Max Cash Flow Now

Max Cash Flow Now: Real Estate Profits with Alternative Housing
There is a method, which increases your net monthly income or cash flow on your rental properties substantially while you’re waiting for the market to rebound. At present many property owners are holding rental property and are either in a negative cash flow position, breaking even or perhaps making a modest profit.  They are waiting and holding on for the market to revive.

Waiting – why wait?  Why wait with a negative or measly cash flow? It is not for everyone, but some more entrepreneurial types find creative approaches to making money in a down market.  Is a return on your rental of a $1,000 a month net or $12,000 a year, worth exploring?

I’m talking about Alternative Housing; renting out individual furnished rooms to maximize a property’s FULL income potential.  It does require more time up-front, but after about 3 months, with the right coaching, this approach actually has the potential to become more of a passive income source.  That will depend on your ability to listen to other creative minds!

How do you find tenants who are not students, the elderly, handicapped or Section 8 who will agree to rent a private or semi-private bedroom?  There are many sources, all of whom work to find affordable housing for their clients.  All you need to do is let them know what you are offering and the referrals will be steady and constant.

Many individuals have skills and jobs, but just cannot raise the necessary funds to cover rent on their own.   They could however cover a shared rent with the privacy of their own room and communal living spaces like kitchen, living room and laundry.  You can offer a real home at a fraction of the cost to them, but 3-4 times more monthly cash flow to you!

There is a need and you can supply the answers for yourself and others.  Download our free Ebook, on the right side bar, to learn more and then give us a call or email so we can share additional insights about an opportunity that is perfect for the times.

Max Cash Flow Now: Rental Property Profits Maximized by Avoiding Mistakes

How many times have most of us taken on a project only to have it turn out to be a total learning experience?  Going in, we may have thought we talked to the right people, asked many of the right questions, researched enough but in the end still were hit with surprises and costly mistakes.  No one has the time or money to spend on a hit and miss investments strategy.

We were talking with a small group of people at our Local REIA (Real Estate Investment Association) meeting who were interested in using their rental properties to make $1000 net profit every month through our system of transitional housing.  One member joined our small discussion group and said he had tried transitional housing with the specific tenant population we work with, with a program he put together himself.  He was disgruntled and said it was not working for him.  His biggest problem was vacancy rates. We suggested meeting with him later to find out what he was doing and offered him a free consultation.

He was the first of two transitional house landlords we met recently who were having difficulty with their properties.  Neither of them were our students and both were doing poorly because of avoidable pitfalls.  During our meeting, we discovered if he wanted to turn things around it was necessary for him to approach areas of his property and tenant management differently, along with how he marketed.

Transitional housing may appear simple to figure out, and it is not rocket science, but there are caveats to every unique business venture.  Don’t confuse learning something new with unusual time commitments or more work, but with simply knowing how to use tried and true choices. Why re-create the wheel?  Get the job done efficiently the first time around instead of on a live and learn basis.

How can you know what you don’t know?   To learn more download our FREE Ebook, “Max Cash Flow Now,” from the right side bar.

Max Cash Flow Now: Rental Property Income Increased When You Know What You’re Looking For

“Location, location, location” that’s the mantra for real estate investors.  But what qualifies as a good location for transitional housing?  (To learn about transitional housing, download the free Ebook, “Max Cash Flow Now” from the right side bar.)  The best properties are those that are within close proximity to public transportation and other conveniences, e.g., convenience stores, grocery stores, and banks.

Your location can greatly affect a transitional single-family residence (SFR) or multi-family unit’s vacancy rate.  So be aware when you are evaluating a property you already own or one you are considering purchasing to convert into transitional housing.

Google Maps is great for finding out how close the subject property is to bus stops, and should be no farther than half a mile away. In colder climates, we recommend that any transitional dwelling be no more that .3 of a mile to public transportation.  In warmer climates, public transportation, for stores and banks can be a bit farther out from the house. Keep in mind the closer you are to these services the better.  Here is a tip; free bicycles can sometimes be obtained for this tenant population from faith-based organizations in your community.

Public transportation is a major factor in evaluating a property.  Call your local public transportation district, or find their web site, and search for the specific route that stops close to the target property and determine that routes hours of operation.  You’re in good shape if the hours of operation are early in the morning to late into the evening, so tenants can get home after working long shifts, or coming home from night school.

Whenever you have a house that meets all of these criteria, you will have a more stable tenant base.  Your tenants will not only appreciate the close proximity of these conveniences, but will reward you with longer stays, a well run house and a reduced vacancy rate.  To you that means maximizing your profits!

