This document summarizes and compares Groupon to income property investments. It notes that Groupon relies on non-GAAP metrics that exclude significant costs to portray growth. However, the cost to acquire new customers is increasing, which does not bode well for long-term profitability. Income properties provide small, consistent profits without media attention or needing large capital infusions. While Groupon offers potentially large losses and chasing "hot" stocks, income properties offer a disciplined approach to building long-term wealth through cash flow and appreciation. Investors are advised to focus on fundamentals rather than bubbles by pursuing consistent profits over speculative growth.

1. In This Issue: Volume 11, Issue 7 $197 annually e-mail, $297 print
• The origins of bubbles.
• Groupon - it’s hip, it’s
The Province of Fools – Anatomy of the Bubble Machine
popular, it’s everywhere. Part Two of a Three-Part Series
But is it a good
investment? When examining market bubbles,
• Why you can’t have it is critical to understand
economic recovery exactly what they represent.
without more jobs. Fundamentally speaking, a
• Why Washington can’t
market bubble emerges when
buy a recovery. expectations about the future
growth for a certain asset grow so
• The good, the bad, and high that people sacrifice future
the ugly (and it sure can production and consumption for
be ugly) about HOAs.
the sake of investing in that asset.
This was the case for tulip bulbs
The Province of Fools - in Holland, technology stocks in
The Bubble Machine Page 1 the 1990s, real estate during the
early 21st century, and possibly
Groupon vs. gold today.
Income Property Page 1
The importance of this insight
Who Gets the “Big Kid” comes from a deeper understanding of what free markets naturally do, and how bubbles distort this necessary
Returns? Page 4 function. The most critical role of a free market is to allocate capital to its highest and best use through investors
seeking the best (risk-adjusted) rate of return on their capital. Thus, in a normal market situation, businesses and
No Jobs, No Recovery investments with the best fundamentals and highest prospects for real growth will be the ones that attract the
Page 5 most capital.
Reasons For the Home However, there are many situations where public policy either directly or indirectly creates market bubbles. When
Price Collapse Page 6 the tax or regulatory status of a certain investment class is artificially altered by the government, it can create
a bubble (tax credits for politically favored companies and industries, for example). When government policy
Federal Money Can’t Buy makes financing artificially easier to obtain than would have been possible in a free market, it creates a bubble
a Recovery Page 7 in assets that are purchased with financing due to a fresh influx of buyers (this is literally what created the real
estate bubble).
Property Performance (continued on page 2)
Projections Pages 8-9
HOA Fees - The Good, The
Groupon vs. Income Property
Bad, and The Ugly Page 10 The recent filing an S-1 document by Groupon for the purpose of an Initial Public
Offering has led to many people speculating about the value of the company,
2011 Income Property especially in the wake of Google’s $6 billion dollar acquisition offer that Groupon
Forecast Page 10
refused. When their stock lands on the exchanges, many expect it to be an
extremely hot item since many people are anxious to own a share of the rapidly
New Ways to Market Your growing company. This filing has come on the heels of IPOs and IPO rumors from
Home Business Page 12
companies such as Facebook, Twitter, and LinkedIn that has led many to believe
that a second wave of the technology bubble may be emerging.
Groupon - Boon or Fail for
Small Business? Page 13
The key characteristic of the technology bubble in the late 1990s was excitement over proliferation of the
Internet, and its potential to change business models. The predominant paradigm at play during this market frenzy
Strategic Default: Now was a belief in growth at all costs. Companies were formed and investments were made based on the belief that
Banks are Doing It Page 14
whoever was first to create a viable Internet marketplace would reap the lion’s share of the financial rewards.
Since this growth paradigm generated tremendous losses for companies participating in the frenzy, many new
PP Product Listing Page 15
measurements were concocted to cover up the fact that loads of investor capital was being burned by these new
companies.
Nothing Lasts Forever
Page 16 (continued on page 3)
www.JasonHartman.com Page 1

2. Other Shows and The Province of Fools –
Resources from
Anatomy of the Bubble Machine (continued from page 1)
In the case of the technology bubble, it represented the intersection of the Internet moving
into the technological mainstream, and an influx of venture capital that perpetuated valuations
upward as multiple online entities all attempted to dominate their respective market niche by
incurring substantial losses for the sake of growth. Each player in the marketplace spent significant
investor resources, signed leases, bought equipment, and made other expenditures in anticipation
www.JasonHartman.com/radioshows of future profits. Unfortunately, ten companies cannot dominate the same market niche. This
means that the (many) entities who failed to meet their growth and profitability projections went
out of business. This phenomenon resulted in a sudden halt for technology demand that rippled
out to the broader economy.
www.CommercialInvestingShow.com Analysis of the NASDAQ 100, Case-Schiller 20 index (with leverage) and gold prices over time tell
a very distinctive story. From Q3’95 through Q1’00, the NASDAQ 100 increased by 450%, but by
Q4’02 all of those gains had been lost. From Q3’03 through Q1’06, leveraged real estate returns
increased at an even faster pace, but began to downslide in 2007 and were accelerated by the
financial crisis of 2008. When gold is added to this chart, it tells a very similar story. Starting in
www.JasonHartman.com/FFR Q1’01 through the end of 2010, gold has risen by over 500%. The course of past bubbles has been
one of rapid escalation followed by an equally rapid collapse. Gold has been increasing in price
considerably over the past few years, and some are even beginning to proclaim the emergence of
a new paradigm where gold perpetually escalates in value. Coincidentally, this is almost the exact
same rhetoric used during the technology and real estate bubbles that subsequently burst and
www.HolisticSurvival.com deflated. Only time will tell the future of gold, but it is showing many features that are similar
to past bubbles.
