Why A $200,000,000 REAL ESTATE PORTFOLIO SOUNDS BETTER THAN IT ACTUALLY IS – Low Cap Rates Are Killers

Learn why a $200,000,000 (Two Hundred Million) Real Estate Portfolio MAY (MAY) sound better than it actually is. HINT: CAP RATES ARE EXTREMELY IMPORTANT. IF YOU ARE BUYING 4 CAP RATES YOU MAY WANT TO READ THIS!

Everyone loves to brag. The guys in the local business journals. The guys in the Wall Street Journal. The guys on YOUTUBE. What do they say?

“I have a 200 Million real estate portfolio”

To the average neophyte, this sounds impressive. And it very well maybe. Especially if it was purchased during the previous recession – or possibly you are an OLD SCHOOL Billionaire like Donald Sterling with tens of thousands of units. Someone in either of those positions is DEFINITELY in a position to brag.

BUT WHAT ABOUT THE GUY THAT STARTED BUYING IN 2014 and brags about his 200 MILLION PORTFOLIO?

Lets consider the facts:

Cap Rates in most tier 1 and even popular tier 2 markets around high 4 cap rates or maybe low 5’s. Of course, everyone thinks that they are buying an 8…..until the numbers actually present themselves in the lack of distributions.

So here is some quick math:

  • $200,000,000 Million of real estate that was purchased on CAP RATES of 5% will yield a net operating income of $10,000,000 per year. 
  • Assuming an all debt transaction (No Equity) the annual (P&I) payments assuming a 4% Interest Rate over 30 years are $11.457,967.09
  • At the end of 12 months, you have lost $1,457,967.09

YOU READ THAT CORRECTLY

THE GUY BRAGGING ABOUT HIS $200,000,000 REAL ESTATE PORTFOLIO IS LOSING MONEY because he is buying stuff like this (and these advertised cap rates are way higher than actual)

http://www.loopnet.com/Listing/533-Evergreen-St-Inglewood-CA/11386063/

Can he make this up by selling if the property value goes to $250,000,000? Yes! But from a pure cashflow standpoint, it is risky.

Interested In Learning How To Make 100% Returns On Your Money? Get My Free, 10-Part Course

Contact Form

LETS TAKE THE RISK OUT OF THE CAP RATES AND INCREASE THEM A BIT. LETS ALSO PUT SOME EQUITY INTO THE TRANSACTION. 

OK, now lets assume that the 200M of real estate was bought on an average of 5.5 – basically cap rates that avg out to 5.5%. Lets also assume that the owner (owners) injected 20% equity into the project:

TOTAL DEBT: $160,000,000

Interest Rate: 4%

Cap Rates: 5.5%

NET OPERATING INCOME: $11,000,000

Monthly P&I payments: $763,864.47

Annual P&I Payment: $9,166,373.67

NET INCOME BEFORE DEPRECIATION ETC = $1,833,626

Look, this is BIG MONEY. And the guy pulled off about a 9.1% CASH ON CASH RETURN on his money when he bought the portfolio with a blended avg. of 5.5% CAP RATES…..

BUT HOW MANY PEOPLE ACTUALLY HAVE $20,000,000 to put down?

If they raised $20,000,000 what guaranteed return would they need to offer their investors? And what % of the deal would they get for themselves?

Obviously, people have gotten tremendously wealth with this formula. But for the avg individual, this is very HARD to pull off. Assuming no appreciation and assuming an 8% pref, there is roughly $18,336 left for the GP’s to divvy up with their LP’s…..hardly a feast for anyone – unless you live in Venezuela!

I show people a very simple formula that I have used to create monthly passive income. You won’t become a millionaire overnight. And quite frankly, this is not a formula for someone that already has 7 figures saved up. This is the exact formula that I used to retire by first creating a $3,000 passive income stream and then repeating the process 10X over. Just 2 little properties can get you to $6,000 per month which is enough for most people to live comfortably on…..ESPECIALLY IF THEY DONT HAVE TO WORK FOR IT!

Sign up today for my free 10-part wealth building course. You Will Be Glad You Did

Contact Form

NAPA VALLEY – HOW TO VACATION WITH WHOM YOU WANT AND WHEN YOU WANT

The Famous George Strait (Jeff Bezos’ Cousin) once said a life living is worth living well. I say, you need to ask yourself how to Vacation Well And Create Money With Group Homes in order to get “Livin’ Well”…..

