Lets start on the premise you acquire a 1-8 unit asset.
How many of us start the basic preparation to do moderate fixing or repairing the property to get it rented at current market conditions. You can expect a properly ran project where income trends to a moderate income while doubling the monthly expendiatures. We will outline on how to make it a Higher Performing Asset performing at twice as much as that.
MAKE IT A CASH RICH BUSINESS
“ Cash Rich Businesses that are not bars or strip clubs... hotels and motels... these are businesses we can look to provide a rare profit, up to five times their expenses. From day one.”
Challenges of providing your investment property into a monthly cash rich business, start with identifying investment single family residences that can operate as business you can run. This community is rising rapidly, and perhaps, has never been easier to become a part of.
Create Relevant Wealth
Bed and Breakfasts, Seasonal Rentals, Elderly Care Facilities are examples of how to turn an sfr into a business. The surprising emergence of fix and flips may very well become the gold standard of being in a position to benefit along the way. During first one to three years, you can position your asset to become a business that is for sale, where they lease the property back from you. Creating three phases of wealth: Acquisition, Stabilization and then the third phase sale / leaseback. All without having to sell your property outright, to get your profits.
Stun Your Investors
“Get Cash Upfront while financing renovations while not having to make monthly payments. Get to the AFTER, faster.”
When utilizing this step, you can either use investors or credit lines to act like cash for schedule of repairs to start and get completed. Escrow is often used with lenders to provide financed funds at different stages of the repairs. Although you may wish to finance those, it does not mean you cannot hedge or take some profit at this stage. Choice of not making mortgage payments before your property is 50% completed can be a benefit. Choosing to do this again as you get to 80% completed, can occur at this stage of the property development, too. While you have completed repairs, the property increases in value. You may wish to sell before completion of the property, but there are options for profit still available to you.
Do Investors Deserve a 20% Stake?
To contrast the need of having multiple investors, credit lines can be an alternative. They often provide a lower risk than investors who can benefit with a percentage of your project. Having low risk and higher profit margins often result.
You may choose to have investors ready, although you may not need them.
Get To The After, Faster.
Having a cash rich business that can provide triple to quadruple income to a monthly payment on an investment is attractive. The risk is minimized when you can sell that business while having that business lease the property from you.
This guide to profitability is a concept that some investors are using in the modern era of Investment Property as we search for creating wealth in 2020.
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