Transcript: - 3 bed 2 bath - Year built 1900 - Attached Garage - Lot 5,850 sqft 3711 W Elmhurst Ave, Spokane, WA 1833 College Ave - NPV 51.4% ($88,958.99) - IRR 37.14 - Capitalization Rate-Purchase 8.99% -Capitalization Rate-Sale 11.73% -Cash-on-Cash Return (year1) 25.17% -Increase in Capital Value 41.06% Discounted Return Measures IRR 37.14% NPV @ 12% $88,958.99 Profitability Index (NPV/IE) 342.81% - 4 bed 2 bath - Built in 1959 - 1 parking outside - Lot 9,147 sqft $254,900 2,027 sqft MBUS664 Comparison Questions? 1227 E 37th Ave, Spokane, WA Thursday, December 12, 2019 1833 W College Ave, Spokane, WA 3711 W Elmhurst - NPV 44.23%($112,731.59) - IRR 32.12% - Capitalization Rate-Purchase 6.79% -Capitalization Rate-Sale 8.86% -Cash-on-Cash Return (year1) 10.49% -Increase in Capital Value 46.61% Discounted Return Measures IRR 32.12% NPV @ 12% $112,731.59 Profitability Index (NPV/IE) 294.84% $173,000 1,550 sqft $219,950 2,140 sqft - 2 bed 1 bath - Year built 1954 - 1 parking outside - Lot 6,098 sqft Which property to invest in? Emil H. 1227 37th Ave - NPV 35% ($76,985.7) - IRR 26.33% - Capitalization Rate-Purchase 5.23% -Capitalization Rate-Sale 6.82% -Cash-on-Cash Return (year1) 0.05% -Increase in Capital Value 55.30% Discounted Return Measures IRR 26.33% NPV @ 12% $76,985.71 Profitability Index (NPV/IE) 233.34% Real Estate Investment
Transcript: Real Estate Investing 20% of investment portfolio should be made up of real estate Management Ways to Invest Commercial Multi-family (MFD) Single Family Equity Debt Differences between Single and Multifamily Types of Real Estate Low ROI Stock & bonds ROI Cash in cash Diversity in your Portfolio Diversification, cash flow, equity build up Different Sizes Pitfalls of Real Estate Investing Multifamily What makes a good real estate investment?
Transcript: Indirect investment - an investment in which a trustee is appointed to hold legal title to the property on behalf of an investor or group of investors Limited Partnerships Some protection against inflation Easy entry Limited liability (important if it is very risky) Financial leverage - the use of borrowed funds for direct investment purposes ex. buy a building for $100,000, sell it for $120,000. Profit = $20,000, so 20% return OR invest $10,000 and borrow $90,000 with 8.5% interest. sells for $120,000. Profit = $7,721, so 77% return Syndicate - a temporary association of individuals organized to perform a task that requires a large amount of funds Usually organized as a limited partnership Offers a variety of benefits: diversification and professionally managed Creates tax shelter Direct Real Estate Investments Chapter 11 Section 1 Real Estate Investment Trusts Home as an Investment High risk for possible profit Wealthy may partake in these investments Banks, savings and loan associations will not Pros and Cons of Real Estate Investment Disadvantages Direct Investment - holds legal title to the property he/she has purchased Participation Certificates High-Risk Mortgages Participation certificates - an investment in a group of mortgages that have been purchased a government agency Considered a type of mutual fund Land ready to be developed rather than already developed Can provide enormous gains ENORMOUS RISKS If construction declines, lose money Land in urban areas doesn't usually produce income For building on - water, utilities, sewer already installed? Land Indirect Real Estate Investments Commercial Property = land and buildings that produce rental income Apartment buildings, duplexes, hotels, office buildings, stores Second-home mortgages also provide tax benefits Federal gov. decides what = a second home If rented out 14+ days/year, considered a rental home and NOT a second home Works much like a mutual fund while investing in real estate Traded on stock exchanges 3 types equity = properties mortgage = financing construction loans hybrid = combination of the two National Association of Real Estate Investment Trusts Commercial Property Vacation Homes Illiquidity - not easily converted to cash Real estate investments may decrease with the market Lack of diversification - you can only buy one thing at a time Management problems - you're responsible for fixing, tenants, can be a full-time job Real Estate Investment Home ownership is the largest financial asset Good investment = home prices have Mortgages give tax benefits Pros
