. Figuring out
WHY works for every goal, and I think we should always be
evalua ng why we do anything in life. Take some me to think
about this. It may come to you right away. You may know
exactly why you want to become financially free.

Ask yourself the following ques ons: How will financial

freedom make me feel? What stress it will relieve? Who will I
be a aining financial freedom for?

What I have found is that in order for a WHY to be big enough

and sustainable enough to keep you going through the tough
mes and through the ups and downs of reaching any goal,
it has to be a WHY that is bigger than yourself. Many mes,
people tell me the reason why they want to become financially
free is because they want to spend more me with their kids or
with their grandkids, or they want to spend more me giving to
ministry or to their church, or they want to fulfill the dream of
going on mission trips; and some mes people are like me--they
want to be able to gain more so they can give more. Whatever
your WHY is for you, it should get you excited! Your goal ought
to be with you as you wake up each morning mo va ng you
with the knowledge that every step along the way is ge ng
you closer to your dreams. If you find that your goal excites
and inspires you day in and day out, then you have discovered
what is the right WHY for you! But I cau on not you to choose
a why that is selfish. In the end, I don’t think you will be happy
or have fulfillment in reaching that goal if your reasons are of
a selfish nature.

So once you have created your perfect life style and figured
out WHERE you are today, and figured out WHY you would
Financial Freedom
like to get to financial freedom, you it is me to move on to
step number four.

4. How 
Figure out HOW you are going to achieve financial freedom by
crea ng a plan.
For you strategic thinkers out there, this will be a very easy
task; for others, the HOW may be more difficult. I do think that
the Ac ve Turnkey Program, which I will explain later in this
blog, will help you understand at least one strategy of how to
make financial freedom a reality, but from a larger viewpoint.

As a ma er of strategy, when crea ng a plan, try to keep your

plan of ac on as simple as possible.

Let’s say that your passive income financial freedom number

is $10,000 a month for a total of $120,000 per year, and your
goal is to reach this number in six years. You could achieve
your goal by simply adding $20,000 a year in passive income
to your por olio. Some of you may believe that $20,000 a year
increase is just too large of a number to be a ainable in a year,
so let’s break it down. $20,000 in one year of passive income,
divided by 12 months, equals $1,666.66 in passive income by
the end of the first year of your plan. So one way to reach the
$20,000 goal would be to develop a plan to have 24 cash-
flowing proper es, averaging $417 income per month, per
property. If you added four proper es per year for six years,
you could reach that goal. Your goal is achieved by simply
adding one property every 90 days (or one per quarter).

Let me discuss passive income with you. Passive income

is typically defined as “income from rental property or income
received from trade or business ac vi es in which you do not
materially par cipate.” My personal defini on of passive
Financial Freedom
income is money that I make from an investment of me,
money, knowledge, energy, networking, or resources from
which I collect money or resources from over and over and
over again. Earning passive income is a way to mul ply your
me, mul ply your money, and mul ply your resources. If you
could go to work for one day and get paid for the next 365
days from that one day of work, why wouldn’t you?

I collect “passive income” three different ways:

1. Rental property
2. Lending my money out for a preferred return mostly on
real estate but some mes for other ventures.
3. Business ac vi es in which I do not ac vely par cipate. I
own part of several businesses because of an investment
of money, me, focus, network, resources etc.

I believe you ought to have an occupa on as an outlet for your

me. I believe you ought to have an occupa on as a means to
increase your income. I believe you ought to have an occupa on
in order to develop knowledge. I believe you ought to have an
occupa on in order for you to build a network of associates
who have the same vision and goals as you. With that being
established, passive income has many benefits. First, you only
have so much me in any given day, month or year, and passive
income helps you make money without being personally
involved in any day-to-day ac vi es. Secondly, passive income
gets taxed at a completely different rate, and it gets looked at
from the IRS completely different than ac ve income.

