It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone wants to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
@@viviancarolgioao My CFA ’’ Sharon Ann Meny, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Sharon Ann Meny, is the licensed advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
For everyone trying to start real estate, first read Forbidden Laws of Wealth by Victor Hayes, this book has some serious knowledge you won't find anywhere else!
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My Husband and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha...
Interesting . I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation..
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
Exploring new investment opportunities demonstrates your proactive stance towards financial growth during these volatile times. Diversifying your portfolio can play a crucial role in effectiveIy mitigating risks..
Don’t be confuse buying the dip in a bear market, with guaranteed future returns. Just because that company is down 60%+ from ATH does NOT make it a sound long-term investment. Make sure you’re investing in great companies. kudos to Sonia karen
She is my family' personal Broker and also a personal Broker to many families in the United states, she is a licensed broker and a FINRA AGENT in the United States.
What happens when you're cash flowing and infinite, but maintenance/cap-x expenses is more than the cash flow? That is a real issue for a lot of people.
Then you are not cash flowing! You do this only when you are cash flowing. Consistently great tenancy (that includes rent increase) plus strategic preventative maintenance will mitigate those issues raised. I hope this helps.
@@etsahidu You actually are cash flowing, just not enough to afford a $50k roof and $75k unexpected plumbing job that requires you to dig up parking lot all the way to the street. I try to caution people on this all the time...$5k/month cash flow on a small MF seems good until stuff hits the fan.
@@phil1954 Yeah, thats the problem. When you get major maintenance expenses, which often happens, it really eats up your cashflow If the $5k/month cash flow is money you're living on, then really its zero cash flow because maintenance can easily wipe that out and then you're cash crunched
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear that you saved me from huge financial debt with just a small Investment, thank you Jihan Wu you're such a life saver
I'm favoured, 90K every week! I can now give back to the locals in my communities and also support the church. God bless America,, thank you Mr Jihan Wu😊🎉
Most rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them. People prefer to spend money on liabilities, Rather than investing in assets and be very profitable
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
Government policy has thrown the future under the bus for decades. The day of judgment is near. I predict an 80% drop in the stock market. Investors will abandon stocks in favor of real estate. There will be no money in banks... You must devise a strategy for survival.
I agree. I have pulled in more than $435k since 2020 through my advisor. It pays off more in the long run to just pick quality stocks and ride with those stocks.
My CFA Sophia Maurine Lanting a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
There is a huge difference between bank evaluation vs sales price, I just asked for my 50 units, I know my actual expenses are 40%, but the bank sees it as 33%, which gets me an extra million on the value, I'm sure I will not be realized that Mill if I sell it. This really is a money game
I was like, okay I get it. And I didn't really get the bite of the apple term and now that makes sense too. I was looking at your video to see how you're increasing your deals over time.
Then You only use a single bank to make all that transactions? Or the first one to get the 15M and then another one to get the 21M. Pretty good strategy I'd say ... I think paying the original debt to the bank is not necessary ,pay the investors and take what it rest to finance other projets anyway it pays itself over time ( BBD)
Can you set up an LLC to act as the funding source ( FS ) aka a bank and another LLC to act as the operating source aka property owner/manger. Then have the operating LLC take a loan from the funding LLC and refinance from funding LLC every 15 years for tax benefits? Or would the government not allow that?
Which risks do you see for the CRE markets? Are all risks already priced in? Do you see any impacts on regional banks in 2025? Thank you for your inspiring videos! Cheers
Would the increase in yearly rents after 2 years be enough money to pay the additional 6M borrowed? 6M is 40% of the original 15M loan so even if all expenses can be covered I have a hard time understanding how the deal would cashflow. Perhaps it’s just a bad example numbers wise but I think it’s important to mention how the new additional debt will be paid off because a $200 rent increase can’t be enough.
