How do you determine if an investment home makes positive income? Answer: if the investment receives more income on a monthly basis than the total costs, it is making positive income. realty pro inc’s homes current average rental amount collected is about $1550 a month. on average, if we were to finance $100,000 per home and pay $1,100 a month per home in PITI+misc costs (principle, interest, taxes, insurance), we would have a positive cash flow of $450 a month. while your financing amount ($110k-140k) should be less after the 20-25% down, these figures will most likely improve depending upon the financing terms, lease terms, property maintenance, and several other factors. it is important that each investor perform their own due diligence to determine the feasibility of their investment. Do you have any homes outside of Lancaster and Palmdale? Answer: No, we are currently focusing on Lancaster and palmdale because we believe this area has the highest opportunity to achieve positive monthly rent due to the high la county rent prices, and the low rural purchase prices of the desert. this combination makes us believe it is the best real estate rental investment area in california and even the continental u.s. What kind of loan rates do you typically get on investment properties? Answer: investment properties still have good rates as long as you have good credit, good income, and a large down payment. investment properties typically require a buyer to have greater financial stability. our non-affiliated lenders require 20-25% down on each property to secure a loan. call us to determine what additional information may be needed.
What are the Tax advantages of owning real estate? Answer: there are usually significant tax advantages to owning real estate in the state of california which can greatly reduce your taxable income, however, because we are not tax advisors, we cannot consult specifically on tax effects, so we recommend you contact your accountant or tax attorney for the specific advantages. Can Realty Pro Inc. Offer this deal on other people’s homes? Answer: No, Realty pro Inc. can only offer these deals on our own properties. How does Realty Pro Inc. get their Homes? Answer: We get our homes through several different avenues, but the majority of our homes are obtained through affiliate bank relationships where we are able to buy them at well below market value. that is how we are still able to offer investors excellent prices on the homes we sell. Can I buy several homes at one time? Answer: absolutely! through traditional financing, each person is able to buy between 4-10 properties in his/her name and still meet fannie mae & freddie mac guidelines. we can assist you in obtaining multiple properties at once. Can outside real estate agents be involved in the process? Answer: yes, you can be represented by your own agent. however, all commissions paid to them shall be paid by the buyer or the property will be slight marked up to accommodate the difference if realty pro inc is required to pay. Realty Pro Inc will not act as the buyer’s agent/broker even though it holds a license. What is the first step in the Process? Answer: Call our customer service number listed on our website to get started. we will help you choose the property, line of the financing, and start the escrow process.
What is this term … “Affordable Rental Property.”
answer: Just because you can afford to buy a rental property in your market place does not make it “Affordable Rental Property.” If the property costs you money to own every month, it is not affordable. More importantly we consider negative cash flow a liability opposed to an asset. Most of the rental property we buy and sell is affordable because the rental income covers the expenses.
Do I need to know a lot about real estate investing in order to be able to own rental property?
Answer: All of our transactions are designed so the process is extremely simple. Not just simple to understand, but simple to do. We try to have all your questions answered up front and put everything in place so you do not have to be an expert in real estate in order to be able to own rental property.
Is there property management lined up for these properties?
Answer: Yes on every single rental house you can buy on our website there is a property manager managing that property with a tenant in place. This makes for a very smooth transition. If you choose to continue using the same property manager the resident never knows the property has transferred owners because they are still sending their rent check to the same place.
Why should I invest in an area away from the city I live?
Answer: Many cities across the US have property values that are so high, they prohibit investors to cover the expenses with the rental income. Therefore, investors are looking to purchase rental properties that help them get closer to their goals of financial freedom, by finding properties that cash flow every month in markets with affordable and appreciating property values.
We have found that most people investing in out of state property worry about how they will handle issues that may arise with their investment property. That is what the management company does. Most of our clients realize they can make more money focusing on their day job rather than repairing leaky faucets.
Do I have to see the property before I close on it?
Answer: Most of our clients do not see the rental property they are buying. Due to the fact that all the information provided on our web site is validated through 3rd party professionals there is not much the property will tell you that you cannot discover from the comfort of your own town. However we always welcome our investors to come and view their rental property as well as a few of the local highlights.
What are the approximate closing costs?
Answer: We have listed all the closing costs typically associated with purchasing property on the for sale detail attachments page.
Is Realty Pro Inc. a Realtor or broker?
Answer: No, we are not a soliciting real estate brokerage company. We are the principals / owners in all of our houses viewed on our website. This benefits our clients by avoiding realtor commissions. A few of the owners are Ca. licensed real estate brokers for the sole purpose of our acquisitions and affiliated property management business.
Does Realty Pro Inc. LLC ever sell property on owner financing?
Answer: Occasionally we will have a property come available that we are able to sell on owner financing, but it is very rare. Please do not count on this being a viable option.
