Investing in real estate is a great way to build wealth but definitely comes with some headaches and heartaches. While managing our own portfolio of rental properties and renovation projects we learned systematic ways to reduce those headaches and want to help investors from all over create passive income. We use a variety of methods to find great deals in high demand areas. After we find the deal, we analyze the numbers to see potential profits and returns. After we analyze the numbers we turn to our in house licensed agent to close the deal.
Our 5 steps we take to maximize your returns:
Step 1: We find you a property in an area with a high demand for rentals. We look for properties that need minor renovations for the opportunity to build in some equity.
Step 2: Our construction team renovates the property
Step 3: We place a well qualified tenant and manage the property.
Step 4: You refinance the property and pull out 80% of the ARV (after renovation value)
Step 5: We handle any and all issues with the property and direct deposit your monthly rental income into a bank account of your choice
Exit plan: If you ever decide to sell your property our licensed agent handles every step of the sale process for you at a discounted rate.
We found our client a single family property for $60,000. They could have funded the deal with 20% down ($12,000) but decided to pay cash to reduce interest paid.
We renovated the property for $23,900
The after renovation value (ARV) of the property was $110,000
Our client refinanced the home at 80% LTV (loan to value) and was able to pull out $88,000 in the form of a 30 year mortgage at a 6% Interest rate
Monthly expenses were:
Homeowner's insurance $50
Real estate taxes $61
Management fee (10%) $130
with a monthly rental income of $1,300, the positive net cash flow is $465.
Depreciation reduces the taxable income to approximately $150 per month.
This client had their total investment back for another deal in 3 months.
With this method, the same $88,000 can buy 4 to 5 houses a year.