Author: admin

The New Tax Code and The Impact On Your Group Home

Posted on by admin

Group Home Owners Will Get Favorable Tax Treatment With The Changes In The New Tax Code. 

The Last time the Tax Code changed this much was back in 1986. Many of you Group Home Entrepreneurs weren’t even born yet! Back then, plenty of people got wiped out…..and plenty of others got massively rich. In today’s lesson I want to talk about how the new changes in the TAX PLAN will impact you as an owner and operator of GROUP HOMES.

The Rich Play The Game Of Money By Using The Tax Code To Their Advantage

Get Started Now


And if you step back and look at the new code objectively, you will notice that they are incentivizing entrepreneurs, business owners and Group Home entrepreneurs . How?

The tax code rewards and encourages certain behaviors and rewards people like you for taking action. There is now a 20% deduction on pass through income, which rental income and certain operating businesses (like group homes, assisted livings, care homes, sober homes, disabled vet homes etc) qualify for. This 20% deduction is not sunsetted either. Additionally, if you happen to own the real estate, you get to depreciate the property….often times wiping out all of your income on paper…..Yes, literally paying nothing in taxes.

BUT WHY WOULD THE GOVERNMENT DO THIS?

If we just use our example above I will give you a few reasons:

1. If you start a group home business, you will employee people. The government wants this!

2. The government wants to train you to be an entrepreneur. Small business (like your group home or care home) is the back-bone of the US economy. Think TAX REVENUE. Local, State and Federal.

3. If you start a GROUP HOME you will be providing a much needed service to society. Disabled Vets, Homeless Vets, MHMR and other special needs populations need housing. Our Government Wants America to be the best. Have you ever been to Brazil or Venezuela? I have…They don’t take care of their homeless. Our Govt. wants to.

4. What Can Your Business Spawn? When you start a business – whether a Group Home or other, it changes how you view the world. You will begin seeing opportunity EVERYWHERE. This is why tech cities like Seattle, Austin, San Jose, San Fran and others have so many startups…..they start with one large company (Think HP, Dell, Amazon etc) and then these employees see opportunity for other endeavors. These other business create more jobs, more wealth and more happiness for the next crop of children and people.

SUMMARY:

The government offers incentives in the form of little to no taxes for those that know how to play the game of money.

Learn more about these secrets at my blog:

https://www.grouphomeriches.com/blog/

Or, if you have already decided it is time for you to start a SIDE HUSTLE with Group Homes or even a full time venture and want to make an additional $3,000 – $30,000 per month with group homes and other assisted livings, check out my GOLD COURSE.

It is a 1 time, $149 cost that could change your life immediately. All starting TODAY

Get Started Now

Section 8 as an alternative to GROUP HOMES? HOW TO MAKE MONEY W SECTION 8

Posted on by admin

WANT TO LEARN HOW TO MAKE MONEY WITH SECTION 8? 

In today’s post, I talk about going about obtaining and servicing your real estate in a different fashion. Basically, accumulating the real estate first, and making a lower margin per month off of it using the section 8 program. Eventually you can convert your rental homes into Group Homes, Care Homes, Sober Homes, Transitional Homes or other Care Homes and really begin making huge margins. But for today, read on about how and why you may want to consider section 8 as a means to your financial future

FIRST OF ALL — the lady above is a section 8 client. She is STOKED! Why? She just got her voucher and NO LONGER HAS TO PAY FOR RENT!
So if she doesn’t pay, then HOW DO YOU MAKE MONEY WITH SECTION 8?
SIMPLE…THE GOVERNMENT PAYS YOU!
WANT TO LEARN ABOUT HOW TO DO THIS? KEEP READING, BUT MAKE SURE TO SIGN UP FOR MY FREE, 10-PART COURSE…

Get Started Now

One of my GROUP HOME coaching clients is a nurse. She travels all over the united states, but primarily lives between California and TX. We are still in the beginning stages of our coaching and mentoring sessions, but due to her travel schedule and income (SHE MAKES A LOT!) I honestly do not think I will advise her to start up a GROUP HOME EMPIRE. Here is why:#1. She already makes a LOT of money as a nurse. This is her primary VOCATION.

#2. Although she could get one set up and hire someone to oversee it, it does take time, energy and effort. Due to her travel schedule as a full time nurse, she does not have the time available!

#3. If doing a start up of any kind, you need to be HANDS ON. She is gone 50% of the time and cannot be there

#4. She doesn’t have enough money/income to subsidize paying someone to start one up for her or purchase one

What is her best option?

