Max Cash Flow Now

Max Cash Flow Now: Rental Property Cash Flow Increased – Providing Transitional Housing Gaining in Popularity

Converting a conventional rental into alternative housing can be quick and simple.  We have created a method that keeps conversion costs to a minimum.  Most multi-family and many single family residences (SFR’s) can be transformed into a much more profitable venture.  One important point is to make sure you check with your local zoning authority first.  You will want to find out how many un-related individuals are permitted per unit, within your property’s particular zoning district.

Why check out at this option?  Profit is the answer.  $450 a month for a private room, $750 a month for a semi-private room adds up quickly.  How many bedrooms does your rental have?  How many are at least 144 sq. ft. that can be made into semi-private bedrooms?  Then there are family rooms and porches that could be converted into an additional bedroom?  Use a calculator and add it up.  You will be amazed to find that in most cases you could be earning at least $1,000 a month in NET INCOME.  With the particular tenant population we rent to, we never run out of tenant applicants and our students are looking for more residences to buy to fill with an on-going stream of tenants.

One in 6 Americans knows somebody or have themselves served time for a crime – That’s a heck of a statistic.  Many of those imprisoned are serving time specifically for a “soft” crime. Soft crime, while still an offense is defined as a crime that is non-violent or not against a person.  When that person is released and working to get on with their lives, they require reasonably priced housing that supports their hard work. We rent to fellows who are released from half-way houses or work release programs.  These individuals have served their time, have jobs and need to find affordable lodging.  The stereotypical idea that all former offenders are thugs just is not true anymore.

As a result, many questions remain.  All of these questions are answered in our FREE Ebook that can be downloaded by inserting your email address in the box on the right sidebar.  Come on – the times call for thinking about making money in new and different ways!

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.

ROI Calculator

Max Cash Flow Now: Rental Property Cash Flow Wizards meetup.

A group of alternative housing landlords got together recently at a local neighborhood bar to discuss a range of common concerns.  They were anxious to re-confirm a collaborative coalition rather than a competitive one.  There is such a need for this type of work and everyone brought important questions and answers to the get together.  The group was made up of of experienced property owners and others that were just opening up.

It was a great sharing of ideas, solutions, and experience.  Things discussed were; the state’s early release program, vouchers to property owners that pay for up to two months rent, newly discovered tenant referral sources, a free bicycle program, and a group marketing initiative.

Everyone is doing so well.  One property owner commented that even with 2 out of 7 beds opened for a while, she was still making great cash flow on her property.  Presently with a little attention given to her referral sources, she has filled the 2 beds and has 2 guys waiting in the “pipeline.”  The experienced landlords all agreed that it doesn’t take much once a house is established to keep it full and they were all loving the income their properties generated every month.

If you’re a first time reader of this blog post, it’s important to appreciate that these property owners are renting individual furnished rooms to a definite tenant population thus creating great rental property income – on the average of $1000 a month NET.

Learn more about transitional housing by downloading our FREE Ebook by inserting your email address on the right side bar.  And feel free to contact us anytime with questions.

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.

Blog Intro 01-06-10

Max Cash Flow Now:  Take yourself on vacation using your increased rental property cash flow.  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 in warmer climes I write from the Colorado Rockies where when winter hits there is no mistaking it!  The point though, is we all enjoy 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.  “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.”

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 the Caribbean this winter?

Learn how he increased his cash flow 3 to 4 times.  Download FREE eBook on sidebar.

Max Cash Flow Now: Is your real estate investment portfolio providing the maximum rental property cash flow possible?  The first of a new year is the perfect time to re-examine your current investment strategy and plot a course for the coming new year that will prove to be even more lucrative.

If you currently own rental property, or are thinking of adding rentals to your portfolio, be it single family, multi-family or even apartment buildings, we are introducing some exciting alternatives that you should consider.  Let’s increase your current cash flow and your net income position!  If you are in the real estate game to make money (and who isn’t?) and find the current market challenging then – yes – it would be wise to consider alternatives to the old way of doing business as usual.  The beginning of a new year is a time to examine new approaches.

We specialize in teaching property owners exactly that – a new approach to extracting the maximum profit out of their rental properties by converting those properties into dwellings for a unique tenant population.  A tenant population who at first glance appears to be tough, BUT upon closer scrutiny has proven to be the best tenants you might possibly ever have.  Who needs the hassles of tenant concerns which are costly and time consuming when there are other options?

Rental properties that are barely producing any income are now cash flowing handsomely for our students.  Upwards of 3 to 5 times what they had earned previously.  The success of the system we teach inspires many of our students to look for additional properties to convert.  Read some of their comments on our testimonial page at the top of this blog page.

Learn more by downloading our free eBook, see sidebar on the right.