As we can clearly see, the incidence of bubbles principally occur when something artificially
skews incentives for market players and investors. In this situation, people perceive future profits
www.AIPIS.org based on artificial market movements. This shifts resources from other uses with greater rates of
real productivity toward things like building more housing. This artificial shift escalates prices as
people bid-up values for resources and end products. To the bubble market players, this appears
to be evidence that a new paradigm is emerging, since prices are moving up and people are
www.YoungWealth.com
making lots of money. Of course, the point ultimately comes where new buyers cannot be found
who will pay higher prices – and the value collapse ensues. The people who are in at the beginning
of a bubble make money like bandits. However, the folks who enter too late end up paying the
price for those profits captured by the early movers. No value is created…all of the profits from
early movers come at the expense of late entrants.
www.HeroicInvesting.com
At the end of this cycle, we end up with many entities going bankrupt and a large amount of de-
valued product from the bubble collapse. In addition to the direct losses that bubbles create, there
is an even more dangerous effect. This effect is the lost productivity from capital that was taken
away from more productive uses and spent in pursuit of a market bubble. Every person who chases
www.SolomonSuccess.com quick money instead of fundamental value plays a small part in suppressing the nation’s long-term
economic growth. Every bubble that rises and crashes destroys future growth by siphoning capital
away from more productive use.
As individuals, we are in the unfortunate situation where our actions cannot directly stop
www.TheSpeedofMoney.com bubbles or change the course of public policy. However, we can ensure that our own activities
are engaged in the pursuit of fundamental value instead of market bubbles. As businesspeople,
this means avoiding fads or get-rich-quick schemes. As investors, this means focusing on providing
real products and services that provide real value to real people. It means focusing on activities
that generate real cash flows, instead of staking all of our returns on future value appreciation.
www.JetSetterShow.com When value appreciation is the only driver of your profits, you will be subject to sudden and
unpredictable shifts in market sentiment that have the potential to destroy your investments.
Action Item: Avoid the allure of bubbles and pursue fundamental value in all that you do.
This will allow you to side-step the “quick buck” mentality that dominates financial media
www.SpeakingofWealth.com and leaves many people devastated by collapsing bubbles.
www.BusinessofLifeLLC.com
Your investing / business / entrepreneurial news source for 2011
www.AmericanMonetaryAssociation.org www.JasonHartman.com Page 2

3. “Invest in places that make sense so you can afford to live in places that don’t make sense.” - Jason Hartman
Groupon vs. Income Property (continued from page 1)
To wit, Groupon has made sure to place emphasis on metrics such as Free Cash Flow, and something they call Adjusted Consolidated
Segment Operating Income, or Adjusted CSOI. Neither of these metrics are part of Generally Accepted Accounting Principles (or GAAP).
Their “Free Cash Flow” measurement looks at operating cash flow with purchases and acquisitions removed. Many of these purchases are
necessary parts of operating a business. The “CSOI” metric examines profitability from existing subscribers/customers, but ignores the
cost of acquiring customers, equity compensation, and taxes.
As we can see, the measurements Groupon uses to evaluate itself leave out many significant costs that the management wishes to gloss
over when selling a growth story to investors. Groupon’s value proposition comes from being a large-scale player … however, that large
scale comes with large losses. In contrast to this are the small-scale profits that come from otherwise boring investments such as income
properties.
Large-Scale Losses
• High growth and high spending that produces large losses to purchase large revenues.
• Requires regular infusions of investor capital to keep the spending binge going.
• Lots of media attention will attract wide-eyed investors who expect that the stock will remain “hot” forever.
• Eventually, investors will tire of continuing to fund a money furnace.
• The early movers and insiders will cash out long before the bubble bursts.
Charting out some data from the Groupon SEC filings
shows a very interesting trend. Groupon’s gross profit
per Groupon sold is very important. This represents the
amount of money they actually see after paying the
vendor their share. This amount has been very flat over
time. However, the total spending of Groupon divided
by the total number of new customers shows a startling
trend. Groupon must spend an ever increasing amount
of money for each new customer that it acquires.
This does not bode particularly well for its long-term
profitability. Astute investors should be wary of what
this trend means for the future of their equity stake.
In contrast to the large-scale losses from a “sexy”
enterprise like Groupon, you have the small-scale profits
of an “un-sexy” investment such as income property.
These two classes of investment differ in almost every
fundamentally important way.
Small-Scale Profits
• Very little media attention – the fragmented market means that there is no money for people like Goldman Sachs to
securitize things like income properties and market them to the general public.
• “Day one” profitability combined with stable cash flow and low to modest growth makes things like income property less
appealing to the general public who prefer “dynamic” investments.
• The power of time works in your favor, instead of against you. Instead of timing the market just right to avoid a bursting
bubble, you can ride out market cycles on the back of strong cash flows and sell when values are optimal.
The contrast is clear…Groupon and all of the other associated “hot technology” stocks showcase lots of media attention, a sexy story,
and large losses that grow with each passing year. Income properties offer small-scale, fragmented profits that keep them away from
investment banks such as Goldman Sachs. For investors who are disciplined and astute, they offer a unique opportunity to grow personal
wealth in an optimal manner.
Action Item: Resist the temptation to chase after “hot” stocks with high rates of growth that burden investors with large losses.
Discipline your mind, and stick to fundamentals when other people are chasing bubbles. This will place you in a position to take
advantage of opportunities that emerge when the bubble inevitably pop. Focus on consistent, sustainable profits that will allow
you to build long-term wealth.
Subscriptions: E-mail $197, Print $297 Annually
Produced by: The Hartman Media Company, © Copyright 2011.
Reprint rights and interviews available with permission, please e-mail Media@JasonHartman.com
This publication is designed to provide general advice and education concerning real estate for investment purposes. Nothing contained in this
publication should be considered personalized investment, legal or tax advice. Every investor’s strategy and goals are unique; you should consult with a
licensed real estate broker/agent or other licensed investment, tax and/or legal advisor before relying on any information contained in this publication.
