All Forum Posts by: Jorge Vazquez

September 21, 2018 By Jorge Vazquez & Rafael Castro 

Trade wars…both countries fight but almost always end up coming to an agreement. It’s like the best friends fighting in middle school for a girl, but then the next day makeup and have lunch together in the cafeteria. What is the impact for those of us focused on long-term real estate investment in the US? You will be surprised, but there are some great opportunities out there, especially for foreign investors. Let’s focus on the top 4 trends you can take advantage of during a Trade War:

1. Steel goes up, rent amounts go up too!
   1. Wait…steel impacts the rental market? Absolutely! Think about it…steel is used in new high rises, condos and apartment buildings. A rise in steel costs could cause a rent hike in apartment and condos to make up for the increase in construction costs. We have recent history to prove it: In 2017 the US levied a 20% tax on Canadian lumber. Lumber prices have gone up 15% since, which in turn led to a six to ten thousand dollars increase in median housing values. Steel prices, go up, rent goes up…Steel matters!
2. China buys a LOT of US Bonds, driving interest rates higher if they react
   1. Trade wars can raise interest rates because they drive inflation, and the Federal Reserve is as allergic to too much inflation as I am to shellfish, and interest rate increases are their tool of choice.
   2. China is the biggest holder of US notes. If they buy fewer notes, the Fed has to increase rates to make them more attractive. If China buys more notes, it floods the market with dollars, creating inflation and…you guessed it, Fed increases rates.
3. If you are a long-term real estate investor, rate increases are GOOD
   1. If rate increases, mortgage rates go up as well, making it harder for buyers to pay for homes
   2. If rate increases, homeowners that have a low mortgage rate will be reluctant to move from their current home
   3. Fewer sellers and more buyers not affording a home lead to an increase in rental demand, driving rent amounts up and decreasing the time to find tenants for your rental properties.
4. When fools money rushes out, smart money comes in!
   1. The trade war can be a red flag to international investors, as they see it harder to invest in US real estate. This could have a big impact on the market and Asian investors in particular. If relations between the countries get worse, more investors may choose to stay away from investing in the US.
   2. What happened during the last recession in 2008? When the real estate market was freefalling, from 2008-2010, as individuals were selling their properties at pennies to the dollars (“fools money rushing out”), big investors were buying in big volumes (smart money rushing in!). Its the big ol’ saying…buy low, sell high.
   3. The 2008-2010 selling/buying spree may repeat again if the trade war continues and international investors decrease dramatically their investments here. It’s a great opportunity to go “against the grain” and scoop up real estate investments with much less competition and at competitive prices. Are we going to see a drop in prices similar to 2008-2010? I hope not! But staying on the sidelines waiting for something to happen has never been a good strategy.

Who knows…maybe this whole article is a mute point if the two countries reach an agreement soon. The impact to both of their economies, and the global market overall is too high and the risks, both financial and political, are very high too. Right now both countries sit a standstill in a game of chicken to see who blinks first. It may be a great opportunity for the smart long-term real estate investor to use the trade war as another tool to analyze and take advantage of the situation. Why act now? Remember, like those middle school kids, after they fight for the girl, they end up next day together eating lunch at the cafeteria…that can be the US and China in a couple of months.

September 11, 2018, By Jorge Vazquez

It’s important for real estate investors to calculate the maximum they can pay for a property, and make a good profit after it is rehabbed and either sold or leased to tenants. So in this article, we want to show you how to calculate the Maximum Allowable Offer (MOA) for investment property.

As we begin, remember that investors make their money when they buy a property. Investors must purchase properties at the right price to make a profit. Therefore, accurately calculating the Maximum Allowable Offer is essential to profitability.

Fixed Cost Method of Calculating the Maximum Allowable Offer

One of the most consistent and accurate methods of calculating the Maximum Allowable Offer is the Fixed Cost Method.

Although the name “Fixed Cost Method” is a little deceiving, because several of the calculations include more than just fixed costs, the theory is very sound.

The general idea of calculating the Maximum Allowed Offer is to estimate the After Repair Value (ARV), deduct the fixed costs and rehab cost, and deduct the profit (or equity)* you plan to make. The resulting number, then, is the Maximum Allowed Offer.

• ARV – Fixed Costs – Rehab Costs – Profit / Equity = MOA

*Note: If you are flipping the property, you calculate the profit you plan to make from the deal. If you are holding the property and leasing it to tenants, you calculate the amount of equity you plan to have in the property when everything is complete.

Estimate the After Repair Value (ARV)

The first calculation needed to determine the Maximum Allowable Offer is the After Repair Value.

This calculation estimates the value of the investment property after it has been rehabbed, and it is ready to sell or lease to tenants. The process of estimating the ARV includes:

• Review information about the property you may purchase.
• Review comparable properties (i.e., the comps).
• Compare the comps with the property you are considering, and estimate the ARV.

Learn More: How To Estimate A Property's After Repair Value (ARV)

Estimate Your Fixed Costs

Now with the After Repair Value, you can estimate the fixed costs, which include all costs other than rehab expenses.

