With real estate being so popular there is an ever-growing amount of books, study courses and really expensive seminars that one can purchase to learn about this tremendous business we call real estate! In this blog, I hope to shed light and educate you on a low-risk alternative to a lot of the hype and smoke & mirrors schemes and strategies that you may hear!

In the photo above, you will find my latest gem of a discovery; this 4 unit multi family rental property is located on a corner lot right by the 2 major highways and is less than 3 minutes from downtown Houston and it is located on the busline. We conservatively estimate the 2-bedroom units will rent for $450 per month unfurnished and $550 for the furnished unit! With all 4 units rented at an average say $500 per unit, that is $2000 per month gross rents and our negotiated price is about $108k.

As part of the financing arrangement and negotiations, I will add about $9k for repairs to bring the property up to the best of class status that we seek on all of our investment properties as this assists in our getting the best qualified tenants available and allows us to command the best rental rates! Even after adding the repairs and upgrades allowance, the estimated mortgage payment with insurance and taxes will be $1200 per month, with gross rents of $2000 per month, that will leave $800 or so in free cash-flow per month! $9600 per year, in addition to that since we will most likely do a 10% down payment (12,000) we will probably have an unrealized cash on cash gain of 200% the day we fully rent the property!

In other words, the 10% down payment we will be paying at the closing table, we will more than double that amount in equity that we gain once the property has been renovated and completely rented out and this will all occur within 75 days after closing! So that is about $800 per month in cash flow and somewhere in the range of $40-45k equity the day we get all of the units rented out! Now here lies the whole essence of this blog, Low Risk Real Estate Investing & Development opportunities.....

Let me explain why this is considered a Low Risk Investment! For starters, the return or instant security of the monies invested is paramount, hence that is why we always buy one of two things when purchasing rental property: equity or cash-flow. Let me explain, you see on this property we are buying equity because it is presently undervalued and we have an instant equity position. Now if the property were already rented out producing a monthly cash flow of say $650 a month, then in that case we would be buying cash-flow!

Now even after re-couping our initial investment, we will still have a positive monthly cashflow after paying all expenses and because of the location of this unit our equity position will be enhanced every day that we own it as there is plenty of New Construction development in the area and within the next 6 months at least 14 units of high end townhomes will begin construction, all of these things will further enhance the value of the land this property sits on! In fact, this property has great re-development potential as a mixed used office building so again, there is another level of protection that further mitigates our risk and makes this deal a NO BRAINER!

There is last aspect of this deal that enhances our investment potential as well; because the free cashflow estimates look so promising, I anticipate renting this property completely out and then listing it for sell for somewhere in the range of $165k, which will produce a gross profit somewhere in the range of $45k or so! Not bad for a Low Risk Real Estate Investment! In the next post I will discuss a recent property that we are presently developing that you will simply not believe the profit potential it has, somewhere in the range of 500% profit!

Talk to you soon!