We are now offering seller financing for our cash flowing investment properties. If you cannot get financing to buy real estate, owner financing is an excellent way to go. Do not wait to buy real estate, buy real estate and wait!
The Numbers (Real Deal)
Down payment: $10,000
Loan amount: $55,000
Interest: 8%
Amortization: 30 years (3-year balloon)
Taxes (2008): $674.52 per year
Insurance (2008): $367.24 per year
Monthly gross rent: $750
Monthly mortgage payments (PITI): $490.38
Current property management fees (10%): $75 per month
Cash Flow: $184.62 per month
Cap Rate: 22.15%
Check out our website for more info: www.vantagerei.com
This is the time to buy when everything is on sale.
How do you know you are protected from the investment? These are properties that cash flow positively every month, meaning, you are paid to own these investments. Not to mention other advantages of owning real estate such as tax deductions, appreciation potentials, passive income, etc.
To learn more about the benefit of owning positive cash flowing properties, read Robert Kiyosaki's Rich Dad Poor Dad. This book changed my life. He writes in simple, easy to understand manner and it's in story format. I used to hate everything business related but this book was different. No business background required.
Anyone what wants to learn more about real estate investing, I highly recommend this book.
Showing posts with label investment property. Show all posts
Showing posts with label investment property. Show all posts
Sunday, November 16, 2008
Thursday, October 23, 2008
Vancouver Apartment Buildings
I read a report from a Commercial Realtor today. I've subscribe to their report for free for several years now. Today, I've found the cap rate for apartment buildings in Vancouver has finally increased.
It used to be around 2% last year when the market is hot. 2% cap rate is not very good. Now it is about 5 or 6%. This is an indication that the purchase price has come down a bit in Vancouver apartment buildings.
The investment properties I have are around 20% cap rate which is calculated by Net Operating Income (NOI) divided by the Purchase Price. NOI is calculated by annual gross income minus annual expenses.
A fast and simple way to look at cap rate is to use it to see if the investment makes sense.
For emample, for a property with 20% cap rate, the interest rate on borrowed money is say 7%, so 20 minus 7 is 13. That means I still have 13% in my pocket after mortage payment and expenses. For a 2% cap rate, in order to have positive cash flow, I need to find loans with less than 2% interest...extremely unlikely unless you have a rich aunt who pratically will lend you the money for free.
So to buy a investment property with cap rate of 2% and if I can only get mortgage about 7%, that means I'll have negative cash flow every months. This strategy is okay if you have a lot of money or are investing for appreciation. But I personally think apartment buildings are for cash flow.
A general rule of thumb is to find investment property with 2-3% higher cap rate than your interest on the loan.
It used to be around 2% last year when the market is hot. 2% cap rate is not very good. Now it is about 5 or 6%. This is an indication that the purchase price has come down a bit in Vancouver apartment buildings.
The investment properties I have are around 20% cap rate which is calculated by Net Operating Income (NOI) divided by the Purchase Price. NOI is calculated by annual gross income minus annual expenses.
A fast and simple way to look at cap rate is to use it to see if the investment makes sense.
For emample, for a property with 20% cap rate, the interest rate on borrowed money is say 7%, so 20 minus 7 is 13. That means I still have 13% in my pocket after mortage payment and expenses. For a 2% cap rate, in order to have positive cash flow, I need to find loans with less than 2% interest...extremely unlikely unless you have a rich aunt who pratically will lend you the money for free.
So to buy a investment property with cap rate of 2% and if I can only get mortgage about 7%, that means I'll have negative cash flow every months. This strategy is okay if you have a lot of money or are investing for appreciation. But I personally think apartment buildings are for cash flow.
A general rule of thumb is to find investment property with 2-3% higher cap rate than your interest on the loan.
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