Although fixed costs change from project to project, some of the more common costs include:

• Inspection.
• Lender fees and financing.
• Taxes.
• Utilities.
• Insurance.
• Warranty.
• Closing costs.
• Commissions.
• Selling expenses, such as advertising and MLS fees.

Estimate Rehab Costs

Estimating rehab costs can be the most difficult part of calculating the Maximum Allowable Offer because there are so many unknowns that can break the budget.

Therefore, it is important to estimate rehab costs with a contractor who is experienced with investment properties and understands the appropriate fit and finishes for the project.

Perhaps most importantly, the rehab budget should include a contingency for unknown expenses, which the contractor can help estimate based on possible issues that might arise.

Learn More: How Much Do I Need to Start Investing in Real Estate?

Set the Profit / Equity

Now, set the amount of profit or equity you would like to have after the rehab is complete.

If you are flipping the property, this is the amount of profit you would like after the deal closes and all expenses are paid. And if you are holding the property and leasing it to tenants, this is the amount of equity you would like to have in the property when everything is completed.

Doing the Math

At this point, all is left is to plug the numbers into the formula.

• ARV – Fixed Costs – Rehab Costs – Profit / Equity = MOA

Here is an example:

• ARV = $170,000
• Fixed Costs = $22,000
• Rehab Costs = $30,000
• Profit / Equity = $40,000
• MOA = $78,000

ARV = 145k-150k. Confirmed by lender. Email me for more questions [email protected]

HI Quintin, Email me the questions here [email protected]

9801 Lamantin Dr, Port Richey, FL 34668

Single-family: 3 bedrooms, 2 bathrooms

Year built: 1973, Size: 1400 SF

Investment strategy: Rental Property

RARE OPPORTUNITY TO PURCHASE A 3/2/2/ POOL HOME WITH A VERY ATTRACTIVE PRICE...NEEDS SOME TLC BUT WELL WORTH THE EFFORT...This SPACIOUS WIDE LINE RANCH HAS BOTH LIVING AND FAMILY ROOMS, SPLIT BEDROOMS, A VERY WORKABLE KITCHEN WITH A LARGE BREAKFAST BAR OPEN TO THE FAMILY ROOM ( perfect for entertaining), A LARGE MASTER BEDROOM WITH IT'S OWN BATH... AND AN INCREDIBLE 30 FT SCREENED PORCH LEADING TO THE SCREENED POOL AREA...SUCH A GREAT LAYOUT...Additionally, IT HAS NEW SCREENING AROUND THE POOL, A NEW WATER HEATER, AND NEW REFRIGERATOR.......HURRY!, THIS WON'T LAST LONG...

Graystone Investment Group is a Real Estate investment firm designed to help new and seasoned investors find, rehab and manage investment properties in Tampa Florida. We have researched the Tampa area neighborhood-by-neighborhood to determine where investments are likely to have the highest return.  

We also keep you up to date with Videos of new properties we’re working on as well as Investor Testimonials, where we let the excitement of each investor-speak for itself.

Get access to more information and off-market deals before they get listed at https://homes4income.com/investor-profile

Awesome @Michael Onuigbo , let me know how I can help. 

The most experienced real estate investors often diversify their real estate portfolio and invest using two or more methods to make money investing in real estate by purchasing, flipping or leasing properties, and selling properties.

Here are six of the top ways to make money with real estate, which everyone interested in real estate investing should consider.

Related: 6 Top Reasons You Should Invest in Real Estate

#1 Single-Family Rental Properties

One of the best ways for people to begin investing in real estate is to invest in a single-family rental property.

Most importantly, you can focus all your time and energy into one project. Finding, purchasing, rehabbing, leasing, and managing a single property is much easier than a property that houses multiple families or businesses.

Secondly, the risks associated with a single-family property are much lower than a multi-family property, mostly because you are dealing with a smaller property and just one family unit. So your liability is limited, especially compared to a large apartment or office complex.

#2 Multifamily Rental Properties

Once you’ve gained experience investing in single-family homes, you may want to bump up to multifamily rental properties, such as duplexes, triplexes, condos, and apartment complexes.

The biggest benefit to owning a multifamily property with upwards of fifty units is that your potential for profit is much higher than single-family properties. Instead of just one family paying rent, you have multiple payments coming in each month. Plus, leasing and maintenance staff can be centrally located, reducing expenses associated with managing single-unit properties spread throughout the city.

#3 Flipping Houses

While there is significant potential for investors to reap large profits, the process of house flipping is much more complicated than glamorous TV shows make it look.

The reality is that buying, rehabbing, and selling investment properties is a great deal of work, with the potential of losing money on a deal if costs skyrocket due to “unforeseen” problems with a rehab.

The best house flippers are real estate experts in at least one field, which can include real estate sales, construction, and finance.

Related: Tampa – St. Petersburg, Florida 2016 Flipping Rates Were 4th Highest in The U.S.

#4 Wholesaling Properties

Wholesaling investing properties is one of the ways to profit from investment real estate without spending any of your own money.

Real estate wholesalers work exclusively to secure deals for real estate investors who purchase the properties.