There are many ways to reach financial freedom, but you must
put a plan in place to reach your goal in a specific amount of
me. Most people, if they focus, can reach financial freedom in
5 to 7 years. You can too!
Financial Freedom

Figure out when you want to reach your goal and what it will
take to get you there. Then figure out who you need on your
team and what connec ons you s ll need in order to make
it happen. “Good Success” has helped many, many customers
reach financial freedom with our Ac ve Turnkey Program.
What a blessing it would be to work with some of you, but if
not, I hope you will take the knowledge from this blog and use
it in your own financial freedom plan.

“ Most people, if they focus, can

reach financial freedom in 5 to 7 years.
You can too! 

Once you have wri en down your plan, revisit your goal every
week un l you have achieved it! You will never grow personally,
spiritually or emo onally without taking ac on. You must be
proac ve! Add me in your schedule to specifically think about
your plan and work on whatever you are trying to achieve.

5. When
Picture ACT: Ac on Changes Things

You can have the best dreams, the best plans, and the best
inten ons, but “you will always lack if you don’t act.”

You CAN take control of your situa on, no ma er what it is! You
CAN enjoy financial freedom. You just have to believe you can
work hard at achieving it and have integrity in reaching it!

As you work toward your goals this year, you may have already
run into some issues or obstacles. Maybe you have been sick;
Financial Freedom
maybe you have had a set back in me or access to money
or access to deals. Well, congratula ons! This is part of the
valuable learning process in achieving your goals, but the
good news is that this is only the beginning of your journey
to financial freedom. In order to start enjoying the rewards of
financial freedom, you have to simply increase your financial
educa on and know where you are now on your financial
freedom journey and where you want to go. Do you need more
educa on or connec ons? DO IT! Do you need to find “boots
on the ground” to help you find deals? DO IT! You may need
to connect with a realtor or wholesaler or a contractor or an
advisor? DO IT! At the end of life, people do not regret the
things they did and didn’t work out, no, they always regret the
things they didn’t do. So DO IT! No one cares how great of a
plan you have or how wonderful your idea is, un l you ACT! So
DO IT! The people that are no ced, the people that succeed
have to act! It’s never the smartest people that win; it’s the
people that DO IT that win. If you want to achieve financial
freedom then DO IT!

YOU CAN! YOU WILL! YOU MUST! 

To start your journey, check out www.goodsuccess.com to

learn about events which can offer you the ability to educate
yourself in principals for real estate success.

I know how scary change can be, but think about it: if you don’t
take ac on now, what does your financial future really look
like? If you have some encouraging words to share with others
about your financial freedom journey, please share them with
us at............... (Insert link for web form that asks quesঞons
about peoples experience or journey to financial freedom)
The Five Wealth Generators
The Five Wealth Generators in Real Estate:

With the five possible wealth generators built into to a rental

property, it only makes sense that many people use single-family
or mul -family rentals as either all or at least part of their financial
freedom plan. In this blog, I plan to explain why real estate is the
easiest path to financial freedom and how this Ac ve Turnkey
Program could be a benefit to you.

The Five Wealth Drivers

1. Cash Flow
Cash flow is the most important wealth driver. When
considering a leveraged rental, I expect a house to have a
net cash flow, a er all expenses (a er mortgage payment,
taxes, insurance, HOA, management fees, etc.), of at least
$300 per month. This HAS to be the case as cash flow is
what will sustain you over the long haul and keep other
proper es afloat when this par cular property is vacant. If
your financial freedom plan was for you to have $10,000
a month in passive income, then you would need 30
leveraged rentals making $333.33 per month each (very
easy with an ac ve turnkey in the right areas). I focus a lot
on cash flow, as I think you should, but understand there
are four other possible wealth drivers built into residen al
rentals.

