Max Cash Flow Now

Max Cash Flow Now: Property Management of income property done differently with transitional housing.

Some of our students have found unique ways to reduce the time needed to manage transitional housing.  Transitional housing is defined by renting out individual furnished rooms in a single family or multi-family dwelling to those persons who are in transition. We are not referring to migratory workers or students, but to an additional vastly underserved tenant population. (Download free Ebook on side bar at our main blog site to learn the tenant population we’re talking referring to).

All tenants share common areas like kitchen, dining room, living room, laundry conveniences; and both private and semi-private bedrooms are “let” on a weekly or monthly basis.  The income benefit for creating this type of rental dwelling is extraordinary.  A large master bedroom could generate $750 per month rented as a semi-private (two beds) room; smaller private rooms could rent for $450 a month.  Take any rental unit you own and add it up.  I think you will quickly discover that you have effectively doubled the gross rent you could be collecting for the unit.

The model is for our real estate investments to provide us with passive income, right?  But how passive is it really?  If you are an veteran rental property owner, you either do the property management yourself, to maximize your net rental income, or you hire it out to a property management company.  You pay them to advertise, screen tenant applicants, collect rents, do credit and background checks, perform property maintenance/repairs, and handle evictions.  The cost for those services will reduce your net cash flow significantly.

Property owners doing transitional housing concern themselves with all the same issues, but in a different way.  Once the house is set up and fully occupied, the cream will come to the top.  By that, I mean a particular tenant could become your property manager.  For a small discount in their rent, they would carry out many of the same functions of a property manager.  Check in tenants, perform minor maintenance, carry out property inspections, and even handle evictions, which are a cinch with this type of housing; (see Ebook).

A virtual assistant can even deal with advertising of your property to established referral sources when you have vacancies.  All that is left is tenant screening, which does not include traditional background or credit checks.  Just a chat with one or two individuals that are informed about the candidates background.

To learn about offering alternative housing, please download our free Ebook, on the right side bar.

Blog Intro 01-12-10

Max Cash Flow Now: Investment property ROI maximizer tip!    Everyone that owns real estate, either for investment purposes or just their primary residence knows that an additional payment towards principle once or twice a year has a dramatic effect.  With an increased monthly rental income, you can easily apply an additional amount every month or just once or twice a year and thereby reducing your principle.  Remember, interest is charged against the unpaid balance, and is front loaded for real estate mortgages.  Consequently, the entire mortgage is paid down sooner, thereby increasing your equity position.

Now consider the opportunity that the increase revenue stream from transitional housing can provide.  Often 3 to 4 times more cash flow than normal market rents can produce.  One of the options offered to the savvy transitional house landlord may be to choose to take a healthy portion of the increase monthly cash flow and pay down the principle amount at a much faster rate.

A goal of the investment real estate property owner is to gain from the properties market appreciation.

The underlining mortgage payoff, deducted from properties future retail value is one of the facets of calculating the total return on investment.

What would be the result of putting $300 to $700 a month towards your mortgage’s principle?

Use freely available mortgage calculators to find out, then download the free Ebook on the sidebar to find out how you can maximize the potential of your rental properties.

Blog Intro 01-04-10

Max Cash Flow Now: Transitional housing is the key to increased rental property cash flow, especially with the right tenants.  A small three bedroom two bath unit can generate $1,900 a month gross income.  A four bedroom can gross $2,600 a month.  It adds up quickly for the property owner and offers an advantage not often afforded to individuals looking for alternatives.

Also, known as alternative housing, this form of housing is in great demand due to the nature of our current economy.  Foreclosures continue to increase, as reported by the Denver Post yesterday, subsequently, forcing more individuals to seek affordable housing options.  The cost of renting a small apartment may still be out of reach for some, as landlords typically demand first and last months rent up front.

That is where transitional housing fills in, by renting inexpensive furnished rooms by the week or the month in a SFR, duplex or small apartment complex fully furnished and equipped.  Private rooms normally rent for $100 a week and up, and some single tenants will agree to a semi-private room for $85 a week, with a $100 damage deposit.  These tenants do not sign leases, and agree to “house rules” minimizing the management time after you are up and running. Many zoning districts allow for this type of occupancy.

There is one tenant population that has a great demand for this type of housing and there are government and non-profit agencies who refer tenant applicants to you for no charge.  This is not section 8 housing.  Download (see sidebar) and read our free eBook, it covers all the details of our unique method of increasing rental property cash flow.  Why not cash in on a lucrative opportunity and at the same time supply a much needed resource?

Why not?  Read our free eBook.   You or someone you know has nothing to loose and much to gain.

Blog Intro 12-22-09

Max Cash Flow Now: Discover how to give back and increase rental cash flow this holiday season.  Increasing rental property income is what we have been writing about since the start of this blog.  It is what initially attracted us, and each of our students, who have implemented our system. However, there is an equally important aspect to the system we teach that makes a tremendous impact on the property owner and the tenant population they serve.