Which leads me to a thought…

A long time ago, one of my mentors told me the following:

  “One Mans Trash Is Another Mans Treasure”

I listened. Why? Because the guy was worth probably $30,000,000 (Back then) and lived in a beautiful home (even he admits personal residences are liabilities)

I bring this up this morning because as I sit writing this in Napa Valley, it is ever apparent. I just looked at my phone and reviewed photos of a dilapidated property that I just acquired for probably $0.20 on the dollar……Yet here I am looking at this view

 

How to start a group home and vacation when you want
How to start a group home and vacation when you want

 

Yet all of this beauty is provided to me through properties like this:

Group Home Fix Up
Group Home Fix Up foreclosure
Buy Distressed Real Estate For Income
How to buy Distressed Real Estate For Income

  You See, This property was one mans trash…..AND I TURNED IT INTO MY TREASURE 
(You can see photos and a blog post of it here)


This Trash is Actually Treasure
REAL GOLD

A treasure that allows me to spend a week in the early part of February in one of the most beautiful places in the entire United States.

$300 dinners, wine, private limos, private wineries and 5 Star Resorts where the rich and famous live and play. Lebron James was here a few weeks ago. $10,000,000 – $20,000,000 Million Dollar homes line the hills.

I owe this lifestyle and the riches and experiences that it provides for my wife and family to my business acumen, more specifically real estate and the
                          INCOME GENERATING POWER OF GROUP HOMES. 

You seeregular real estate sounds great. People can brag. I own X dollars of real estate. It sounds great on paper. And if they sell (assuming they purchased correctly) their overall pops can be tremendous. But with capitalization rates as low as they are, someone with a $100,000,000 million empire may actually not have that much money coming in. You see, a 5 Cap building with a 4% interest (and principal) expense doesn’t leave much room. I will write on this topic at another time ( I actually know of people with $200,000,000 Real Estate Portfolios that don’t make any money)

But a $30,000 home with 8 beds and a house manager could yield you the following:

Revenues:                       $4,800
Utilities:              $500
TV/Phone:         $100
Food:                 $350
Rent:                  $500
Other:                 $500
TOTAL EXPENSE           $1,950
———————–
MONTHLY NET INCOME:               $2,850

I TEACH PEOPLE HOW TO GENERATE MONTHLY PASSIVE INCOME IN MY FREE 10-STEP COURSE

Subscribe

For most of my subscribers, 2 or 3 homes will set you free. Free to do what you want, when you want, with whom you want.

  • Want to come to Napa for a few weeks? Go for it.
  • Go to Maui for a Few Weeks? Go for it.
  • Argentina for a few months? GO FOR IT.The process takes time to get up and going and will not provide you with $50,000,000 capital gains like a 1000 unit MF portfolio very well may.BUT, it will provide you with the cashflow lifestyle that I teach people how to create….

Get Started Now

 

The best part about this business is that you really don’t need any money.

  • You don’t need credit
  • You don’t need to talk with bankers
  • You Don’t need to put together financial statements

Those are all prerequisites when you want to buy a $20,000,000 asset.

However this business can be done with little to nothing.

You don’t need to own. You can rent the property to get started. Later down the line, I will teach you how to ramp up your game and build wealth through the acquisition of real property….but for now, LEARN HOW TO GET FREE. FREEDOM  is the name of the game.

And for most people, $3,000 – $6,000 per month of passive income will do the trick.

Want to learn how to do this? Follow a free, 10-step course and get started NOW. 

Get Started Now

START LEARNING TODAY. MAKE THE DECISION TO CREATE THE LIFE YOU WANT IN 2018

One Mans Trash Foreclosure Is Another Mans Treasure

HOW TO BUY FORECLOSURES FOR PENNIES ON THE DOLLAR AND TURN THE FORECLOSURE INTO A MONTHLY OIL WELL THAT PRODUCES BIG PROFITS

I will buy 30 – 40 or so homes like this (buy foreclosures) in 2018. These houses may look like trash, but with a bit of knowledge you can turn them into TREASURE. Yes, foreclosures can be your GOLD

Let me give you an idea of what can be done with a foreclosed house like this and for what price you can pick up foreclosures for depending on your city

                              This foreclosed property was purchased for $28,000.