The value of commercial property is based on the net income that the property makes. This net income is divided by the cap rate of 6% to give us the value of the property. So in the example, $200 rent increase X 200 units= $40,000 a month. $40,000 a month X 12 months=$480,000 additional income per year. Divide the $480,000 by the 6% cap rate and you get an $8,000,000 increase in the value of the property. The bank will loan you 75% of the value of the property, which is now $28,000,000 with the rent increases. So $28,000,000 X 75% = $21,000,000 loan. At the cap rate of 6%, the property has net income of $1,680,000. This should be enough to pay the new monthly loan payment at current interest rates, and provide some positive cash flow. I hope this helps and wasn’t too confusing. Btw- Ken McElroy is the MAN!
Speculation isn’t fact nor is it truth, it’s merely your opinion; you’re so broke you can’t afford to pay attention….this guy has been actively buying property for over three decades and has many people working for him to manage his properties; you honestly think he hasn’t possibly mastered his craft? You’re talking a lot of smack and had a lot of practice at it almost mastering it and what has that gotten you for a return? People putting it back in your face!
What I find dificult to understand, maybe because the strategy is an "american" strategy, available only there, is if all te equity belongs to the investors, how can you become an owner as well and part of the deal? In this example, are not the investors who will become the owners of the property?
When the deal is set up, he gets his slice of pie for finding the deal and managing the property and doing all the work to keep the project profitable. He probably has his own money in the deal as well.
So you borrow 5 million from investors for the property and you said you paid them back 5 million. I've never seen anyone loan 5 million dollars at 0% interest.
@@dipankarkaushik5285 exactly, monthly cash flow, then portion of profit of sale later or more than likely cash-out re-fi for tax free lump sum when property value goes up from inflation+value add
bro got all them apartments when building costs were low, interest rates were low, even the existing ones prices were low. now he makes videos saying you can do it today... lol
Yes but the million cash out will be needed to pay the investors their interest (20%) for loaning you the down-payment. And you haven't said how you pay for the turn over (value added) to raise the rent. Still a nice method but not easy to find
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
I appreciate you sharing this. When I looked up the woman you named and read through her credentials, it was obvious that she was a complete professional. I just need her to respond to the message I wrote her.
He mentioned one on a live stream awhile back. The deal fell through after discovery and the units needed way to much in maintenance. Another fell through when financing changed and if I remember right another when his numbers changed and the rental growth projection evaporated.
LOL, sure a lazy may operate with below market rents just because it is easier for them but they are not ging to sell to you based on those rents. That destroys your plan. Pie in the sky!
@@Walina-gv9ph Commercial real estate is valued based on the net income that the property produces. The seller would be pricing the building based on present net income divided by the current Cap Rates. If the seller tried ask for more money beyond that, it probably would languish on the market and not sell.
@@Louie_V71 Nah, the seller is gong to use market rents and subtract the cost to cure! Say I have excess vacancy that reduces rent by $10,000. Market cap is 5% so that NOI of $12,000 would be worth $240,000. No seller is going to give you a $240,000 discount when all you'll be out is $6,000 if it takes 6 months to lease up. So you'll also have some leasing costs and some risk so at most maybe $20,000 total off instead of $240,000. I just saved you $220,000 if you were the novice seller.
@@Louie_V71 The property will sell on the NOI the property could produce. The calculation of NOI starts with PGI (potential Gross Income. Then you adjust below the line for cost to cure.
@@Walina-gv9phI’ve been thinking about your comment. Typically the investor will look at the trailing 12 months of income and expenses to arrive at the price they will pay based on the current cap rates. This would factor in the vacancy you used in your example. If the unit was vacant for 12 months, it would definitely affect the net income and the resulting price of the building. Of course the seller is free to ask whatever amount they want, but most everybody is using the same metric to value the property. If it’s a really hot market with multiple investors trying to buy the property, they might get their asking price.
@@Louie_V71 Two buildings with $100,000 NOI. One is 50% vacant and the other is 100% occupied. You think both buildings are worth the same. Which would you buy?