Please call (714) 820-4200 and visit www.JasonHartman.com for additional disclaimers, disclosures and questions.
www.JasonHartman.com Page 3

4. “Big Kid” Returns go to Direct Investors
Jason Hartman’s
When most people think about investments, their minds immediately
Creating Wealth drift to vehicles such as mutual funds, hedge funds, bond funds,
Podcasts REITs, and other methods of pooled investments that are either
managed or pegged against an index. Many noted academics such
Over 200 informative, as Burton Malkiel have rightly observed that most active managers
exciting, wealth-building fail to beat the market portfolio, and that it is optimal to simply
podcasts available on purchase the market portfolio at the lowest cost possible.
www.JasonHartman.com.
However, there is another aspect to consider in regard to pooled investment and investment
Titles include:
funds. This factor is that large pools of capital can only pursue large investments. Upon deeper
#215 - Don’t Sell Your Gold or analysis, this reveals that anything which cannot be scaled into a large-scale portfolio will
Silver...Yet! necessarily be overlooked by any aggregated funds or indexes.
#214 - The Demographic Shift in
Texas and the U.S. In many cases, there are small, fragmented opportunities where investors can capture very high
#213 - A Rant on Loan rates of return, but are not scalable into pooled investment funds. Examples of this phenomenon
Modification, Short Sales, and are single-family income properties, and small privately-held companies. These investments are
Mobile Home Parks too small to be captured in indexed portfolios, so the high rates of return that they can produce
#211 - Distressed Properties Up accrue only to those who invest in them directly.
Close: The Phoenix Tour
#208 - First-Time Landlord: Thus, it becomes true that “Big Kid” rates of return only go to direct investors. Anybody who
Your Guide to Renting Out a trusts a fund manager to select investments on their behalf places themselves at the mercy of
Single-Family Home that manager’s decisions. In addition to this, consider that most fund managers are compensated
#204 - Meet the Masters by receiving a percentage of the fund asset base. Because of this, their incentive is to attract
#202 - The Winner Take All Society new investors, which grows the capital base, and makes it impossible for them pursue anything
#199 - How to Improve Your outside of large-scale opportunities that typically produce only average rates of return.
Credit Score
#198 - The Wealthy Freelancer When constructing your personal investment portfolio, there is probably a place for pooled
with Steve Slaunwhite investments such as the market portfolio. For the portion of your investments where you are
#196 - A Christmas Story - satisfied with the “average” market rate of return and don’t want to babysit the capital, the
“A Tale of Two Brothers” market portfolio can be optimal. However, if you are seeking to achieve rates of return that the
#195 - Guerilla Marketing with “Big Kids” like Donald Trump and Robert Kiyosaki talk about, it isn’t going to happen in a mutual
David Fagan fund or REIT. Only direct investors can achieve these levels of returns.
#193 - Exposing a Real Estate
Scam The rub is that being a direct investor requires much more research, courage, and discipline
#190 - Millionaire Memory than purchasing a pooled investment. By taking the effort to become educated, developing the
#189 - Unique Brand New, Fully discipline to follow fundamentals, and fostering the courage to act, these returns can be yours.
Rented, Multi-Family Investments It all comes down to what efforts you are willing to make for the sake of your financial future.
#188 - Did Congress Try to
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#186 - Ric Edelman on 10 Great investor so that you are able to capture the rates of return that are out of reach for
Reasons to Carry a Big Long “average” investors.
Mortgage and Never Pay It Off!
#182 - The Complete Idiot’s Guide
to Starting a Home-Based Business It’s that time of year again!
#180 - The Divine Cosmos, 2012, Will you be any closer
Dreams and DNA to financial freedom
#172 - Harvey Mackay: Swim with in one year? Three
the Sharks, Get Your Foot in the days can make all
Door the difference if
#170 - The “Psychometrics” of you simply have the
Success and Happiness courage to take action on your dream. The reality is you can
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Coming in October 2011! Visit www.JasonHartman.com for more details
www.JasonHartman.com Page 4

5. No Jobs, No Recovery
The recurrent news stories about the current economic
“recovery” have begun to wear on many people. What
the population at large is beginning to wonder about is
jobs. Specifically, why the employment situation is still
so difficult in a “growing” and “recovering” economy.
Each month, jobs reports are released by the government
that articulate estimates about how many net jobs
were gained or lost. Naturally, the political authorities
overseeing the current anemic economy quickly jump
on any increases in employment as evidence of success
for their policies. However, it turns out that simply
analyzing raw numbers does not paint a full picture of
the economic situation.
What the government press releases fail to articulate
is the growth in jobs relative to the growth of the
population. This is the real barometer of whether the
economy is moving toward or away from prosperity. For
the purpose of our analysis, the population of people aged 16 and above is the most relevant comparison for the total job growth,
since these are the people who are eligible to work.
When analyzing this trend over time, it becomes quickly
apparent that the current recession represents a level
of job destruction not seen since the Great Depression.
Past recessions have resulted in net annual job growth
that failed to keep pace with population growth and
occasionally dipped negative for a single year. However,
the past few years have seen massive net job destruction
that has yet to show signs of reversal.
When analyzing the net difference between job growth
and population growth, it shows a long-term trend of
relative expansions and contractions where jobs have
grown either faster or slower than the population of
people aged 16 and above. What this chart shows very
clearly is the extent to which people currently entering
the job market are trapped behind a rock where massive
job destruction has displaced millions of workers who
are both skilled and experienced. Since most people
entering the work force possess minimal skills or experience, and depend on their first jobs to build both of these attributes, there is a
tremendous risk being run of creating an entire generation of terminally unemployed citizens.
Further evidence of the problems we are presented
with are demonstrated by comparing the total number
of employed people against the total population of
people aged 16 and above. This removes the ambiguity
of government unemployment calculations and simply
compares total jobs against total people. What this
analysis shows I that labor force participation has
dipped down to a level not seen since the Nixon-Carter
Stagflation Recession of the 1970s and early 1980s. It is
certainly true that some people stay out of the labor
force because they are retired, or they choose to raise
a family. However, with labor force participation this
low, it is impossible to ignore how few people are now
supporting the entire government complex. Consider
that taxes cannot be collected from people who have
no income…as the employment base shrinks relative to
the total population, the burden placed on those who
produce will increase as more people become dependent
on the Government-Entitlement Complex™.
