Subject: Rental Income

Hi {!firstname_fix}

Another way to produce residual income
through real estate is as an investment
property. The two biggest values of
rental income are the actual cash flow
from the rent and the fact that
property values increase. 

To use this method, you buy a property
with income. By income, I mean a
POSITIVE cash flow. I am sure you
realize that asking the owner of the
property whether it has a positive cash
flow may not yield the whole truth,
particularly if the answer is no! So,
how do you find out the truth? 

You ask them to show you the bank
records for the past 5 years and the
expenses for the past 5 years. If they
don’t have them or won’t show them to
you, simply walk away from the deal. If
they do show you the records, you
simply add up the income per year to
get net income and add up the expenses
per year to get the net expenses.
Subtract the net operating expenses
from the net income to give you the net
operating income. Now subtract the debt
service fees and that gives you the
cash flow. 

Just as in foreclosures, you need to be
known as “the buyer”. Get known by the
CPA’s, attorneys, real estate brokers,
mortgage companies, refinance
companies, and anyone else that may be
“in the know” about rental properties
before these deals get out to the
general public. Essentially, you need
to have these “plump” deals referred to
you. 

Example:

Let’s take a look at a real life
example. I have a friend who found out
about a Co-op in the same neighborhood
with the United Nations. The Co-op was
300 sq ft and going for $100,000. That
is not a misprint! Trust me, this is
prime real estate! 

She financed $79,200 and since she had
at least 20% down, she didn’t have to
have personal mortgage insurance (PMI).
The debt service costs her $6403 per
year. During her first year, she made
$1107 or 4.5% return. During her second
year, however, she didn’t incur any
closing costs, so she had $5683 or
22.9% return. As the years went along,
the rental prices increased somewhat
and she went from a 25.3% return in
year three to a 30.6% return in year 5.
Her five-year pretax average return was
22.2%!!

If you had one of these deals each year
for the next ten years, you would make
$7500 cash flow per year per deal. That
means that after the last deal, you
would have a positive cash flow of
$75,000. Now, let’s assume that you do
not wish to be the one who maintains
these ten properties. You can hire a
general repairman for $30,000 and still
make $45,000 with no hassles! 


Follow the link below to find out
more..

YOUR LINK


Regards,
YOUR NAME

