Real Life success stories with rental properties with Dave Kupernik
I’ve recently been asked by a few of you about purchasing rental properties. Many of you would like to know how it works and better still see a real life example of how it works. Over the next couple of months, I will share two such examples and the success achieved.
Purchased 5 properties over a 3-year period using about 20 to 25%% on each for a total investment of approximately $150,000. The combined value of those properties at the time of purchase was about $620,000. We structured each transaction so that on the day of closing there were tenants in place, which means my client had in hand a signed lease with 1st month’s rent and security deposit. Those properties have all generated a positive cash flow from day one and now are worth approximately $1,125,000. That’s a $500,000+ gain. Today their options are considerable. They could just hold the properties as they are generating about $4000+ positive cash flow each month (that’s $48,000 per year!). They could sell them and walk away with almost $450,000 pre-tax gain. They could do a tax-free 1031 exchange into one or more properties of their choosing. The choice of properties into which they could transition is quite broad. They could look at resort properties, commercial properties, multi-unit apartment complexes, farm land and a whole host of other types of properties.
Keep in mind these calculations do not include the amount of income they’ve already received over the last 10 years. I don’t have the exact figure but suffice to say a reasonable estimate would be about $150,000.
If you are at all thinking of investing in real estate, we should talk. The sooner the better too, while interest rates are low and the market is quieter than it will be this spring. Worried that prices have gotten too high? Don’t be, there are still some good values even in this market, if you’re willing to be patient.