(continued on page 6)
www.JasonHartman.com Page 5

6. No Jobs, No Recovery (continued from page 5)
In response to this information, some would argue that
the figures do not accurately reflect the “good news”
that has come about in the second half of 2010 and
2011. To address this concern, we have constructed
a monthly breakdown of the job growth relative to
population growth of people 16 and older over the last
12 months. What the facts show is that over the last
year, the population of employable people has grown
nearly 0.5% faster than the number of jobs.
The bottom line is that there has been no real recovery
to date. The horrific levels of job losses in 2009 and
2010 have not even begun to be addressed, since the
job gains over the last 12 months have not even kept
pace with the rate at which new people are entering
the labor pool. For all of the ruminating that pundits
do over the future of the housing or stock market, the
job climate is a critical variable that is not being fully
appreciated.
The housing market will not recover until more people can pay their mortgages. This will not happen unless more people become
gainfully employed. The stock market cannot continue its current rally unless more people invest. As unemployment continues to linger,
more people will be selling their investments, which will suppress value growth in the financial markets. The simple facts are that this
recession will be with us until policies and incentives are tilted toward real growth. There is no reason to believe that this will happen
until or unless government policy moves in a different direction than it has over the past few years.
Action Item: Use the investment opportunities created by this extended downturn to place yourself in an advantageous position
when the economy resumes a growth trajectory. The recent trend of destructive public policy has created a hotbed of opportunities
for investors. Capitalize on these opportunities before they disappear.
Four Reasons Behind the Continuing Home Price Collapse
Despite the current administration’s constant hyperactive dog-and-pony show, we at the Financial
Freedom Report think the gyrations are a bit excessive. If the economy is turning around, why are
home prices still flat on the ground and getting kicked in the teeth? If you listen only to President
Obama, one might draw the conclusion that the Great Recession of the past few years is a distant
memory and we now have a chicken in every pot and a car in every garage, to quote the great
political acumen of Herbert Hoover.
But do we? If so, soaring unemployment and dropping home prices must be a mirage? Not to go out
on a limb here, but maybe it’s because the President knows exactly what he’s saying and it’s all
lies. Just off the top of our collective head, we can think of four very real factors that are keeping
home prices down, thus contributing to the limp-along economy. And now experts believe the global
economy is moving into recession as well. The straight story is that nothing will change until the housing market recovers in large sections
of the country.
1. Foreclosures
Every bubble is followed by a precipitous drop in price when it pops. Such was the case in 2006 as the housing market began a steep
decline in many regions around the United States. Though everyone anticipated that the bubble would burst at some point, few expected
it to be on the pinpoint of the American Dream, and carried out via the mechanism of millions of home foreclosures – home foreclosures
caused by a double dose of bad government policy and irresponsible buyers.
When you buy too much house for your income, the eventual result is personal financial implosion, and that’s exactly what happened to
far too many of your fellow Americans. Maybe you’re one of them. Did they make bad choices? Some did, and are suffering now for it.
But also intrinsic to the foreclosure explosion was a national government that encouraged banks to make loans to people who would not
normally qualify. Good old Aunt Fannie and Uncle Freddie were standing by to pay the bill until the problem of delinquent mortgages
got so big that it threatened to topple the entire economy. Eventually, the bad mortgages did topple the entire economy, and it’s not
done yet. Too many foreclosures are still for sale. Too many people afraid or unable to buy. Too many American Dreams yet to be ground
underfoot.
(continued on page 11)
www.JasonHartman.com Page 6

7. A “Recovery” Bought and Paid For by Washington is Not a Recovery
Despite our best efforts to bring you the first and last words on what you need to know about
income property investing and how it is affected by current fiscal policy from the ne’er-do-wells
in Washington D.C., sometimes someone else says what we wanted to say just perfectly.
Such is the case with a recent report written by Mike Larson and titled “The Great American
Apocalypse of 2011-2012.” While he deals with many topics over the course of 60-some pages, one
particularly caught our eye - the difference between a healthy economic recovery and one bought
and paid for by the government.
If you ever wanted to know exactly how to distinguish the two - take it away, Mike...
“Despite the greatest government rescue operations of all time, America continues to suffer through the toughest of times. And the
pattern is now clear: First a great speculative bubble ... then a greater bust ... followed by massive government stimulus, bailouts and
money printing ... and then ... still another, even greater bubble and bust.
When all is said and done, some people make fortunes. But millions of average hard-working people lose their jobs, get evicted from
their homes, sink deeper into debt, and even risk abject poverty. What our government has failed to understand is that the most recent
bust could have been used as an opportunity to end this cycle — once and for all.
Yes, we could have seen the collapse of the likes of AIG, Fannie Mae and other “too-big-to-fail” institutions. And yes, we could have
experienced a very painful decline in asset prices. But that, in turn, could have allowed the patient and conservative, cash-rich investors
waiting on the sidelines to swoop in and scoop up the bargains of the century, helping to rebuild America from the ground up. That
climactic end to the crisis could have laid the groundwork for a healthy, sustainable economic recovery — one built on solid bedrock
rather than quicksand.
But Washington policymakers and politicians blinked! Officials at the Federal Reserve and Treasury panicked. They took the wrong lesson
from the Lehman Brothers collapse — namely that anything and everything had to be done to prevent large financial implosions and
cleansing recessions. That’s when they went to work with our money, ultimately lending, investing, spending, or committing at least $8
trillion to...
