Tips for investing in positive cash flow properties

Download Tips for investing in positive cash flow properties

Post on 14-Aug-2015



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<ol><li> 1. Tips for Investing in PositiveCash Flow PropertiesHeres a big hint of what this means to you. Your financing options have moved from Wall Streetto Main Street. Take your local banker out to lunch and nurture that relationship. Youre going toneed it because while youre building your commercial real estate investment portfolio in a downmarket, youll need to borrow money to grow your wealth. If you buy for cash flow and you focuson the fundamentals, the exit will take care of itself, your deal will be financible, and youll getyour original investment back more quickly-something everyones concerned about these days.A quick look at the math will demonstrate that purchasing for cash flow works. Lets start with thepurchase price. You decide to purchase a property for $1,000,000. You deposit $250,000 asyour down payment and earn a 10% cash on cash return on your investment. This investment willpay you $25,000 in the first year and as the rent increases, so will your cash on cash return. Plus,while youre holding the property, your $750,000 loan is amortizing or being reduced by yourrental income. This means that youre recovering your down payment while you pay down thedebt.At the end of the 10 years, you sell the building for $1,000,000. That may not seem like a greatdeal to some, but if youve already recovered your $250,000 in cash flow and paid down yourmortgage by $100,000, youre walking away from the closing with a check for $350,000 plus the$250,000 you already got back. My simple math may be wrong, but you more than doubled yourmoney.If you focus on the fundamentals first, buy for cash flow. Empires are built on durable, long-termcash flows. Once you have that in place, go out and play.For more information visit below link: -</li></ol>