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The 5 Money Making Advantages Of Multi-Unit Investing

Nancy — Mon, 08 Mar 2010 12:43:18 +0000

The 5 Money Making Advantages Of Multi-Unit Investing

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Having rehabbed over 800 properties in the last seven years and collected over 7,000 apartment units I’m often asked, how can I become wealthier faster investing in real estate? While most investors concentrate on some aspect of single family houses, I was always interested in multi-units (apartments) first, and then single family homes as a means of getting more multi-units .

From the very beginning of my investing in real estate, I liked the idea that a group of people (the tenants in a building) would get together and pool their money to pay down the mortgage on a property, and I liked the idea that they would also pool their money together to pay for all of the maintenance work for a building.

I especially liked the idea that they would give an owner so much money that the owner would have a bunch of money left over at the end of every month that could be used to either re-invest, save or to go out and have a good time with.

Essentially, I like the idea that other people were willing to help make me wealthy. I liked it even more when I started using management companies to manage my properties and no longer had to have contact with my tenants.

I soon came to realize that I could also wholesale, retail, pre-foreclosure, rehab, subject to and lease option apartment houses as well.

I also realized that there were certain advantages that investing in multi-units buildings had over single families.

1) The first was cash flow. Cash flow on a multi-family is always greater than that of a single family. Simply because you have more rents coming in.

The more units you have under one roof, the less risk you have. If you have a single family house and you lose your tenant, you’ve lost 100% of your income. In some instances, this could be your entire profit for the year. If you had a three family and lost a tenant, you still have two rent coming in to pay your expenses.

2) Economies of scale are in mulit-unit buildings. If you have six single family houses opposed to one six family, you have six roofs to be replaced or repaired, six lawns to be maintain, six tenants spread out through out your city or town.

In your six family you have one roof, one lawn and your tenants are centrally located. Economies of scale are in your favor.

3) There’s a lot less competition than there are in single family houses. Why? Because no one is out there teaching how to do it and all the single family guru’s make flipping single family houses sound as easy as chewing gum in the dark. The smart investors put multi-units in their portfolios along with single family houses.

4) Because of the bigger cash flows, you can afford to hire management companies to manage your tenants, thus eliminating that hassle while you go out and do what you do best (or should do best), find and finance them.

5) Your pay days are a lot bigger when you finally sell your property. This is because an apartment complex cost more than single family homes, because of this they obtain a greater dollar amount of appreciation. For example, a $100,000 single family house will in a market that appreciates 10% will be worth $110,000 while a three family house worth $300,000 in the same market (10% appreciation) will increase to $330,000. That’s $20,000 more money in your pocket!

You’ve know a few people who have made a lot of money flipping single family houses, but if you think of the all the people you know who have become extremely wealthy through real estate, you’ll realize that they did it through owning multi-units (apartments).

These are the five biggest advantages to investing in multi-units, there are many, many more. If you are interested in creating more wealth at a faster rate, adding multi-unit to your portfolio is the way to do it!

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Have you thought of creative financing?

Nancy — Fri, 08 Jan 2010 03:06:50 +0000

Have you thought of creative financing?

Wholesaling houses has proven to be a quick money spinner for people in the real estate investing market. People all over the world are using creative financing to buy properties and then selling them on quickly to make a large profit within the space of a couple of days. The great thing about creative financing is that you rarely need to put in a lot of your own money to buy a house, and you can quickly build up your income through wholesaling.

Real estate investing has become a reality for thousands of people with little or no money. Imagine being able to buy a house for little or none of your own money and then selling it on to make a profit. This is exactly what wholesaling is, and investors are finding it to be a very lucrative business.

In order to wholesale a house, all you need to do is a little bit of research to find people that are motivated to sell their homes quickly. Motivated sellers typically include people who have bought a home elsewhere and need to sell quickly or people who have painful memories associated with the house such as someone who is recently divorced. Motivated sellers are often keen to sell their home for less than their original asking price, and buying such a home can prove to have a good wholesale value.

Using creative financing, you will have put little money down to purchase the home, and then you sell it on for a higher price and make an instant profit. Wholesaling houses has helped people to make money quickly and easily, and is a great way to start real estate investing.

Using creative financing is the perfect way to wholesale houses, and make a quick income. With little of your own money going into the purchase of a house; real estate investing can be a very lucrative and profitable business. The key to wholesaling a house is to sell it on quickly for a larger amount than what you bought it for, and you will quickly be on the road to making money in real estate.

The best program to learn wholesaling in my opinion is Than Merrill’s Quick Cash Wholesaling Course. See my FREE Video here by going to www.thanmerrillwebinar.com . Enjoy!

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Make sure you’re using 2 or 3 exit strategies in Real Estate

Nancy — Wed, 06 Jan 2010 22:22:29 +0000

Make sure you’re using 2 or 3 exit strategies

Real estate investors who jump in with both feet and buy a home inexpensively might think they’ve got a great deal. But they don’t. Technically, they don’t have a great deal until they can turn around and make money on that property.

Making money on owned property is called “exiting” and there are numerous ways you can do it. Before you buy a property you should make sure that you have 2 or 3 different exit strategies in place for various circumstances. Here are a few options to consider:

Exit strategy #1 – Buy and hold: When you buy a property and hold it, you are waiting for it to appreciate. This was a strategy when house prices were climbing, although many investors don’t feel like this is going to happen any time soon. However, buying low right now might be the best choice if you feel that house prices will climb again in the future!

Exit strategy #2 – Landlording: Although you’re not technically exiting from the purchase of the property, you are still benefiting from ongoing rental revenue so it is included in an exit strategy.

Exit strategy #3 – Flip: If you want to earn fast cash, flip the house to another investor or to a landlord. When you do this, you probably won’t charge full market value for the home but instead offer it at a discount so that someone else can buy the house and do something with it while you walk away with a small profit.

Exit strategy #4 – Sell: Even though the market is in rough shape, people are still buying houses. You can buy your home at an inexpensive price and resell it for full market value to consumers.

Don’t go into your real estate investing without thinking of at least 2 exit strategies for every home. By considering more than one, you’ll be able to be flexible should you find that the market shifts unexpectedly.

Mix and match the exit strategies – for example, buy the home, landlord it for a while, then flip it over to a landlord who might appreciate getting a home with tenants.

Having exit strategies will help you feel more confident during your investing and will ensure that you are more likely to earn an income from your effort.