1. Bail out Bear Stearns, Fannie Mae, Freddie Mac, AIG, and General Motors...
2. Shore up banks around the country via the $700 billion Troubled Asset Relief Program (TARP) program...
3. Expand FDIC coverage to even wealthier individuals by raising the deposit insurance cap to $250,000 from $100,000...
And rescue foreign investors and banks by swapping hundreds of billions of dollars with central banks in Canada, the U.K., Japan,
Australia, and continental Europe. That’s also when the Federal Reserve embarked on its epic run of money-printing that we mentioned
earlier. What about Congress? The Obama administration? More of the same! They showered the economy with money as part of the $787
billion economic stimulus package in early 2009. They helped concoct the bogus “stress test” exercise for the banking sector, which made
it easy for banks to raise $75 billion in capital to shore up their balance sheets. And they passed targeted bailout packages for certain
industries, such as the $8,000 home buyer tax credit. The government takeover of U.S. credit markets has gotten so extensive, in fact,
that Uncle Sam has been standing behind just about every home mortgage issued in this country: Fannie Mae, Freddie Mac, the FHA, and
the VA are backing as much as 97 percent of the home loans originated these days. That, in turn, effectively brings trillions of dollars
worth of additional, contingent liabilities onto Uncle Sam’s balance sheet.
All told, federal government debt outstanding exploded by 24.2 percent in 2008 and another 22.7 percent in 2009, the biggest annual
increases since 1975, according to the Fed. Total public debt outstanding is now running at $13.2 trillion, per the Bureau of the Public
Debt. That’s a whopping 132 percent rise in the past decade! The budget deficit isnow running at close to 10 percent of GDP year after
year, a level never seen before in American history except temporarily — during the Civil War and the two massive world wars.
The result of all this money being thrown out of Washington helicopters? A bought-and-paid-for economic recovery. In other words, a
recovery based on smoke, mirrors, trillions in funny money, and abundant hot air.
Private companies didn’t abruptly decide to start building scores of new factories or hire millions of new workers. They were still
swimming in excess production capacity and labor from the bubble days. Consumers didn’t all of a sudden decide to go on a renewed
debt binge. They were still reeling from the housing market implosion and looking to repair their personal finances by paying down their
loans — or walking away from them!
But with the Treasury and Fed vomiting so much free money, some was invariably spent. That gave us a few quarters of GDP growth,
prevented the loss of some jobs, and helped levitate asset prices, driving the Dow up by more than 4,500 points.
Yet even so, the recovery was extremely anemic — nothing like what we’ve seen in past, healthy rebounds driven by private sector
resurgence. And that’s not all. The government-led, bought-and-paid-for economic recovery always had a dangerous Achilles heel: It
relied on the willingness of bond investors the world over to finance it!
(continued on page 10)
www.JasonHartman.com Page 7

8. 1 Year Performance Projection July 11, 2011
Decatur Home Built in 2000
Decatur, GA 30034
Performance
3 Bedroom 2.5 Bath Home Built 2000
Square Feet 1,480
Projection
Initial Market Value $ 76,900
Purchase Price $ 76,900
Downpayment $ 15,380
Loan Origination Fees $0
Depreciable Closing Costs $ 1,538
Other Closing Costs and Fixup $0
Initial Cash Invested $ 16,918
Mortgage Info First Second
Cost per Square Foot $ 51
Loan-to-Value Ratio 80% 0%
Monthly Rent per Square Foot $ 0.60
Loan Amount $ 61,520 $0
Income Monthly Annual Monthly Payment $ 359.01 $ 0.00
Property Highlights: Gross Rent $ 895 $ 10,740 Loan Type Amortizing Fixed
Vacancy Losses $ -71 $ -859 Term 30 Years
Operating Income $ 823 $ 9,880 Interest Rate
- Decatur, GA 30034 Monthly PMI
5.750%
$0
0.000%
Expenses Monthly Annual
- 3 bedrooms, 2.5 baths Property Taxes $ -128 $ -1,538 Financial Indicators
- Built in 2000 Insurance $ -44 $ -538 Debt Coverage Ratio 1.50
Management Fees $ -65 $ -790 Annual Gross Rent Multiplier 7
Leasing/Advertising Fees $0 $ 0 Monthly Gross Rent Multiplier 86
Association Fees $0 $ 0 Capitalization Rate 8.4%
Maintenance $ -44 $ -537 Cash on Cash Return 13%
Projected ROI Other
Operating Expenses $ -283
$0 $ 0 Total Return on Investment
$ -3,403 Total ROI with Tax Savings
31%
31%
31% Net Performance Monthly Annual Assumptions
Net Operating Income $ 539 $ 6,477 Real Estate Appreciation Rate 3%
Cash Flow - Mortgage Payments
= Cash Flow
$ -359
$ 180
$ -4,308 Vacancy Rate
$ 2,168 Management Fee
8%
$2,168
8%
+ Principal Reduction $ 65 $ 791 Maintenance Percentage 5%
+ First-Year Appreciation $ 192 $ 2,307
Comments
= Gross Equity Income $ 438 $ 5,267
Split level home built in 2000! Sold in 2000 for $113,700 and
+ Tax Savings $0 $ 0 foreclosed in 2010 for $119,702! Home has dining room/living
= GEI w/Tax Savings $ 438 $ 5,267 room combo, master on main and a breakfast area. Home is
traditional style with vinyl siding.
*Information is not guaranteed and investors should do their own
research, get professional advice and conduct due diligence
prior to investing.
1 Year Performance Projection July 11, 2011
BEING REHABBED - Incredible Phoenix Investment!
Phoenix, AZ 85043
3 bed / 2 bath PLUS LOFT; Built in 2002.
