ABCDEFGHIJKLMNOPQRSTUVWXYZ
1
2
3
4
5
6
7
8
9
10
11
12
13
Invest in Real Estate and turn $60,000 into owning a $650,000 investment property
14
15
16
Step 1:Get into the market!
17
18
Saved $$60,000
19
Created investment groupRELP
51% ownership
20
You and Nataeah partnered with 5 investor friends
21
Each other investor averaged $10k each
22
$110,000
total to invest
23
24
Set parameters and searched diligentlyAll of NOCO for 4+ months
25
Made offers on multiple properties
26
27
OFFER ACCEPTED!
$250,000 home in need of repair (off market, through agent connection)
28
$385k-$400k after repair value
29
30
Step 2:Improve your property!$55,000
Cash into the purchase
31
-5,000
NO carrying costs due to refugee renter!
32
$60,000
Improvement costs
33
had refugee renter in the home during construction period
34
this kept carrying costs to zero but also prolonged the duration
35
finished to a higher level than anticipated at the beginning of the project
36
didn't complete the full scope intended at the beginning of the project
37
38
Step 3:Generate income for next investment$450,000 Sold price
39
$220,000 Net at sale
40
prepared property for sale, move refugee renter out, full finish, clean, stage and ready for photos
41
$110,000
INCOME from purchase, rehab, sale.
42
15 months (goas was to keep the timeline to one year for tax purposes)
43
44
Step 4: Purchase the next investment
2022 happened… values went up and competition was stiff for every property
45
looked at a dental office
46
committed $300,000 (and I committed $150,000) to a baseball training investmen that didn't happen
47
searched all over, Nashville, Estes, campground, semi storage lot, using your lot for cabins, NOCO, and in between
48
looked for ANYTHING that made sense for 14 months... sitting on cash...
49
came to conclusion, after market softened, a net zero hold is the best solution to get cash invested in appreciating asset
50
identified a high appreciation, high value property where the rent covers the actual expenses
51
Now the group owns long term rental that will appreciate well in old town for
52
53
Details:Purchase price$643,000
was listed for $775,000 in June, Sold for $643,000 in November. Without the price adjustment, it would not have worked.
54
($12,000)
seller concessions to cover loan costs and some sewer line repairs…
55
56
Financing$300,000 Cash
Added $100,000 to RELP. $12,000 remains in the investment account for this property
57
$343,000 Loan
58
59
Investment2,730PITI
60
3,000Rent
$270.00/mo available for vacancy, maintenance, reserves and etc…
61
62
Factors
interest rate at 7.25% on financing
63
not a lot of margin between hard costs and rental income
64
belief that Fort Collins and the old town area will appreciate well even with the negative political pressure on housing
65
ability to self manage and make basic repairs as needed over time
66
with appreciation and mortgage reduction this is a 12.5% return on cash invested annually.
67
68
Step 5: Future plan
refiinance to increase margin so outside property manager and maintenance can be used
69
add in maintenance and reserve savings
70
keep long term
71
if can't refinance then rent will increase to cover actual costs.
72
generate enough income from this property to purchase another investment
73
74
Notes
investors have beat my estimates every time
75
first projection was 50-% roi - sold at 100% roi
76
the income for this rental property was projected to be a minus, market resulted in a positive return on cash
77
78
RECAP
Turned $60,000 cash into a $643,000 cash flowing investment property in Old Town Fort Collins!!!
79
3ish year timeline
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100