2. Instant Appreciation
When you buy under market value and then rehab a
property, you are forcing apprecia on (or making a
property worth more). For example, if I buy a home for
$50,000 that a er repairs is worth $100,000, and I spend
The Five Wealth Generators
$25,000- $30,000 rehabbing the home, then I have
forced apprecia on of $20,000- $25,000. This is instant
apprecia on or instant wealth! The awesome, wonderful
thing about forced apprecia on is there is a form of
deferred tax built into this wealth driver. Your house
doesn’t know that it is now worth 20%- 30% more than
the money you have into it. If you were to refinance that
same property, you would end up with very li le of your
own money into the property (another benefit of instant
apprecia on). You must work with people that know
how to predict what a property is worth a er repaired
appraised value and can rehab to a standard that will get
renters to want to rent your home and also get your home
to appraise without spending too much or too li le on
rehab. I have seen investors go both ways here. I have
seen landlords not want to spend enough, and I have seen
investors make the mistake of over-improving a rental.
You don’t want to over-improve a rental. You will never
get your investment back out of the rental, and when
there is turn over you will be very frustrated if a tenant
does not take care of the home the way you think they
should; so in the end over-improvement on a prospec ve
rental property is just a waste of money.
3. Mortgage Principal Pay Down
Every month that your renter pays you rent and you pay
the mortgage, you are not only ge ng the cash flow that’s
le over each month, but you are also gaining wealth each
month because the principal is being paid down on the
mortgage. This is one of the major wealth drivers in real
estate that most people forget about. Many mes the
paying down of the principal is a greater wealth driver
than the actual cash flow. With amor za on, this is also
a snowball effect as well. You start out paying very li le
toward the principal, but as me goes on you pay more
The Five Wealth Generators
and more on the principal making each month a larger
and larger wealth build. Not to men on that the rents will
probably go up over the years so you could end up with
a higher cash flow down the road plus a higher wealth-
building mechanism built into the mortgage pay down
wealth generator.

“ Many times the paying down of the

principal is a greater wealth driver than
the actual cash flow.

4. Depreciation and Other Tax Benefits

Deprecia on is the process by which you would deduct the
cost of buying or improving rental property. Deprecia on
spreads those costs across the useful life of the property.
Say you buy a home to use as a rental. Instead of taking
a single, large tax deduc on in the year you bought the
property, you can take a por on of the cost of the building
as a deprecia on deduc on each year.

A note about deprecia on: You may have heard people use
the word “deprecia on” to describe the decline in value
that occurs as a piece of property endures wear and tear.
This isn’t really true. Deprecia on is about alloca ng the
cost of property, not assessing its value. You’ll depreciate
rental property even if it remains in p-top shape. One
of the unbelievable benefits of deprecia on of rental
proper es occurs when you own a property and you pass
on your proper es to your heirs. They get what is known
as a stepped-up basis. For example, let’s say you bought a
property for $100,000 and appreciated it all the way down
to zero over 30 years; then when the property gets passed
The Five Wealth Generators
on, the market value is $200,000. Your heirs get a stepped-
up basis of $200,000. So if they were to sell the property,
they would only be paying a capital gain on increase from
that amount instead of at zero.

Depreciable Property
To take a deduc on for deprecia on on a rental property, the
property must meet specific criteria. According to the IRS:
• You must own the property, not be ren ng or borrowing
it from someone else
• You must use the property to produce income -- in this
case, by ren ng it
• You must be able to determine a “useful life” for the
property. This means that the property must be one that
would eventually wear out or get “used up.” A house has
a definable useful life; a piece of land does not.

Depreciating Improvements
You don’t just depreciate the cost of buying rental property.
Money spent to improve the property is depreciated as well. An
improvement is anything that enhances the value or usefulness
of a property, restores it to new or like-new condi on or adapts
it to a new use. The list of poten al improvements is endless,
but common improvements include:
• Building new addi ons or garages
• Installing new systems, such as hea ng or air condi oning
• Replacing the roof
• Adding wall-to-wall carpe ng
• Installing accessibility upgrades, such as a wheelchair
ramp

Rou ne repairs and maintenance are not considered

improvements. Maintenance costs are deducted as expenses
The Five Wealth Generators
in the year you spend the money. For example, “some tar on
a roof would be maintenance,” explains Rick Snow, an El Paso,
Texas, real estate broker who hosts a weekly radio show on
issues of interest to homeowners and landlords. “Replacement
of an en re roof would be depreciated.”

