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Santa Clarita ValleyResidential Real Estate<br />BNI Presentation on August 2, 2011<br />By<br />Phil Levy, REALTOR®, CDPE...
Investment Opportunity<br />Present climate is opportune to invest in residential real estate for<br />Cash Flow<br />Rela...
Investor Profile<br />According to a 2009 National Association of Realtors the median investor annual income was $87,200.<...
Investing Considerations<br />Assemble a team<br />REALTOR® <br />Quarterback<br />Source of available listings<br />Penci...
Investing Considerations – Cont<br />Assemble a team – cont<br />Insurance<br />SD IRA Custodian<br />Loan Officer<br />Ap...
Investment Considerations<br />Cont – Finding the Right Property<br />Area<br />Appreciation<br />Rent Rates<br />Vacancy ...
Investment Considerations Cont <br />Crucial Definitions<br />Net Operating Income<br />Expected rent less operating expen...
Investment Considerations Cont.<br />Crucial Definitions – cont.<br />Leverage – the amount borrowed divided by value of t...
Real Life Example<br />8/1/2011<br />9<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
Protecting the Downside<br />Exit Strategy<br />Always buy with the idea that the property will be sold some time in the f...
Conclusion<br />This is an opportune time to invest in residential income property<br />Great returns with upside potentia...
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Bni presentation 08-02-2011 r1

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Bni presentation 08-02-2011 r1

  1. 1. Santa Clarita ValleyResidential Real Estate<br />BNI Presentation on August 2, 2011<br />By<br />Phil Levy, REALTOR®, CDPE, CIAS<br />Intero Real Estate Services<br />Lic # 01850664<br />661.313.4717<br />phil@jpscvrealty.com<br />
  2. 2. Investment Opportunity<br />Present climate is opportune to invest in residential real estate for<br />Cash Flow<br />Relatively high returns on investment<br />Diversification<br />Create generational wealth<br />Tax benefits<br />Leverage<br />Appreciation<br />Ultimate financial independence<br />8/1/2011<br />2<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  3. 3. Investor Profile<br />According to a 2009 National Association of Realtors the median investor annual income was $87,200.<br />8/1/2011<br />3<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  4. 4. Investing Considerations<br />Assemble a team<br />REALTOR® <br />Quarterback<br />Source of available listings<br />Pencil out the figures<br />Primary source of research and data<br />Negotiator<br />Get the deal closed<br />Helps you identify and coordinates within limits of confidentiality the rest of the team<br />Attorney<br />Accountant/Tax Advisor<br />8/1/2011<br />4<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  5. 5. Investing Considerations – Cont<br />Assemble a team – cont<br />Insurance<br />SD IRA Custodian<br />Loan Officer<br />Appraiser<br />Inspector<br />Title<br />Escrow<br />Handyman<br />Contractor<br />Property Manager<br />Cleaning service<br />Landscape Maintenance<br />8/1/2011<br />5<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  6. 6. Investment Considerations<br />Cont – Finding the Right Property<br />Area<br />Appreciation<br />Rent Rates<br />Vacancy Rates<br />Net Operating Income<br />Cap Rate<br />Prices<br />Condition<br />Leverage<br />Cash on Cash Return<br />Property Taxes<br />Holding costs<br />8/1/2011<br />6<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  7. 7. Investment Considerations Cont <br />Crucial Definitions<br />Net Operating Income<br />Expected rent less operating expenses<br />Excludes debt service = principal plus interest payments<br />Cap Rate – Net Operating Income divided by value of the property. Used to compare alternative acquisitions.<br />Cash Flow – Net Operating Income less debt service. MUST BE POSITIVE<br />Cash on Cash Return – Cash Flow divided by investment. Used to gauge profitability. <br />8/1/2011<br />7<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  8. 8. Investment Considerations Cont.<br />Crucial Definitions – cont.<br />Leverage – the amount borrowed divided by value of the property. <br />Overleveraging can cause serious problems if the value drops.<br />Some leverage can magnify returns.<br />Rule of thumb: Stay no higher than 60% to 75%.<br />Cash flow should always project positive even after debt service.<br />8/1/2011<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />8<br />
  9. 9. Real Life Example<br />8/1/2011<br />9<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />
  10. 10. Protecting the Downside<br />Exit Strategy<br />Always buy with the idea that the property will be sold some time in the future<br />Avoid unusual ,“white elephants”<br />Determine in advance triggers and actions to exit<br />Sell <br />Refi<br />Line up supplemental financing<br />Maintain cash reserves – at least 6 months carrying costs.<br />Vetting the tenants<br />8/1/2011<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />10<br />
  11. 11. Conclusion<br />This is an opportune time to invest in residential income property<br />Great returns with upside potential<br />Great referrals are anyone<br />Saving for college and/or retirement<br />Striving for financial independence<br />Wants an independent business<br />Wants to build generational wealth<br />And… wants independent professional advice and analysis on each alternative.<br />8/1/2011<br />11<br />BNI Presentation by Phil Levy, Intero Real Estate Services<br />

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