Sunday, April 17, 2016

       This is a snippet of the monthly inspiration that I receive from my Broker Dave Hess of Avery Hess Realtors. With the record low rates and income potential everyone should be taking advantage of the income opportunity that is available today.
Hey Gang,
So what's the big deal about investing anyway? Let's build a foundation to answer that question. When someone is a W-2 employee, they are taxed at the highest rates, the government takes out all sorts of deductions before the employee ever even smells the money, and the employee has no control on the timing of the receipt of the money or the payment of taxes. Darn near nothing is deductible as a pre-tax expense. And the total amount of money one can make is limited by both the number of hours in a day and how much the boss is willing to pay. Ah, but when you become a property investor, with positive cash flow, you have all of the expense deductions of a real estate agent, but you are no longer limited to the fact that there are only 24 hours in a day. Now you make money while you sleep! You have people who go to work every day so they can mail you a check once per month. You have people going to work to make you rich. And because of depreciation and other expenses, some of your cash flow is now "tax sheltered." Once you master the skills of being a positive cash flow investor, the sky is the limit to how much money you can have coming in every month.
When you hear politicians talking about the disparity between the rich and the poor, they are not talking about the difference between low paid W-2 employees and high paid W-2 employees. They are talking about RICH investors with money POURING IN MONTHLY. Money they did not have to punch a time card to get. This is not magic that is unattainable for you. With some book knowledge, a burning desire, and a plan that you commit to, you can attain it. And there are many people you that have done it who can guide you. I promise you it is possible. But it is only possible if you think it is.

Thursday, April 14, 2016

Real Estate Income Quick Formula

Quick Worksheet for Real Estate Income Property

Purchase Price - Market Value = (Income Potential)
Income PotentialAfter Repair Value (ARV)= (Potential Income)
Potential Income/MortgageAvg Rental for area= Income Potential

          Above is a quick formula for analyzing Real Estate Income Property. #1 Rule is to look for a Deal. The reason why is because of the old saying "Buy low Sell high."  Key point to keep in mind is that nothing is set in stone and Real Estate Investing is a risk.

Purchase Price Market Value? = (Income Potential)
          In order to "Buy low Sell high" the purchase price that you are going to buy the property should be less than the current Market Value. The percentage amount your looking for on average should be no less than 30% - 40%. 
                                Income Potential – After Repair Value (ARV)*= (Potential Income)
          To make a profit you also need room or a cushion for other expenses such as ARV            (After Repair Value) which consist of the upgrades or fixes to make the property appealing to potential buyer. Whether its just cosmetics or full renovation such as knocking out a wall the cost has to be accounted for since it plays a big factor the income.   

                               Potential Income/Mortgage*– Avg Rental for area?Income Potential
         If the property is going to be use as a Rental Property, its best to subtract the Mortgage by the Average Rentals in the area this will give you an idea of your Income Potential. Do your research, because a a rental that is not price correctly will become more of an expense than an income generator.