What is a Qualified Opportunity Zone? A Qualified Opportunity Zone (QOZ) is an economically-distressed community that has been designated as such by the State. You can search for Opportunity Zones here. How do I invest in an Opportunity Zone? You must invest the capital gains from the sale of real estate, stock, or a business […]
Can you buy apartments with no money?
Maybe, but probably not. Every time I see an ad on social media claiming to possess the secret to buying large multifamily assets (5 or more units) with no money out of pocket I have to resist the urge to comment. And on top of that, they claim you can do it with no experience. […]
Evaluating Real Estate Investments
Evaluating any real estate investment is fairly simple. Take the gross annual income, subtract expenses, consider how much the annual debt service and acquisition will cost you, and then decide if the profit leftover is worth pursuing. Next, we will break down the most common expenses you will encounter and how to underwrite these conservatively. […]
Paying off your mortgage is costing you money!
We hear it all the time. Debt is bondage. Pay off your mortgage as quickly as you can. You will never be financially free until you are debt free. It all sounds good on the surface when you think about not having to pay that $2,000 mortgage every month but the truth is, bank money […]
What is a Capitalization Rate?
The capitalization rate of a property is the annual return on investment if you would have bought the asset in cash. Cap rates will vary by submarket as well as asset class (A, B, C, etc.) and they only apply to properties with 5 or more units. Why do cap rates vary? The cap rate […]
Multifamily Assets. Bigger is BETTER.
For the growth-oriented investor, it’s a no-brainer. Why buy ten individual houses and source ten individual insurance policies, utility providers, and ten different loans? Wouldn’t it be easier and less of a headache to close one transaction on a ten or even a 100-unit property? It is. And it’s even more lucrative. Valuation. In my […]
How to Buy an Apartment Complex
So, you’ve decided that owning a multifamily asset is the best investment you can make. You know the tax advantages specific to real estate, and the benefits over flipping houses. You are ready to take the plunge but you don’t know where to begin. Enter, Step 1. Network. Build your team. Real estate investing is […]
A Better Investment Than Flipping Houses?
The #1 reason is taxes. As most flips are owned less than one year, upon sale, the profit will subject to the short-term capital gains tax rate which equals your ordinary income tax rate. For most of us this will be in the 22-24% tax bracket. If the asset is owned longer than 12 months, […]
The 1031 Exchange
The 1031 Exchange (pronounced “ten thirty-one”) gets its name from its inclusion in Section 1031 of the IRS tax code. By exchanging one like-kind property for another, you can defer capital gains taxes until you die. When to 1031 Exchange? It would be much simpler to tell you when NOT to 1031 Exchange. 1. If […]