TO MAKE MONEY WITH SECTION 8!

I am advising her to simply purchase real estate as a cashflow investment with her discretionary funds. She needs to know the formula for buying right (which I teach), but in doing so, she can get into a rental property for $10,000 – $20,000 (or even less using my methods) and should be able to produce a decent return on her money will OWNING real estate that she can EVENTUALLY turn into a group home when she has the time, energy and desire to do so…..

WHAT KIND OF TENANTS CAN SHE GET?       IS SECTION 8 A GOOD OPTION??

Great Question. Some people LOVE section 8, others HATE IT! Here is why I personally LOVE IT:

1. Guaranteed rents (MINUS THE Co-PAYS). Yes, imagine having the federal government direct deposit MONEY into your account EACH AND EVERY MONTH on the 3rd….not bad! You basically give them your routing and checking number and VOILA….the money appears! No chasing tenants for payment….let the money just FLOW ON ON

2. It is easy. Getting set up with section 8, whether you OWN THE PROPERTY OR RENT IT TO SUBLET IT is a simple process

3. THE RENTS ARE HUGE! Julian Castro the former mayor of San Antonio was also the head of HUD….he made it an initiative to allow people on SECTION 8 to live wherever they wanted. This meant an INCREASE IN VOUCHER SIZE. Often times you will have a little 3 bedroom you would normally collect $950 on and section 8 will pay $1475 or more!

4. This means you could easily rent a home for $950 and then rent it back out to a section 8 tenant for $500 per month spread! 

THE BAD AND THE UGLY OF SECTION 8

You need to screen your section 8 tenants just like any other…..and trust me, you WILL have problems if you don’t do this!

Personally, I train my students to look for older section 8 voucher holders that do not have large co-payments. Remember, you dont want to be in the collection business….especially with this demographic! You will never see the money!

But if you find a section 8 voucher holder that is elderly, will take good care of the property and has a low (or no) co-payment…then this is like finding GOLD on the highway!

These are some of the alternatives to GROUP HOMES that I teach in my FREE 10-PART COURSE

Get Started Now

Look, you can get going right away with a GROUP HOME or alternatively, you can begin by getting all of your inventory set up (THINK HOUSES) and then little by little transition them over to GROUP HOMES……

 What’s in it for you to run one of these homes? Why wouldn’t you just provide housing to a traditional renter? Watch this video to see the amazing outcome this business model will have on your community AND your wallet:

DISABLED VETERAN HOUSING GRANTS – HOW TO MAKE MONEY

Posted on by admin

ARE YOU LOOKING TO MAKE MONEY WITH GRANTS FOR VETERAN HOUSING FOR DISABLED?

Get Started Now

but lately, many of you have been asking for more info….so here is some free cheese for you……

Homeless Providers Grant and Per Diem (GPD) Program (Learning how to grants for veteran housing for disabled)
State, local and tribal governments and nonprofits receive capital grants and per diem payments to develop and operate transitional housing and/or service centers for Veterans who are homeless.
How It Works

VA funds an estimated 600 agencies that provide over 14,500 beds for eligible Veterans. Grantees work closely with an assigned liaison from the local VAMC. The VA GPD liaison monitors the services the grantees offer to Veterans and provides direct assistance to them.

Typically, the maximum stay in housing is up to 24 months, with the goal of moving Veterans into permanent housing eventually (Just remember, YOU ARE THE HOUSING). So opting for grants for veteran housing for disabled can be a good idea befitting many of you!

WHO DO YOU PROVIDE HOUSING FOR?

The targeted population is chronically homeless Veterans who suffer from mental-health or substance-use problems, or who struggle with maintaining sobriety; and Veterans with multiple treatment failures who may have never received treatment services, or may have been unsuccessful in traditional housing programs. These grants for veteran housing for disabled may have not yet fully committed to sobriety and treatment.

HOW MUCH DOES IT PAY?


$45.79 PER DAY PER VET. YES, YOU READ THAT CORRECTLY. $45.79 PER DAY. 10 BEDS = $457.90 PER DAY! HOW MUCH IS THAT OVER 1 MONTH? 

THINK YOU CAN MAKE ANY MONEY WITH GRANTS FOR VETERAN HOUSING??

HOW DO I GET STARTED?

I hate to break it to you guys and gals, but you are going to need to make an INVESTMENT. An INVESTMENT IN TIME AND MONEY. First, start by getting my FREE 10-PART COURSE.

