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Is investing in real estate a potentially lucrative venture? Absolutely. But here’s the catch: to grab profitable deals, you need some understanding of the key financial metrics. Net Operating Income (NOI): NOI represents the property’s profitability potential. It’s a vital indicator of the property’s ability to generate income. Cash Flow: Reflects the actual income you receive from the property after covering all expenses, including mortgage payments and operational costs. Equity Multiple: How many times your initial investment you can expect to receive in returns over the investment’s lifespan. Return on Investment (ROI): This helps you understand how much profit or loss your investment has earned. Cap Rate: Measures the yearly return potential of the property, assuming the property is purchased in cash and not on loan. Cash-on-cash return: Rate of return that calculates the cash income earned on the cash invested in a property. Debt Service Coverage Ratio (DSCR): Assesses a property’s ability to cover its debt obligations through its operating income. Break-even occupancy: Ratio of total expenses associated with the property and the total rental income. Which metrics do you want to know more about? Let us know in the comments below. For detailed reading, check our blog: https://lnkd.in/dnqNHBtv #crowncapital #multifamilyinvesting #financialfreedom

🏡💼 Looking to purchase an investment property? Make it a reality with these steps: 1️⃣ Get Your Finances in Order: Assess your financial situation and ensure you have a solid credit score and manageable debt. 2️⃣ Save for a Down Payment: Start saving for a sizable down payment, typically 20% of the property's value. 3️⃣ Research Loan Options: Explore different loan options and find one that suits your needs, whether it's a conventional loan or an FHA loan. 4️⃣ Crunch the Numbers: Analyze potential rental income, expenses, and cash flow to ensure the property is a sound investment. 5️⃣ Build a Strong Application: Prepare necessary documents like tax returns, pay stubs, and rental history to strengthen your loan application. 6️⃣ Work with Professionals: Seek guidance from real estate agents, lenders, and property managers to navigate the process smoothly. Ready to embark on your journey to property ownership? Let's make your income property dreams a reality! 🌟💰 📲 833.937.2276 🌐 myabsm.com #IncomeProperty #RealEstateInvesting #FinancialFreedom

🏨 Commercial Real Estate Jargon – Key Terms Every Investor Needs to Know ◾ Capitalization Rate (Cap Rate) – percentage return an investment would yield in annual net income if purchased all cash. ◾Net Operating Income (NOI) – Income the commercial property produces after all expenses excluding debt payments. ◾Operating Expenses (OpEx) – Normal Recurring costs that are necessary to support the day-to-day operations of the property, also excludes debt/interest payments. ◾Cash Flow (CF) – How much money the property produces after all operating costs and debt service. The true net income to owner. ◾Debt Service Coverage Ratio (DSCR) – Ratio that determines the ability for the NOI to cover the debt. For example, if the NOI is $125,000 and the annual debt service is $100,000 then the DSCR is 1.25 ($125,000/100,000). Most lenders will want between 1.2-1.3 DSCR ◾CapEx – Capital expenditures - The large one time expenses needed to bring the property up to satisfactory standards. ◾COC – Cash On Cash Return – The percentage annual return based on the amount of equity (cash) invested in the deal. ◾Preferred Return – Percentage return that is paid to investors prior to any profit splits kicking in. ◾Average Annual Return – AAR – a simple measure of a projected investment’s growth over a given period averaged number of years held. ◾Internal Rate of Return – IRR  - the metric used to estimate the profitability of investments that accounts for the time value of money.  Confused? So are most people with IRR What terms did I miss? ⬇ Share the important metrics I missed below and make the definition as simple as possible! #cre #creinvesting #commercialrealestate #mhps #mobilehomeparks #mobilehomeparkinvesting

