INVESTING IN REAL ESTATE

HOW TO BUY AN INVESTMENT PROPERTY?

STEP 1: DETERMINE

Location
Type - Single Family, 4 Plex, Commercial, etc.
Area type - look for lower vacancy rate, higher rent, value appreciating
School, Transportation, Grocery, Entertainment, etc.
City and County Regulations, and HOA regulation

STEP 2: SELECT

$800 - $1000 (or more) rent average 3 + bedrooms, 2+ bathrooms, about 1200 Sq ft (or more)
Fenced/ Blocked Yard
Open Layout
Condition of property - need repair? or need major capital improvement?
Year 1980 or newer (or Less than 20 years old)
Risk and Reward
Potential type of tenant
Cost vs. Profit
Time and Money
Amenities of the property (park, pool, etc.)
Hidden Cost

STEP 3: MANAGE

Select a Property Manager to manage property and tenants

STEP 4: LONG TERM or SHORT TERM GOALS

Determine your goal for the property: EQUITY (fix and flip) or CASHFLOW (rent)
Total Cost of house NEED to be LESS than total rent collected each month for property to cashflow

HOW TO GET OUT OF AN INVESTMENT PROPERTY?

Do a 1031 EXCHANGE (TRADE UP) to a bigger investment property
SALE of the property (Paid OFF and Cash Out)
REFINANCE - reduce monthly payment by reducing interest rate
CASH OUT REFINANCE - reduce monthly payment and take out equity

HOW TO INCREASE THE RETURN ON AN INVESTMENT PROPERTY?

VALUE ADDED Activity - paint the property, refresh the property, make repair, upgrades, remodel, etc.
REFINANCE - reduce monthly payment by reducing interest rate
CASH OUT REFINANCE - reduce monthly payment and take out equity

HIRE A PROFESSIONAL PROPERTY MANAGEMENT COMPANY

For investors who may pay cash or purchase multiple homes - they can help you save time, earn more money and avoid costly mistakes:

rental rate estimates
assess rent readiness
make repair/ replacement
suggest improvements for properties being considered as investments
leave the hassles of property management behind, they can do it for you

This will save time and effort to help you buy more properties.

Detail your services

If customers can’t find it, it doesn’t exist. Clearly list and describe the services you offer. Also, be sure to showcase a premium service.

investing in rental property

Multi-family home; 4-plex or 4 apartment building

DO YOU WANT TO INVEST IN REAL ESTATE?

If you are going to buy a rental income property, then why not buy ALL 4 of them for about the same price? BUY a 4 -PLEX, or an 8-PLEX or even a 32 UNIT Apartment.

For example, when buying a single-family home as a rental property, you get only one rental income check a month. BUT, when buying a multi-family home, such as 4 -PLEX (or more), you can get 4 (or more) rental income checks a month.

CALL ME FOR MORE INFO & LET ME SHOW YOU HOW!

contact me

BENEFITS OF BUYING A 4-PLEX

INCOME - Get MORE than 1 rental income checks
BENEFITS - Get Tax Benefits
APPRECIATION and DEPRECIATION – Increase your income and reduce your expenses

RETURN ON INVESTMENT = 10%

Return on investment needs to be 10%, otherwise DON'T BUY. If buying anyway, then do so with CAUTION.

For example:
Buying a property for $400,000
Down Payment is $100,000
Getting $10,000 a year net income = 10% return
So, in 10 years, I will get my money back.

HOW TO CALCULATE INCREASING VALUE WHEN INCREASING RENT

If you increase rent by $75 a month for 12 months on a 272 unit apartment building, then $20,400 x 12 month = $244,800 net operating income.

6% cap rate given originally before increasing rent: $244,800/ 6% = $4 million in value.