Sept 2012 Income Property Showcase

September 2012

Income Property Showcase

If you have interest in acquiring a property shown today

SURVEY www.goo.gl/86eVH

EMAILDavid@HasslefreeCashflowInvesting.com

GoTo Meeting CHAT BOX

David CampbellJim Thylin

Jeff Lerman, Esq.

Today’s Panelists

TODAY’S AGENDAEvaluate propertyEvaluate markets

Take notesSolicit feedback through polls

Acquisition follow up procedureExit Survey

DisclaimersInformation may not be accurate

High reliance on 3rd parties for infoAll forecasts are inherently inaccurate

DO YOUR OWN DUE DILIGENCE before making an investment decision

Real Estate Profit CentersCash throw off (aka cashflow)Tax savings from depreciation

Equity growth from loan amortizationEquity growth from price appreciation

Forced Equity from change of use /development

All numbers in this presentation show annualized profits solely using Cash Throw Off. Your returns could be potentially much higher when factoring all of the ways you can make money in real estate.

Charles CondosVallejo, CA

Property Information

•Waterfront redevelopment•Studio / 1 bath•Kitchen with window•396 Sq Ft.•Third floor•On-site laundry•Walking distance to the S.F. Ferry Terminal

Charles Condos - Vallejo, CA

Financial Information

Purchase Price: $25000

Gross Rent: $6,600

8% Vacancy -$528

10% Management -$607

Property Taxes -$300

Insurance HOA

Maintenance -$300

HOA / Misc -$2,820

Net Operating Income $2,045

CAP Rate 8.2%

SELLER Financing Information

Purchase Price $25000

Down Payment 50%

Down Payment $12500

Loan $12500

Closing Costs $2,000

Total Cash Invested $14,500Interest Rate 5%

Loan Term 30 years

Annual Payment -$805

NOI $2,045

Cashflow $1,240

Cash Throw Off 8.6%

Local Rent Comparisons

Median House ValueCharles Condos - Vallejo, CA

lower priced part of town

Median Household IncomeCharles Condos - Vallejo, CA

lower income part of town

Unemployment RateCharles Condos - Vallejo, CA

higher unemployment part of town

Year BuiltCharles Condos - Vallejo, CA

older part of town

Owner OccupancyCharles Condos - Vallejo, CA

rental community

How can I make money with this property ?

• Rental income: creates monthly spendable cashflow

• Potential increase in rents

• SELLER FINANCING

• Loan Amortization: tenant’s pay down mortgage

• Tax Benefits: Depreciation

• Resell to owner occupant when market strengthens

Single Family HomeMacon, GA (Atlanta)

Macon, GA

Macon is the Fourth (4th) largest city in Georgia. Large air force base

Confederate - Macon, GA

• SFR Built in 2005 • $50,000 Purchase Price• 3BR / 2Bath• 1,932 Sq Ft on 0.27 Acres

Gross Rent: $9,000

8% Vacancy -$720

Insurance -$450

Maintenance -$400

Replacement Reserve -$800

CAP Rate 10.4%

Financing Information

Down Payment 25%

Down Payment $12500

Loan $37500

Total Cash Invested $15,500Interest Rate 4.5%

Loan Term 30 years

Annual Payment -$2,280

NOI $5,202

Cashflow $2,922

Cash Throw Off 18.9%

Median House ValueConfederate - Macon, GA

value consistent with area

Median Household IncomeConfederate - Macon, GA

income above median

Vacant Housing Unit for RentConfederate - Macon, GA

high OCCUPANCY rates

Unemployment RateConfederate - Macon, GA

high employment rate

Year Built Confederate - Macon, GA

newer than average

Owner OccupancyConfederate - Macon, GA

mix of owners & renters

• High leverage: 80% LTV at historically low fixed rates

• SUPER HIGH CAP RATE = CASHFLOW!!!

“Bread and butter”Atlanta, Georgia

Single family home Built in ~2002 3 bed / 2 bath 1,118 Sq Ft

Clydesdale - Atlanta

Atlanta, GeorgiaAtlanta is the primary transportation hub of the Southeastern United States

The Atlanta Metro is the 9th largest metro area in the nation with over 5.3 million residentsIts economy ranks 15th among world cities and 6th in the nation

Mableton, GA is a part of the 5 county Atlanta Metropolitan Area.