Get Started Now

 and start learning. If you want to waste time trying to learn this stuff on your own, by all means. But you will spend 100’s of hours and make no money – versus just GETTING IT FOR FREE
In the interim – IF YOU ARE IN ATLANTA – get on the phone and start calling the following contacts and begin networking! 
SALVATION ARMY
275 Pryor Street SW, Atlanta, GA 30303
1000 Center Place, Norcross, GA 30093 

Want to get on the phone and actually speak with the head of the Homeless Providers Grant for entailing your requisites with the grants for veteran housing and Per Diem Program? Call Jeff Quarles at 1-877-332-0334DON’T KNOW WHAT TO ASK HIM OR WHAT TO SAY?

Then, chances are you need TO SIGN UP AND START LEARNING! 

Get Started Now

WANT TO GET STARTED APPLYING FOR GRANTS FOR VETERAN HOUSING TO HELP DISABLED VETS?

1. Go to www.sam.gov

2. Create a Personal Account and Login

3. Click “Register New Entity” under “Manage Entity” on your “My SAM” page

4. Select your type of Entity

5. Select “No” to “Do you wish to bid on contracts?”

6. Select “Yes” to “Do you want to be eligible for the grants for veteran housing and other federal assistance?”

7. Complete “Core Data”, Validate your DUNS information, Enter Business Information (TIN, etc.) , Enter CAGE code if you have one. If not, one will be assigned to you after your registration is completed. Foreign registrants must enter NCAGE code., Enter General Information (business types, organization structure, etc) Financial Information (Electronic Funds Transfer (EFT )Information), Executive Compensation, Proceedings Details. Indeed, that complies to the functionalities to qualify for the grants for veteran housing!

8. Complete “Points of Contact”

9. Your entity registration will become active after 3-5 days when the IRS validates your TIN information

What’s in it for you to run one of these homes? Why wouldn’t you just provide housing to a traditional renter? Watch this video to see the amazing outcome this business model will have on your community AND your wallet:

Group Homes Are About Operating Cash Flow – But You Still Need To Watch The Economy

Posted on by admin

Group Homes Are About Operating Cashflow – Not financing or Capital Gains….But if you pay attention to interest rates and are a BUYER of Real Estate  – you may want to continue Reading….This is a quick synopsis of how interest rates CAN impact bond prices (and therefore – often REAL ESTATE)

Today’s post is not going to be in depth. We are not going to review procedures or policies for running group homes or assisted livings. If you want that, you can simply sign up for my free TEN PART course which will teach you the step by step ways of making money with group homes

Get Started Now

TODAY’S POST IS ABOUT INTEREST RATES AND THEIR IMPACT ON BOND PRICES

Quick Rule Of Thumb:

A 1% change in interest rates will equate to a price change equal in duration.

For example a 10 year duration will go UP, 10% if interest rates FALL by 1%

The inverse applies as well:

A 10 year duration will go DOWN 10% if interest rates go up by 1%

Remember, these are rules of thumb.

NOW LETS LOOK AT REAL WORLD EXAMPLES

Microsoft sold a 2057 bond (meaning it is DUE in 40 years earlier this month). The yield at inception was 4.5% and at the time, the ten  year treasury was at 2.41%.

Currently, the ten year is about 2.88% or about 1/2 a point higher and the microsoft bond price is down about 4.1%. Using the rule of thumb, a .5% increase in rates would = a 5% change in price assuming a 10 year bond. This Microsoft bond issue is 40 years, so I’d like for you to comment on how to better understand this! Again, not all rules of thumb are precisely accurate. That is why they are rules of thumb.

IN MY GROUP HOME BUSINESS, I WOULD RATHER BE ROUGHLY RIGHT THAN PRECISELY WRONG.

I make the above statement because I am not a wall street whiz or trader. I wont teach you how to be either. In fact, quite frankly I don’t know if I really believe the majority of these Hedge Fund guys can really make money on a % basis any better than how I do, or how I teach people to with group homes. Warren Buffet placed a bet with a few of these guys like 10 years ago and asked them to beat the S&P index over a 10 year period. None of them did. Did they get rich in the process? YES! But not from returns. They got rich due to great marketing and taking 2% of assets under mngt and 20% of the upside…..But I digress.

Now lets talk about group homes and what to do if you own the real estate:

Take a look at the chart above to get an idea of how this may affect you if you are a buyer of real estate. Remember, if you can buy LOW, you will have less debt service and therefore a larger monthly profit each month which is the NAME OF THE GAME in the group Home business. You are looking to HELP OTHERS and also MAKE MONEY WITH GROUP HOMES!