New 21M loan from the bank is financed from current rents from that property? You put in pocket 1M difference, do you have positive CF from rents or this all goes to returning the bank loan?
Positive cash flow even after paying bank loan and investors. 1 million probably goes to investors or save for emergencies, depending on how the deal is set up.
The S&P 500 moved 8.9% higher last Month, achieving one of its best monthly performances in history.. which is an indicator for profits to continue to improve. I just want my money to keep outgrowing the inflation rate. I'm still looking for companies to make additions to my $500K portfolio, to boost performance. Here for ideas...
The problem is every time you refinance you take a bigger credit, so basically you say you have no more equity in the deal because the new credit is sufficient to pay it off, but actually you still owe the equity to the bank, it's like you are leasing the equity. So instead of owing it back to the investors you owe it to the bank.
You cash out 1 million after two years. That's tax-free, in your pocket. If you decide to sell, you still have about 7 million before closing costs and taxes. You still have no money in the deal. How's that a problem? It's not about ownership. It's about controlling an asset. So what if the bank owns all of it. You could always pay it off year over year after the investors are paid back. I'd take a million in cash and some cash flow every month.
Move then expenses raise we just raise to meet expensive repairs and bills my water bills alone have tripled in the last 5 years due to the city changing things
I have a property I’m currently financing for $50,000. I put 5000 down and with some added cost it came up to around 7500 recently. I’ve received a few payments from HUD which has my initial investment around $5300 down however the property is now cash flowing about $455 a month. I use the same equation that use here in this example and if I divide the 6% rate into the 9500 or so yearly profit I come up with the number around $150,000 to be the new price of the rental. I have done zero rehab to the property as of now I only increased the rent from $695 monthly to $1472 monthly. Can I go to the bank to get a new loan with the current value increase? Will they consider that for equity?
U can present your numbers to them, but they will do their own due diligence as well. Hopefully, their results match yours. Sounds like a good investment!
It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone wants to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
this sounds considerable! think you know any advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
@@viviancarolgioao My CFA ’’ Sharon Ann Meny, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Sharon Ann Meny, is the licensed advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
For everyone trying to start real estate, first read Forbidden Laws of Wealth by Victor Hayes, this book has some serious knowledge you won't find anywhere else!
I've been saying that
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My Husband and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha...
Interesting . I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation..
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
I want to start too but i don't know how..
Lol, what strategy do you use please?
Exploring new investment opportunities demonstrates your proactive stance towards financial growth during these volatile times. Diversifying your portfolio can play a crucial role in effectiveIy mitigating risks..
Don’t be confuse buying the dip in a bear market, with guaranteed future returns. Just because that company is down 60%+ from ATH does NOT make it a sound long-term investment. Make sure you’re investing in great companies. kudos to Sonia karen
She is my family' personal Broker and also a personal Broker to many families in the United states, she is a licensed broker and a FINRA AGENT in the United States.
What happens when you're cash flowing and infinite, but maintenance/cap-x expenses is more than the cash flow? That is a real issue for a lot of people.
Then you are not cash flowing! You do this only when you are cash flowing. Consistently great tenancy (that includes rent increase) plus strategic preventative maintenance will mitigate those issues raised. I hope this helps.
Can you make a video discussing how a newer MF investor can go about raising the equity from family offices, high Networth people and Wall Street ?
It's OPM . that's the risk of his investment. Not saying that's good or bad but it's OPM ; it's there pesos in the deal
@@etsahidu You actually are cash flowing, just not enough to afford a $50k roof and $75k unexpected plumbing job that requires you to dig up parking lot all the way to the street. I try to caution people on this all the time...$5k/month cash flow on a small MF seems good until stuff hits the fan.