Square Feet 1,934
Initial Market Value $ 99,900
Purchase Price $ 99,900
Downpayment $ 24,975
Loan Origination Fees $ 749
Depreciable Closing Costs $ 3,496
Other Closing Costs and Fixup $0
Initial Cash Invested $ 29,220
Mortgage Info First Second
Cost per Square Foot $ 51
Loan-to-Value Ratio 75% 0%
Monthly Rent per Square Foot $ 0.51
Loan Amount $ 74,925 $0
Property Highlights:
Income Monthly Annual Monthly Payment $ 425.42 $ 0.00
Gross Rent $ 1,000 $ 12,000 Loan Type Amortizing Fixed
Vacancy Losses $ -80 $ -960 Term 30 Years
Operating Income $ 920 $ 11,040 Interest Rate 5.500% 0.000% - Phoenix, AZ 85043
Expenses Monthly Annual Monthly PMI $0
- 3 bedrooms, 2 baths plus loft
Property Taxes
Insurance
$ -79
$ -41
$ -959 Financial Indicators
$ -499 Debt Coverage Ratio
- Built in 2002
1.63
Management Fees $ -73 $ -883 Annual Gross Rent Multiplier 8
Leasing/Advertising Fees $0 $ 0 Monthly Gross Rent Multiplier 100
Association Fees $0 $ 0 Capitalization Rate 8.3%
Maintenance $ -30 $ -360 Cash on Cash Return 11%
Projected ROI
Other $0 $ 0 Total Return on Investment 28%
Operating Expenses $ -225 $ -2,701 Total ROI with Tax Savings 28%
Net Performance
Net Operating Income
Monthly
$ 694
Annual Assumptions
$ 8,338 Real Estate Appreciation Rate 4%
28%
- Mortgage Payments $ -425 $ -5,105 Vacancy Rate 8%
= Cash Flow $ 269 $ 3,233 Management Fee 8% Cash Flow
$3,233
+ Principal Reduction $ 84 $ 1,009 Maintenance Percentage 3%
+ First-Year Appreciation $ 333 $ 3,996
Comments
= Gross Equity Income $ 686 $ 8,238
Being rehabbed now. Large lot: 6,567 sq. ft.; RV parking;
+ Tax Savings $0 $ 0 spacious kitchen with island; large tile flooring throughout
= GEI w/Tax Savings $ 686 $ 8,238 bottom floor; loft on 2nd story opens up over living room &
formal dining area.
*Information is not guaranteed and investors should do their own
research, get professional advice and conduct due diligence
prior to investing.
www.JasonHartman.com Page 8

9. 1 Year Performance Projection July 11, 2011
First Look! Fourplex at a 13% CAP Rate
Phoenix, AZ 85020
Performance
Lock this Fourplex down before it's gone!
Square Feet 1,776
Projection
Initial Market Value $ 120,000
Purchase Price $ 120,000
Downpayment $ 30,000
Loan Origination Fees $ 900
Depreciable Closing Costs $ 4,800
Other Closing Costs and Fixup $0
Initial Cash Invested $ 35,700
Mortgage Info First Second
Cost per Square Foot $ 67
Loan-to-Value Ratio 75% 0%
Monthly Rent per Square Foot $ 1.15
Loan Amount $ 90,000 $0
Income Monthly Annual Monthly Payment $ 511.01 $ 0.00
Gross Rent $ 2,060 $ 24,720 Loan Type Amortizing Fixed Property Highlights:
Vacancy Losses $ -164 $ -1,977 Term 30 Years
Operating Income $ 1,895 $ 22,742 Interest Rate
- Phoenix, AZ 85020
5.500% 0.000%
Expenses Monthly Annual Monthly PMI $0
Property Taxes $ -91 $ -1,092 Financial Indicators
- Four-plex of 1 bedroom, 1 bath units
Insurance $ -80 $ -960 Debt Coverage Ratio 2.70 - Vintage 1964 building
Management Fees $ -151 $ -1,819 Annual Gross Rent Multiplier 5
Leasing/Advertising Fees $ -32 $ -395 Monthly Gross Rent Multiplier 58
Association Fees $0 $ 0 Capitalization Rate 13.8%
Maintenance $ -61 $ -741 Cash on Cash Return 29%
Other
Operating Expenses
$ -100
$ -517
$ -1,200 Total Return on Investment
$ -6,207 Total ROI with Tax Savings
46%
46%
Projected ROI
Net Performance Monthly Annual Assumptions 46%
Net Operating Income $ 1,377 $ 16,534 Real Estate Appreciation Rate 4%
- Mortgage Payments
= Cash Flow
$ -511
$ 866
$ -6,132 Vacancy Rate
$ 10,402 Management Fee
8%
8%
Cash Flow
+ Principal Reduction
+ First-Year Appreciation
$ 101
$ 400
$ 1,212 Maintenance Percentage
$ 4,800
3%
$10,402
Comments
= Gross Equity Income $ 1,367 $ 16,414
PROPERTY STILL UNDER REMODEL. FINAL PRICE IS
+ Tax Savings $0 $ 0 SUBJECT TO REMODEL COSTS BUT NOT EXPECTED TO
= GEI w/Tax Savings $ 1,367 $ 16,414 CHANGE. All units are 1 Br / 1 Ba. Built in 1964.
*Information is not guaranteed and investors should do their own
research, get professional advice and conduct due diligence
prior to investing.