Owner-Occupied vs Investment Property – what’s better? In the past, I’ve written about the benefits of investing in property and renting (otherwise known as rentvesting). We have discussed the tax advantages and lifestyle advantages that go with this. Now, let’s look at the difference in purchasing power… ✅2 individuals earning $150,000 each. No debts, no kids. Both want to maximise their borrowing capacity. One will purchase a home to live in. The other will purchase an investment property. Individual 1: Owner-Occupied home – max loan: $750,000~ Individual 2: Investment Property – max loan: $850,000~ ✅Why does Individual 2 get an extra $100,000 in borrowing power? It’s because they can claim the rent from the investment property and the negative gearing benefit. ✅Now, I’ve obviously made some assumptions about rental income, interest rates and different lenders (yada yada), but in general terms, purchasing an investment property will mean you have additional purchasing power through rent and tax benefits. And there’s nothing to say you can’t move in down the line! ✅ Of course, many other factors should go into this, including CGT implications and the increased interest rate with investment loans - I’ve simplified things, but you get the point. Want to discuss purchasing a property with me? Reach out - I’m here to help! #MortgageBrokersTips #OwnerOccupiedProperty #InvestmentProperty #MortgageBroker 📢 𝑫𝒊𝒔𝒄𝒍𝒂𝒊𝒎𝒆𝒓: 𝑻𝒉𝒆 𝒐𝒑𝒊𝒏𝒊𝒐𝒏𝒔 𝒆𝒙𝒑𝒓𝒆𝒔𝒔𝒆𝒅 𝒊𝒏 𝒕𝒉𝒊𝒔 𝒑𝒐𝒔𝒕 𝒂𝒓𝒆 𝒔𝒐𝒍𝒆𝒍𝒚 𝒕𝒉𝒐𝒔𝒆 𝒐𝒇 𝒕𝒉𝒆 𝒂𝒖𝒕𝒉𝒐𝒓 𝒂𝒏𝒅 𝒅𝒐 𝒏𝒐𝒕 𝒓𝒆𝒑𝒓𝒆𝒔𝒆𝒏𝒕 𝒑𝒓𝒐𝒇𝒆𝒔𝒔𝒊𝒐𝒏𝒂𝒍 𝒂𝒅𝒗𝒊𝒄𝒆. 𝑰𝒕 𝒊𝒔 𝒓𝒆𝒄𝒐𝒎𝒎𝒆𝒏𝒅𝒆𝒅 𝒕𝒐 𝒄𝒐𝒏𝒔𝒖𝒍𝒕 𝒘𝒊𝒕𝒉 𝒂 𝒒𝒖𝒂𝒍𝒊𝒇𝒊𝒆𝒅 𝒆𝒙𝒑𝒆𝒓𝒕 𝒃𝒆𝒇𝒐𝒓𝒆 𝒎𝒂𝒌𝒊𝒏𝒈 𝒂𝒏𝒚 𝒅𝒆𝒄𝒊𝒔𝒊𝒐𝒏𝒔 𝒐𝒓 𝒕𝒂𝒌𝒊𝒏𝒈 𝒂𝒄𝒕𝒊𝒐𝒏𝒔 𝒃𝒂𝒔𝒆𝒅 𝒐𝒏 𝒕𝒉𝒆 𝒊𝒏𝒇𝒐𝒓𝒎𝒂𝒕𝒊𝒐𝒏 𝒔𝒉𝒂𝒓𝒆𝒅.

Why invest in real estate when lending earns you 10%? The Financial Times is hitting the nail on the head and highlights the importance of shifting the allocation of funds when interest rates are rising. “Instead of investing in the buildings themselves, many wealthy individuals are now switching to lending cash to those who do.” In times of low interest rates investing in property has been fairly easy. Now that rates are increasing it becomes more difficult to generate returns from property that exceed 10% p.a. A simple buy and hold strategy might not work as it used to. However, there are still opportunities out there that are capable of generating consistent 10-12% p.a. Examples are: - Value add strategies - Change of use strategies - Development opportunities with gross yields of 12%+ We at EM Investments have been generating 10-12% p.a. for our private lenders for the past several years through the above strategies and continue to do so for years to come. If you have funds ready to invest in real estate, but cannot find the right opportunities, reach out to the team how you can join as a private lender and still make the above mentioned returns. #investment #property #pension

