How Much Can I Make With Group Homes? Hint: Try $70 Million

How Much Can You Make With Your Group Home Empire? Here is one that just sold for $70,000,000  

Good Morning! I wanted to add some inspiration to get your TUESDAY started on the right track.

Many of you ask me, “Andy, How Much Is My Business Worth? Other ask, “How Much Can I make With Group Homes?”

The quick and short answer is however much someone is willing to pay. That said, just like we discussed interest rates the other day, I want you to understand that all businesses and real estate are priced based on how much income they will bring in over time. That is why the second part of the above question is so important. “How Much Can I make With Group Homes?” To reiterate…..it is all about the INCOME that the asset will produce over time

CAN I SELL MY GROUP HOME AND SERVICE BUSINESS FOR $70 MILLION?

Absolutely. That is why I included the data from PitchBook above. On the left side, you will see the Company Name – D&S Residential – and you will notice that it was acquired by Comvest for $70,000,000. Yes, This GROUP HOME OPERATING BUSINESS was sold for $70 MILLION.

Look, I am not telling you this is Warren Buffett or Carlos Slim money. Its a drop in the bucket for them. But for the average UBER WEALTHY person, this is a lot of SCRATCH.

D&S Residential started off just like many of you are starting off right now. With 1 home.

In fact, I actually personally know the first banker that financed them. A small little bank about 80 miles North of San Antonio TX and 25 miles southeast of Austin. Yes, the owner started with 1 Home.

WHY AM I TELLING YOU THIS STORY?

1. Group Homes Produce Income. Businesses are sold based on the income they will produce over time. How much can I make with Group Homes truly is the question. And the answer equates to the price

2. 98% of people start small. The owner of D&S started with 1 home!

3. The owner of D&S invested in himself and obtained knowledge. Just like compound interest, he added to his knowledge base each and every day by reading and studying. Whether it was a course like the GOLD COURSE, or going to industry conferences, he INVESTED IN HIMSELF everyday

4. You need to understand the potential and have a vision. As the Old Book says, “without vision, the people will perish”

5. Anything is possible! Look, D&S didn’t turn into a $70,000,000 company overnight. It took effort and focus.

6. HE STARTED! HE TOOK MASSIVE ACTION! The owner of D&S did not waste time. He knew the opportunity was HUGE and he wasted no time. He too asked himself the question, “How much can I make with group homes?” and he obviously found the answer 🙂

I encourage you to WASTE NO TIME……

If you want to get started in the GROUP HOME
 business, assisted living, care home, transitional home ICF MR Home or other…….

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or get out today and rent or buy a property you MUST GET STARTED!

 

 

Group Homes Are About Operating Cash Flow – But You Still Need To Watch The Economy

Group Homes Are About Operating Cashflow – Not financing or Capital Gains….But if you pay attention to interest rates and are a BUYER of Real Estate  – you may want to continue Reading….This is a quick synopsis of how interest rates CAN impact bond prices (and therefore – often REAL ESTATE)

Today’s post is not going to be in depth. We are not going to review procedures or policies for running group homes or assisted livings. If you want that, you can simply sign up for my free TEN PART course which will teach you the step by step ways of making money with group homes

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TODAY’S POST IS ABOUT INTEREST RATES AND THEIR IMPACT ON BOND PRICES

Quick Rule Of Thumb:

A 1% change in interest rates will equate to a price change equal in duration.

For example a 10 year duration will go UP, 10% if interest rates FALL by 1%

The inverse applies as well:

A 10 year duration will go DOWN 10% if interest rates go up by 1%

Remember, these are rules of thumb.

NOW LETS LOOK AT REAL WORLD EXAMPLES

Microsoft sold a 2057 bond (meaning it is DUE in 40 years earlier this month). The yield at inception was 4.5% and at the time, the ten  year treasury was at 2.41%.

Currently, the ten year is about 2.88% or about 1/2 a point higher and the microsoft bond price is down about 4.1%. Using the rule of thumb, a .5% increase in rates would = a 5% change in price assuming a 10 year bond. This Microsoft bond issue is 40 years, so I’d like for you to comment on how to better understand this! Again, not all rules of thumb are precisely accurate. That is why they are rules of thumb.

