How a Deal Makes Money?

Hello Family, Friends and Investors,

Often we hear the question, “How much money can I make if I invest in real estate”???

Obviously, there are a lot of variables to that question but here is how we analyze the deal so we can explain the projected returns. ?

High-level, here’s how the returns work.

• For each and every real estate deal we source it has been thoroughly vetted and underwritten with projections to achieve a 100% rate of return over 5 to 6 years.??
• In the most simplest of terms we project that a Limited Partner (LP) (the investor) can double your investment every 5 to 6 years – without ever having to deal with all the headaches of being a landlord.

Below, we have broken a deal down on a year by year basis.? For this example we’ll use an investment amount (from you the LP) of $100K to keep the math simple.? Also, keep in mind that these returns are the same on any size property purchased.

Limited Partner invests $100K

• Year 1 – Investor Makes $10,500 / 10.5%
• Year 2 – Investor Makes $11,600 / 11.6%
• Year 3 – Investor Makes $12,100 / 12.1%

At this time we also like to refinance!? Why?? When we make improvements to the property and increase the Net Operating Income, the value of the property also increases in value.? This allows us to refinance to the new appraised value giving you a portion of your initial investment back, although still retaining your initial shares.? This isn’t done on every deal, although gives you an idea how the returns look in this scenario.??

Investor receives $40K back of original $100K investment leaving $60K invested in the project.

• Year 4 – Investor Makes $9,000 / 15% (based on $60K still invested)
• Year 5 – Investor Makes $9,200 / 15.2% (based on $60K still invested)
• Year 6 – Investor Makes $9,500 / 15.8%

Sale Occurs, investor receives $38,400 from sale proceeds and receives remaining $60K of original $100K investment.

Over the life of the project, the total amount of money made $100,300 – or a 100.3% rate of return over the 6 years.??

Imagine what your wealth would look like if you could double it every 5 to 6 years… how would that change how you feel about your family’s financial future?

Not only has multifamily proven to be recession-resistant across many market cycles, but you also don’t have to take on additional risk to achieve great returns.?

Investing in real estate has proven to be one of the best ways to build wealth over time!

Hopefully this gave you a better understanding of the returns that are very achievable in real estate. Obviously, there are risks associated with real estate just like other investments so the returns can and will change from deal to deal and market conditions.?

There are different variables for each and every project and the returns shown above aren’t exactly the same each time.? The example above is just a blueprint for how we analyze deals to make the decision if we are going to purchase it or not.? If our underwriting lays out the projections as indicated above, we will be moving on it!

Thank you for taking the time to read this and as always reach out if you have questions!

Lastly, if you know someone who would like to see content like this and benefit from it please share our contact information with them and have them get in touch with us!