How Long It Lasts

You start taking deprecia on deduc ons, not when you buy a
property, but when you begin using the property to generate
rental income. The IRS refers to this as pu ng the property
“in service.” Deprecia on con nues un l one of two things
happens:
• You have deducted your en re “cost basis” in the
property. In most cases, your cost basis is what it costs
you to acquire the property, including certain taxes and
fees paid at se lement, plus any improvements to the
property.
• You remove the property from service--meaning, you
stop using it to generate income. This may be because
you sold the property or just decided to stop ren ng it.
I’m not an accountant but according to Turbo Tax: Rental
property o en offers larger deduc ons and tax benefits than
most investments. Many of these are overlooked by landlords
at tax me. This can make a difference in making a profit or
losing money on your real estate venture.

If you own a rental property, the IRS allows you to deduct

expenses you pay for the upkeep and maintenance of the
property, conserving and managing the property, and other
expenses deemed necessary and associated with property
rental.
As far as employees and independent contractors, landlords
can deduct wages and salaries for employees, such as for
residen al managers and staff grounds maintenance workers.
The Five Wealth Generators
Other tax-deduc ble services that can be used as deduc ons
are independent contractors, such as:
• Carpenters, electricians, and plumbers
• Architects, landscapers, and gardeners
• Roofers, carpet layers, and painters

Keep each contractor’s tax ID number, especially if they are

unincorporated, and submit the amount you paid them on IRS
Form 1099-MISC. If you paid the contractor less than $600
over the course of the year, this form is not required. However,
you are s ll allowed to deduct the expense.

Deductible Expenses for Rental Property

A landlord is allowed to deduct any reasonable expenses
used in the conduct, maintenance, and managing of his rental
proper es. That includes:
• U li es
• Taxes
• Necessary and reasonable repairs to the property
• Travel costs incurred while doing business

Expenses that are some mes overlooked, according to David

Ayoub, CPA in Syracuse, N.Y., are meal and entertainment
expenses for employees. “You can only deduct 50 percent of
meal and entertainment expenses incurred while doing business
with poten al clients or business associates. However, if you
throw a Christmas party or a summer picnic for your staff, it’s
100 percent deduc ble.”

Accidental Landlords
It’s not unusual for someone to become a landlord out of
circumstan al necessity.
“You see people moving out of town or state to go to a be er
The Five Wealth Generators
job. If they can’t sell their house, they rent it.” If you rent your
home for three years out of five, and then sell it, the capital
gain is taxable. However, if you sell it within two years, you
don’t have to claim capital gain. You’re also en tled to the
same deduc ons as any other landlords. As with any rental
property, make sure you have landlord insurance on your
home. It’s deduc ble as an expense, too.” Please refer to IRS
guidelines as they are always changing. And please consult
with your accountant before taking any of these deduc ons.
When choosing an accountant, please make sure they
understand rental property deduc ons and how to properly
depreciate. I find it a good prac ce if you own real estate to
find an accountant that specializes in real estate.