IN MY GROUP HOME BUSINESS, I WOULD RATHER BE ROUGHLY RIGHT THAN PRECISELY WRONG.

I make the above statement because I am not a wall street whiz or trader. I wont teach you how to be either. In fact, quite frankly I don’t know if I really believe the majority of these Hedge Fund guys can really make money on a % basis any better than how I do, or how I teach people to with group homes. Warren Buffet placed a bet with a few of these guys like 10 years ago and asked them to beat the S&P index over a 10 year period. None of them did. Did they get rich in the process? YES! But not from returns. They got rich due to great marketing and taking 2% of assets under mngt and 20% of the upside…..But I digress.

Now lets talk about group homes and what to do if you own the real estate:

Take a look at the chart above to get an idea of how this may affect you if you are a buyer of real estate. Remember, if you can buy LOW, you will have less debt service and therefore a larger monthly profit each month which is the NAME OF THE GAME in the group Home business. You are looking to HELP OTHERS and also MAKE MONEY WITH GROUP HOMES!

SUMMARY:

In the group home business, the lower your monthly payments are for the underlying real estate the larger your monthly profits and FREE CASH FLOW.

If you want to learn how to MAKE MONEY with group homes, assisted livings, foster homes, care homes, ICF or MHMR homes – I encourage you to sign up for my free, 10 – Part Course. I will show you the methods you need to take to get started making money with group homes and how to help others and feel great about what you are doing

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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.

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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!

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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

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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….

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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. 

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

L(Earn) Today!

Remember the big fight between Mayweather and McGregor? As we all expected Mayweather is the winner. The weird thing was the reaction of the audience. We all know Mayweather’s crazy lifestyle, but why people bother so much?

Yes, Mayweather likes to exaggerate and brag about his money. But he came from nothing and managed to make 300 million for one night. It’s his right how he’s going to spend his millions.

People usually think that millionaires are cocky and insensitive. What they don’t realize is what millionaires have been through to get where are they now. Mayweather had a drug addict mother, drug dealer father who was in prison at some point and lived in the worst neighborhood. He could have taken drugs, get in a gang, but he became undefeated with millions on his account.

He stayed determined and pursued his dreams. That’s where most people fail. So, we all could learn a lesson from Mayweather.

McGregor, on the other hand, was bold enough to switch from MMA to boxing and accept to fight with The Undefeated. This made him 30 million which is more than everything he has earned so far.

If you are bold enough to make decisions that others wouldn’t, you’ll live the life they couldn’t. The same applies to business. The entrepreneurs who react fast and are ready to adapt get the most of the money.

I opened my first group home without anyone’s help and with only basic knowledge. I had to go through trial and error, but nothing could get in my way. I was one of the first in the area to open a group home. I risked, but it was worth it.

You don’t have to risk as much as I did. I have the Gold Course to guide you through the process of opening and running a group home. You just have to make a decision and stay determined.

I went through the hard way and made it happen. You are in a way better position.

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.

Treat Yourself!

  • Former tech CEO and a passionate car collector Antoine Dominic are one of the three people in the world who drives a Lamborghini Veneno. This is the most expensive car on the road as of 2014. He spent $4 million without even seeing it ahead of time. Don’t forget that this is not the only luxury car in his garage.
  • Socialite Theresa Roemer owns a three-story, 3,000-square foot closet. The luxury closet is designed after the department store Neiman Marcus. Could you imagine how many clothes and accessories she has?
  • The co-founder of Broadcast.com, Marc Cuban has a $40 million private jet and once spent $90 000 on a bottle of champagne.

Continue reading “Treat Yourself!”

The Blueprint For Success

One of the first things that you need to do if you want to succeed is to set clear goals. Next, you need a specific plan how you are going to achieve these goals.

Of course having dreams is important, but every single person on the planet has dreams. Only those who have clear goals and a plan can succeed.

Continue reading “The Blueprint For Success”

Are You Capable of Being the Best?

Success is mindset you need to be the best. And if you ever doubt this statement take a look around you.

Here is a simple example. Every year we see amazing performances at The Voice. But only a few individuals end up making a great career and worldwide fame. And what most people would say is: “I can’t believe why such talent isn’t getting enough recognition!”

Continue reading “Are You Capable of Being the Best?”