@@phil1954 Yeah, thats the problem. When you get major maintenance expenses, which often happens, it really eats up your cashflow
If the $5k/month cash flow is money you're living on, then really its zero cash flow because maintenance can easily wipe that out and then you're cash crunched
Hit 250k today. Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 24k in August 2024.,..
I would really like to know how much work you really did put in to get to this stage
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear that you saved me from huge financial debt with just a small Investment, thank you Jihan Wu you're such a life saver
I'm favoured, 90K every week! I can now give back to the locals in my communities and also support the church. God bless America,, thank you Mr Jihan Wu😊🎉
Waking up every tenth of each month to £210,000 it’s a blessing to I and my family… Big gratitude to this same Jihan Wu🙌
Most rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them. People prefer to spend money on liabilities, Rather than investing in assets and be very profitable
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
Government policy has thrown the future under the bus for decades. The day of judgment is near. I predict an 80% drop in the stock market. Investors will abandon stocks in favor of real estate. There will be no money in banks... You must devise a strategy for survival.
I agree. I have pulled in more than $435k since 2020 through my advisor. It pays off more in the long run to just pick quality stocks and ride with those stocks.
pls how can I reach this expert, I need someone to help me manage my portfolio
My CFA Sophia Maurine Lanting a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I only have two paid for rentals but that is enough for me. Life is good.
Hell yeah brother
My goal is to own outright enough rental units to put $8,000k/month (before expenses) in my pocket.
If you don't mind sharing how much after expenses are you left with?
The first thing he said was "anything divided by zero is infinite" and the mathematician in me just broke in half.
I’m not sure what you mean, could you define that?
😁
@@Chiraelthere is math rule which prohibit deviding by zero.
Thanks once again for the financial information Ken McElroy.
There is a huge difference between bank evaluation vs sales price, I just asked for my 50 units, I know my actual expenses are 40%, but the bank sees it as 33%, which gets me an extra million on the value, I'm sure I will not be realized that Mill if I sell it. This really is a money game
Your presentation always gives us something new which amazes me.
Ken gave a lot of wisdom here .
Thx Ken! Appreciate it! Great information. 👍 Tell Uncle Robert I said hello. Lol. This was a very useful educational video.
We try not to keep raising rent and say it’s to keep up with market rates. It is really just greed.
1000%
Ken, what are your thoughts on the rent prices going down considering the rents are the highest they’ve ever been?
Thanks Ken!
I was like, okay I get it. And I didn't really get the bite of the apple term and now that makes sense too. I was looking at your video to see how you're increasing your deals over time.
Love this guy!!! Wish I could download all his thought processes into my brain lol. (Yes, im anti-Ai) great representation!
Incredible idea. Thanks.
Then You only use a single bank to make all that transactions? Or the first one to get the 15M and then another one to get the 21M. Pretty good strategy I'd say ... I think paying the original debt to the bank is not necessary ,pay the investors and take what it rest to finance other projets anyway it pays itself over time ( BBD)
Can you set up an LLC to act as the funding source ( FS ) aka a bank and another LLC to act as the operating source aka property owner/manger. Then have the operating LLC take a loan from the funding LLC and refinance from funding LLC every 15 years for tax benefits? Or would the government not allow that?
Which risks do you see for the CRE markets? Are all risks already priced in? Do you see any impacts on regional banks in 2025? Thank you for your inspiring videos! Cheers
Would the increase in yearly rents after 2 years be enough money to pay the additional 6M borrowed? 6M is 40% of the original 15M loan so even if all expenses can be covered I have a hard time understanding how the deal would cashflow. Perhaps it’s just a bad example numbers wise but I think it’s important to mention how the new additional debt will be paid off because a $200 rent increase can’t be enough.
The value of commercial property is based on the net income that the property makes. This net income is divided by the cap rate of 6% to give us the value of the property. So in the example, $200 rent increase X 200 units= $40,000 a month. $40,000 a month X 12 months=$480,000 additional income per year. Divide the $480,000 by the 6% cap rate and you get an $8,000,000 increase in the value of the property.