5. Appreciation: The Icing on the Cake! 

I normally do not talk a lot about apprecia on, but this is
definitely a benefit to owning real estate. Where else can
something be worth more money, plus you get a capital
gain, and you not have to pay tax in the year in which you
receive the gain? Take stocks for instance. When you own
stock and it goes up in value during the year, you pay tax
in that year. However if the stock loses money, you do
not get a loss. I have many investors who have lost their
shirts in taxes over the years because of this. However
with real estate that is not the case; you do not pay any
kind of capital gain un l you sell the property. In history
there has always been apprecia on in real estate over
the long haul. Sure,there have been some years in which
there has been no apprecia on, but over a 20-year period
of me there will typically be a rise in what real estate is
worth. In most markets a 2%- 4% apprecia on is typical
if you average it out over several decades. And yes, there
will be occasions when during a market cycle, such as in
the 2009 real estate crash, you will be able to purchase
The Five Wealth Generators
a property and then resell five years later for double or
even triple what you paid for the property. This is not what
I’m recommending, but the gains in those proper es over
those years would have been apprecia on. There are three
types of apprecia on. Forced apprecia on, when you rehab
a property and make it worth more money. Neighborhood
apprecia on which is the long-term natural rise in value,
and market apprecia on. I’m sure you have heard the
three rules of real estate: Loca on, loca on, loca on.
This refers to market apprecia on. In my opinion, market
apprecia on is very specula ve but can be very rewarding.
I tend to understand all three types of apprecia on, but I
choose to focus on forced apprecia on and neighborhood
apprecia on. Most of the markets in which I do an Ac ve
Turnkey Program are in our cash-flowing, boring markets
where there are not many ups and downs in value. Why?
Because we focus on keeping our risk low and our returns
as high as possible. I want to find a way to put my money
out and get my money back as quickly as possible and
con nue to make money over and over again. I choose to
place my me, effort, and money into something that will
perform and create a cash machine that con nues spi ng
out cash for as long as it can be maintained. Focusing
on this type of real estate inves ng will allow you to be
financially free within the next 5 to 7 years!

“ Where else [other than real estate]

can something be worth more money,
plus you get a capital gain, and you not
have to pay tax in the year in which you
receive the gain?
Safer With More Controls
Owning tangible assets like real estate has been proven to be
much a safer and more controllable investment. Unlike the
results of the stock market, you as an investor of real property,
will have the most control over this type of tangible asset.
Real estate for a long me now has been considered risky in
the investment world. However, over the last 20 years or so, I
would say real estate has become a much less risky investment
with much higher returns. With the right educa on, knowing
where to buy, knowing how to buy, having access to deal
flow and having a rock star, boots on the ground team and a
property manager to be a trusted advisor who can help you
navigate as you just steer the ship and make the big decisions,
you can own real estate with much more control and much
lower risk.

“ Unlike the results of the stock

market, you as an investor of real
property, will have the most control
over this type of tangible asset.

Real estate has a larger clientele base than most other

investments. As the saying goes, “Find a need, fulfill it and
become wealthy.” Today more than a third of all households are
ren ng. This number is rising quickly and expected to con nue
for the next decade. With more households ren ng, it only
makes sense that we need more investors providing housing
for these renters.

With more safety, be er controls over your investments, and

the huge need for rental proper es that currently exists, you
simply have to develop a great rental business. The perfect
storm is in place, and you will only be limited by your own
Safer With More Controls
belief, work ethic, integrity and go-give spirit that you bring
to the market place. Yes, I said “go give.” We all need to be
focusing on what we can do or what service we can provide
to add value to other people’s lives. A ques on to ask yourself
is who will live their life thanking God that you lived yours? So
how does this philosophy pertain to owning rental proper es?

