All of our clients can take advantage of our Investment Strategy services to help improve their cash flow and make educated decisions for their investment portfolio. These strategies come from experience in managing over 1,000 units in my career and continue to evolve as the industry changes. We can assist you whether you have one rental unit or a large portfolio.
In order to budget your investment and formulate the decisions needed to improve your investment, you need to start with the basic data. We prepare a rent projection study for up to eight years. This allows us to predict increases or decreases in revenue with changing market conditions.
It’s important to understand how financing or adding capital improvements affect your investment. Will financing provide you a positive or negative leverage? How much cash is required beyond the down payment? How will the specific property taxes, bonds and assessments affect the cash flow on the property? These are all questions we answer and can provide side-by-side scenarios.
This is the deep dive into your property’s expenses, net operating income and cash-on-cash return. We further calculate depreciation and mortgage principal reduction to provide an investment’s true return-on-investment. With an 8-year proforma, this analysis gives us a clear picture of your property allowing us to make the right management decisions.
The final metric we track is the Internal Rate of Return (IRR). This is crucial when creating your entry and exit strategy because this gives you the overall rate of return on a real estate investment property after you sell and collect all profits, cash flow and deduct out of pocket expenses. It’s the IRR that usually makes real estate the best investment vehicle. With these figures we provide you with the minimum and maximum up-leg in an exchange and a guide to increase your investment portfolio size. Imagine going from one rental unit to over 100 units with ease and automated by our company.
Keeping It Realty is a real estate show done by Marc Guzman and Brian Baniqued. In this episode, we showcase a 6-unit complex in the City of Richmond and run a quick analysis. We do this level of analysis for every building acquisition and exchange, which allows us to give a final determination to whether this building should be purchased at the asking price.