SUMMARY:

In the group home business, the lower your monthly payments are for the underlying real estate the larger your monthly profits and FREE CASH FLOW.

If you want to learn how to MAKE MONEY with group homes, assisted livings, foster homes, care homes, ICF or MHMR homes – I encourage you to sign up for my free, 10 – Part Course. I will show you the methods you need to take to get started making money with group homes and how to help others and feel great about what you are doing

Get Started Now

Why A $200,000,000 REAL ESTATE PORTFOLIO SOUNDS BETTER THAN IT ACTUALLY IS – Low Cap Rates Are Killers

Posted on by admin

Learn why a $200,000,000 (Two Hundred Million) Real Estate Portfolio MAY (MAY) sound better than it actually is. HINT: CAP RATES ARE EXTREMELY IMPORTANT. IF YOU ARE BUYING 4 CAP RATES YOU MAY WANT TO READ THIS!

Everyone loves to brag. The guys in the local business journals. The guys in the Wall Street Journal. The guys on YOUTUBE. What do they say?

“I have a 200 Million real estate portfolio”

To the average neophyte, this sounds impressive. And it very well maybe. Especially if it was purchased during the previous recession – or possibly you are an OLD SCHOOL Billionaire like Donald Sterling with tens of thousands of units. Someone in either of those positions is DEFINITELY in a position to brag.

BUT WHAT ABOUT THE GUY THAT STARTED BUYING IN 2014 and brags about his 200 MILLION PORTFOLIO?

Lets consider the facts:

Cap Rates in most tier 1 and even popular tier 2 markets around high 4 cap rates or maybe low 5’s. Of course, everyone thinks that they are buying an 8…..until the numbers actually present themselves in the lack of distributions.

So here is some quick math:

  • $200,000,000 Million of real estate that was purchased on CAP RATES of 5% will yield a net operating income of $10,000,000 per year. 
  • Assuming an all debt transaction (No Equity) the annual (P&I) payments assuming a 4% Interest Rate over 30 years are $11.457,967.09
  • At the end of 12 months, you have lost $1,457,967.09

YOU READ THAT CORRECTLY

THE GUY BRAGGING ABOUT HIS $200,000,000 REAL ESTATE PORTFOLIO IS LOSING MONEY because he is buying stuff like this (and these advertised cap rates are way higher than actual)

http://www.loopnet.com/Listing/533-Evergreen-St-Inglewood-CA/11386063/

Can he make this up by selling if the property value goes to $250,000,000? Yes! But from a pure cashflow standpoint, it is risky.

Interested In Learning How To Make 100% Returns On Your Money? Get My Free, 10-Part Course

Contact Form

LETS TAKE THE RISK OUT OF THE CAP RATES AND INCREASE THEM A BIT. LETS ALSO PUT SOME EQUITY INTO THE TRANSACTION. 

OK, now lets assume that the 200M of real estate was bought on an average of 5.5 – basically cap rates that avg out to 5.5%. Lets also assume that the owner (owners) injected 20% equity into the project:

TOTAL DEBT: $160,000,000

Interest Rate: 4%

Cap Rates: 5.5%

NET OPERATING INCOME: $11,000,000

Monthly P&I payments: $763,864.47

Annual P&I Payment: $9,166,373.67

NET INCOME BEFORE DEPRECIATION ETC = $1,833,626

Look, this is BIG MONEY. And the guy pulled off about a 9.1% CASH ON CASH RETURN on his money when he bought the portfolio with a blended avg. of 5.5% CAP RATES…..

BUT HOW MANY PEOPLE ACTUALLY HAVE $20,000,000 to put down?

If they raised $20,000,000 what guaranteed return would they need to offer their investors? And what % of the deal would they get for themselves?

Obviously, people have gotten tremendously wealth with this formula. But for the avg individual, this is very HARD to pull off. Assuming no appreciation and assuming an 8% pref, there is roughly $18,336 left for the GP’s to divvy up with their LP’s…..hardly a feast for anyone – unless you live in Venezuela!

I show people a very simple formula that I have used to create monthly passive income. You won’t become a millionaire overnight. And quite frankly, this is not a formula for someone that already has 7 figures saved up. This is the exact formula that I used to retire by first creating a $3,000 passive income stream and then repeating the process 10X over. Just 2 little properties can get you to $6,000 per month which is enough for most people to live comfortably on…..ESPECIALLY IF THEY DONT HAVE TO WORK FOR IT!