“ With more safety, better controls

over your investments, and the
huge need for rental properties that
currently exists, you simply have to
develop a great rental business.
If you can find realtors, wholesalers, contractors, a maintenance
man, property managers, “boots on the ground” a orneys,
accountants etc. that you can add value to by giving them
steady work in order for them to make a living; then eventually
you will succeed if you can offer rental proper es to people in
good neighborhoods that are well-maintained.
By adding value to people’s lives you will in return benefit from
their success. You reap what you sow. I strongly discourage
being a landlord that does not take care of his proper es. I
strongly discourage ripping off contractors and not paying
them for work they did on your proper es. I strongly discourage
figh ng with your property manager about every line item.
Trus ng people does come with some risk, but not trus ng
people comes with much more risk! We at Good Success are
commi ed to always doing something “good.” We believe in
working with our hands for the that which is “good” so we
can give to those in need. In whatever we do in life, we should
focus on providing services that add value to others, and the
benefits will follow!
Safer With More Controls
So with all that you have just learned, I am sure that some of
you are now looking to buy rental proper es. Are you looking
to find a way to get some cash-flowing, single-family rental
proper es that spit out cash like a cash machine every month
and build instant and long-term wealth? Conven onally, there
have been two ways to go about this:
1. First option: The do-it-yourself way
• You buy a house and manage all the issues yourself
• You become overly ac ve, driving the project from start
to finish
• You find a realtor or a wholesaler who can help you find
a property or look in the newspaper or on Craigslist
looking for that deal that actually fits your budget
• You work on the house yourself or go through the
headache of ve ng and working with a contractor
• You list the house and show the house to poten al
renters
• You manage the house yourself and then when the
tenants need a toilet fixed, they call you and you figure
out how to do the repairs and how to manage scheduling
a me for repairs with the tenants
• You also get the dreaded task of being a bill collector
when a tenant is late on rent… and what if the tenants
don’t pay the rent at all…and you can’t reach them. Well,
then you are stuck trying to get the tenants out or filing
for an evic on
2. Second option: Purchase Turnkey, rented
properties.
These are all fixed up proper es with most of the big
maintenance items fixed and property management in
place, but those conveniences o en come at retail prices
resul ng in less cash flow, less equity in the house and
Safer With More Controls
resul ng in high risk and not resul ng in the best “actual’
returns.
3. There is a third option which is the BEST
option!
Let me tell you about the best way to buy rental proper es
while providing great cash flow and excellent wealth
building. It’s not a trick or a new-found secre. It’s likely
not anything you haven’t considered yourself. It’s not
revolu onary. It’s just the easiest way for you to make great
returns without ac vely having to manage everything.
This plan doesn’t have a fancy name, doesn’t have a flashy
marke ng plan, and it doesn’t have a cool logo. All it has is
the poten al to make you incredible returns monthly, create
wealth, and save you hundreds of hours of work. There
is great power in using leverage. Most people talk about
OPM in real estate (other people’s money). OPM is the
leverage that occurs when you either use the bank’s money
or a private lender’s money to make deals. This is awesome
because you can basically make money on other people’s
money as long as you were using your own experience in
your own knowledge or your own hard labor or boots on
the ground. However with the right connec ons and the
right educa on you can also use leverage with OPE--other
people’s exper se, or their knowledge and connec ons.
We have created this wonderful Ac ve Turnkey Program
for our investors, but if you do not use us to help you “buy,
rehab, rent, refinance, and repeat” rental proper es in our
markets, I believe the same principals will s ll apply. I hope
this blog gives you some educa on to help you reach your
goals.

Please feel free to contact us if you are interested in investment

opportuniࢼes.
The Active Turnkey Program
With this program we help you buy a house at a wholesale
cash price which gets you the absolute best deal. We all know
cash is king, and if you can pay cash you can always get a
be er price. If you can buy from a trusted advisor, wholesaler
or realtor that looks over the deals for you, this is a way to use
other people’s experience and exper se! The right person will
help you find the right deal making sure the property meets
the qualifica ons for what you’re trying to achieve. Yes, our
program actually works with people on a one-on-one basis!

