Financial Freedom Group Blog

My $100,000,000 Plan

Without further ado here is my $100,000,000 plan.

The goal, remember, is to create $100,000,000 net worth in 5 years or less.  You will see a carry forward in year 1 that took into account where I was when I started this exercise.

I am going to outline the 5 years individually with the action step and how much income each step will generate.

Year 1 Action Steps:

We have created a business that flips properties at $10,000 a month for $120,000 annually.

We have created a business that sells notes from properties in IA that we sell on a contract for deed.  This will net $200,000 annually.

Purchase a piece of land, do entitlement work, sell it for double the purchase price (paid $100,000 and sold for $200,000).  Net, $100,000 annually.

Create a new, positive, cash flow of $8,000 a month from buying real estate.  $96,000 is the annual net number.

We purchase real estate that has a value of $2,000,000 for only $1,800,000 (10% equity).  This adds $200,000 to the net worth.

Carry forward $7000 a month positive cash flow.  This is a $84,000 addition to the net worth

Carry forward $250,000 equity. 

Recap

• $120,000 Wholesaling Deals
• $200,000 Selling Notes
• $100,000 Land Deal
• $96,000 New Cash Flow
• $200,000 Equity from New Purchases
• $84,000 Existing Cash Flow
• $250,000 Existing Equity
• $1,050,000 Gross after Year 1
• ($60,000) Living Expenses
• ($20,000) Business Overhead
• $970,000 Net Worth

Year 2 Action Steps:

We wholesale properties for $20,000 a month.  This is $240,000 annual increase in net worth.

We purchase $7,000,000 worth of real estate for $5,950,000 (15% Equity).  This adds $1,050,000 to the net worth number.

Cash flow from new real estate acquisitions is $15,000 a month for $180,000 cash added to the bottom line.

Carry forward cash flow from the previous real estate acquisitions is $15,000 a month also for an additional $180,000 per year.

Appreciation of 3% on real estate already owned for an increase of $135,000 to the bottom line.

Get into a land deal for $1,000,000 and resell is for $3,000,000.  $2,000,000 addition to our net worth.

Business sells IA property notes for $500,000 profit annually.

Equity and cash carried forward from previous year of $970,000. 

Recap of Year 2:

• $240,000 Wholesale Business
• $1,050,000 Equity from Purchases
• $180,000 New Cash Flow
• $180,000 Existing Cash Flow
• $135,000 Appreciation
• $2,000,000 Land Sale
• $500,000 Note Sales
• $970,000 Carry Forward Cash and Equity
• $5,255,000 Gross
• ($80,000) Living Expenses
• ($140,000) Overhead Expenses
• $5,035,000 Net Worth

Year 3 Action Steps:

Our wholesale business is running at full steam turning out $35,000 a month.  This adds $420,000 to the bottom line.

We get into a large value add industrial project.  Create $10,000,000 in equity.

3% appreciation on real estate owned (total amount of $11,600,000 worth of real estate) this would be $348,000

Carry forward cash flow of $30,000 a month.  This adds $360,000 a month to the bottom line.

New monthly positive cash flow of $40,000 per month.  This adds $480,000 a month to the bottom line.

We add to the investing business by adding a commercial brokerage which nets $1,000,000, we have an equity stake in deals we have put together for $2,000,000 and we continue to sell notes for $3,000,000.  This adds $6,000,000 to the bottom line.

We purchase a land deal for $3,000,000, subdivide and sell for $6,000,000. 

Equity and cash carried forward from Year 2 $5,035,000.

Recap of Year 3:

• $420,000 Wholesale Business
• $10,000,000 Industrial Value Add
• $348,000 3% Appreciation
• $360,000 Carry Forward Cash Flow
• $480,000 New Cash Flow
• $1,000,000 Brokering Deals
• $2,000,000 Equity Stake in Joint Venture Deals
• $3,000,000 IA Note Sales
• $3,000,000 Land Deal
• $5,035,000 Equity and Cash Carried Forward from Previous Year
• $25,643,000 Gross
• ($150,000) Living Expenses
• ($300,000) Overhead Expenses
• $25,193,000 Net Worth

Year 4 Action Steps

We stop the quick turn real estate business.  Even though it is leveraged it isn't worth keeping around.  We consider selling the business but in the mean time this adds $0 to the bottom line.