1 Year Performance Projection July 11, 2011
Under $100k
Dallas, TX 75253
3 Bd - 2 Ba Built in 2004
Square Feet 1,302
Initial Market Value $ 98,000
Purchase Price $ 98,000
Downpayment $ 19,600
Loan Origination Fees $ 3,136
Depreciable Closing Costs $ 1,960
Other Closing Costs and Fixup $ 0 Mortgage Info First Second
Initial Cash Invested $ 24,696 Loan-to-Value Ratio 80% 0%
Cost per Square Foot $ 75 Loan Amount $ 78,400 $0
Monthly Rent per Square Foot $ 0.88 Monthly Payment $ 420.87 $ 0.00
Loan Type Amortizing Fixed
Property Highlights:
Income Monthly Annual
Term 30 Years
Gross Rent $ 1,150 $ 13,800
Interest Rate 5.000% 0.000%
Vacancy Losses $ -92 $ -1,104
Monthly PMI $0
- Dallas, TX 75253 Operating Income $ 1,058 $ 12,696
Financial Indicators
- 3 bedrooms, 2 baths Expenses Monthly Annual
Debt Coverage Ratio 1.47
- Built in 2004 Property Taxes
Insurance
$ -204
$ -65
$ -2,450
$ -784
Annual Gross Rent Multiplier 7
Monthly Gross Rent Multiplier 85
Management Fees $ -105 $ -1,269
Capitalization Rate 7.6%
Leasing/Advertising Fees $ -31 $ -375
Cash on Cash Return 10%
Association Fees $0 $0
Projected ROI Maintenance $ -34 $ -414
Total Return on Investment
Total ROI with Tax Savings
30%
30%
30%
Other $0 $0
Operating Expenses $ -441 $ -5,292 Assumptions
Real Estate Appreciation Rate 4%
Net Performance Monthly Annual
Vacancy Rate 8%
Net Operating Income $ 616 $ 7,403
Management Fee 10%
- Mortgage Payments $ -420 $ -5,050
Cash Flow = Cash Flow $ 196 $ 2,352
Maintenance Percentage 3%
$2,352
+ Principal Reduction $ 96 $ 1,156 Comments
Fully Rehabbed - Better than new! Tenant placement, 6
+ First-Year Appreciation $ 326 $ 3,920
months property management and one year home warranty
= Gross Equity Income $ 619 $ 7,429
included. Photo is pre construction. CC
+ Tax Savings $0 $0
*Information is not guaranteed and investors should do their own
= GEI w/Tax Savings $ 619 $ 7,429 research, get professional advice and conduct due diligence
prior to investing.
www.JasonHartman.com Page 9

10. Not a Recovery (continued from page 7)
You see, it’s not like we had a bunch of money lying around to pay for all the bailouts, handouts and stimulus packages. We had to borrow
it from the capital markets. The same was true for other nations, some of which embarked on the same kind of wild spending that we did.
That worked for a while. Bond investors went along with it like lambs to the slaughter. But that is coming to an end ...”
Mr. Larson is a researcher/writer at the Weiss Institute. If you want to get the rest of his fine report, Google it and download it. We get
nothing in the way of compensation from suggesting this, but are merely concerned that the average American doesn’t realize how near
the precipice our government is taking us with these foolish attempts to spend our way to prosperity. The current economic path we are
on in America is an exceedingly dangerous one. Inoculating ourselves with endless nights of television, movies, and eating out will not
make it go away.
If parents want their children to grow up in an America that resembles in any way, shape, or form her past economic glories, and not a
destitute Third World borrower - better sit up and pay attention now!
HOA Fees - The Good, The Bad, and The Ugly
It’s become an increasingly common scenario that the American homeowner will be expected to pay Home Owner Association (HOA) fees
ranging from ten or twenty bucks a month up to several hundred or more. In some cases, especially in certain ritzy neighborhoods, you
could find yourself ponying up the equivalent of a new car payment each month for the privilege of living within a particular community.
(Jason Hartman says that HOA fees should be simple, understandable, and priced no more than $40 monthly.) At Platinum Properties
Investor Network, we’re not against HOA fees entirely, but do advise that you know exactly what you’re getting into (and what you’re
getting in return for your dues) when you sign on the dotted line.
How It Works
In the beginning, a developer decides he wants to build a subdivision, so he creates a legal entity (usually a corporation) which is known
as a homeowners’ association. He devises an initial set of rules and regulations that anyone must follow if they decide to buy a property
in the neighborhood. Normally there is a president, vice-president, and assorted other officers who hold regular meetings and insure that
the rules are being followed. Usually after a certain number of homes have been sold, the developer eases himself out of the association,
transferring ownership completely to the subdivision’s home owners.
The thing to keep in mind about an HOA is that if you want to buy a house within such a community, you MUST join the HOA. There
are no exceptions. Furthermore, you must obey the particular rules set out for the community or risk being fined, or even having your
property foreclosed upon by the HOA in extreme circumstances. If you think this sounds like something less than the full property rights
guaranteed us in the United States Constitution, you’re not alone. The best practice is to read the HOA contract thoroughly and make
sure you understand and agree with exactly what is required of you before going forward with the home purchase.
HOA rules are famous for their insistence on conformity and keeping their community in nice, neat little homogenous rows. Are you a big
fan of a certain NFL football team? Take heed. If your pigskin heroes make it to the Super Bowl and you want to show a little team spirit
by sticking a temporary flag in your front yard, there’s a good chance HOA rules could prevent it.
(continued on page 14)
Behold the Future . . . The 2011 Income Property Forecast
The new 2011 Income Property Forecast, published in
partnership with The American Monetary Association and
Platinum Properties Investor Network, Inc., has all of the
critical information that you need to succeed. The Financial
Freedom Report has negotiated an exclusive price for
our clients that allows them to acquire this research at a
fantastic price. In this report, you will learn:
• Key economic trends impacting income property
investment.
• The relationship between inflation, gold, and
income property.
• The current outlook of value and appreciation for
30 major markets.
• Full income property ROI forecast for 30 major markets.
This is a full ROI forecast that goes beyond appreciation to show the impact of leverage
and cash flow to paint a full picture of investment prospects in each market.
• Key recommendations for investment in 2011.
Make sure to secure your copy of the 2011 Income Property Forecast by the American Monetary Association today at www.
AmericanMonetaryAssociation.org.
www.JasonHartman.com Page 10

11. “Invest in places that make sense so you can afford to live in places that don’t make sense.” - Jason Hartman
Reasons Behind the Continuing Home Price Collapse (continued from page 6)
2. Unsold Homes
What do contractors do when nobody is buying houses? They stop building them, which brings the housing market to a grinding halt. As a
major component of the overall United States economy, no real recovery can take place until housing gets headed in the right direction.
That means builders building and buyers buying. Right now, no construction company with a brain is going to put resources and money
at risk by cranking out a bunch of new homes that no one stands ready to buy. They’ve adopted a bunker mentality, hunkering down
and waiting for the worst to pass, hoping their business can remain solvent until the American public overcomes an unwillingness and
inability to buy.