The bank will loan you 75% of the value of the property, which is now $28,000,000 with the rent increases. So $28,000,000 X 75% = $21,000,000 loan. At the cap rate of 6%, the property has net income of $1,680,000. This should be enough to pay the new monthly loan payment at current interest rates, and provide some positive cash flow.
I hope this helps and wasn’t too confusing.
Btw- Ken McElroy is the MAN!
Thank you.
how can you have returns, with 0 down, vacances, and maintenance. Where is the cash flow?
How do you structure your waterfall/cash flow once all equity has been returned? Is it an equity multiple waterfall as opposed to an IRR waterfall?
Thank u ❤
Do you have something for a smaller scale? for a newbie
Just take away a zero to the right of 1,000,000
Slumlord 101 right here.
I thought dividing by zero was undefined, not infinite…
🔥🔥🔥
This is Robert Kiosawki's formula
Robert and Ken work together on real estate deals
Robert, his wife and their CPA did a podcast with Ken
They are partners; if Ken speaks, you hear Rob and vice versa😂😂
@@vmurphs thank you, that explains it
You increased rents by 200 but increased your loan payments by 300/unit by doing a cash out refinance. He conveniently didn't explain that part lol
Speculation isn’t fact nor is it truth, it’s merely your opinion; you’re so broke you can’t afford to pay attention….this guy has been actively buying property for over three decades and has many people working for him to manage his properties; you honestly think he hasn’t possibly mastered his craft? You’re talking a lot of smack and had a lot of practice at it almost mastering it and what has that gotten you for a return? People putting it back in your face!
@freewillchoice8052 what are you talking about lol
@@jayflaggs can’t read too well and thinks people who type words on screens are “talking” 🤣
@@freewillchoice8052aww sorry you're having a bad day. Good luck with that buddy
What I find dificult to understand, maybe because the strategy is an "american" strategy, available only there, is if all te equity belongs to the investors, how can you become an owner as well and part of the deal? In this example, are not the investors who will become the owners of the property?
When the deal is set up, he gets his slice of pie for finding the deal and managing the property and doing all the work to keep the project profitable. He probably has his own money in the deal as well.
So you borrow 5 million from investors for the property and you said you paid them back 5 million. I've never seen anyone loan 5 million dollars at 0% interest.
He's giving that fellow a share in the deal. So question of interest doesn't arise. Partnership business.
@@dipankarkaushik5285 exactly, monthly cash flow, then portion of profit of sale later or more than likely cash-out re-fi for tax free lump sum when property value goes up from inflation+value add
He is either paying them some negotiated interest or they get a percentage of the property's Cashflow.
This is why you want to pay them back quickly to avoid paying them high interest of ~10%
bro got all them apartments when building costs were low, interest rates were low, even the existing ones prices were low. now he makes videos saying you can do it today... lol
There is plenty of opportunities but not nearly enough cash for deals.
❤❤❤
Yes but the million cash out will be needed to pay the investors their interest (20%) for loaning you the down-payment. And you haven't said how you pay for the turn over (value added) to raise the rent. Still a nice method but not easy to find
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
@@mellon-wrigley3 That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
My CFA Izella Annette Anderson a renowned figure in her line of work. I recommend researching her credentials further.
I appreciate you sharing this. When I looked up the woman you named and read through her credentials, it was obvious that she was a complete professional. I just need her to respond to the message I wrote her.
lol I played this at 1.75 speed and he still sounded normal.
This is wierd, he speaks incredibly clearly
When is he going to tell us about his apartment deals that are allegedly failing?
Which ones?
Relevant links?
He mentioned one on a live stream awhile back. The deal fell through after discovery and the units needed way to much in maintenance. Another fell through when financing changed and if I remember right another when his numbers changed and the rental growth projection evaporated.
LOL, sure a lazy may operate with below market rents just because it is easier for them but they are not ging to sell to you based on those rents. That destroys your plan. Pie in the sky!