In some cases, real estate wholesalers buy the properties before selling them to an investor. But often times, wholesalers assign contracts to investors, whereby they are able to avoid the expense of buying and reselling the property.

#5 Vacation Rentals

Vacation rentals are another great opportunity for beginner real estate investors because they are dealing with a single-family property. Though the return isn’t always as high on a vacation rental, there are other appealing benefits.

For many investors, vacation rentals allow them to have a place to vacation a few weeks during the year, while also generating a profit the rest of the year. Furthermore, vacation properties can have financial and tax benefits, not available with rental property the owner never occupies.

#6 Commercial Buildings

The commercial real estate consists of properties the owner rents out to businesses, which includes “mixed-use” buildings.

Many benefits of investing in the commercial real estate are similar to the residential real estate, although additional benefits include:

• Potentially higher income.
• Building professional relationships via a public presence, such as owning an arena in a large city.
• Advantageous lease terms, such as triple net leases.

BY JORGE VAZQUEZ

Everyone wants to retire someday, and a lot of people want to retire early. One of the best ways to achieve retirement goals is to generate cash flow profits by investing in rental properties. That’s why millennials are choosing to invest in real estate above stocks.

So, if you’ve been thinking about investing in real estate, here are 10 reasons rental properties are a good investment.

Related: Cash Flow is King with Real Estate Investing

#1 Rental Properties are a Tangible Asset

When you put money in the stock market, all you get is a digital receipt for the mutual fund or individual stock you purchased. You can’t see or touch your asset. And, you can’t talk to the CEOs of companies in which you have invested, unless you are a zillionaire.

Investing in rental property is the opposite. You can see and touch your investment. And, you can talk to the top person in charge (i.e., CEO), because you are that person.

#2 You’re in Control

When you invest in stocks, bonds, and mutual funds, you’re trusting other people to make the right decisions. Unfortunately, poor decisions are sometimes made, and investors lose a lot of money.

With rental properties, you’re in complete control of your investment. You choose whether to use a management company, which you can hire and fire at will. You can also select the tenants, write the lease agreement, set the rental price, and maintain the property to your standards.

#3 The Ability to Leverage Your Money

Real estate is one of the only investments you can buy without any money, and pay for with other people’s money. Furthermore, real estate can be leveraged to purchase more property and grow your portfolio more quickly.

With that said, we always recommend that clients put money down on properties they purchase and maintain a healthy contingency fund.

Related: How to Pay for Your Kid’s College Education with Real Estate

#4 You Can Hustle for Higher Returns

When you purchase a stock, other people are in charge of generating profits, and you are just along for the ride. With real estate, though, you have numerous opportunities to create appreciation and increase your profits.

Forced appreciation results from adding value to a property, such as renovating it. One way real estate investors can force appreciation is to hire a management company that suggests and implements improvements that force appreciation, resulting in higher property values, higher rental rates, and increased profits.

Related: Increase Your Real Estate Profits – Use A Property Management Company

Experienced real estate investors who invest in multifamily properties have even more options for forcing appreciation, compared to single-family homes. A relatively small change to a multifamily property can add value affecting multiple families, not just a single family, resulting in forcing more appreciation on a per family basis.

Related: 5 Important Reasons to Invest in Multifamily Real Estate

#5 Demand for Homes

There will always be a demand for homes, and a demand for rental property. Although styles come and go, and properties are updated every few years, the demand for a place to live will never go away.

Furthermore, younger generations prefer to be mobile, often choosing to rent over buying a home, which will continue to increase demand for rental properties.

#6 Job Security: Rental Homes Won’t be Automated into Extinction

As we continue making advances in technology, many people are losing their job due to automation. But real estate investors will never be replaced with a computer. Computers aren’t going to own rental properties.

#7 There’s Something for Everyone

There is a great deal of variety in real estate. You can invest in single-family homes, multi-family homes, apartment complexes, office buildings, and several other types of real estate. There are properties for every level of investor, from the novice to the corporate real estate investor.

#8 You Can Live Anywhere

One of the biggest benefits of real estate investing is that the owner can work remotely. Unlike other professions, real estate investors can work and live anywhere, no matter where their properties are located.

Retired investors, especially, like the idea of owning investment real estate in several areas of the world, so they can travel and visit their properties. And, other investors like the freedom to travel and live anywhere, while their rental properties generate monthly cash flow profits.

#9 You Can Get Great Deals

Some people are driven to find great deals, no matter what they are buying. Real estate, whether flipping houses or buying property to rehab and lease to tenants, is perfect for people who live to find the next deal.

The best real estate investors often purchase property well below market value, renovate it, and flip it for a profit.

#10 Different Ways to Profit

In real estate, there are several ways to profit, such as cash flow, appreciation, and tax benefits. Rental property investors allow tenants to pay for their investments while banking monthly profits, and later sell the property for additional profit.

The best investors often combine several methods of generating profits that result in a lifetime of cash flow, and a lucrative inheritance for future generations.

The Tampa Bay Business Journal it is one of the best ways for sure. I personally use the local Facebook groups with relevant information to keep me updated. If you are seeking for "out of state investors" or "foreign national investors" this information is vital to have!