Location Information

Purchase Price: $63,000

Gross Rent: 10,200

Vacancy -816

Management -938.4

Property Taxes -1,020

Insurance -500

Maintenance -600

Net Operating Income 6,325.6

CAP Rate 10.0%

Down Payment 20%

Down Payment $12600

Loan $50400

Loan Term 30 years

Monthly Payment -$3,064

NOI $6,326

Cashflow $3,262

Local Rent Comparison

Median House ValueClydesdale - Atlanta

higher priced part of town & below area median

Median Household IncomeClydesdale - Atlanta

higher income area

Vacant Housing Unit for RentClydesdale - Atlanta

ultra low vacancy

Unemployment RateClydesdale - Atlanta

low unemployment

Year BuiltClydesdale - Atlanta

newer part of town

Owner OccupancyClydesdale - Atlanta

mostly owner occupied

• Tax Benefits: depreciation over 27.5 years

Single Family HomeIndianapolis, IN

Indianapolis has a population of 830,000. It is the 12th largest city in the country and is the one of the fastest growing metropolitan

areas in the US.

Indianapolis, IN

• $55,000 • 3BR / 2Bath• 1 Car Garage•1,260 Sq Ft on 0.20 Acres• Built in 1957

Englewood - Indianapolis, IN

Gross Rent: $9,600

8% Vacancy -$768

Insurance -$450

Maintenance -$400

Replacement Reserve -$600

CAP Rate 10.6%Englewood - Indianapolis, IN

Down Payment 20%

Down Payment $11000

Loan $44000

Loan Term 30 years

NOI $5,839

Cashflow $3,164

Cash Throw Off 21.8%Englewood - Indianapolis, IN

Median House ValueEnglewood - Indianapolis, IN

below median

Median Household IncomeEnglewood - Indianapolis, IN

below median

Vacant Housing Unit for RentEnglewood - Indianapolis, IN

mostly high occupancy

Unemployment RateEnglewood - Indianapolis, IN

mostly high employment

Year BuiltEnglewood - Indianapolis, IN

older part of town

Owner OccupancyEnglewood - Indianapolis, IN

mostly rental

Singly Family ResidenceClaremore, OK (Tulsa)

Claremore, OK

Tulsa, OK2nd largest city in Oklahoma.

Tulsa County is the most densely populated county in OK.Claremore, OK

Tulsa Metro Area boasts ~1 million people

Population Information

Claremore, OK

Top Economic Drivers in Tulsa, OK1.Aerospace

American Airlines Tulsa International Airport FlightSafety International

2.Oil / Natural Gas Baker Hughes Williams Companies SemGroup Syntroleum WindStream Communciations

3.Shipping and Cargo Tulsa International Airport Tulsa Port of Catoosa

4.Higher Education University of Tulsa / Oral Roberts University

5.Other QuikTrip BOK Financial Corporation Dollar Thrifty Automotive Group

Claremore, OK

Top Local Employers

AMERICAN LEATHERARMY & AIR FORCE EXCHANGE

SERVICESOLO CUP COMPANY

SWIFT TRANSPORTATIONTEXWOOD INDUSTRIES INC

US POSTAL SERVICE DISTRIBUTION CENTER

VA NORTH TEXAS HEALTH CARE SYSTEM

American AirlinesTulsa Intl. Airport

Williams Gas Pipeline TranscoSEMGroup Corp.Syntroleum Corp.

Tulsa Port of CatoosaUniversity of Tulsa

Oral Roberts UniversityQuikTrip Corp.

