Max Cash Flow Now

Max Cash Flow Now: Rental Property Income Affected by Neighborhood Associations

Rich bought a beautiful old fixer-upper in an neighborhood close to downtown, which was gradually evolving from a low income working class neighborhood to one that was now attracting young urban professionals.  He didn’t know when he bought the property that there would be strong opposition by the area’s Neighborhood Association to using this home as a transitional house – renting individual furnished rooms to former offenders of soft crime.  Rich called and asked us what we thought about turning this particular property into alternative housing.

If he went with alternative housing instead of a renting for normal market rates to a single renter, he would let 7 rooms, some private and some with two people sharing a room.  He could make a net monthly profit of a little over $1,200.  Nice cash flow!

While the money would be fabulous and very tempting, we told him to re-examine the strength of the Neighborhood Association.

Using our system we have never had a problem with a transitional house causing disruption in an area, but those not familiar with transitional housing aren’t always as open minded as we would like to give them credit.  They hear the words alternative housing and renting to former offenders, and their imaginations run wild.  Too much TV, and not enough of the facts, and Rich discovered they didn’t necessarily want the facts once their minds were locked into an opposing position.

With respect for the NA, Rich decided to use this particular property investment as a potential flip rather than as a transitional house. Why swim upstream?  There are many neighborhoods that fit the requirements for good location, zoning and where the neighbors stay to themselves and appreciate others doing the same.

A primary consideration when deciding to buy or use an existing property as a T-house – stay away from HOAs, NAs, gated communities, townhomes and condos.  A small and simple 3×2 in a quiet working-class neighborhood can bring you a $1,000 or more net monthly cash flow. The deals are still out there and the best are not in restricted areas.

Discover how you can maximize your rental cash flow by downloading our free Ebook on 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: Rental Profits quadrupled with great tenants.

When I blog about renting out individual rooms the usual thinking on the subject goes to a rental population of students, seniors and the mentally and physically challenged.  I say think outside the box – it’s a great time to be unconventional and observe your rental properties cash flow like never before.  As written in yesterday’s post, on average a $1,000 a month in net cash flow per dwelling unit.

Our preferred tenant will not fit into any of the above-mentioned categories.  We have found that the renters we work with – ex-offenders of soft crime – can be less of a hassle and less expensive than those most people think of when renting out individual rooms.  With anyone on parole or probation, finding a place to live is often challenging at best and forces men and women into shelters where they are apt to experience the same issues that got them into trouble in the first place.  Those who want to make a change and make their lives work are in need of clean affordable housing that reinforces their goals.

Every tenant comes in knowing that in order to take advantage of this opportunity a set of “House Rules” must be agreed to.  They are a set of living requirements handed down by most States Department of Corrections, as part of the individual’s parole or probation agreement.  They are not impossible to follow and they keep your house safe and healthy.  Who enforces them?  The individuals themselves and their parole or probation officers.  Former offenders don’t want to violate the conditions of their parole/probation requirements and if the House Rules are not being maintained there is always someone waiting to take the room.  This is just one of the reasons why this tenant population is so wonderful to have as renters.

Download our FREE Ebook on the side bar at right, to learn more about what makes these tenants some of the best renters you could ever have.

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.

Pic’s of Transtional Housing

Max Cash Flow Now: Build ROI with investment property through transitional housing.

We write a lot about increasing rental income 3 to 4 times by renting out individual furnished rooms.  But, what does a furnished transitional home look like?  Here are some interior pictures of some of our student’s homes.

Commen Area

Private Room

Dining Area

Kitchen

Private Rm

Semi-Private

Each home has been furnished with reconditioned, used or gifted furniture, fixtures and appliances at very reasonable costs, normally in the range of a one time cost of $400 to $600 per bed.  A schedule to repay yourself for this investment in furnishings either can be very short, or over an extended period of time depending on the advice of your accountant.

Our philosophy is to provide a warm, clean, comfortable environment that fosters a growing sense of self-esteem, which is so important for individuals seeking employment or struggling with getting their life back on track.

Be the difference in someone else’s life and at the same time prosper financially.  Read our free Ebook, which can be downloaded on the side bar to the right of this post.

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.

Max Cash Flow Now: 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 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 Mexico this winter?

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

Max Cash Flow Now: Market rents may be heading down, so quadruple rental property income instead.   So,  if you are in a money-making frame of mind and either presently own or want to own rental property, you could quadruple average rental income on your residences.  Quadruple, you say?

That’s right, with all the foreclosures on the market all over the country, and not enough home buyers yet (yes, we’ve heard home sales in some parts of the country are up – are you in one of those exceptional pockets?) the rental inventory is increasing and creating higher than expected vacancy rates and lower rental rates.  However, if you could still earn a profit it would seem that because of the increased inventory of distressed properties now is still a time to buy and hold residential real estate.

A new real estate investor entering this market will likely make a few mistakes.  Possibly purchasing what might appear to be a good deal, only to find rents in that part of town have fallen.  Or perhaps you purchased a property when the rental rates were higher and slowly you’ve seen them decline?

How do you get positive cash flow from a property like that?  Don’t give up or put up with the circumstances – find a way – there is always a way.

So do your research.  Check with property management companies about the status of rents in the neighborhood that you are focusing on.  Discovery the trend, and be on its upside.  Explore other alternatives and think out-of-the-box.  Unusual times call for unusual solutions.

How?  Just read our FREE eBook and keep an open mind.  Make money!!  Do something for yourself, your family and your tenants!  To download our eBook, see sidebar.

Have a wonderful Thanksgiving!