I will spend probably $10,000 on labor and another $5,000 – $10,000 on materials fixing it up. Rounded up, this house will cost me roughly $50,000 when it is all said and done. The final value? Probably $130,000 on the low  to $160,000 on the high. To me, it really doesnt matter. What matters is the income that it will generate.

 I WILL RENT IT TO MY GROUP HOME BUSINESS FOR $1,000 per month.

 

Market Rents would be about $1,200 / month

Buy Distressed Real Estate For Income
How to buy Distressed and foreclosed Real Estate For Income

Whether you want to use foreclosed houses like this for your group home or care home business, rent them out, sell them on terms or flip them for cash –

                                                  YOU HAVE A LOT OF OPTIONS. 

This website is dedicated to showing people like you how to set up and operate gr0up homes. One part of the wealth building formula that I teach is

 

                                            FINDING FORECLOSED PROPERTIES

like this, fixing them up and then holding onto them.

Subscribe

Look, the houses dont even need to be foreclosures. They could be short sales or simply distressed property. Another secret is knowing WHERE to look. If you are in Los Angeles, chances are you are going to have a tough time finding foreclosures at the moment. The banks are holding onto them. So you need to look elsewhere. But once you find the location – AKA your farm area, you can find an ABUNDANCE of motivated sellers. Just remember, the window of opportunity usually doesnt last long. Heck, just look at Detroit!

In a nutshell, you need to learn how to market for these types of properties. After you learn how to find them, you need to learn how to fund them.

 

                                               After that comes the HARDEST PART.

                        Learning how to fix them without getting taken advantage of.

                                                   YES. THE CONSTRUCTION ASPECT

This is where most people lose their asses. The final part is EASY. Renting, Selling or Financing them out.

I have compiled all of this in my step by step system. Continue checking in on the Blog or simply sign up for my FREE, 10-Step GROUP HOME COURSE

 

Contact Form

 

buy foreclosures and make money
Learn to Buy Foreclosures and turn them into income

Questions? Comments? LET ME KNOW YOUR THOUGHTS or sign up for my free 10-part course below

Contact Form

 

Homeless Veteran Grant Per Diem Program

Homeless Vet Grant Per Diem
Homeless Vet Grant Per Diem

On a client consulting call yesterday, one of my students asked about grants. I explained to her that yes, Homeless Vet Grant Per Diem Grants were available, but the money flow looks like this:

FED GOVT—TO THE STATE GOVT—-TO LOCAL GOVT—TO LOCAL PROVIDERS

 

WHAT ARE LOCAL PROVIDERS?

Local providers are people like you!

They are also the local CANS (Community Action Networks) and other non profits that are responsible for administering the homeless veteran grant per diem program monies and other different grants. Once you begin building relationships with these local grant recipients and marketing your housing options to them, they will begin contacting you! Typically, they will look to help place people for the following reasons:

  • Bridge Housing: Emphasizes short stays, quick connection to permanent housing and necessary supportive services and benefits for homeless veterans that are in need of the grant per diem
  • Service-Intensive Transitional Housing: Emphasizes slightly longer stays paired with intensive services and supports to address a veteran’s barriers to achieving permanent housing; or
  • Transition-in-Place: This is more of a section 8 type program where the homeless veteran grant per diem program is essentially run through the section 8 VASH program office. It is a time limited transitional housing option where the veteran takes over the lease as their permanent housing.
HOW MUCH CAN I CHARGE PER NIGHT, WEEK OR MONTH WHEN HELPING HOMELESS VETERANS ON THE GRANT PER DIEM PROGRAM?

It runs the gamut, but by and large $18 – $46 night (FOR HOUSING ONLY). Remember, there are multiple “types” of grants within the homeless veteran space (Mentally Ill, chronically homeless etc) and all pay different amounts. Remember, the homeless veteran grant per diem program is just one of many funding options for you!

In my Gold Course, I outline the different niches that you can serve once you get into the group home industry. At the very beginning however (unless you already have an “in”) I recommend being a broad based provider for a variety of special needs communities. Don’t restrict yourself to homeless veterans only – open it up for all types of people. Eventually, as you begin building up your network of Doctors, nurses, case workers, social workers etc. your phone will begin ringing off the hook and you can begin setting up specific homes for specific needs – i.e. homeless vets struggling with substance abuse issues

WHO CAN I CONTACT TO LEARN MORE ABOUT THE Homeless Veteran GRANT PER DIEM PROGRAM?

