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Every year you go see your doctor for a physical. He/she runs a series of diagnostics,
checking your heart rate, blood pressure, cholesterol, and also checking for cancer.
Based on all the results your doctor suggests a plan of action for your physical health.
We do the same thing for your real estate. We perform a detailed check-up on your entire portfolio looking at the cash flow,
financial returns, interest rates, etc. and then design an action plan for the real estate based on your personal situation.
For example, we had one client, who owned a couple of duplexes down by the beach and received $6,250 / month in rents.
Sounds pretty good, but because he had owned the property a long time, he had few tax deductions,
such that the money he got to keep amounted to only 1.25% of the value he had in the property.
And, the property had so much deferred maintenance that is was not
appreciating at all if the termites quit holding hands, the entire building would fall down.
We had him sell the two properties and buy a large multi-family apartment complex out of state.
Now he receives $18,000 / month, almost all of which he gets to keep due to unique real estate
tax advantages (i.e., depreciation). Also, about $4,000 / month is going toward principal reduction (think of it as forced savings).
Additionally, as rents increase, the property appreciates. Finally, because it is a leveraged purchase,
the rate of return is a multiple of its growth rate.
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