Buy it, Rent it, Profit it

Transportation
Crime Rate
Break up
Craiglist
One room+den
Demographics
psycho-graphics
mortgage interest rates
rantal market
occupancy
who they are and what they want
closing fee 6%
title
homeowner insurance

Bryan M. Chavis

1. They both had steady jobs, though neither was pulling in the big bucks.

2. Why don’t you buy a rental property in which you can live and rent out the other units to help pay down the debt you will be taking on?

3. They have been looking at single-family homes in the $240,000 price range. I suggested that they explore buying a duplex for the same amount. They could live in one apartment and rent out the other apartment in the building to help defray the cost of the mortgage.

4. It would appreciate in value

5. We will talk about the power of leverage later on, but for now you need to understand only that their down payment entitled them to own an investment valued at 240K.

6. Benefits: Their renters help pay for their mortgage; as the mortgage balance decreases over time, they can refinance to have lower payments—until eventually the property is paid off. The rent they collect (which is likely to rise over time) will eventually be equal to or greater than their monthly mortgage payment. Eventually , once that balance is paid off, they will be making a profit each month in addition to being free and clear of that original debt; They will benefit from 3-D tax advantages—deductible, depreciable, and deferrable.

7. Remember that you have a limited time period to complete this due diligence process. To meet your deadline, it is important as the project leader to keep your whole team on track and moving forward. Important members of your team are your maintenance technician or home inspector, your attorney, your mortgage broker or bank, your Realto, your CPA, and your title company. I like to schedule a weekly meeting or teleconference that each person is required to attend every Monday. It dosnt have to be long, thirty minutes is sufficient to vreview the due diligence checklist, check off items, check off items that are completed, and assign dealines for items still due. You can then schedule separate time with each team member to review their particular information and discuss its impact on the deal—basically touch base and it also makes team members accountable for completing their tasks within the time line agreed to. No one like to show up to a team huddle without complete3ing their assignment and let the team down. Group check-ins work well to encourage accountability.