I typically only help my Coaching Clients build out lists of names and numbers in their local community – but today I want to give out some more specific info. Because I do not know exactly where you live, the best place to start is at the VA Headquarters.

What you can do is reach out to the following list of people in DC and ask them whom to get in touch with in your local community.

Mr. Jeffery Quarles, Grant Per Diem Program Director: EMAIL: Jeffery.Quarles@va.gov 

Ms. Chelsea Watson, Deputy Director, VA GPO National Program Office:
EMAIL: Chelsea.Watson@va.gov

Ms. Lisa Pape, National Director, VHA Homeless Programs and now Chief of Staff(202) 761-7016 

Remember, when contacting these people, make sure you have your SCRIPT put together like I outline in my GOLD COURSE. You need to sound professional and know what you are talking about!

Hope this information is extremely beneficial for you! 

2018 – What is your Group Home Game Plan

This Group Home Room = Your Retirement

Group Home Room
Group Home Room

(THIS ONE ROOM in our Group Home = Over $1,500 in NET MONTHLY INCOME)

Hi ,

I’m putting up this Group Home Blog Post this Saturday afternoon with 1 tip and 1 inspirational story.

Group Home TIP #1

Group Home Automation. When you get your first group home up and going, furnished and making money your next step is to AUTOMATE. One of the easiest ways of automating is setting up your website and marketing systems to produce inbound leads for you while you sleep.

  • You can do this by coming up with a group home marketing flyer and 10-15 pre-scripted emails that go out to the nurses, case workers, social workers and doctors in you area one to two times per month.
  • You can set this up on auto-pilot using any old email system. Total cost Free – $99/month depending on how advanced you want it to be.
  • We actually include group home campaigns like this targeted toward disabled vets and other similar areas that you can use to build up your client base. All of this is included in my GOLD COURSE and you can literally just copy, past and change your company name and contact #. The calls will start rolling in in order to get your group home occupancy full and generating income ASAP.

Group Home TIP#2.

I have been absolutely slammed the last 6-9 months working on new projects – all primarily recent real estate acquisitions (in order to add more Group Homes to the portfolio) The past few weeks, my family and I decided to head out of town for a small break (quicker flight than Hawaii)- and so I am here right now writing this from my phone. The trip will cost a small fortune – but let me tell you a great inspirational story. Just last night one of my Group Home Managers told me he had received a call from a case worker needing to house a special needs client. We signed the guy up on a $3,500 three month contract. My margins on just that one client will probably be close to 90% because we will not be paying for food, and the social services agency is covering his gas, water and electric. Not bad! I just paid for half my trip with just one client without doing much if any work at all.

This is the power of the GROUP HOME AND HALFWAY HOME business. There are literally millions of people that need a place to live. I show people, step by step in my GOLD COURSE exactly how to do this and automate it so that you too can travel the world while others pay You!

Thoughts?

Questions?

Dont believe me?? Or dont think you can do it?? Think again! You CAN DO IT!

Send me an email and lets talk!

 

Get Started Now

Want $3000? Check this out!

Give me only one month of your time and I will change your life! I made the Gold Course to guide all of you looking for financial freedom outside of your workplace. Here is why you should let me help you:

– No experience needed

– Results in one month

– At least $3000 monthly passive income

You’ve waited for too long. Now is the time to take an action and open your own business that can make at least $3000 a month. Group homes don’t require a big investment in advance. You could either rent or transform your property into a group home.

You can turn a house into a group home in just days. Go to few garage sales, get basic furniture and there you have it. Let’s say you start with only six people. Now let’s say you charge the minimum of $500 per month. You could make a monthly passive income of $3000.

My Gold course makes you skip the trial and error and jump right into making money.
You should never rely on one source of income. If you already do, this is your chance to change that ASAP.

How to Stop Worrying About Money?

Just get rich! Seriously, there is no better way!

First of all, I eat, sleep and live significantly better since I got rich. I also worry less, especially about small things that most people worry about every day.

About 11 years ago I stayed in an average hotel in Santa Barbara. During my checkout, the gentleman at the front desk informed me that I made a huge stain on the wall in my room and they will have to charge me for the damage.

I barely stayed in the room and I was pretty sure that I had nothing to do with the stain. Maybe the housekeeping lady accidentally stained the wall. Anyway, the guy insisted that I have to cover the damage.