BOK Financial Corp.Dollar Thrifty Automotive Group

FlightSafety Intl

Baker HughesWindstream Communications

Claremore, OK

Claremore is a Suburb of Tulsa, OKAdjacent to Rogers State University and Claremore Hospital

Claremore, OK

Single family home Built in ~1950 4 bed / 2 bath Detached 1 car garage 1,587 sq ft Can be leased as a 4/2 SFR or as a non-conforming duplex 3/1 + 1/1

Claremore, OK

Purchase Price: $55,000

Gross Rent: $700

7% Vacancy -$49

Management -$65.10

Property Taxes -$32

Insurance -$35

Maintenance -$60

HOA / Misc $0

Net Operating Income $458.90

CAP Rate 10.01%

Claremore, OK

Purchase Price $55,000

Down Payment 3%

Down Payment $1,650

Loan $53,350

Loan Term 30 years

Loan Payment -3,243.84

NOI 5,830.8

Cashflow 2,586.96

Claremore, OK

Median House Value Claremore, OK

borders on nicest area

Median Household Income Claremore, OK

borders on nicest area

Vacant Housing Unit For Rent Claremore, OK

mostly high occupancy

Unemployment RateClaremore, OK

mostly high employment

Owner Occupancy Claremore, OK

mostly owner occupied

•SUPER CASHFLOW of 55%?!?!

• Potential to raise rent

Claremore, OK

“Double Duplex”Pride of Ownership Property

Broken Bow OK (Tulsa)

2 Duplexes Fully Leased 3 bed / 2 bath each 1 car garage each 2,232 Sq Ft 0.67 Acres 1981

Duplexes - Broken Arrow

Gross Rent: $1,600

Vacancy -$112

Management -$149

Insurance -$67

Maintenance -$60

HOA / Misc $0

CAP Rate 8.50%

Down Payment 20%

Down Payment $30000

Loan $120000

Loan Term 30 years

Monthly Payment -$608

NOI $1063

Cashflow $455

POTENTIAL TO RAISE RENT

Median House ValueDuplexes - Broken Arrow

Median Household IncomeDuplexes - Broken Arrow

Vacant Housing Unit for RentDuplexes - Broken Arrow

Unemployment RateDuplexes - Broken Arrow

Year BuiltDuplexes - Broken Arrow

Owner OccupancyDuplexes - Broken Arrow

• Resell to owner occupant when market strengthens (strong schools)

• Efficiency of management if purchasing both properties, but dual exit strategy

• Potential to raise rents Duplexes - Broken Arrow

3 Houses & 1 DuplexKansas City, MO

Kansas City, MO

Kansas City is the largest city in Missouri and its metropolitan area has a population of over 2 million.

3 houses + duplexKansas City, MO

3 Single Family Homes Duplex

•4BR / 1Bath•5BR / 2Bath•3BR / 2Bath•No deferred maintenance•Rents at $650-$700

• Two Units at 2BR / 1Bath•Built in 2009•1,500 Sq Ft•Rents at $450 per Unit•No deferred maintenance• 95% seller finance available!

Purchase Price: $240000Gross Rent: SFR $8,400Gross Rent: SFR $8,400Gross Rent: SFR $8,400Gross Rent: Dup $10,800

TOTAL RENT $36,0008% Vacancy -$2,880

10% Management -$3,312Property Taxes -$2,770

Insurance -$1,800Maintenance -$1900

Replacement Reserve -$2,400Net Operating Income $20,938

CAP Rate 8.7%

Financial Information - Duplex

Down Payment 5%

Down Payment $12,000

Loan $228,000

Loan Term 30 years

NOI $20,938

Cashflow $4,538

Financing Information - Duplex

Charles Condos - Vallejo, CA3 houses + duplexKansas City, MO

Median House Value3 houses + duplexKansas City, MO

SFH - E 67th Terrace

SFH - Bellefontaine

at median for area

Median Household Income 3 houses + duplexKansas City, MO

SFH - Bellefontaine

at median for area

Unemployment Rate 3 houses + duplexKansas City, MO

SFH - Bellefontaine

higher unemployment

Year Built 3 houses + duplexKansas City, MO

SFH - Bellefontaine

at median for area

Owner Occupancy 3 houses + duplexKansas City, MO

SFH - Bellefontaine

blend of owners & tenants

SFH - Crystal Ave

lower end of median for area

SFH - Crystal Ave

lower income

Vacant Housing Unit for Rent3 houses + duplexKansas City, MO

SFH - Crystal Ave

good occupancy rate

Duplex -E 25th St.

at median for area

Duplex -E 25th St.

at median for area

• SELLER FINANCING High leverage: 95% LTV

• Sell off portfolio in pieces in the future

Jeffrey H. Lerman, Esq. Lerman Law Partners, LLP

Jeffrey H. Lerman, Esq.