The current refugees from the foreclosure mess are headed for the rental market, which seems to be doing quite well for the moment,
with rental rates expected to increase as much as 25% in the next three years, due to increased demand. But for now, home buying is
at a standstill, with builders and buyers faced off against one another on Main Street at high noon. Someone has to blink. Eventually.
3. Reluctance to Buy
Even with home prices sagging back to 2002 levels, Joe Q. Public is afraid to buy a house right now, and who can blame him? Maybe
he still has a job, but how long will it last? Maybe he’s one of the reported nine plus percent of Americans actively looking for work.
That number swells to almost 20% if you look at the reality of the situation and toss out the manufactured government numbers. When
the administration admits to nine percent unemployment, you know the actual number is higher. Much higher. As an example, the
government figure does not include those who have given up and stopped looking for work. And it does include temporary workers like
census takers who will be let go soon.
The point is that buyers are nowhere near feeling secure enough in their personal finances to begin seriously considering buying a house.
Like the construction industry, they’re are hunkered in a bunker of their own, too focused on having a job tomorrow, paying bills, and
keeping food on the table to worry about luxuries like owning a home.
4. Inability to Buy
Along with a reluctance to extend themselves financially in order to buy a house, the cold truth is that many Americans simply cannot
meet the new lending industry guidelines required of new buyers. It wasn’t so long ago you could become the proud owner of a new
house with only five percent down payment. And all you had to do was say you had a good enough job to cover the monthly payment.
Since lenders were being prodded by the government to loan money practically to anyone and everyone, if you had a pulse and could
sign your name, congratulations, you just bought a house.
Thankfully, much has changed in a short time, at least for the long-term health of the financial industry. Today’s buyer can expect to be
required to put down 20% to 25% of a new house purchase. Interest rates are still great, but a chunk of change that size is out of the range
of most people right now. House prices are incredibly low, but few can qualify for loans. So they rent. And wait. And hope something will
change soon.
The Good News
The good news is that if you are in the position to lay your hands on the cash necessary to make the down payment, prices have rolled
back almost a decade in price, making it a premium time for real estate investors to jump in and land some really great deals. And
we mean REALLY great deals. Markets like Phoenix, Atlanta, Orlando, Indianapolis, and Dallas are literally overflowing with incredible
property buys for residential property income investors.
If you never considered becoming a landlord before, now is a good time to start pondering the possibility. With the stock market
approximating the course of the average ping-pong ball, fueled by the alternating panic and euphoria of speculator frenzy, there are
precious few opportunities to create a comfortable financial future for yourself and family. Property investing is one such way; in fact,
it is the best we have found.
If you’re unsure of how to get started and the whole thing seems too complicated, we’d like to offer a single suggestion. Visit Jason
Hartman’s website and begin listening to the Creating Wealth Show. This series of free podcasts now numbers over 200 and is packed full
of the kind of information you need to become a savvy land investor in a short period of time. Listen online or download to play on the
MP3 player of your choice at a later time at www.JasonHartman.com/radioshows.
Imagine Your Property SOLD in Only Two Weeks!
Open Door Auctions operates using a business model that is fundamentally different
from every other traditional real estate agency in the marketplace. Open Door
Auctions hosts weekly auction-style open houses – offering interested buyers,
homeowners and real estate agents a more fruitful and exciting way to do business.
www.OpenDoorAuctions.com
www.JasonHartman.com Page 11

12. Four Marketing Strategies Your Home-Based Business
Should Implement Immediately
Sales and marketing tactics in business have drastically changed from high-touch, personal relationships
to content creation and other educational methods to deliver a business’ value proposition. Those who
aren’t adapting to the new methods will undoubtedly be left behind in what has become a digital
media business environment.
Anymore, it is a challenge to cold call a decision maker. Gatekeepers are impossible to get through,
and the fact is, through technology, it is incredibly easy to screen calls. Cold calling is no different
than walking into a building to get a face-to-face with a decision-maker; low probability and a poor
use of time.
Technology reduces cost of marketing in most cases; in fact, for a home-based business, technology enables a person to begin selling a
product or service almost immediately with little cost.
We have defined four marketing methods that any home-based business can use to build a brand following and sell its product or service:
Search Engine Optimization
Almost always, those seeking a product or service will do some web-based research to find a business delivering what they need. People
who go through this research process head to the search engines, type in a set of keywords and find a business that sells the product
or service they seek. As a business, the goal is to show up on the first page, if not the top three spots. This is done through a practice
called search engine optimization, or SEO. In simple terms, it is a process of content creation, writing Meta data, friendly URLs and back-
linking to a website all while using specific keywords to describe what is on a particular page. Websites who use on and off-page SEO best
practices almost always see higher traffic and a lower bounce rate within a few months of implementing.
Podcasting
Providing educational content for free to your target market is the ultimate no-pressure way to gain interest in your topic and services.
Podcasting is typically formatted in a few different ways to reel in followers, often times in the format of an interview or discussion about
a particular topic for each episode. Podcasters find that after creating multiple episodes with high-value content, they have developed
a following for their brand, and they will also increase their web presence.
Question & Answer Boards
Surprisingly, a lot of people still use discussion forums to ask questions and talk about topics they are interested
in. A great marketing strategy is to find discussion forums around a topic that aligns with your expertise and
answer questions people have. Make sure that every time you submit a question or response you include a
signature containing a link to your business website. This is a great back-linking strategy for SEO, but more
importantly, it allows the people in the conversation to find more resources at the website, which can lead
to more customers.
Speaking Engagements
This is not technically an online marketing strategy, but you can sure leverage it into one! Get started by
scheduling free speaking engagements at a local chamber of commerce, schools, and other places where
your target customers typically hang out. Speaking for free on certain topics can lead to more followers of
your brand and will give you the opportunity to spin it into a web-marketing strategy through webinars, press
releases, video clips, and other forms of content creation.
“Invest in places that make
sense so you can afford to live in
places that don’t make sense.”
- Jason Hartman
www.JasonHartman.com Page 12