@@Walina-gv9ph Commercial real estate is valued based on the net income that the property produces. The seller would be pricing the building based on present net income divided by the current Cap Rates. If the seller tried ask for more money beyond that, it probably would languish on the market and not sell.
@@Louie_V71 Nah, the seller is gong to use market rents and subtract the cost to cure! Say I have excess vacancy that reduces rent by $10,000. Market cap is 5% so that NOI of $12,000 would be worth $240,000.
No seller is going to give you a $240,000 discount when all you'll be out is $6,000 if it takes 6 months to lease up. So you'll also have some leasing costs and some risk so at most maybe $20,000 total off instead of $240,000. I just saved you $220,000 if you were the novice seller.
@@Louie_V71 The property will sell on the NOI the property could produce. The calculation of NOI starts with PGI (potential Gross Income. Then you adjust below the line for cost to cure.
@@Walina-gv9phI’ve been thinking about your comment. Typically the investor will look at the trailing 12 months of income and expenses to arrive at the price they will pay based on the current cap rates. This would factor in the vacancy you used in your example. If the unit was vacant for 12 months, it would definitely affect the net income and the resulting price of the building. Of course the seller is free to ask whatever amount they want, but most everybody is using the same metric to value the property. If it’s a really hot market with multiple investors trying to buy the property, they might get their asking price.
@@Louie_V71 Two buildings with $100,000 NOI. One is 50% vacant and the other is 100% occupied. You think both buildings are worth the same. Which would you buy?
New 21M loan from the bank is financed from current rents from that property? You put in pocket 1M difference, do you have positive CF from rents or this all goes to returning the bank loan?
Positive cash flow even after paying bank loan and investors. 1 million probably goes to investors or save for emergencies, depending on how the deal is set up.
The S&P 500 moved 8.9% higher last Month, achieving one of its best monthly performances in history.. which is an indicator for profits to continue to improve. I just want my money to keep outgrowing the inflation rate. I'm still looking for companies to make additions to my $500K portfolio, to boost performance. Here for ideas...
thx. like 73
DUDE NEEDS DAVE RAMSEY BADLY !!!! LOL !!!!!
True♾😂📢🚭🍐😏😹🌞🥝
The problem is every time you refinance you take a bigger credit, so basically you say you have no more equity in the deal because the new credit is sufficient to pay it off, but actually you still owe the equity to the bank, it's like you are leasing the equity. So instead of owing it back to the investors you owe it to the bank.
Yes but you pay no taxes on it and you let renters pay the loan down
The only true way to pay no taxes
Until Kamala takes the taxes anyways
@@vmurphsExactly! U paid attention in class. 😉
You cash out 1 million after two years. That's tax-free, in your pocket. If you decide to sell, you still have about 7 million before closing costs and taxes. You still have no money in the deal. How's that a problem?
It's not about ownership. It's about controlling an asset. So what if the bank owns all of it.
You could always pay it off year over year after the investors are paid back. I'd take a million in cash and some cash flow every month.
Does that make you feel good when you raise rent on people that may be struggling with their current rent?
Move then expenses raise we just raise to meet expensive repairs and bills my water bills alone have tripled in the last 5 years due to the city changing things
I have a property I’m currently financing for $50,000. I put 5000 down and with some added cost it came up to around 7500 recently. I’ve received a few payments from HUD which has my initial investment around $5300 down however the property is now cash flowing about $455 a month. I use the same equation that use here in this example and if I divide the 6% rate into the 9500 or so yearly profit I come up with the number around $150,000 to be the new price of the rental. I have done zero rehab to the property as of now I only increased the rent from $695 monthly to $1472 monthly.
Can I go to the bank to get a new loan with the current value increase? Will they consider that for equity?
U can present your numbers to them, but they will do their own due diligence as well. Hopefully, their results match yours. Sounds like a good investment!