Building Wealth Through Real Estate Investment

Yasmin Ansari

About Me

• Realtor & Investor (Own 54 Units)• Two Masters in Science • SFR (Short Sale & Foreclosure Resource) • SRES (Senior Real Estate Specialist)• Member of

– Local Investors Clubs– National Association of Realtors– Missouri & St Louis Association of Realtors

• VP & Board member at Campbell Montessori School

Why Real Estate• Diversification• Preferred tax treatment• Leverage• Cash flow

St Louis Occupancy rate

95.3%

95,000,000Renters in US

Different Kinds of Real EstateResidential Commercial

• Quick to buy/sell• Lower cashflow

• Strong cash flow• Higher capital needs

Financial AnalysisProperty A (single-family) Property B (12 units)

Purchase Price $100,000 $500,000

Down payment (20%) $20,000 $100,000

Loan Amount (80%) $80,000 $400,000

Gross Operating Income $10,000 $72 ,000 ($500 per unit)

Vacancy (10%) ($1,000) ($7,200)

Tax & Insurance ($2,250) ($11,250)

Expenses ($1,000) ($16,500)

Net Operating Income (NOI) $5,750 $36,990

P & I $4,581 $26,003

Cash On Cash $1,169 (6%) $10,987 (11%)

Actuals PotentialTotal # of Units 12 12Average Rent Per Unit $500 $550Target Purchase Price $500,000 $500,000 Proposed Down payment 20% ($100,000) ($100,000)

Total Closing cost ($5,000) ($5,000)Total money needed at closing ($105,000) ($105,000)Loan amount $400,000 $400,000GROSS OPERATING INCOME $72,000 $79,200VACANCY 10% vacancy 5% vacancy

($7,200) ($3,960)EFFECTIVE GROSS INCOME $64,800 $75,240ANNUAL OPERATING EXPENSES

Property Taxes (estimated) 1.25% ($6,250) ($6,250)Insurance (estimated) 1.00% ($5,000) ($5,000)Electricity/Water/Trash 6% ($4,320) ($4,752)Repairs/Maintenance 8% ($5,760) ($6,336)Management fees 6% ($4,320) ($4,752)Other expense (Grounds, Cleaning, reserve etc) 2% ($1,440) ($1,584)Replacement reserve 1% ($720) ($792)

ANNUAL OPERATING EXPENSES ($27,810) ($29,466)NET OPERATING INCOME (NOI) $36,990 $45,774Yrly. P & I ($26,003) ($26,003)CASH ON CASH $10,987 $19,771 11% 19%

Screening Tenants • Tenant Screening Services

– Credit Check, Background Check, Employment Verification and Landlord History• Casenet Website: https://www.courts.mo.gov/casenet/base/welcome.do • Always charge deposit• Don’t get involved with tenants• Don’t give your address or personal information• Good LEASE

Flipping• High Risk – High Reward - Foreclosure & Short-sale - Tax Sale - Auctions

• Buy Cheap - 60-70% of ARV (After Repair Value) – Repair

Determine purchase PriceARV $100,000Repairs $10,000ARV - Repairs $90,000Purchase Price (70%) $63,000

Potential ProfitPurchase Price $63,000Repairs $10,000Total Investment $73,000Sale Price $100,000Potential Profit $27,000

Flipping• Estimate Repair• Finance the deal

• Cash• Conventional loan• Hard money Lenders

•DON’T Get Greedy

LLC - Limited Liability Company • A LLC is a business structure that is similar to a corporation, but less formal. • Business owners form LLCs to protect themselves from being personally liable for business debts and claims. • “Article of Organization” with the Secretary of State Office• Members Managed Vs. Manager Managed• EIN (Employer Identification Number)• Operating Agreement

Tips• Join the local Investors Group - Wealth Improvement Network - St Louis Real Estate Investors - Street - St Louis Rehabbers Club - Lifeonaire REIA Stl - St Charles Real Estate Investors Association• Free Magazine: MFE (Multifamily Executive)• RICH DAD POOR DAD - By Robert Kiyosaki

Opportunities

4-Family Units in U-city1bd/1bath

Asking price: $179,500Gross Rent: $2040

8 Units in Maryland Heights2bd/1bath

Asking Price: $450,000Gross Rent: $4800

Single Family in Creve Coeur2bd/2bath

Asking Price: $165,000Gross Rent: $950

What are your goals?• What is your ultimate goal?

Looking for cash flow OR appreciation? Quit work and live on rental overage within 48 months? Build equity for children’s college in 10 years?

• How much time do you have to Invest in the project?• What type of investment is right for you and best fits your lifestyle?• Do you have the disposable income, TIME and desire to spend renovating or managing a project?

Questions??