Get 32% Out Of Your Real Estate!
Just the other day, I was working away on my computer. That’s when I received a very interesting e-mail. I’m signed up to receive alerts from a company specializing in selling foreclosures. They buy them on the courthouse steps, then immediately flip them to other investors.
They operate throughout the entire Phoenix metro area. However, I’m only interested in a few select areas. That’s why I rarely open their “For Sale” alerts.
But this one was different…
“Phoenix 6-Plex For Sale” – I was curious.
My jaw hit the floor as I read the details. A 6-plex housing unit up for sale, only $110,000. The first one to show up with the cash would own the property. I dug a little deeper…
I went to Google to look at the location… It’s situated in a solid working class neighborhood. You won’t see a Mercedes or Bentley rolling down these streets… but you’re not paying premium prices either.
I decided to drive by. The neighborhood was just like I thought… and the building didn’t look too bad either. A little paint and a few minor repairs and the property would look much improved. I couldn’t make it inside any of the units… so I’ve got no idea how good or bad they look.
That might be a red flag.
I took a closer look at the price. Not the price of the building, but the price of the rents. Any savvy real estate investor will tell you, it’s not what you pay for a property, but what you get back in cash flow.
Three units rented for $550. The other three rented for about $450.
I checked with my property manager and all the rents were right in line with the neighborhood.
A little quick math and you realize this property generates $3,000 a month in cash flow!
If you bought the whole place for cash – $110,000 – and just sat back to collect the rent, you’d be sitting pretty. $3,000 a month for rent is $36,000 cash every year.
That’s a 32% return on your money.
And that assumes the property value doesn’t rise over time. A property like this could easily be worth $250,000 or $300,000 in just a few years. Sell in three years for $300,000 and your return skyrockets to 270%!
Not a bad investment.
All you need to do is buy the right property at the right time. I think now’s the perfect time to be getting back into real estate. And deals like this one only confirm my thoughts.
Just look at the recent market data from the S&P Case-Shiller Home Price Index. After heading lower for more than two years, it’s finally moved higher. That means across the nation we’re seeing residential housing values rebound.
It’s happening here in Phoenix, and no doubt it’s happening right where you live too.
Opportunities in the real estate market can be had for another 9 to 12 months. But don’t wait… the best investments are already being snapped up by other real estate investors.
Category: Real Estate