It all came about when another real estate investor, told us that he was making incredible profits on a couple of properties he owned.   He was presently looking for more houses to continue growing his strategy (and his bottom line).  He went on to describe that he was renting out individual furnished bedrooms for $400 a month.  Some of the larger bedrooms he let as shared, two to a room. While the idea of a shared room may be a put- off to some, other tenants came into his houses wanting to save money and knew they could upgrade to a private later if they wanted to as one became available.  By offering shared rooms, $700 a month split between two people increased the landlord’s cash flow considerably.  This real estate investor’s gross monthly rent on one little 3 by 2 was $1900, and another duplex was totaling $3,600 a month!

Because the tenant population is derived from particular sources and they agree to a set of house rules and don’t sign leases the idea was even more intriguing and attractive.  Here was a way we could add a fix-n-hold strategy to our existing fix-n-flip one.  This approach would allow us to profit on future higher real estate values, and at the same time pocket $1,000 or more on each rental while we wait.  Equally attractive was letting rooms to a tenant population, which could otherwise be homeless.  We could truly have a positive impact on someone’s life and make a profit at the same time.  Sounds like a win- win all the way around.

Are there really people who would consider such a living arrangement?  YES, and who are grateful and appreciative of the opportunity to have this option over a shelter.  Men who easily pass our screening criteria and who have skills, jobs, but don’t have the funds for a furnished or unfurnished apartment.  Most apartments either way require one month’s rent up front and a damage deposit equal to a month’s rent. ?

What we offer is called transitional or alternative housing. Read what one of our students has to say about this system.

It’s a wonderful feeling to be able to incorporate this work into my successful real estate business and earn great positive cash flow along with the personal satisfaction of knowing I have an opportunity in making a difference in someone’s life.”

Matt Gerace – Freedom Choice Properties

Discover more about transitional housing by downloading the free eBook, see sidebar.

Max Cash Flow Now: “If your method to increase rental property cash flow is so good, why is no one doing it in my area?”  We often are asked this question, and there are varieties of reasons.  Chief among them is lack of awareness.  You have probably never been in on a discussion about a program like ours. It’s just not an area that has been considered.  Now that the need is so great, more and more investors are beginning to learn how they can get involved, make the most of an existing rental property, and consequently contribute to their communities.  In addition, many property owners who have rental property shy away from the tenant population we thrive on because of the following:

• Couldn’t pass a background check
• Doesn’t have a credit history and it doesn’t even have a bank account
• No rental history
• May not initially be employed

Nonetheless this market of renters is entering our communities all the time and they need and want to find clean, affordable furnished housing.   By now you must think we are absolutely nuts. Why would we suggest you rent to such an individual?  Fair question.

Why consider this tenant population?  They have:

• Initial financial support from family, friends and sometimes the state
• They often have honed good job skills
• They persevere in finding employment often working jobs that other will not
• They can pay a modest weekly/monthly rent plus the security deposit
• They are willing to live with house rules that require them to keep a clean, safe home
• They don’t sign leases so when necessary are easy to evict
• They are people who need to catch a break and therefore are very appreciative renters
• They are often involved with programs that assist them in acquiring skills to be contributing members of society

I’ve found that the most successful investors, in any area of real estate investing, are so successful because they do think “outside the box.”  One property owner I spoke with today is just getting enough in rents to cover the mortgage on his duplex, ($1,600) giving him zero cash flow.  He had never heard of or considered a program such as ours before. After learning more and doing the numbers, he would gross $3,940 a month, providing a net income of $2,340 a month, where before he had no profit at all!  Thinking outside the norm is one way to beat the odds in any economy.

Remember to get your free eBook download by submitting your email address on the right.

Max Cash Flow Now: Rental property income comes in two forms, active and passive.  We’re all aware of the passive kind.  Purchase a SFR or multi-family, rehab to rental level and rent out to a family at market rates or to a section 8 renter.  But is it so passive after all?  Every rental property requires property management, either done by the property owner themselves or by a property management company.  In either case it’s an expense of either time or money that cuts into your net cash flow.

If you’re the type that does your own property management, our system should be of interest to you.  It’s a system that does require more of a commitment of time up front, and by that I mean the first two or three months, while you implement the program.  Then after that, your time involved is whatever you want.  We like to keep a pipeline of potential tenants and that takes a few random minutes every month.  Then when you are getting a renter in and one is leaving, your time is required.  Is it overall more time than a typical rental?  A little.  Is the extra time worth it?  Not even close!  Three to four times the net monthly income you were making on your property previously.  That’s right! All because you changed the tenant population, and put into practice a program that would consistently earn you an average $1000 per rental unit “net” or more.

To learn about our system, download our free eBook, see sidebar.