Max Cash Flow Now: Quadruple Rental Income with Multi-Family

Multi-Family is the way to go when considering transitional housing.  Transitional housing is defined by renting out clean affordable individual furnished rooms on a weekly or monthly basis. It’s a departure from the usual way of renting to individuals or families and there are things to know that will save you from making unnecessary and costly mistakes. (To learn more about transitional housing download our free Ebook “Max Cash Flow Now” see right side bar.) If done correctly the cash flow return on multi-family dwellings can be awesome. In addition, because you are renting to a particular tenant population you can adjusts the requirements as the property owner in ways that otherwise would be out of your control.

Consider a three bedroom one bath duplex in Denver, Colorado.  Market rents for this one unit is $850 or $1700 for both sides.  If this were transitional housing, the same duplex grosses $3,999 every month.  Would you say that this was worth looking into?

Take a smaller, 2 bedroom, 1 bath per unit fourplex.  Renting at market rates would yield $650 per unit or $2,600 for the entire structure.  Converting it to transitional housing, this exact same fourplex grosses $1,483 per unit or $5,932 for the entire fourplex.  Want to learn more?

Deduct your PITI payment, and a portion of the utilities (regarding utilities – there’s plenty of room in the deal, and it is actually to your advantage to pay.)

Another person we coached who has decided to have transitional housing has a triplex that he was getting the usual market rents.  One unit was a 1 bedroom, another unit was a 2 bedroom unit and the last one was a four bedroom.  He was grossing $1,975 with normal rents, but now doing transitional housing, he grosses $3,140. Can you say — sweet?

Are you beginning to get the picture?  If you are a real estate investor who is holding or considering rental property, you really should consider this system for your real estate portfolio.  With a minimum investment, right guidance and coaching to avoid any pitfalls you can earn max cash flow now.

Max Cash Flow Now: Take Yourself on Vacation with Increased Rental Property Profit

Take yourself on vacation using your increased rental property income.  I was driving home in 11-degree temperatures from a meeting with one of our rental property owner/students.  He was telling me about his upcoming vacation to warm and sunny Mexico.  While some of you reading this are in warmer climes, most of us have been hit by an unusually cold winter and our minds go on vacation more often than our bodies!  We all could use a vacation to break up the winter months.

Our student mentioned that he skimmed a little off his rental income every month to add to his vacation fund.  Not a bad idea I thought as I watched the snow blowing along the side of the road.  In most rental situations, the property owner does not have anything at the end of the month to skim. What I heard our student/rental property owner say was “Before I worked with your program my gross rents were barely getting the expenses paid; now it does that twice over and leaves me a little play money.”  Oh, the joys of having a little play money – practically unheard of in this economy.

Not everyone would take this approach with the additional income they generate from their rental properties.  I understand.  Some would even think it bad business not to put the entire added profits back into their investment, but then again . . . live once and enjoy it!

There is so much room in the deal after transforming your rental property with our unique approach that considering taking a little every month and padding your vacation fund may not be such an imprudent idea.  How many rentals do you have right now that would help pay your way to Mexico or Hawaii this winter?

To learn more about our method download the FREE Ebook from the right side bar.

Max Cash Flow Now: Don’t let your rental property become a charity shelter.

I just read a blog by Donna in NM, who has had the most dreadful experience with a Section 8 tenant. She wrote that she did not have Section 8 housing experience and her tenant had 10 years of experience scamming the system. No rent has been collected and now she has a squatter and is unsure how to correct the situation. Several good remedies were written in response to her questions and I don’t want to repeat her options here. I can not imagine that this is an isolated case. Probably not your specific circumstances, but even so, many real estate investors, who are holding rental property are making costly mistakes.

Depressed real estate prices and the profusion of very good deals on distressed properties are drawing many new investors into real estate. The smart ones look for coaching or mentoring from others more experienced. The majority most likely feel they can figure most things out for themselves, and then there are areas that they are inexperienced in and can have a harmful effect on their net monthly income. Getting good counseling can save money and headaches.

With our method and transitional housing, our landlords and I have never had these troubles. If the rent is overdue by more than 3 days, I just make a phone call or two, change the locks and wait for the tenant’s family member or friend to set up a time to pick up any personal belongings. I do not return their damage deposit. Within a few hours or a few days, I have the room occupied by another tenant from my waiting list.

It’s just that simple. It doesn’t involve an expensive eviction process and a minimum to no loss of rent. Squatters are absolutely unheard of, there are no legal fees, no court fees, and no fee made to local law enforcement.

