Investors Toolkit
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Powerpoint Slide show describing the issues regarding a rental property

Powerpoint Slide show describing the issues regarding a rental property

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  • 1. Rocio Moore [email_address]
  • 2.
    • Are you looking for optional investment opportunities?
    • This presentation shows you that rental property is a great investment, and an average return of roughly 11% for each year for a 5 year commitment.
  • 3.
    • Single Family Residents Rental
    • Multifamily Residents Rental
    • Undeveloped Land
    • Commercial Spaces
  • 4.
    • Single Family has highest rate of return with lowest risk
    • Undeveloped land is speculative and many of the variables that affect the rate of return are out of control of the purchaser.
    • Multifamily takes management skills and can have legal risks and liabilities and tax issues
    • Commercial Spaces take a certain level of experience and expertise
  • 5.
    • Rate of return
    • Liability
    • Maintenance
    • Risks such as abandonment.
  • 6.
    • High Rate of Foreclosures allow for some real deals
    • Limited credit for purchasers means high demand for rentals pushing the “rental revenue amount” higher than normal
    • Usually only requires small amount of money down
    • Properties are easy to source and evaluate
    • You are earning on the renters money as well as on the increased value of the property
  • 7.
    • Professional or Small Business owner in their 30’s-50’s with interest in growing their investment opportunity
    • Responsible, hardworking, but conservative
    • Future issues such as college expenses for children, eventual retirement, and limited current career path growth
    • Frustrated with other investment opportunities
  • 8.
    • Set Goals for amount of money you can commit to secure rental property (Money can be cash, home equity loans, loan from 401K, etc)
    • Decide type of Residential property to source
    • How the property is going to be managed depends on your time, number of properties, location
    • Decide on time period for holding the property. (EG: 5 years, 10 years, etc)
    • Source financing options and evaluate investment properties
    • Agent does comparison to set expected rental rate, and Inspector determines if there are key repair issues to deal with.
    • Decision to purchase is based on the ROI, goals, and expectations for property based on holding period .
  • 9.
    • Experience, Knowledge, and Competency as as a Real Estate Consultant for Clear Lake, Houston area
    • Research and Comparative Evaluations in order to have a good idea of ROI
    • Savings Benefits which include partners in the area of lending, construction, moving and other home services willing to offer discounts
    • Flexible Commission rate based on number of units purchased in 12 month period.
  • 10.
    • Loan Origination Fee: Usually 1%
    • Appraisal fee: roughly $275
    • Credit Report: about $65
    • Tax Service Fee about $75
    • Underwriting Fee about $300
    • Flood Certificate about $25
    • Prepaid items: Interest (1-30 days), Hazard Insurance 1 year premium
    • Reserves: Hazard Insurance (2mths), Taxes (2 months), Mortgage Insurance (2 mnths)
    • Title Charges: roughly $500 depending on type of loan
    • Recording Charges: roughly $200
    • Survey Charges: roughly $100
    • Closing costs guess: 4.5 % of the cost of the home
  • 11.
    • Initial investment of $24,000 brings a return of roughly $14,400
    • Assumptions:
      • A. Holding period is 5 years
      • B. Monthly rent is approximately $1,000
      • C. Loan is at a rate of 7%
      • B. Appreciation is minimal over 5 years with sale price of $114,000
      • C. Overage of monthly rent is used to pay off note
      • D. Total maintenance costs are roughly $3,000 over 5 years.
      • E. Purchase Closing costs are $4,000 and sellers closing costs are $6,000.
      • F. If any of these costs are lower, or appreciation greater, rate of return will be greater
      • Rate of return on 5 year CD is roughly 3.5% so a $24,500 investment will be worth $28,787 in 5 years.
      • So payment for your time and trouble to manage a rental home for 5 years is roughly $12,000 as compared to a conservative 5 year CD
  • 12.
    • Turn $24,500 into $38,900 in 5 years by buying a $100,000 rental property.
    • Now is a great time to purchase Forclosures with a 5 year appreciation rate to be very promising.
    • If this looks of interest to you, please call me. I would love to help you with your investment interest.
      • Sincerely, Rocio Moore. 832-878-0776