Real Estate IRA Investment Packages - Main Street Planners


Published on offers Self Directed IRA Real Estate packages. If you are an investor looking for ira investment options, then please view this presentation. Many of our clients ask "can i invest my ira in real estate?" The answer of course is yes. You can also use 401k real estate investment as well. We specialize in alternative assets for your retirement account.

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Real Estate IRA Investment Packages - Main Street Planners

  1. 1. Real Estate Packages
  2. 2. MAAP “Core Four” Pillars
  3. 3. Asset Class Summary
  4. 4. PROT ECT PRI N CI PAL WH I L E I N CREASI N G R ET U RN SGol den Geese Cr ea t e Gol d EggsIn the past, the wealthy maintained their lifestyleon the “golden eggs” known as dividends fromtheir stock portfolios. As a rule in today’s market,stocks and mutual funds no longer pay dividends.Today, rental real estate is the closest thing to agolden goose. Monthly rents work like goldeneggs. And when the rents recur, you have a Pr oper t y Ma na gementdividend-quality of life. In each of the markets where we have anAlso, because stocks aren’t paying dividends, the inventory of high cash flow homes, we alsoonly way to collect returns is to sell. That wipes provide the best property managers available.out the opportunity to enjoy recurring gains! The objective is NOT to turn you into a landlord, so the managers do the day-to-dayReal estate pays monthly dividends without work with the renters.selling your principal. Every month, you cancount on another rent check as return on The property managers screen and placeinvestment. tenants. Our professional managers are only paid when there a tenant in the property. TheirWe like to think of rental properties as a “cash maintenance staff can do minor repairs to savefaucet.” How many “faucets” do you want in you money.your portfolio? Of course, you don’t have to use our preferred managers, but it is wise to tap in to the leverage of our combined business with the preferred management staff. R EAL E ST AT E PACK AGES
  5. 5. Bought at Auction• Saves SO much time• Not shotgunning low- ball offers• Short-sales take 2-3 times as long• Don’t have to get money to the courthouse in 24 hours
  6. 6. Rehabbed• Financing fix up• Not keeping crews on budget• Try to get a contractor to finish the job• Don’t over-improve• Don’t have to supervise
  7. 7. Tenants in Place• Cash flow now• Most important tenant is the first one• 12-24 month leases• Managers screen for quality
  8. 8. Property Managers• Find the best in the area• Does the heavy lifting• Day-to-day tenant interface• On staff maintenance• Only paid when tenant occupied
  9. 9. Melbourne Street, SLC• Purchased in 1992 for $87,500 – Rents $1,300 – Net $1,000• Cash on cash $12,000/$87,500 = 13.7%• 1996 appraised for $240,00• 2008 appraised for $390,000• 2012 worth $230,000
  10. 10. The Power of Leverage• Increases returns 3-4%• Allows buyer to secure double the properties• “Non-Recourse” lending• Based on the property only – No application – No collecting from the borrower – Required financing if using retirement dollars• Banks don’t like it – 1 national bank says they do it – Minimum loan sizes, deny deals for whatever reason• Our vendors have it
  11. 11. How to value properties• Property Tax notice • Values estimated by neighborhood area • Every 2-3 years• Online Data • Zillow is common – Pulls data from public records like property tax, or sales in area, not accurate, includes short sales and foreclosures• Appraisal-best and closest
  12. 12. How to value properties• AppraisersAppraisal report– Comparable Sales– Income Approach– Replacement cost
  13. 13. How to value properties-Comparable Sales Comparable Sales-subjective • 3 “like” properties sold in last 6 months • Distance within a mile • Adjustments for differences – No garage vs 2 car – Covered patio vs no pation – Lot size – Number of bathrooms – Number of bedrooms
  14. 14. How to value properties-Income ApproachValue based on the income-commercial properties– Income approach-Melbourne Street, SLC • Net income $10,000 • Divide by a common rate of return (cap rate) • At 8% – $10,000.08 = $125,000 value • At 6% – $10,000.06 = $166,666 value
  15. 15. How to value properties-Replacement Cost• Replacement cost • How homeowners insurance looks at a property • $80 per square foot x square footage • Deduct depreciation • Value of lot added on Melbourne Street SLC • 1600 sq ft upstairs x $80 = $128,000 • 1600 sq ft downstairs x $40 = $64,000 totals $192,000 – Add the land• Significant remodel creates “effective age” estimate
  16. 16. How do our vendors value properties?• Cost to build comparison • Florida condos, what would I pay down the street • Instant equity• Replacement cost-cuts out non-market type sales • How homeowners insurance looks at a property @ $80ft • Replacement cost is a watermark for value over time. • If we can get a property in the $40-50ft, it is a good price Significant remodel creates “effective age” estimate Change out plumbing, HVAC, electrical, windows, kitchen in a 100 yr old property, how old is the property?
  17. 17. Newer properties 10-14% 14.2% return Doubles every 5 yrs Year 0 $60,000 Year 5 $120,000 Year 10 $240,000 Year 15 $480,000 Year 20 $960,000 Year 25 $1,920,000
  18. 18. ASSET TYPE: SFR 801-352-4055YEAR BUILT:SIZE-SQ FOOTAGE: 1966 1,114 3780 RangelineBEDS: 3BATHS: 1PURCHASE PRICE: $51,900PRICE PER SQFT: $46.59TAX (YEAR): $995INSURANCE: $550 (estimate)MANAGEMENT FEE: $720TOTAL ANNUAL EXPENSES: $2,265RENT (MONTHLY): $750 (*typical rent)ESTIMATED ANNUAL RENT: $9,000EST. ANNUAL NET INCOME: $6,735ESTIMATED NET YIELD: 12.98%Non-Recourse FinancingPURCHASE PRICE: $51,900FINANCED $23,000CASH DOWN $28,900INTEREST @ 6.99% $1,608PRINCIPALADJ. NET INCOME: $5,127ADJ. CASH ON CASH RETURN 17.74%*This is based off of current market conditions and Silver Stream does not guaranteespecific returns.
  19. 19. Real Estate Returns HopeCan start with less money, same result 18% return Money doubles every 4 yearsReturns safely secured Year 0 $30,000 Year 4 $60,000People understand the risks Year 8 $120,000Loans are repaid in 4-5 years Year 12 $240,000 Year 16 $480,000To compound, we need to reinvest therents Year 20 $960,000Gives people returns high enough to Year 24 $1,920,000get back on trackPeople understand the risks
  20. 20. Cornerstone of a portfolio
  21. 21. Ideal Portfolio Contents