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This article was first posted on March 25, 2006 on HoustonRealNews.com. David Lindahl is a national "guru," teaching real estate investors about the Multi-Family Real Estate Investment market. On Saturday, March 4th, he came to speak at a Houston real estate investment association (RICH) and shared some of his insights. Houston real estate investors received him well, if sales of his investor package are any indication [See Photos]. That despite the observation of several vendors at the monthly RICH General meeting, noting that overall turnout was low. Below, read our summary of Mr. Lindahl's presentation: Mr. Lindhal started out as a landscaper, making little money. Then, he turned to real estate investing. He has bought and sold 562 properties in 10 years.
One of the benefits of multi-family properties is that with the right management the owner never has to deal with tenants. Multi-family properties should be evaluated (as with any investment) based on your rate of return. He simplified the calculations: - Capitalization rate (Cap Rate) = Return on your money - Yearly income - yearly expenses = Net operating income (NOI) - NOI x 10 = Value of property (with 10 multiple) - Value of multifamily is determined by the income stream - Banks tend to look at the property's income with a higher priority than you and your credit - Grow business = create systems Multi-family markets tend to work in cycles. A typical Market Cycles takes eight years to complete and can be broken down into four parts, which he defines as:
Seller's #2: Risky; jobs leave, over-supply. Action = Only Flip Buyer's #1: Rents falling, supply at its highest, jobs at lowest. Action = Hold Buyer's #2: Prices rising for the 1st time, Demand is rising. Action = Buy and Hold Houston is in a Buyers #1 Market. According to Mr. Lindahl, the key advantages of Apartment-owning as a business are:
Part time/ be your own boss Tax free money Fewer deals Less competition Less risk Economies of scale One good emerging market is Birmingham, AL. Key factors in an emerging market are job growth and new construction - data which can usually be ascertained at a local Chamber of Commerce. Total packet cost- $1695, at RICH $895. Related Articles -BASIC EDUCATION OVERVIEW - Basic Investing ARV - After Repair Value Birddogging Contract for Deed Dealing with Contractors Estimating Profits Evictions - A Primer Executory Contract Foreclosure Overview Foreclosure Types Overview Hard Money Loans - a/k/a Asset Based Lending* Lease Options Leverage MAO - Maximum Allowable Offer Multi-Family Investing Basics as Presented by David Lindahl on March 4, 2006 No-Money Down Real Estate Investing Options Part-Time v Full-time Passive Investing For Beginners Pre-Foreclosure Profit Calculation Remodeling for Beginners Rent vs Buy Is Really Rent vs Sell Seller Financing as Investor Buying Tool Skiptracing Subject To Wholesaling Return to Listing Return to Investor Education |
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