•Featured expert—TV, radio, newspapers•2007 President, Marin County Bar Ass’n.•“The Real Estate Investor’s LawyerTM”•Chair, CA Bar Real Estate Litigation Section •Chair, Marin County Bar Real Property Section•General Counsel, 2 RE syndication companies•30+ yrs experience•Real estate investor•Real estate broker

www. RealEstateInvestorLaw.com

Disclaimers & Cautionary Notes

This educational seminar is not a substitute for getting your own legal advice. This webinar is offered with the understanding that the speaker is not offering legal or other professional advice. Any actions with regard to the information contained in this seminar should be undertaken only upon the advice and counsel of competent legal and tax professionals. Receiving this information does not create an attorney-client relationship between you and the speaker.

Disclaimers & Cautionary Notes

This educational seminar is not a substitute for getting your own legal advice. This webinar is offered with the understanding that the speaker is not offering legal or other professional advice. Any actions with regard to the information contained in this seminar should be undertaken only upon the advice and counsel of competent legal and tax professionals. Receiving this information does not create an attorney-client relationship between you and the speaker.

Disclaimer

I’m not your lawyer.

You can’t sue me.

r Safer

Cheaper

Easier

Faster

CHeaper

Easier

Faster

Forming Partnerships to Buy

#1: What is the best business relationship for you and your

partner to work together?

• Joint venture partners (both active)?

• Lender—borrower?• Active investor—passive

investor?

Forming Partnerships to Buy

#2: What is the best form of ownership for you and your

partner?• Partnership Form

–General Partnership –Limited Partnership –Limited Liability Company

• TIC –Discuss flexibility of TIC to

allow partners to make different choices re 1031 on exit

Working with Financing Partners

What's your biggest challengeas a real estate investor?

• Can't afford to keep your current properties?• Want to take advantage of the best buyer's market in

decades, but can't find that "needle in the haystack" investment that makes economic sense?

• Can't afford the down payment to buy new properties?• Got bad credit?• Can't get financing?• Can't find the time to invest in real estate?

• Find just the right strategic partner to meet your needs

• Convert your properties from problems into profits

• Avoid foreclosure• Avoid bankruptcy• Save your credit• Find great investments• Invest without worrying about getting financing• Invest with bad credit• Position yourself for incredible returns

Partnering for Profit• September 20th noon - 1pm• FREE Webinar• David Campbell and Jeff Lerman

• http://www.hasslefreecashflowinvesting.com/events/webinar-partnering-for-profit/

Chattanooga, TNThe future of the southeast

4Plex - Chattanooga, TN

Geographic Information

Chattanooga is located in the heart of the southeast, centrally located between other major cities such as Nashville, Huntsville, Birmingham, Atlanta, Knoxville, Ashville, Columbia, and Charlotte

Multifamily Income

•Class B Fourplex•Four 4BR/2Bath•Totally Renovated in 2011•75% Occupancy•10 Minutes to downtown Chattanooga•Additional lot for potential construction of more units

Gross Rent $42,600

Vacancy -$4,260

Management -$3,834

Property Taxes -$1,152

Insurance -$1,400

Maintenance -$3,500

Utilities / Misc. -$900

Net Operating Income

$27,554

CAP Rate 11.5%

Down Payment 25%

Loan $180,000

Total Cash Invested $63,600

Interest Rate 4.5%

Loan Term 30 years

Payment -$10,944

NOI $27,554

Cashflow $16,610

Cash Throw Off 26%

Top Economic Drivers in Chattanooga, TN

1. Warehousing & Distribution• Amazon• Kenco Group

2. Manufacturing• Auto: Volkswagen / Miller Industries• Food: Mckee Foods Corporation/ Chattanooga Coca-Cola Bottling Co. • Construction Equipment: Astec Industries, Komatsu America Corp.

