Start Investing In Real Estate The RIGHT WAY In 2024
Published: 2024-03-22
Status:
Available
|
Analyzed
Published: 2024-03-22
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker's current investment strategy targets a 7% cash-on-cash return for real estate investments.
"I'm looking for a 7% cash on cash return meaning for every dollar that I invest I'm looking for 7 cents worth of cash flow worth of profit from my real estate investment"
Pending
In the past (2011-2013), the speaker's investment strategy required a 20%+ cash-on-cash return for real estate investments.
"back in 2011 2012 2013 if a property was not making 20 plus% it wasn't worth my investment"
Pending
Home prices in two years (from 2024) are predicted to be similar to current prices, assuming personal financial improvements like promotions and debt repayment.
"if you get that promotion in 2024 you pay off your student loan debt you really build up your savings you're going to be in a position where home prices may not be much different 2 years from now than they are today"
Pending
In high-cost areas like Manhattan, the expected cash-on-cash return for real estate investments is around 1%, meaning $10,000 profit on a $1 million investment.
"in Manhattan you are not going to find a 7% cash on cash return you're looking for a 1% cash on cash return so if you invest a million dollars you're trying to make $10,000 a year of profit"
Pending
The speaker prioritizes cash flow over appreciation for real estate investments due to the unpredictability of appreciation.
"I do not invest my money for appreciation because that's unpredictable"
Pending
More unique real estate investment opportunities are expected to emerge.
"more will be coming don't believe me let me show you here is a three-bedroom one bath home listed for sale in a nice and growing population suburb of Detroit in Michigan is listed for sale for just under $100,000"
Pending
A $100,000 home in a Detroit suburb, requiring $20-30k in renovations, could rent for $1,550 per month.
"20 to $30,000 worth of work would make this home amazing and the rental price for this home according to Zillow is $1,550 a month"
Pending
A free virtual real estate investing workshop was scheduled for April 2nd, 2024.
"on April 2nd 2024 I'm hosting a live free and virtual real estate investing Workshop where I'm going to be going over my own real estate investing strategies"
Pending
In 2011-2013, a 20%+ cash-on-cash return was considered the minimum acceptable for real estate investments in the Metro Detroit area.
"back in 2011 2012 2013 if a property was not making 20 plus% it wasn't worth my investment"
Pending
The speaker's current target for real estate investments is a 7% cash-on-cash return.
"now what I look for when I go out and invest my money in real estate state is a 7% cash on cash return"
Pending
In Manhattan, a 1% cash-on-cash return is considered a target for real estate investments, significantly lower than in other markets.
"if you're in Manhattan you are not going to find a 7% cash on cash return you're looking for a 1% cash on cash return"
Pending
A typical rental property investment might involve purchasing for $165,000 and investing an additional $15,000 for renovations, bringing the total cost to $180,000.
"you buy a property for around $165,000 and then it probably will need a little bit of work because I like to have my rental properties be nice and kind of that top of the market in terms of the quality of the property so even if it's in really good condition at $165,000 I'm still probably going to put in another $115,000 worth of work meaning my total cost in this property is $180,000"
Pending
An all-cash investment of $180,000 in a renovated property with $1,170 monthly profit would yield approximately $14,040 annually, resulting in a 7.8% cash-on-cash return.
"if we take $1,170 and we multiply this by 12 that means your annual income after this property is renovated after you get a tenant in there is $14,040 a year ... now if we take this $14,040 and you divide it by the $180,000 you had to invest to get this property this is a 7.8% cash on cash return"
Pending
A 25% down payment ($45,000) on a $180,000 property with a $944 monthly mortgage payment would result in approximately $2,712 annual profit after expenses and mortgage, equating to a 6% cash-on-cash return.