This literally ruined my vacation. I was saving for so long to afford a decent family vacation and any unexpected expense was a reason to worry about.

On the other hand, If this happened today I wouldn’t bother at all. If I end up being charged I can easily afford it.

Now I earn money even while I am sleeping. I earn monthly passive income from my group home business and the money keeps rolling in no matter where I am or what I am doing.

Not to mention that something like this would never have happened at the expensive resorts I spend my vacations now.

That’s why I enjoy being rich. I don’t have to worry about irrelevant things such as where to dine in, where to park or when the flight tickets are the cheapest. Being rich saves a lot of time and effort.

Back in the days, I would spend hours reading reviews and thinking if a certain online course, program or book is worth the money. I just don’t care now. I will buy it and determine myself.

I transferred the formula that made me rich into an online course. I don’t want every single little problem to ruin your day. I want you to have more awesome days like I do!

I am so grateful for the amazing life I have now and I feel that is my obligation to make your days better.

I’ll do my best to make this happen, are you in?

Work Less, Succeed More!

HOW TO MAKE GROUP HOME RICHES THE RIGHT WAY BY WORKING LESS AND SUCCEEDING MORE. GROUP HOME RICHES IS NOT JUST FINANCIAL. IT IS GROUP HOME RICHES IN THE SPIRITUAL SENSE AS WELL

Most people tend to overwork when they want to make more money. That’s not a bad idea. But on a long-term basis, something will break if you work a lot. You may lose most of your friends, get divorced or put your health at risk. So, even if you feel that you can handle 55-60 or more hours per week now, that won’t last long.

And at the end of the day, you don’t want to miss living life because you were busy making money.

But how could you possibly afford more if your work less?

Hard work is simply not enough. It could help at some point, but you won’t be able to maintain the same energy and productivity after years and years of hard work.

The corporate world taught us that more work equals to more respect. I was personally happy 15 years ago when my boss gave me more responsibilities. So my promotion wasn’t a promotion at all. I wasn’t moving forward in life. I was working more and had less time for everything else that I love to do.

So, I figured out that I had to work hard but for myself. Only when you work hard for yourself you could succeed more.

I was able to grow my group home business and hire other people to work for me. I have a lot more free time now and a lot bigger monthly passive income. So hard work pays off, but only when you don’t have to work that hard anymore.

If you want to find out how to achieve more with less effort check my Gold Course. All I am asking is a bit of your time and determination. You’d be surprised how your life could change in just months.

Hakuna Matata Group Homes!

You know what’s Hakuna Matata! A problem-free philosophy! So are the group homes!

Most people start a group home as a side business. On the other hand, most companies don’t encourage their employees to have a side business. In the worst case scenario, they prohibit them.

They might question your loyalty and your performances even if you are an excellent employee.

If you decided to start a side business you probably wonder should you tell your boss or not.

There isn’t a correct answer to this question. If your company allows side businesses but doesn’t encourage the idea it’s probably better to keep your side business as a secret.

There are 2 important reasons why:

1. Any issue with your performance might be addressed to your side business.

2. During layoffs, you might be the first on the list because the company may consider that you have other means of survival.

If you want to ditch your job once your side hustle gets going it’s definitely better to keep it as a secret.

Anyway, we can’t exclude the possibility your boss to find out about your side business.

With so many possible problems in the way, you are probably curious why I referred to group homes as a problem-free philosophy.

This is why:

1. Group homes generate monthly passive income and don’t require much activity from your side. Your boss can’t address any issue with your performance to your side business.

2. Group Homes aren’t considered as a competition to any corporate business.

3. Group Home is like renting a property. A lot of people with full-time jobs rent part of their house or other property they own and their employers are totally fine with this.

You can quit your full-time job after you open your third group home. And until then you have no reason to worry!

After you open your first group home and run it for a while, money will pile up in your bank account every month. This allows you to expand and open your second and your third one.

The sooner you start, the sooner you can ditch your 9-5 and be your own boss!

Diversify or Die

There is this amazing book “Diversify or Die” by Eric Guthrie that inspired me to write this post.

The dynamics of the nowadays market requires everybody to diversify. Diversification is not only for entrepreneurs or companies but for people who work full-time jobs also.

Continue reading “Diversify or Die”