Once we know that you want to get into the program, we put
you into our queue. Once in the queue, we keep sending you
deals un l you choose one. Be very careful because these
deals go very fast! One of the biggest complaints we get is that
people don’t have enough me to look over a deal, but we have
developed a trus ng clientele of investors for which we have
produced tons of cash-flowing proper es. Repeat customers
snatch up recommended proper es very quickly, and let’s face
it, there are only so many deals to go around, and it doesn’t
take a rocket scien st to figure out that we are providing a
tremendous amount of value to our customers. Once you say
you want the house, we put the house under contract and you
send the earnest money to the tle company. Once you close
on the house, my construc on team will manage the rehab,
upda ng you with pictures and weekly updates as the project
goes along. The goal is for you to be all in, purchase plus rehab,
at or around 75% LTV (loan to value). Once we have the house
rehabbed, we turn it over to our rental management company
which will get it rented and then take over the maintenance
and management of the property. Finally, once all that has
happened, you refinance the house for 70%-75% A er the
repaired appraised value, meaning your all-in price, gets mostly
or all refunded by your loan, most of my clients end up with
$5000-$8000 of money into each deal. Essen ally it’s possible
The Active Turnkey Program
that you could end up paying yourself to buy a house or in
other words, you get to “have your cake and eat it too!” This is
not usually the case, but definitely has happened on occasion.
Now I know this all sounds too good to be true, but let me
break it down for you using a real house with real numbers.
Let’s say you start with $100,000 in cash. This is an actual deal
that was available as of 1/26/2016:

7221 McLaughlin Ave, Hammond, IN 46324

Purchase Price (cash price): ...$42,000
Repairs: ......................................$22,000
Closing Costs: ...........................$1,400
All-In Price: ..................................$65,400

Our buyer purchased this home in Hammond for $42,000.

Repairs were es mated at $22,000, and our buyers paid around
$1,400 closing costs. Your money for repairs is escrowed at the
tle company (this helps the deferred refinance work and help
you to be able to refinance quicker). We rehab the property--
this usually takes 1-2 weeks to get u li es turned on, pull
permits etc. Then 4-8 weeks are typically needed for the rehab
itself. Let’s say it takes 6. You should end up with a rent-ready
home in 2-3 months. Our contractors guarantee all work for
a year. We do not expect maintenance costs for the investor
during the first year; however; my experience with proper es
has been that some mes a property can go for a year or two
years, and maintenance-type issues may not arise un l there is
regular use of the property.

Please understand that this program does come with risk.

You are buying a house that no one really knows anything
about. Yes, we have seen the house; we have pictures, and a
contractor es mate of repairs which are usually within 10%
of being accurate, but you never know what could happen
The Active Turnkey Program
and what unforeseen problems may occur. It is possible (and I
would say a 1% chance) that one of these deals actually has a
hidden repair of 15k-20k. But don’t let this scare you too much
as we do feel that over the long haul (say over 10 houses), you
will save tens of thousands of dollars using this strategy not to
men on the fact that you could be si ng with most of your
money back in your pocket (if not all of it)!

The other major risk in doing a deal like this is that it is very
possible that if you refinance the property too soon it may
not appraise at full-market value. There are many reasons
for this. The first reason is that banks really do not like to do
cash-out refinance. The second biggest reason is appraisers
are scared to death of the government cracking down on
them like they did a er the 2008 crash. For example, if you
purchase a $100,000 property for $50,000, three months later
could expect the house to be worth $100,000 because you
put $25,000 worth of work into it. Some appraisers may say,
“Why do you think it’s worth $100,000? Why is it not only
worth $75,000?” In no way, shape or form does this mean the
property is not worth $100,000; it just means at the me the
home may not appraise for that type of loan. Think of your
own house for instance. How many of you have done cash-out
refinance on your own property that you live in? When I talk to
people that have done this, myself included, the property does
not appraise for as high as we could sell it for on the market.
What we have found is that if we wait six months, many of the
underwri ng guidelines fall off and appraisers are much more
willing to appraise the property and it’s real market value. We
do try to be conserva ve with our numbers as we understand
that we are not going to get a house to appraise for full-retail
market value when we do a rental rehab. A good rule of thumb
is a rental-rehabbed property should appraise for 10% to 15%
lower than the fix-and-flip comparable sold homes in the area.
The Active Turnkey Program
This is a fluid target however with an experienced, boots on
the ground person. He ought to be able to predict the a er-
repaired, appraised value (if wai ng 6 months to refinance) a
majority of the me.