Sign up today for my free 10-part wealth building course. You Will Be Glad You Did

Contact Form

NAPA VALLEY – HOW TO VACATION WITH WHOM YOU WANT AND WHEN YOU WANT

Posted on by admin

The Famous George Strait (Jeff Bezos’ Cousin) once said a life living is worth living well. I say, you need to ask yourself how to Vacation Well And Create Money With Group Homes in order to get “Livin’ Well”…..

Which leads me to a thought…

A long time ago, one of my mentors told me the following:

  “One Mans Trash Is Another Mans Treasure”

I listened. Why? Because the guy was worth probably $30,000,000 (Back then) and lived in a beautiful home (even he admits personal residences are liabilities)

I bring this up this morning because as I sit writing this in Napa Valley, it is ever apparent. I just looked at my phone and reviewed photos of a dilapidated property that I just acquired for probably $0.20 on the dollar……Yet here I am looking at this view

 

How to start a group home and vacation when you want
How to start a group home and vacation when you want

 

Yet all of this beauty is provided to me through properties like this:

Group Home Fix Up
Group Home Fix Up foreclosure
Buy Distressed Real Estate For Income
How to buy Distressed Real Estate For Income

  You See, This property was one mans trash…..AND I TURNED IT INTO MY TREASURE 
(You can see photos and a blog post of it here)


This Trash is Actually Treasure. REAL GOLD

A treasure that allows me to spend a week in the early part of February in one of the most beautiful places in the entire United States.

$300 dinners, wine, private limos, private wineries and 5 Star Resorts where the rich and famous live and play. Lebron James was here a few weeks ago. $10,000,000 – $20,000,000 Million Dollar homes line the hills.

I owe this lifestyle and the riches and experiences that it provides for my wife and family to my business acumen, more specifically real estate and the
                          INCOME GENERATING POWER OF GROUP HOMES. 

You see, regular real estate sounds great. People can brag. I own X dollars of real estate. It sounds great on paper. And if they sell (assuming they purchased correctly) their overall pops can be tremendous. But with capitalization rates as low as they are, someone with a $100,000,000 million empire may actually not have that much money coming in. You see, a 5 Cap building with a 4% interest (and principal) expense doesn’t leave much room. I will write on this topic at another time ( I actually know of people with $200,000,000 Real Estate Portfolios that don’t make any money)

But a $30,000 home with 8 beds and a house manager could yield you the following:

Revenues:                       $4,800
Utilities:              $500
TV/Phone:         $100
Food:                 $350
Rent:                  $500
Other:                 $500
TOTAL EXPENSE           $1,950
———————–
MONTHLY NET INCOME:               $2,850

I TEACH PEOPLE HOW TO GENERATE MONTHLY PASSIVE INCOME IN MY FREE 10-STEP COURSE

Subscribe

For most of my subscribers, 2 or 3 homes will set you free. Free to do what you want, when you want, with whom you want.

  • Want to come to Napa for a few weeks? Go for it.
  • Go to Maui for a Few Weeks? Go for it.
  • Argentina for a few months? GO FOR IT.The process takes time to get up and going and will not provide you with $50,000,000 capital gains like a 1000 unit MF portfolio very well may.BUT, it will provide you with the cashflow lifestyle that I teach people how to create….

Get Started Now

 

The best part about this business is that you really don’t need any money.

  • You don’t need credit
  • You don’t need to talk with bankers
  • You Don’t need to put together financial statements

Those are all prerequisites when you want to buy a $20,000,000 asset.

However this business can be done with little to nothing.

You don’t need to own. You can rent the property to get started. Later down the line, I will teach you how to ramp up your game and build wealth through the acquisition of real property….but for now, LEARN HOW TO GET FREE. FREEDOM  is the name of the game.

And for most people, $3,000 – $6,000 per month of passive income will do the trick.

Want to learn how to do this? Follow a free, 10-step course and get started NOW. 

Get Started Now

START LEARNING TODAY. MAKE THE DECISION TO CREATE THE LIFE YOU WANT IN 2018

Group Homes Are Not Get Rich Quick. Group Homes Are Get Rich For Sure. But What About The Economy?

Posted on by admin

This Blog post will discuss the overall economy and the impact on Group Homes. Quick Tip: The Economy Doesn’t Matter when you own and operate Group Homes Like I Teach….However, If you own the real estate where your Group Home operates – interest rates and the economy may impact your overall wealth…..continue reading to learn why CASH FLOW is the name of the game in the Group Home Business

 

Where Are We in this 2018 business cycle? 

