Tomorrow: DIY Series Made for Contractors, Remodelers & Home Pros

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The First “Everything Revealed” DIY Series Made for Contractors, Remodelers & Home Pros

Many contractors have leveraged their expertise and connections to fuel their expansion into real estate investing.  Replacement contractors, remodelers, general contractors, HVAC, roofers and designers are examples of industry specialists that can use the cyber world to generate business for their “day job.”   Real estate investors that are doing rehab projects in essence act as a general contractor for themselves.

How to Increase the Return on Your Investment Property

Rehab Investing

Most real estate investors continuously ask themselves how they can create more return on their investments, but hardly come up with an approachable answer. Top Five Strategies to Increase Your Investment Property’s Return from the blog Real Estate News & Analysis, provides five great tips to help investors earn the greatest return. These steps are easy, affordable, and motivational, and help keep the business organized. What tips do you find helpful?

The First “Everything Revealed” DIY Series Made for Contractors, Remodelers & Home Pros

Many contractors have leveraged their expertise and connections to fuel their expansion into real estate investing.  Replacement contractors, remodelers, general contractors, HVAC, roofers and designers are examples of industry specialists that can use the cyber world to generate business for their “day job.”   Real estate investors that are doing rehab projects in essence act as a general contractor for themselves. 

This FREE webinar can provide valuable information for the home service pros and real estate investors who are considering using online marketing or improving it in order to grow and build wealth and financial freedom.

Register Now!
The First “Everything Revealed” DIY Series Made for Contractors, Remodelers & Home Pros

What Will Your Investment Give You In Return?

One of the most important tools to use when analyzing real estate investment opportunities is return on invested capital (ROIC) which is also known as “Other People’s Money.”

The question you may find yourself asking is, “How do I compare projects and choose a financing methodology that will maximize my return?” ROIC is the answer! Below you will find a comparison on ROIC using your own cash verses financing. Unless you have unlimited cash reserves, ROIC is a necessary tool for any investor to determine how to maximize the available investment money.

For our example, the property in question is valued at $100,000 after completion, and we are calculating a six month loan term. The purchase price is $40,000 and the cost of improvements is $25,000.  As of now, you will require $65,000 of your own cash to fully fund the project. Let us assume you sell the property for $100,000. There are charges, fees and soft costs involved in most transactions. For simplicity, I am going to use the same charges for both examples, a $6000 realtor fee, a $1500 title fee and $2000 for closing costs.

Your Cash:

$65,000

Fees:

$9500

$74,500

With a selling cost of $100,000, you have netted $25,500. With your invested capital at $74,500 we can calculate your ROIC. With a net profit of $25,500 and an invested capital of $74,500, your ROIC would be 34.2%

Sale Amount

$100,000

Interest

$3,539

Realtor Fee

$6,000

Loan Repayment

$74,500

$15,961

$25,500 /$74,500 = (.342) x 100 = 34.2% ROIC.

Now use the same figures, but with ReCasa Financial Groups program that utilizes the powerful benefit of leverage. All charges and costs are rolled up into the loan amount.  Assuming you draw out fully on the $74,500 you would pay interests of approximately $3539 for that six month loan term.

Of the purchase price of $100,000, $74,500 went to loan repayment, $3539 in interest, and $6000 in realtor fees. That leaves you with a $15,961 profit. Your ROIC would be 451%.

$15,961/$3,538.75 = (4.51) x 100 = 451% ROIC.

With the example above, you can see that with your own cash, you are getting a ROIC of 34.2%. However, by simply using the power of leverage, you get a 451% ROIC.  That is more than 13 times the ROIC!

Many investors focus primarily on profit. Successful investors are confident in their ability to generate a profit on a real estate investment, and have learned that in order to build substantial wealth; the ROIC calculation is the best tool!

November Marks Nine-Month High for U.S. Home Repossessions

November was a busy month for real estate statistics with many peaks and valleys. November topped the nine-month high for U.S. home repossessions, while foreclosure numbers started to decline to the lowest point seen in six years.

According to RealtyTrac Inc., in November 2012,

  • 59,134 homes were completely foreclosed on by banks
  • Banks saw their first annual increase in repossessions since October 2010
  • 77,494 homes were reported at the start of the foreclosure process, including homes that were up for auction for the first time ever, which was a of 13 percent decrease from October 2012 and down 28 percent since November 2011
  • The least amount of foreclosures were accounted for since December 2006 with a record 72,163 foreclosed homes

With a decrease in foreclosure starts and an increase of lenders regaining their properties, banks are starting to complete more foreclosures on homes with unpaid mortgages over a year or two. However, banks and mortgage providers prefer short sales as an alternative.

Currently there is almost 1 million homes in the U.S. that are in some point of the foreclosure process, and there are several factors that are known to delay the process. A few years ago foreclosures were more severe. Today, federal and state lawmakers are putting forth efforts to delay the foreclosure process or make finance alterations a more likely choice for homeowners.

Some homeowners have avoided foreclosure due to the improving real estate market and growing home prices in 2012.

The top ten states for the highest foreclosure rates include Florida, Nevada, Illinois, California, South Carolina, Ohio, Arizona, Georgia, Michigan and Indiana.