The Challenge

Georges and Vanessa are a hard-working, money-saving loving couple in their 30’s. Like most people, they are busy with jobs, family, and other interests. So they don’t want to spend all of their time with real estate management over the long run. They want a better lifestyle.

Their situation is based upon real principles, concepts, and numbers we have encountered in the business. I hope this case study will remind you of what’s possible with real estate rental properties.

Let’s get started!

Here’s a snapshot of Georges and Vanessa’s financial situation as they begin their journey to create income from rental properties:

  • They are employees at the same company for 2 years

  • They combine together as $85,000 per year as salary incomes.

  • They each have 680+ credit scores

  • They have $12,000 in cash savings

  • They have a car loan of $15,000

A relatively small number like 3 income properties would be a reasonable amount for them to manage in the long run. 

250+

Units Sold

We help them buy their property with creative strategies

8%

Cap Rate

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520+

Business

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Team working

The Process

Now let’s move on to the 2-step plan we put to help Georges and Vanessa accomplish their goal of $100,000 per year in rental income within 5 years.

  • The House Hacking

House hacking is the easiest way to buy your first rental property. And in the bargain, you get to live for free!

The traditional house hacking concept is simple: you buy a small multifamily (2-4 units), move into one of the units, and rent out the other(s). Your neighbouring tenants’ rent covers your mortgage and other housing costs, for effectively free housing.

And when you move out, you keep it as a pure rental property, and the cash flow only improves from there.

  • Refinancing

It works like this: you buy a fixer-upper with a purchase-rehab loan, which does involve a down payment. You then renovate it, financing the upgrades with the purchase-rehab loan .

When the renovations are finished, you refinance the property with a long-term landlord loan and pull your original cash back out. It works because the new landlord loan is based on the new, after-repair value (ARV) of the property, not what you initially paid for it. So, if you created sufficient equity, you can pull some cash out when you refinance, to cover your initial down payment.

Grow your traffic

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Traffic

Increase your sales

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Sales Chart
Marketing Project

Conclusion

As you all know, the one thing we know about a plan like this is that it will never work exactly as planned!

But can you see how creating a plan gives you a path to follow? It guides your actions and decisions in the present. As circumstances, the economy, financing, or any other variable changes, you can then change your plan as needed.

So the true purpose of this case study is to challenge you to think, to plan, and to take action.  Real estate rental properties are a wonderful vehicle to build wealth and cash flow.  But the most important rental property plan is the one you begin executing for yourself.

We wish you all the success in your journey!

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Let’s Make Things Happen

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Richard Madsen

Marketing Consultant Expert
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