Honestly, I don’t know. Quite frankly, if you are running and operating group homes, it really does not matter. The care home, assisted living, sober home, retirement home and other group home type industries literally will not be affected by a downturn in the economy unless the USA turns into Venezuala.

Why?

Because the trend is your friend. Demographics are destiny in today’s assisted living and group home world. Whether you live in Atlanta, Dallas, Los Angeles, Nashville or Miami people are retiring, people are abusing substances and all these people need group homes and care homes where they can live CHEAPLY. Yes, $400 – $800 per month. They will continue paying whether or not the stock market falls. This is what I teach in my free, 10-part course

Subscribe

how to start a group home
group home business cycle

BUT WHAT IF I OWN MY REAL ESTATE AND MY WEALTH IS STORED IN REAL ESTATE?

Ok, great question. Look, I am not running a hedge fund or a PE Fund. I am a main street guy off wall street that shows individuals LIKE YOU how to do what I have done. That said, here are my thoughts:

In the later part of the business cycle when the demand from businesses and consumers is picking up at a fast clip – basically faster than businesses have the ability to produce the goods and services wanted or needed prices begin to climb.

EXAMPLE: Housing in a supply constrained area like Northern Ca. Consumers (i.e. tech workers) are making lots of money and builders cannot produce more houses due to land scarcity, lack of labor, material shortages and of course Government Bureaucracy. 

During phases like this, the profits become tremendous for builders or others that are producing what the end consumer wants. At that point, the government and the Fed will often get involved to slow down the increase in prices. They do this by increasing interest rates. In fed parlance, this is referred to as Monetary Tightening. This is the opposite of what we say during QE 1, QE2, QE 3 etc. When this happens, the stock values go down as do the value of other assets like real estate and entire businesses.

Remember, ALL ASSETS ARE PRICED AS THE PRESENT VALUE OF THEIR FUTURE CASH FLOWS AND INTEREST RATES ARE USED AS THE DISCOUNT RATE TO COMPUTE THESE CURRENT VALUES. 

In the last few weeks, Mr. Market has been teaching those who listen how this works. The economy (from the stats we are provided from the GOVT.) is apparently pretty darn good. So the fed comes in and says, OK, time to lift rates or TIGHTEN. Notice how the stock market has gone down a bit….. Eventually this will cause a downtrend in prices and eventually demand will fall which leads to the next phase:

DEMAND WILL BE SIGNIFICANTLY BELOW THE ABILITY TO PRODUCE (THE OPPOSITE OF THE EXAMPLE GIVEN ABOVE RE: NORTHERN CA. REAL ESTATE) 

EXAMPLE: How much can you afford per month if interest rates are 3% VS. 6%?

A million dollar home (give or take) would cost you $3,000 per month VS. $6,000 per month.

THIS IS WHY DEMAND FALLS WHEN INTEREST RATES RISE

At this point, the cycle would start all over again and the Fed would begin reducing rates making assets more affordable again.

This is why it is smart to pick up assets when the economy is weak. In essence, there is excess capacity on the end of the asset owners (think businesses, developers etc). Basically, they have employees to feed and not much demand so they lower prices. THAT IS WHEN YOU WANT TO BUY!

WHY 2018 IS AN INTERESTING TIME

The above is a very simple illustration of how things work. The reality is a bit different for a number of reasons. Here are a few:

  1. Lower Taxes. You all just saw what happened with the tax bill. AT&T and other large companies are giving out bonuses. This is HUGE
  2. Monetary repatriation. Trillions of overseas capital could come back to the Unites States
  3. Interest Rates Are Already SUPER DAMN LOW! Central Banks cannot really lower rates at the moment due to how low they currently are

Obviously, if you hold your wealth in real estate, own a large group home business or other means of production now MAYBE a great time to sell. Especially if you are nearing retirement.

But my method for how to operate Group Homes, Care Homes and other Assisted Living type properties focuses on producing CASH FLOW. Each and every month, my goal is to produce MONSTER TIDAL WAVES of recurring income from these group homes. Do I own real estate? Yes, lots of it. But the cash flow that comes in from the group homes is what allows me to live and be free.

THE END SUMMARY:

Don’t worry too much about the overall economy and the value of your assets. Focus TODAY on getting your group home up and going or expanding your group home empire.

I teach people how to do this in my FREE, 10-Part Course. If you haven’t signed up, I urge you to do this today.