"you put down 25% ... you are going to be financing $135,000 ... your monthly mortgage payment on this is going to be $944 a month ... you're making $226 a month after paying your mortgage payment ... you're making $2,712 a year from your income from this property after your mortgage ... you put down $45,000 yourself ... that means you are getting a 6% cash on cash return on your money here"
Pending
Through depreciation deductions, it's likely possible to show a paper loss for tax purposes on a $180,000 home, potentially resulting in paying no taxes on rental income.
"you get to also pay less money in taxes in this instance you'll probably be paying no money in taxes on your rental income because again if you do the depreciation deduction on $180,000 home you subtract the land value then you take the property value divide it by 27.2 well you're probably going to have a loss on paper"
Pending
The speaker's preferred real estate investment strategy is to focus on cash flow, aiming to acquire a property annually and continually increase cash flow.
"for me I like investing my money in cash flow producing real estate because now I can just keep stacking the cash flow buy a property every year and just keep stacking the cash flow year after year after year"
Pending
By 2026, individuals who receive promotions, pay off student debt, and save well in 2024 might find home prices similar to current levels, but their personal financial situation will be significantly improved.
"if you get that promotion in 2024 you pay off your student loan debt you really build up your savings you're going to be in a position where home prices may not be much different 2 years from now than they are today but your financial position is a whole lot better"
Pending
The speaker acknowledges that most people assume real estate will appreciate over time, with a hypothetical example of a $200,000 property potentially being worth $300,000 in 10 years, though they caution against this as a primary investment strategy due to unpredictability.
"what most people would assume is that this home is going to be worth more in the future than it is today how much well nobody can predict is there a chance to be worth less sure but the hope is that 10 years from now maybe this home will be worth I don't know $300,000"
Pending
The IRS allows real estate investors to deduct a portion of the physical property's value annually for 27.5 years, based on a $200,000 purchase with $20,000 attributed to land, meaning $180,000 of the building can be depreciated.
"so what you do here is first you separate the value of the property versus the land so you bought this property for $200,000 let's assume that the land that this property is sitting on the land that this home is sitting on is worth I don't know $20,000 so this building itself the home the actual property is worth $180,000 well what the IRS says is you get to write off a piece of the physical property a piece of this $180,000 every year for the next 27 and a half years"
Pending
The 1031 exchange allows real estate investors to defer taxes on capital gains if they reinvest the entire sale proceeds into acquiring similar investment properties.
"well now what you can do is you can defer all of those taxes because of something called the 1031 exchange"
Pending
The speaker prioritizes cash flow over appreciation when making real estate investment decisions.
"so when I invest my money in real estate what I'm looking for is cash flow those are the numbers that I make my decisions off of"
Pending
In the Metro Detroit area between 2011-2013, the speaker would only consider deals yielding over 20% cash-on-cash return.
"back in that time in 2011 2012 2013 if a property was not making 20 plus% it wasn't worth my investment"
Pending
Currently, the speaker targets a 7% cash-on-cash return for real estate investments.
"now what I look for when I go out and invest my money in real estate state is a 7% cash on cash return"
Pending
In Manhattan, investors are expected to target a 1% cash-on-cash return.
"if you're in Manhattan you are not going to find a 7% cash on cash return you're looking for a 1% cash on cash return"
Pending
An all-cash real estate investment of $180,000 is projected to yield a 7.8% cash-on-cash return.
"this is a 7.8% cash onh return meaning if you put an $180,000 you're getting 7.8% in yield from your cash flow"
Pending
With a 25% down payment ($45,000 equity) on a $180,000 property, the projected cash-on-cash return is 6%.
"so now if you take this $2,712 and you divide it by the $45,000 that you had to invest out of your own pocket that means you are getting a 6% cash on cash return on your money here"
Pending
By 2026, individuals who receive promotions, pay off student loans, and save significantly in 2024 may find home prices similar to 2024 but are in a much improved financial standing.
"if you get that promotion in 2024 you pay off your student loan debt you really build up your savings you're going to be in a position where home prices may not be much different 2 years from now than they are today but your financial position is a whole lot better"
Pending