Transcript: The ideal tenants we are looking for are a working family of no more than 4-6 people and not one with too many little kids because little kids will cause damage to the apartment. The tenants will not be allowed to have pets in the apartment as they might dirty the property. We will check the tenants previous rental record and check things such as: How long did the applicant live at the previous property? Did they pay the rent on time? What type of condition did they leave the property in? Was it clean and well-maintained? Did they keep pets? Why are they moving? The answers to these questions will indicate weather the applicant was a good tenant in the past. We will also make sure if the applicant is employed full-time or part-time. Finding out how stable the applicant’s source of income is will indicate whether or not he or she will be able to pay rent in the future. Trend for units is pretty stable and the houses price is slowly rising. 11/53 Meredith Street Bankstown This property is in the most popular location. With freshly painted interiors, high ceilings, all opening onto a large outdoor area, it is ideal for a family and is and minutes walk to Bankstown CBD. Features: * Unique double storey design, fully tiled throughout. * Spacious lounge & dining * Three good sized bedrooms, built-ins to all. * Two full bathrooms * Lock-up garage, video security intercom. * Centrally located near Bankstown CBD, train station and buses... * Short walk to schools,TAFE, College... Bankstown is located in Sydney’s south-western suburbs, between 13 and 23 kilometres south-west of the Sydney Median Property Price Bankstown Why this suburb? Features of Bankstown Why we chose this property Bankstown is known as one of Australia’s most multicultural suburbs, with locals hailing from across the globe, including Vietnam, Lebanon and China. While many people commute to the CBD for work, Bankstown is also home to many small businesses where some locals work. The major shopping centre is not far from Bankstown Train Station. There are many schools in Bankstown with a wide variety of girls, boys and co-educational schools, public schools, religious schools and private schools. Apartment living is popular in Bankstown, and recent developments offer all the requirements for a busy family. A 30 minute drive from the city and well-serviced by public transport, Bankstown is popular with families establishing a life in Australia. In addition to the wonderful culture and cuisine on offer, residents have access to more than 350 parks and sporting reserves and 1090 hectares of beautiful natural environment. Bankstown is a buzzing, busy suburb that is constantly evolving.Known for its diversity and strong sense of identity, Bankstown has been shaped by its attractiveness to new migrants and its strong community spirit. In a rapid growing suburb like Bankstown the prices of the property's are obviously going to appreciate. The End! Demographics Bankstown is a vibrant multicultural city, home to more than 188,000 residents from 160 countries. Bankstown is home to the University of Western Sydney Bankstown Campus. Bankstown is also home to a TAFE Bankstown has numerous public and private schools including Catholic and Islamic Schools. Bankstown is the largest central business district in the region and features a large shopping centre called Centro Bankstown. Alongside the shopping centre is a cinema. Bankstown station is in the middle of everything weather you want to travel to the city or Liverpool, Lidcome side. Bankstown's train line takes only about 30 mins to the city and drive takes less than 30 mins. Sydney Trains Bankstown Line runs from the City Circle to Liverpool or Lidcombe via Campsie and Bankstown. Buses go mostly everywhere from the massive Bankstown Interchange. Bankstown has its own hospital and a huge library. Bankstown also has its own Private Airport. With four Leisure Centres on offer, Bankstown is also home to some of the best sporting venues and facilities in Sydney. Mortgage calculator Real Estate Investment Bankstown We will be borrowing $470,000 from the bank and using the other $69,000 from our savings. We are going to make the rent for our property $490 per week which is above the 3 bedroom median rent but due to the prime location we think people will rent the property. In order to pay the mortgage repayments we will still have to pay $69 from our savings. Our Property Market Trend Ideal Tenants
Transcript: REAL ESTATE INVESTMENT SHESYAII CONCEPT PURCHASE OR SALE OF LAND AND BUILDINGS TO EARN MONEY RESIDENTIAL REAL ESTATE COMMERCIAL REAL ESTATE INDUSTRIAL REAL ESTATE CATEGORIES RESIDENTIAL REAL ESTATE Includes houses, apartment buildings, vacation properties, and anywhere else people live. This is typically the easiest area of real estate for a beginning investor to enter. RESIDENTIAL COMMERCIAL COMMERCIAL Involves office spaces, retail storefronts, or any building used for business purposes. It’s more expensive than residential real estate and you’ll manage more property. The best way for individual investors to get into CRE is to buy shares in a real estate investment trust. INDUSTRIAL INDUSTRIAL Includes warehouses, storage units, and other large “special purpose” structures like car washes that generate sales. HOW TO INVEST REI PURCHASE A RENTAL PROPERTY SHORT TERM AND VACATION RENTALS JOIN A REAL ESTATE INVESTMENT GROUP