Get Started Now

One Mans Trash Foreclosure Is Another Mans Treasure

Posted on by admin

HOW TO BUY FORECLOSURES FOR PENNIES ON THE DOLLAR AND TURN THE FORECLOSURE INTO A MONTHLY OIL WELL THAT PRODUCES BIG PROFITS

I will buy 30 – 40 or so homes like this (buy foreclosures) in 2018. These houses may look like trash, but with a bit of knowledge you can turn them into TREASURE. Yes, foreclosures can be your GOLD

Let me give you an idea of what can be done with a foreclosed house like this and for what price you can pick up foreclosures for depending on your city

                              This foreclosed property was purchased for $28,000.

I will spend probably $10,000 on labor and another $5,000 – $10,000 on materials fixing it up. Rounded up, this house will cost me roughly $50,000 when it is all said and done. The final value? Probably $130,000 on the low  to $160,000 on the high. To me, it really doesnt matter. What matters is the income that it will generate.

 I WILL RENT IT TO MY GROUP HOME BUSINESS FOR $1,000 per month.

 

Market Rents would be about $1,200 / month

Buy Distressed Real Estate For Income
How to buy Distressed and foreclosed Real Estate For Income

Whether you want to use foreclosed houses like this for your group home or care home business, rent them out, sell them on terms or flip them for cash –

                                                  YOU HAVE A LOT OF OPTIONS. 

This website is dedicated to showing people like you how to set up and operate gr0up homes. One part of the wealth building formula that I teach is

 

                                            FINDING FORECLOSED PROPERTIES

like this, fixing them up and then holding onto them.

Subscribe

Look, the houses dont even need to be foreclosures. They could be short sales or simply distressed property. Another secret is knowing WHERE to look. If you are in Los Angeles, chances are you are going to have a tough time finding foreclosures at the moment. The banks are holding onto them. So you need to look elsewhere. But once you find the location – AKA your farm area, you can find an ABUNDANCE of motivated sellers. Just remember, the window of opportunity usually doesnt last long. Heck, just look at Detroit!

In a nutshell, you need to learn how to market for these types of properties. After you learn how to find them, you need to learn how to fund them.

 

                                               After that comes the HARDEST PART.

                        Learning how to fix them without getting taken advantage of.

                                                   YES. THE CONSTRUCTION ASPECT

This is where most people lose their asses. The final part is EASY. Renting, Selling or Financing them out.

I have compiled all of this in my step by step system. Continue checking in on the Blog or simply sign up for my FREE, 10-Step GROUP HOME COURSE

 

Contact Form

 

buy foreclosures and make money
Learn to Buy Foreclosures and turn them into income

Questions? Comments? LET ME KNOW YOUR THOUGHTS or sign up for my free 10-part course below

Contact Form

 

CAP RATES FOR MULTI FAMILY REAL ESTATE AND GROUP HOMES

Posted on by admin

WHAT ARE REAL ESTATE CAP RATES AND HOW TO EASILY THUMB-NAIL A MULTI FAMILY CAP RATE CALCULATION

One of my students in Los Angeles reached out to me the other day. I have been coaching him since the recession back in 2008 or so. At that time, I pushed him HARD to get into the multi-family real estate game because the CAP RATES WERE (past tense) amazing. Fast FWD to 2018 – the cap rates suck. Will they go down further and may you be able to sell to the “Greater Fool”? YES! It very well may happen. I do not have a crystal ball. But what I DO, is play conservative and invest for YIELD. GROUP HOME CAP RATES are HUGE…..READ ON!

Although it is a bit more work than class A or class B; the yields (CAP RATES) and opportunities were very lucrative in the C and D grade space back then. He had the capital, the time and the energy to build up a strong portfolio – although he opted NOT to get into the Group Home game as he didn’t feel like he had the management experience at the time or the personnel resources available to act as house managers.