Since I do not know the areas of the cities I buy in, How do I know it is a good area?
Answer: We only buy property that we can rent to residents that want to move in and take care of the property. As a general rule, our properties are in established working class neighborhoods. Occasionally we buy in trasitional neighborhoods when we have insight into the changes occurring in that particular area.
Why are you selling if these are such great rentals?
Answer: We specialize in buying and renting property. We have developed many relationships and sources of new deals and we are not able to keep them all. We stand by all of our properties. We use the following protocol on every transaction.
Initially we market a property for 60 days. If the property does not sell in that first 60 days we keep the property for our own private portfolio of rentals. This keeps our portfolio growing, but also allows us to pass on our deals to fellow investors working towards the same goals.
How do I know that the appraisal you get is not an inflated appraisal?
Answer: Once you review our appraisals, you will find out very quickly that only the truest comparables were used by our affiliates. We also encourage all of our clients to call the appraiser of that particular property with questions once you have a purchase and sale agreement on the property. In addition, our investors are always welcome to order their own appraisals to verify the values of our properties.
Why doesn’t Realty Pro Inc. have “high end” looking rental properties?
Answer: All of our properties are structurally and cosmetically sound. We don’t believe in buying trophy properties that rarely make numbers sense from an investment standpoint. We believe in buying properties that make financial sense; simply meaning that the income covers the expenses and in most cases provides cash flow on a monthly basis.
Can I finance rental property with my retirement account?
Answer: Absolutely. We are happy to point you in the right direction. As with most retirement programs, there are a lot of choices for you to choose from. The following company is merely a suggestion, and we encourage you to research your own options. www.trustetc.com or 440-323-5491. Equity Trust company is a company we have seen some of our clients use. Any company of this type can assist you in investing using your 401k, IRA, Roth IRA, or Pension Plan. .
How does closing work in California?
Answers: In california most closings take place with escrow companies. They handle everything from acquiring title insurance, and working with lenders to coordinating closing.
Why are the prices of real estate so low?
Answers: Prices over the past 4 years, prices have plummeted to 1989 levels in the Lancaster and Palmdale area for several reasons including: high volume foreclosures, stricter financing, job losses, owners reduction in incomes, etc. What are my Financing Options Answer: We would suggest you start by talking with one of the lenders listed on our affiliates page. They have all helped numerous clients of Realty Pro Inc. get the 1st, 2nd, or 9th investment property loan. Talk to them you will find them helpful. Going to the bank for loan…
Investor Loans Traditional Financing: There are hundreds of investor loan programs out there for buying rental property. Down Payments range from 25% down to 30% down, and interest rates range from 5%- 12%. With some of the programs you do not have to prove your employment or income, and they are strictly credit score driven. Other programs meet the needs of the credit challenged investors with concessions like larger down payments or higher interest rates. For those of you looking for conventional financing, we encourage you to talk to your bank as well as a few loan officers in order to find out what kind of loans they can offer you as you search for the best way to acquire you rental properties.
Selling your current Investment Property…
1031 Tax Free Exchange: A tax free exchange will allow you to sell an investment property and not pay taxes on the profit. Since we are not experts in this area, we suggest you elect a qualified 1031 coordinator prior to selling your property. The proceeds from the sale will go into an account set up by your coordinator. You then have 45 days to identify the property to exchange your money into and you have six months to close on that property. If you do not identify a property in the 45 days after you sell your property you will be forced to pay taxes on those proceeds. If you do identify a property in those 45 days and close on it you can avoid all tax consequences and have your money working for you again.
I’m Paying CASH…
No loan costs involved for you. This could mean you plan to purchase with cash, or a line of credit that is secured by another asset, but you are not utilizing the power of leverage.
Proceeds from you Primary Residence Sale: You can sell your primary residence and under the rules of IRS Section 121 as long as you have lived in the property for two out of five years any profit made on your residence is tax free. You can use that tax free money and invest in real estate which could provide you in other tax write offs for the income you are taxed on currently.
Working your Retirement Plan…
Using your 401k/Pension Plan/ IRA/ Roth IRA: This is a very specialized area and we have had our experience rolling 401k into a Self Directed Roth IRA and then purchasing rental property with it. However with each plan and your own personal set up you may be responsible for fees or penalties associated with that retirement plan. For that reason we recommend you call a professional. Equity Trust Company is one of the leaders in the industry for assisting people in using leveraging their retirement plan into real estate. http://www.trustetc.com or 440-323-5491.
Please Note: Realty Pro Inc. is a passive custodian and does not provide tax, legal, or investment advice. Any information communicated by realty pro inc. is for educational purposes only, and it should not be construed as tax, legal, or investment advice. Whenever you make an investment decision, please consult with legal, tax, and accounting professionals. |