Hello
Private Investor page
"Anybody can buy a house. It takes a smart investor to learn how to take a property and get every ounce of value out of it, that he or she can."
Income Property
The Goal
The goal is to buy income property that will make you more money each month, than it costs to own.
You are not buying a home you are buying a small business
Crunch the numbers: add up the costs and subtract it from the anticipated rent. Rent should be higher than expenses.
Value
The value of the property is determined by the income it brings in.
When you buy a rental property it means you want to be a landlord.
If you do NOT want to be a landlord, but are committed to real estate investing, switch to house flipping. OR hire a management company.
Conditions
You are looking for a healthy economy, a town or area likely to grow in desirability, increasing housing demand, and appeal to tenants. Without any of these, the market conditions don't matter. You want to own property that most people are willing to rent.
Determine the Best Areas
Buyer Due Diligence: crime, school value, walk score, determine typical rental limits. Avoid high crime areas, high drug areas, high vacancy rates, and expenses incurred when tenants don't take pride in their home.
Due Diligence
Financial
The seller must prove the income.
- Last three years of operating expenses presented in a 12 month trend report.
- Year to date profit and Loss report
- Balance Sheet
- Last 12 months of rent roll.
Physical
Home Inspector at the buyers expense. After the report is completed, identify immediate repairs, estimate of costs, and check zoning requirements. Make plans to walk every single unit, to identify and allocate resources to common problems. Negotiate real expenses that the seller didn't tell you about, like replacing a roof, a bad boiler, dry rot in the walls. Ideally the seller can return that money after close, as a repair allowance, so that your financing will be funding the repair.
Legal
Request Title Search and delivery of property free of liens and outstanding taxes. Review accuracy, easements or right of ways. Review zoning, wetlands maps and flood maps.
Types of Investing
Flipping
Buy and Hold
Buy and Hold
Create Wealth Fast.
The goal is to get in, get it sold, and get out.
This house should sell significantly more than the expense associated with acquiring and rehabbing the property.
Three to Six months are usually required to complete this cycle.
You then have the option to sell for a nice fat check or create mailbox money .
Buy and Hold
Buy and Hold
Buy and Hold
Create Wealth Slow.
Buy a Single family house, at a great price, and collect small payments over time.
Risk: If you lose your tenant you have lost 100 percent of your cash flow.
Buy and Hold
Buy and Hold
Owner Occupied Slow Flip
Create Wealth with Investors
Buy an apartment building, at a great price, and collect small payments over time.
Each unit is treated like a business with a separate LLC, accounts, property manager, and maintenance staff.
small 2-4 units
medium 5-60 units
large 60-1000 units
Owner Occupied Slow Flip
Owner Occupied Rental/ Buy and Hold
Owner Occupied Slow Flip
Create Wealth without Timeline Stress
Buy a house as your primary residence to rehab, live in it for 2 years and fix it up, and sell. Because it is your primary residence, there are capital gains benefits.
Owner Occupied Rental/ Buy and Hold
Owner Occupied Rental/ Buy and Hold
Owner Occupied Rental/ Buy and Hold
Create Wealth with an owner occupied building, and then buy and move to another owner occupied building.
Live in one unit
and let the other units
contribute rent payments
to pay your mortgage.
Verify zoning and legal property type
with the town.
An in-law apartment is not a legal rental.
You are responsible for property taxes, property insurance, trash removal, snow removal, yard maintenance, normal wear and tear, house systems, needed repairs and updates, ...and utilities, unless they are separately metered.
Vacation rentals
Owner Occupied Rental/ Buy and Hold
Owner Occupied Rental/ Buy and Hold
Create Wealth and Have Personal Access
People will pay a higher price
by the night or week.
It is more challenging to have
more vacancies,
and manage turnover and cleaning costs. Short term rental laws and taxes apply.
1031 exchange
Property Managers Jobs
Property Managers Jobs
Defer Capital Gains
Property Managers Jobs
Property Managers Jobs
Property Managers Jobs
.png/:/cr=t:5.36%25,l:0%25,w:100%25,h:89.29%25/rs=w:388,h:194,cg:true)
Create cash flow
- keep the property full
- collect rents
- tenant screening
- evictions
- contracts and leases
- curb appeal and landscaping
- tenant relations
- tenant maintenance requests
- revitalize units for quick turnover to re-rent
- plan and execute renovations
- review vacancies
- maintain ongoing building deterioration
- avoid deferred maintenance
- maintain building systems
- provide spread sheets of expenses, maintenance and anticipated expenses
- trash and snow removal
- pest evaluation
- transfer profits to you
The Formula for profitability BEFORE you buy.
Gross Income minus Expenses = PROFIT
Expenses
Repairs
Upgrades
Landscaping
Parking/Driveway
Energy Efficiency
Continued Building Maintenance
Mortgage Principal
Interest
Taxes
Insurance
Property Management Costs
Vacancies
Lawn Service
Plowing
Trash Removal
Common Area Utilities
Rental Property creates tax advantages
Depreciation and Interest
100% of the loan should be paid by tenant income
aim for $100-200 profit, per unit, per month.
what ROI do you need 15%, 12% or 7%?
Create passive income
What would it take for you to be financially free and your bills to be covered? If you want a passive income of $6000 per month you need 30 units. 30 x $200 Profit= $6000 per month. If you want passive income of 2400 per month, you need 12 units. 12 X 200 Profit= $2400 per month.