At the time, he was buying stuff for $60 – $80 per square foot in downtown LA. Heck, even back then the build-costs were upwards of $200. I figure his buy-in cash yield (cap rate) at the time was 9-11%…To give you an idea, nowadays, people are buying stuff in Inglewood and elsewhere out there in the mid 3%’s (although they are probably marketing them as 5%’s)

Today I want to give you a quick tip on how to easily compute a cap rate (or yield) on your total investment and then also give you an idea of what type of return you can generate if you set up a group home

 

 

Subscribe

HOW TO EASILY THUMB-NAIL A CAP RATE (CAPITALIZATION RATE OR YIELD)

Step 1: Determine total annual revenues (tip: take monthly gross rents X 12)

Step 2: Divide by 2

Step 3: Take that number and divide by your all-in cost (purchase price + repairs + fees)

EXAMPLE:

Revenues are $100,000 per year. Divide by 2 = $50,000. Your all in costs are $1,000,000.
$50,000 / $1,000,000 = 5%

That is your return or CAP rate

Those types of returns are pretty typical in non-tier 1 markets (assuming tier 1 = San Fran, LA, NYC etc) for C grade properties. As you can imagine, it will take A LONG TIME to get your money back and get rich this way (unless you plan to fix and flip or add value in some capacity)

GROUP HOME RETURNS

I am a strong advocate of locating deals (10 CAP RATE or better) and then turning them into group homes. Once your group home is up and running, you should be able to increase your net yield on that property to 20% – 30% or better. In fact, most of the time, I don’t even bother calculating it.

As Warren Buffet says, “If you need a calculator to determine your return….chances are it is not a good deal!”

                                                                                    SUMMARY

When you operate group homes, you are operating a business. Most small businesses should enjoy 20-35% returns.– REMEMBER, these can be calculated using the cap rate formula I taught you above.  Often times even more. With Group Homes, you should be able to generate 1000% returns (not including the real estate) which should bring your net ROI / CAP RATE / YIELD of your group home and the real estate to anywhere between 20% – 40% depending on your location.

Stay Strong,

Andy

How Does Your Group Home Deal With Code Compliance?

Posted on by admin

WOW! What a topic.

group home code compliance
group home code compliance official with a BADGE! (Are you kidding me?)

You thought being in the Real Estate game was PASSIVE INCOME?

HA!

Look, there is no such thing as passive income. Ask Johnny Depp. He has made over $650,000,000 during his career (Think Tyson or Holyfield) and 50% of his “Passive Income” was fleeced by his portfolio managers!

In our business we have what I call “Leveraged Income”….You may have a property manager, but no matter how “Passive” you think it is, eventually you need to work in some capacity in order to make money. Whether that means overseeing the financials, talking or going out to lunch with your house managers or whatever – YOU HAVE TO WORK!

     PERIODICALLY, YOU JUST HAVE TO GET INVOLVED

Once you begin running real estate – whether group homes, multi family or just a few rental houses, you are unfortunately going to come across the biggest pain in the asses in our industry:

CODE COMPLIANCE

They will come into your properties for a variety of reasons – most often because a tenant is not paying rent and wants to complain to the local government.

HERE IS HOW TO BEST HANDLE AND WORK WITH CODE COMPLIANCE

1. Be pro-active. If you have a tenant that is not paying rent and you suspect they will call code officials, get going on making a call to them directly. Be honest and explain the situation. Then arrange to have the code officer come out to inspect the unit. This is what we refer to as a “preemptive strike”. The code officials will respect you for calling them first. The real beauty of this strategy is that you are running the event rather than them. Proactive VS. reactive

2. The minute you call the code dept. send your maintenance team over to the unit and begin cleaning it up! Get it looking as spotless as possible. You want them in and out FAST

3. Direct your other maintenance staff or house managers to “put on a party” and remove everyone from the property. This is easier said than done, however if you can get everyone out of the property by enticing them with Doughnuts, Coca-Cola and Cookies it will make your life easier. After all, human beings talk – and that is the last thing you want your clients doing in front of the code officials. Make no mistake – everyone wants something for nothing – and Code Compliance gives them that hope!

4. Document everything with Code Compliance. Be firm but polite. Some code officials are sneaky and will attempt to give you a verbal “to-do” or a verbal “sign-off” and then change the list up on you. Video record them, voice record them or make them sign off on a sheet of paper! Your business depends on it.

5. Follow up with them in writing. Include a recap of your meeting accompanied by photos, voice recordings and any and all signed documentation.

6. LAST and WORSE CASE SCENARIO. If code compliance continues being evasive or attempting to play games, reach out to the mayor or city manager and explain your situation.

SUMMARY:

You need to be polite and do not want to get on the wrong side of these “officials” however you also need to let them know that you will not be walked on. I have been in this business for 20 years and shed further light on how to deal with the ins and outs of all the issues that come up (for you, your GM or just your house managers) in my GOLD COURSE. The cost? It is $149 and will pay for itself in NO-TIME FLAT. It is literally less than 50%  of the avg. client’s deposit. 

 

 

 

Categories

Recent Posts