Discover how I can get away with this by downloading our FREE Ebook from the side bar.

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.

Max Cash Flow Now: How does your rental properties cap rate compare to other income producing properties.

Since our method guarantees such a vast difference in cash flow from what is normally received from a single family and multi-family investment property we wanted to illustrate what investors in apartment houses do when they asses a deal.  They evaluate the profit potential of the property as opposed to what comparable properties recently sold for, to establish value.  Basically, how that investment is going to pay them back, similar to annual interest rate paid on an investment in a CD or Bond.  So the ratio between the sum invested and the net profit the asset produces is the cap rate.

By applying a certain criteria, someone investing in larger money producer, such as apartment buildings can determine a worthwhile investment and the same criteria can be used when looking at our system applied to your single family and smaller multi-family rentals.  A good deal for an investor in apartments is a cap rate of 10% or better.

annual net cash flow / total dollars invested in the property = Cap Rate

For illustration, if a single family residence (SFR) were acquired for $85,000 and it required $15,000 in remodel costs so the total investment would be $100,000.  Market rents for the neighborhood suggested that you could rent the property for $1,250 a month gross or $15,000 annually.  Deduct your total annual operating costs; principle, interest, taxes, insurance, property management/maintenance costs, (lets use $1,050 a month) to arrive at your net positive income.  So annualized operating costs would then be $12,600 annually, which leaves $2,400 in net annual cash flow.

$2,400 / $100,000 = 2.4% cap rate

It’s not unusual for a usual rental to cash flow $200 a month net. Naturally, the property owner is relying on the property’s ultimate market appreciation, and tax advantages, to evaluate their overall investment also.

Now apply our system, and rent the home at double market rates of $2,500.  Our suggested method does necessitate some additional operating expenses, so the monthly effective operating costs would now be $1,250 a month, thus providing $1,250 a month in net cash flow or $15,000 annually.

$15,000 / $100,000 = 15% cap rate

Now that’s much better and the envy of every apartment owner out there and you did it with a SFR.  It’s not completely passive income, it does call for some extra time, but not as much as one might think.  We teach ways to reduce management time considerably.

To learn how to increase your “Cap Rate,” download our free Ebook, Max Cash Flow Now, from the side bar.

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Building ROI on your investment properties.

Max Cash Flow Now: Be a leader in your area by building ROI on investment properties.  A reader of this blog wondered why, “if this (our method) was such a good idea, why wasn’t anyone else doing it.”

We understood his concern and we can only respond with what we know to be true in our overwhelmingly successful Denver market.  This area is booming with transitional housing in all types of neighborhoods throughout the city and surrounding counties.

Presently when someone from this region calls us for information on opening a transitional house, we mildly discourage them.  That might not sound like good business on our part, but due to the number of investors who have witnessed this niche come alive and thrive over the past 18 months, we are approaching a saturation point.

It took about 12 months for the looky-loos to stand back and watch and collect information before they ventured into this lucrative opportunity.  Therefore, I really do understand the concern about being the first one to take a new path.  Consider though what those looky-loos lost in cash flow, property repair costs, bad tenants and evictions until they finally started thinking out of the box and work with a now proven system.

When we started, the local area boasted 12 beds in alternative housing.  With our very first house we brought the total up to 17.  We are now responsible for 64 beds.  There are other companies and individuals who have turned their rentals into transitional housing and we don’t have an exact count on them, but suffice it to say when the word gets out that something good is happening it doesn’t take long for others to jump on board.

It is an idea of the times, but few people have even thought about the need that is out there.  It boils down to a lack of awareness and education.  One in 6 people in the US has been or knows of someone who has been incarcerated.  We as a nation have the highest incarceration rate in the world.  Are they all bad guys?  When we think of men coming out of prison we think of gangstas and thugs, but often the crime is “soft” and the guy was in the wrong place at the wrong time hanging with the wrong people.  We teach our students how to screen applicants who are desperate to make their lives right again and not make the same stupid mistakes that got them into prison in the first place.  But really – who thinks of them – has the idea ever been brought up in a Real Estate Investment Association (REIA) meeting?  No – because it just has not yet been thought of, investigated and worked as a viable investment strategy in your area.

When we first started in this work we stood in front of a group of 220 investors and several wide-eyed individuals thought we were nuts!  However, we were bombarded with questions from every angle imaginable.  Denver has a pretty savvy investment climate yet no one had ever thought about this approach to increasing their cash flow and now as I said earlier the local area is saturated with transitional house landlords.

Find out if this concept is right for you.  Download our free Ebook, “Max Cash Flow Now,” on the right sidebar.