💰 Why property investment is still profitable in 2024 💰 There have been a number of challenges for property investors in recent years... Tax changes, higher interest rates, and increased legislation have led to a general feeling of negativity towards the property sector 😒 But there's a huge amount to be positive about as well! 😃 House prices have increased by 152% since the year 2000, an average of +6% per year, which means most investors should be sat on significant equity gains 📈 Those equity gains also mean most investors using mortgages will be running at lower LTV's than when they first purchased, and more than a third of investors don't use mortgages at all, so are less exposed to higher interest rates. The BoE base rate at 5.25% is not high by historical standards. In fact, this is around the average rate across the past 100 years and for much of it rates were higher. Therefore current rates are "normal", not "high". Experienced landlords understand this and know the right amount to debt to benefit from leverage without being overexposed. Rents are up by 31% over the past decade and demand is higher than ever 📈 Those rental increases mean your effective yield is always increasing too 📈 🕰️ As you can see from all these factors, the real benefits come from holding property over time 🕰️ The hardest part is simply getting started. If you would like help taking your first steps, get in touch with me today! 📥

Equity is ownership. In real estate, it's your home's value minus outstanding debt. https://brev.is/AaP20

Equity is ownership. In real estate, it's your home's value minus outstanding debt. https://brev.is/Cemjs

How can my investment portfolio benefit from real estate without owning and managing properties directly ? You have options. 1. LIMITED PARTNERSHIP A limited partner invests private capital in a private equity fund. The general partner finds, finances, acquires, operates and exits the property for profit. 2. REAL ESTATE INVESTMENT TRUST REITs can be private or public investment opportunities. REITs issue shares that are backed by the real property that they aquire and manage for profit. REITs are required by law to distribute 90% of profits to shareholders. 3. MORTGAGE BACKED SECURITIES MBS are secondary market debt instruments bought and sold by an entity such as exchange traded funds and REITS. MBS insures liquidity and availability of financing in mortgage markets. 4. TAX LIENS Oftentimes, Cities and towns will sell unpaid real estate property tax bills to investors in order to cut losses short. This allows investors to pursue the property owner for delinquent taxes and charge the property owner interest and fees. 4. HARD MONEY LENDER HMLs provide private financing for RE investors who are unable to obtain traditional financing. The interest rates are usually higher than traditional financing. The lender collects interest on outstanding loans. Loans are used for activities such as ground up construction, redevelopment, buy and hold etc. Conduct thorough research before making an investment decision. Each strategy comes with financial risk.

Thursday Thread ~ If you’ve got the money honey, I’ve got the time. Proficient commercial real estate brokers are the most ready, willing and able to assist new clients, who are financially capable and ready to invest. This headline suggests that the broker is prepared to dedicate their time and expertise to helping clients find and purchase properties as long as they have the financial means to do so. In essence, it emphasizes the importance of having financial readiness and the broker's commitment to assisting clients in their commercial real estate endeavors. Tire kickers beware. Having financials in order before searching for commercial property is crucial for several reasons: - Realistic Budgeting - Understanding one's financial capabilities helps in setting a realistic budget for your property purchase or lease. It prevents clients from wasting time and effort on properties that are well beyond their financial reach. - Negotiation Power - When clients have their financials sorted, they have stronger negotiating power. They can make competitive offers and secure favorable terms because they can demonstrate their ability to follow through on the deal. - Faster Transactions - With financials in order, the transaction process can proceed more smoothly and quickly. Sellers or lessors are more likely to take seriously offers from clients who have demonstrated financial readiness. - Loan Approval - If clients intend to finance the purchase, having their financials in order streamlines the loan approval process. Lenders require detailed financial information to assess creditworthiness and determine loan terms. I suggest starting with your current banking relationship! - Clear Investment Strategy - Knowing their financial capabilities allows clients to develop a clear investment strategy. They can identify the types of properties that align with their budget and investment goals, whether it's income generation, long-term appreciation, or other objectives. - Risk Management- Understanding financial limits helps clients manage risk effectively. They can avoid overextending themselves financially, reducing the risk of default or financial strain in the future. Having financials in order prior to searching for commercial property is essential for making informed decisions, negotiating effectively, and ensuring a smoother transaction process. It also sets the foundation for a successful and sustainable investment in commercial real estate. #olwillie #streetcre