TRADE OR FLIP REAL ESTATE PURCHASE A RENTAL PROPERTY 1 The residential real estate investor with time to commit can buy a property and become a landlord. This is a guaranteed monthly income, as long as you can find tenants, and it’s one of the most common ways to make consistent money in real estate. (You can buy and rent out a commercial or industrial property, too, but the upfront cost is higher and the management is more complex). Residential properties may technically be passive investments but they require pretty active involvement. So make sure you’ve got the time as well as the money. Many landlords outsource building maintenance to management companies; others handle repairs themselves. First, get to know your local real estate market. The better you know the neighborhood, the more likely you are to make a smart purchase and offer tenants a price that’s fair for them and competitive for you. Learn what kinds of tenants live in the area, who’s moving there, and how prices have changed over time. HOW? SHORT TERM AND VACATION RENTAL 2 Try renting out a room on a nightly or weekly basis. You can even rent out an entire home for short-term periods. The amount you’ll earn will vary depending on the local rental market. If you live in an area with high tourist traffic, whether the traffic is seasonal or year-round, you can really turn a profit. You don’t need a ton of cash to get started; just the extra space. And you’ll start seeing a cash flow pretty quickly compared to a stock investment. Think of these rentals as a “side hustle” or part-time gig. You’re responsible for furnishing and maintaining the property and bringing it up to code, as well as communicating with renters. JOIN A REI GROUP 3 Investment groups are one way to get into the residential real estate market without the hassle of active landlording. Like-minded investors pool their resources and buy residential properties, like apartment buildings or condos, through a larger company. In return for taking a cut of the rental income, the company handles maintenance and tenant management. Think of these investments as small-scale mutual funds. Single investors can own individual units within multifamily housing. (The group itself becomes a legal entity with each member as a joint owner.) Since vacancy is always a risk with rental properties, many groups “pool” a portion of the rent so investors still earn some income even when their unit is empty. TRADE OR FLIP REAL ESTATE 4 For investors ambitious enough to embark on construction projects, trading or flipping real estate can bring in big returns in just a few months. Here’s how it works: an investor buys an undervalued residential property, renovates it, then sells it at a higher price. It’s possible to be a pure “property flipper” who leaves their purchase unrenovated and waits for the market to improve. Properties should already be in good condition for this to work. Selling isn’t guaranteed, of course, and you’re still on the hook for the mortgage if you can’t get tenants or buyers. “House flipping” is best for seasoned real estate investors who know how to hedge their bets with the local market.
Transcript: What is Real Estate and how does it work? Get rid of it as fast as possible. So here is how it works, you buy a foreclosure for 45k for example. But it's valued at around 110k. You put down 10k cash out of your pocket and loan the rest being 35k at an amortization of 10 years with house payments of around $500 a month thanks to your good credit and an interest rate of 4%. Then invest from 2500k-5000k out of your pocket to the house for "Make-Up" improvements in order to sell your house. After all just like cars, a clean and beautiful house will sell faster. Lastly sell your house and finance it "BY OWNER". That's it? A foreclosure occurs when the current resident of his/her home fails to keep up with their mortgage(loan) and bank retakes possession of the house. When the bank forecloses, all they care about is getting their money back for loss and damages. So what do they do with the foreclosures? Put them up for grabs in AUCTIONS! Usually homes valued around 120k are always your best shot and cost less than half of what their valued! A simple Real Estate example that can be used in a harsh economy. So if it's profitable, why is the market horrible? OK so buy a foreclosure now what? Real Estate is real property consisting of any land and it's improvements in a physical sense as well as the rights to own or BOTH! Now Real Estate doesn't just mean "Houses" or the selling or buying of them. It can have many meanings in the aspect of business and investing. It also works in many ways and is very profitable! Ever since the market fell, the economy has never been the same, BUT who says you need to sell? Instead one of the examples that will be shown on how real estate works in a bad economy is pretty simple, BUY! Investing