3% Appreciation on real estate owned ($27,000,000 in total real estate).  This adds $810,000 to our net worth.

We carry forward monthly positive cash flow of $70,000 a month.  This is $840,000 in the bottom line.

New monthly positive cash flow of $70,000 a month.  This adds another $840,000 to the bottom line. 

Big Deal creates $10,000,000 in equity. 

Real Estate Investing Company.  We broker deals for $2,000,000.  We joint venture with investors for $4,000,000 in equity.  We sell notes for $5,000,000 profit.  This is a total of $11,000,000 in net worth

land purchase of $10,000,000 and resell for $22,000,000.  This adds $12,000,000 to our net worth.

Equity and cash flow carried forward of $25,193,000

Year 4 recap:

• $0 Stop Wholesale Business
• $810,000 3% Appreciation
• $840,000 Carry Forward Cash Flow
• $840,000 New Cash Flow
• $10,000,000 Bid Deal Value Add
• $2,000,000 Brokering Deals
• $4,000,000 Equity Stake in Joint Ventures
• $5,000,000 Note Sales
• $12,000,000 Land Purchase and Sale
• $25,193,000 Equity and Cash Carry Forward
• $61,683,000 Gross
• ($500,000) Living Expenses
• ($1,000,000) Overhead Expenses
• $59,183,000 Net Worth

Year 5 Action Steps:

3% appreciation on real estate owned ($60,000,000) for a total of $1,800,000 added to net worth.

Carry forward monthly positive cash flow of $140,000 a month for a total of $1,680,000 to the net worth total

New monthly positive cash flow of $140,000 for an additional $1,680,000 addition.

1-2 Big Deals for a total of $20,000,000

Our investment company brokers deals for $3,000,000.  We have an equity stake worth $6,000,000  in joint venture deals and $7,500,000 in cash from note sales. 

We purchase a land deal for $10,000,000 and resell for $22,000,000 for a profit of $12,000,000. 

Equity and cash flow carry forward for a total of $59,183,000.

Recap of year 5

• $1,800,000 Real Estate Appreciation
• $1,680,000 Carry Forward Cash Flow
• $1,680,000 New Cash Flow
• $20,000,000 From Big Deal(s)
• $3,000,000 Brokering Deals
• $6,000,000 Equity Stake in JV Deals
• $7,500,000 Note Sales
• $12,000,000 Land Deal
• $59,183,000 Equity and Cash Carry Forward
• $112,843,000 Gross
• ($6,000,000) Living Expenses
• (2,000,000) Overhead Expenses
• $104,843,000 Net Worth

This plan does not take in account tax effects. 

I will post an update to where we are tomorrow.  We are ahead of schedule.

If you have any questions please let me know.

$100,000,000 Plan

An outstanding way to really stretch yourself is to create a plan to develop a net worth of $100,000,000 ($100 million) in the next 5 years.  You will find that you will try to do it by using techniques that you are familiar with.  You will soon find out that you will have to move to bigger deals to get to the numbers you are looking at or start to leverage yourself tremendously to buy a lot of single family homes.

This will take some time to put together.  I initially did my $100,000,000 plan on an airplane while flying to a real estate seminar.  I will post my original plan tomorrow, and I will also share how it has worked itself out. 

Here is how to put the plan together.

Create a plan for every year of the 5 years.  Have the previous year add into the plan that you are creating.  I would also add in 2-3% to the equity as appreciation.  I am going to leave the structure open for your mind to run wild. 

A few tips.  I would try to focus on deals that have some component of value add.  That may be a rehab, problem management or a vacant commercial property.  Adding value is an outstanding way to explode your wealth.  I would also add in big deals to your plan.  You may not know much about big deals but that is OK.  I would also look at many different types of deals such as land, development, apartment buildings, commercial properties, etc.  If you have questions please post in the comments section (I am sure others will have questions as well and we can all learn together).

Stay tuned for my $100,000,000 plan.  Also feel free to send me your plan and we can brainstorm around it.