Real Estate Does Not Go Out Of Business

OPPORTUNITY IS ON THE SIDE OF REAL ESTATE AGENTS

WE ARE BECOMING INVESTMENT ADVISORS

MARKETINGSend a letter to your farm and sphere

regarding letting them know incredible investment opportunities now exist.

Give them an invitation to call you to discuss what is involved in buying investment property.

Let them know of your own successes or clients success with investment property

Remind them “Real Estate does not go out of business”.

Get on the phones, they will be very happy to hear from you regarding these opportunities!!!!

ACROSS THE GENERATIONSThe stock market blue chip stock

casualties of recent, will have a generational long term effect.

Everyone needs to invest their money. Leaving your money in the bank will never grow your wealth the way real estate can.

Think about the reasons why someone should own investment propertySomeone else pays off your mortgage for

you.The property always increases in value

over time.Think of older people who are wealthy;

they usually receive their income from rental properties they own free and clear.

ResedaPurchase price of $300,000Square Feet 1200Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2009Monthly Rent $2050Monthly Profit $41

ResedaPurchase price of $340,000Square Feet 1750Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2151Monthly Rent $2200Monthly Profit $49

Granada Hills, West HillsPurchase price of $350,000Square Feet 1300Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2327Monthly Rent $2200Monthly Profit ($-127)At 25% Down the monthly profit is $33

Granada Hills, West HillsPurchase price of $450,000Square Feet 2000Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2814Monthly Rent $2700Monthly Profit ($-114)

WinnetkaPurchase price of $340,000Square Feet 1200Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2151Monthly Rent $2050Monthly Profit $101

WinnetkaPurchase price of $390,000Square Feet 1800Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2582Monthly Rent $2400Monthly Profit ($-182)

Northridge Purchase price of $400,000Square Feet 1500Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2814Monthly Rent $2200Monthly Profit ($-614)

Porter Ranch S&SPurchase Price of $500,000Square Feet 1800Down Payment of 25%Interest Rate of 6.75%Monthly P.I.T.I. $3053Monthly HOA $150Monthly Rent $2800Monthly Profit ($-403)

Porter RanchPurchase Price of $600,000Square Feet 2500Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $3918Monthly Rent $3100Monthly Profit ($-818)

Lake BalboaPurchase Price of $365,000Square Feet 1200Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2423Monthly Rent $2100Monthly Profit ($-323)

Lake BalboaPurchase Price of $400,000Square Feet 1500Down Payment of 20%Interest Rate of 7.00%Monthly P.I.T.I. $2646Monthly Rent $2300Monthly Profit ($-346)

Understanding Multiple UnitsUsing The Example of 4 Units A residential loan is on 1-4 unitsDown Payment requirements differ

between 1-2 units and 3-4 unitsThe Down Payment required on 3-4 units

non-owner occupied is 25% down with a current interest rate of 7.25%

The Down Payment requirements for non-owner occupied 1-2 units is 20%, with a current interest rate of 6.75%

Lets Take a Look At a Sherman Oaks Fourplex5550 Allott $800,000Gross Monthly Income $5,700Annual Gross Income $39,240Gross Rent Multiplier 11.69Cap Rate 7.07Cash Needed to Purchase $200,000 (25%)Monthly P.I.T.I. $5,126Monthly Profit $574

Understanding 5+ Units

5 units or above is a commercial loan and typically require 40% down, and have short term fixed rates, with amortization over 25 years

Investors are concerned with the cap rate and gross rent multiplier

Understanding Gross Rent Multipliers Gross Rent Multipliers are the number in which

the gross rent was multiplied by in order to find the asking price of the property.

$5,000 per month gross rent($1,000 per month on 5 units)

$60,000 per year gross rental income$60,000 x 10 (gross rent multiplier)=$600,000 asking

price$60,000 x 14 (gross rent multiplier) =$840,000 asking

price

Finish Strong

We are in the last quarter of 2008. Now is the time to make things happen!!

Next Weeks’ Meeting – Are You Having Problems Getting Your Offers Through?

We Will Have Solutions…