WHY INVEST IN REAL ESTATE?
Some of the wealthiest families in North America got there by investing in real estate. From Donald Bren, to Donald Trump, to best-selling author of ͞RICH DAD POOR DAD͟Robert Kiyosaki; these are just a few examples of many that have built their wealth and reputation primarily through real estate.
TURN-KEY INVESTMENTS - for Short-term Profit is a great way to supplement your income and grow your net worth. Single Family properties are in high demand so there are short-term investment opportunities for the investor to capitalize off of. Buying old and rundown you can either build or renovate in a turn-key investment to produce large returns. The key is to turnover investment capital as quick as possible.
EQUITY APPRECIATION - for long-term investments for building NETWORTH is the most common method to generate ROI in real estate. As the market fluctuates, the property value increases. Market shifts are influenced by current economic conditions and are determined by comparable properties. Also how much government funding are going back into the community, area, city. Transportation and health care are huge factors in growth.
The value of multifamily properties with more than 5 units are evaluated differently. Banks and appraisers evaluate a multifamily property like a business; they look at net income. Properties that have been neglected create an excellent opportunity for investors to purchase the property ͞at a discount͟ and set out to ͞force the appreciation͟ by being diligent in their approach to property management.
Mortgage pay down is one of our favorite method of generating ROI. Each month, income from rents are used to pay all expenses, including the mortgage. An investor’s net worth increases as monthly rents pay down the mortgage on an investment property. In the end, the tenant ends up buying the asset for the investors. This is a long term Investment and is the best way to increase net worth.
Positive cash flow is achieved when rents collected are greater than monthly operating expenses. Whatever is left over after all expenses have been paid, including the mortgage, is deemed positive cash-flow. Experienced investors pay careful consideration to this area to ensure maximum ROI.
The Power Of Leveraging your real estate investment is a huge advantage. Banks are all too willing to assist in the purchase of a cash flow generating investment property. This ability gives us the option of financing the property 70% to 85% of the purchase price. A $100,000 investment can purchase an asset valued $400,000 or more. Banks are willing to do this because the loan is secured by the property.