in foreclosed houses has never been so profitable and easy that it won't matter how the market moves if you know how to manage it! Not really Once you put your house for sale remember that your customers are those that have bad credit or no credit at all. So let's say a that a customer is decided and picks your house what then? Your new client has no credit because he is a student at NMSU starting anew. You sell your house at what it's worth, that's right 110k. Since he is only 18 and he doesn't really have credit you will finance the house to him yourself. You are to require 15k down payment and amortize the rest for 25 years at a 12% interest rate and 1k monthly payments. You are also to require for your economic safety that he is legal in order to provide you with their S.S., an ID or DL, two check stops and proof of income. Thanks to all those "Policy" steps, those 15k cash dollars you invested in the house are back in your pocket and those monthly payments your making are also coming back to your pocket and making them with none of your money! In 5 years you earned $2500 and also saved $2500 for a total of 5k plus those 15k you got back, that's right that's 20k but wait it's not over. In five years your cleared of your loan meaning you now have the full possession of the house and thanks to you that NMSU student now has good and experienced credit meaning he can now get a loan thru a bank with better conditions on his payments and interest meaning the bank liquidates your note that is still worth 90k add that up with 20k and in five years you now have in your pocket 110k! Now imagine investing those profits in 5 similar houses? Now who says the economy has to be harsh? Better yet it's completely legal and can even be a way of life and a rich income! So Foreclosures?
Transcript: Postion Statement TAM The Competition Financial crises/recession Volitility Limited good investment options that give you a positive return People looking for safe investments The Unique Advantages The Solution Real Estate Investment inc. Target Market = Investors (age 40+) --- more financially stable --- more savings Market Niche = Helping investors achieve there financial goals faster Advertising = Online and Networking Investment + real estate = 2 X GIC SAM For people looking to invest their money Who want a safe, reliable and good return on investment (ROI) The investment is then invested in real estate That provides a safe reliable and higher return on investment Unlike the stock market and current bank rates Our service will give you the return you deserve Reaching Customers Reaching Customers Population of people that invest in real estate in Canada (as investment only) = 1.4 million Population of people that invest in real estate in Ottawa/Gatineau = 48,000 Making you money $$ Help investors get higher rates Real estate investment - 2-5 units Bank GIC X 2 3 year = 2% per year The Problem Key to success = Long term Investors Long term business Start working part time Estimated start up costs = $20k --lawyer, accountant, website, business cards, networking events Conclusion - Strong go ahead http://www.ingdirect.ca/en/save-invest/gic/index.html The Business Model source: Peter Kinch (2010). The Canadian Real Estate Action Plan: Proven Investment to Kick-Start and Build Your Portfolio. John Wiley & Sons Canada, Ltd. Mississauga Ontario. http://www.gatineau.ca/page.asp?p=histoire_cartes_statistiques/profil_demographique_socioeconomique http://www.statcan.gc.ca/daily-quotidien/081106/dq081106b-eng.htm more equity = greater return Any other investment option Banks Stock Market Real estate Revenue = $$ 200k purchase 15% undervalue Cashflow Appreciation 5%/year Mortgage payment Feasibility Summary Population of investors in Canada = 8.9 million Other people's money GIC x2 Safer investment and greater return Collateral = Property source: Peter Kinch (2010). The Canadian Real Estate Action Plan: Proven Investment to Kick-Start and Build Your Portfolio. John Wiley & Sons Canada, Ltd. Mississauga Ontario. http://www.gatineau.ca/page.asp?p=histoire_cartes_statistiques/profil_demographique_socioeconomique source: Larry B. Loftis, Esq. (2006). Investing in Duplexes, Triplexes & Quads: The Fastest and Safest Way to Real Estate Wealth. New York, NY. Ready to make some Money $$ ?
Transcript: Real Estate Investment Cut back?? Overspent generation with historic high household debt... Industry Story & Stakeholder Map Or Real Estate Investment Other Buyer Demands design by Dóri Sirály for Prezi New Entrants Right or Wrong? Hypo: real estate investments provide financial security for the future with tangible assets? Refine... refine... refine... The Industry Sustainable future... Alternative Services Real Estate - what? Financial security for the future? Tangible assets? Why bother? "hakuna matata"!
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