This par cular house, with its proximity to Chicago, will pull at
least $1,100 in rent. Below is the breakdown of the expenses.
The rehab for the me period during which the house was
rehabbed.

Monthly Rent ........................................................ $1,100

Monthly Insurance............................................... $66
Monthly Taxes....................................................... $124
Property Management (8%) .............................. $88
Monthly Uঞliঞes (tenant pays) ......................... $0
Total Monthly Cash Flow (not leveraged) ...... $822

Typical vacancy for this area is about three weeks, so within

3-4 months of owning the house, chances are you will have a
tenant.

A er ge ng a tenant in the house, the next step is to refinance.

Refinanced Loan Amount( 70% of ARV)......... $65,030

Amorঞzaঞon Term (years) ................................. 30
Mortgage Monthly Payment .............................4.90%
Interest Rate ......................................................... $345.13
All-in LTV ............................................................... 70.4%
All-in A[er Refinance.......................................... $370

As you can see, a er refinancing this house for only 70% of the
ARV, you have only put $370 into the purchase of this home.
At this point, your $822 of cash flow covers your mortgage,
The Active Turnkey Program
leaving you with $477 of monthly cash flow if you leverage the
property. Following this property over the following 10 months,
(one year a er the purchase) this home would have produced
a net income of $4,400.35, plus the equity in the house. As an
investor, what I am always looking for in an investment that
carries risk is, “How soon can I get my ini al investment back?”
Once this happens what are my returns? INFINITY!!!! Sure,
cash-on-cash returns of 1000% are great, but don’t ever get
sucked into focusing on yield. Once you get to the point that
you have all your money back and you are making any money
at all, you can make this a repeatable, predictable model The
goal should be to do this as many mes as possible? RIGHT??

Original Money Invested......................... $65,400

Loan Amount.............................................. $65,030
Total Money Spent ....................................$370
1st Year Cash Flow....................................$4,770
(2 month’s vacancy, 10 month’s rent)
Total Money A[er 1 Year ........................ $104,400
1st Year Net Income ................................. $4,400
Total ROI: ....................................................1189.2%

This program is pre y amazing; it almost seems like it should be

illegal! But if that wasn’t enough, let’s add to this the power of
rent-to-own (lease op on). If you use the rent-to-own strategy
which adds a $3,000 non-refundable op on fee to the renter’s
first month payment, you greatly increase your chances to get
all of your ini al investment back AND START with INFINITY
RETURNS!!!!

Keep in mind that from our experience only 10-20% of these

lease op on tenants will ever cash out. You will have turnover,
and you will have the same percentage of people being late on
their rent. However the average maintenance cost is less than
The Active Turnkey Program
2%. The one thing that I love about the lease op on program is
the long-term, predictable, steady income that it helps provide
me. When there is turnover in a typical rental property, you
always lose money. You have a month of down me plus you
typically have some repairs, and rarely ever does the security
deposit cover those repairs; so all in all, you typically lose about
$3000 every me there’s a turnover. This could take all of the
income you would have had for property for an en re year
right down the tubes; however, I don’t mind turnover because I
know the next tenant is going to be bringing me another $3000
non-refundable op on fee. I never think of these op ons fees
as extra income or a way to make more money on a property;
no, I look at them as a way to sustain reliable cash flow over a
long period of me. And that, my friend, is the best way to buy
rentals--using ul mate leverage with other people’s money and
other people’s exper se and connec ons, but only if you are
connected to the right people and have the right educa on.

“ If you can buy from a trusted

advisor, wholesaler or realtor that looks
over the deals for you, this is a way
to use other people’s experience and
expertise!
This program is not for everyone, and I am sure that some people
do not qualify for the program or do not have the $100,000 in
cash to get started; however, if you do and you can start out
with at least $100,000, I would at least consider this program
as part of your investment, re rement, and wealth-building or
financial freedom plans.
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