3. Insurance Services• Blue Cross BlueShield Of Tennessee/ UNOM

4.Healthcare • Erlanger Health System/ Memorial Health Care/ CIGNA Health Care/ Parkridge Medical Center

5. Higher Education • University of Tennessee at Chattanooga/ Chattanooga State/ Southern Adventist University

6. Utilities• Tennessee Valley Authority/ Electric Power Board of Chattanooga

Top Local Employers

BlueCross BlueShield of TennesseeTennessee Valley Authority

Erlanger Heath SystemMemorial Health Care System

McKee Foods CorporationUnum Group

Volkswagen Chattanooga

Submarket Description4Plex - Chattanooga, TN

Median House Value4Plex - Chattanooga, TN

just outside high priced area

Median Household Income4Plex - Chattanooga, TN

middle class area

Vacant Housing Unit for Rent4Plex - Chattanooga, TN

Low vacancy area

Unemployment Rate4Plex - Chattanooga, TN

ultra low unemployment

Year Built 4Plex - Chattanooga, TN

older part of town

Owner Occupancy 4Plex - Chattanooga, TN

mixed rentals & owner occ

• Rental income: creates HUGE monthly spendable cash flow

• Tax Benefits: depreciation

• Resell for profit if CAP rates are compressed and/or if rents increase

• Increased Occupancy/Potential Rent Increases(current rents are 5-10% less than market rents).

“Dollar Mailbox Money”North GA Dollar General Portfolio

• Corporate Guaranteed Leases• Newer Construction• Little Landlord Responsibility• 5-8 Years Left on Current Lease Terms

• Lease Options in Place• Scheduled Rent Bumps with Renewals

• Largest Small Box Retailer in the United States

Dollar General - GA

Gross Rent: $3,500

Vacancy $0

Management $0

Property Taxes Tenant Pays

Insurance Tenant Pays

Maintenance -$167

HOA / Misc -$50

CAP Rate 8.25%

Dollar General - GA

Down Payment 15%

Loan $405,898

Loan Term 20 years

Monthly Payment -$2678

NOI $3283

Cashflow $605

Cash Throw Off 9.2%Dollar General - GA

How Can I Make Money with this Property?

• Rental Income: creates monthly spendable cashflow

• High Leverage: 85% LTV at historoically low fixed rates

• Loan Amortization: Tenant pays down mortgage

• Tax Benefits: Depreciation over 39 years

• Property appreciation through CAP rate compression

• Rent increases with renewal options yield higher future returns and potential appreciation

Dollar General - GA

“Mailbox Money”United State Post Office - Macedon, NY

• Population 8,688• Median household income - $52,000

Macedon, NY - Post Office

Macedon, NY

• Main Post Office for Macedon, NY• 39,927 Sq Ft property• 3,625 Building Size• New roof added in August, 2010• Landlord is only responsible for roof, structure, and liability insurance

• 5 years left on current lease. 3 - 5yr options remaining

Purchase Price: $950000Gross Rent: 5 yrs $68,875Gross Rent: 5 yrs $94,464Gross Rent: 5 yrs $106,272Gross Rent: 5 yrs $119,556

AVG RENT $97,292Vacancy 0

Management $0Property Taxes $0

Insurance -$1,100Maintenance 0

Replacement Reserve -$400Net Operating Income $95,792

CAP Rate 10.1%

Down Payment 20%

Down Payment $190000

Loan $760000

Loan Term 20 years

NOI $95,972

Cashflow $30,633

How Can I Make Money with this Property?

• Tax Benefits: depreciation over 39 years

• Resell to owner occupant (potential owner user property)

• Rent Increase at renewal period

• CAP Rate compression would increase the value of property

September 2012

Income Property Showcase

If you have interest in acquiring a property shown today

SURVEY www.goo.gl/86eVH

EMAILDavid@HasslefreeCashflowInvesting.com

GoTo Meeting CHAT BOX

Sept 2012 Income Property Showcase

Real Estate

Transcript of Sept 2012 Income Property Showcase

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