Free Home Value Report Search For Homes

Finding the Funds to Invest in Real Estate

You can find the funds to invest in real estate by using your retirement fund and putting it into a self-directed IRA.

In one of my previous videos, I discussed the seven reasons you should buy an investment property to forge a path of financial independence and perhaps even become a millionaire. 

Since then, I’ve received a lot of great feedback on this topic. One question I keep getting is from people who are interested in investing in real estate but don’t think they have the money to do so. 

Everybody’s circumstances are different, but there are ways you can invest in real estate even if you think you don’t have the means. 

Odds are you have a 401(k), a 403(b) if you’re a teacher, a deferred compensation plan, or an IRA. As I’ve mentioned before, our market has averaged a 6% appreciation every year for the past 30 years, and with a leverage of 20% to 25% and a 6% cash flow based on your rental, you should be able to produce a 30% return per year. 

If you have a child that’s about to attend college, I have a way for you to invest in real estate that I personally use. I recently purchased a home near where my son attends college at UC Riverside using my retirement fund. He and his friends rent this home out, which produces more than a 6% return annually. 

Using a self-directed IRA gives you total checkbook control.

Find the funds to invest in real estate by using your retirement fund and putting it into a self-directed IRA. This way, you have total checkbook control, you’re not dependent on a company you’re not familiar with, and you have total control over the property. You can also benefit from the tax write-offs that come with owning an investment property. 

If you want to know more about how to set up a self-directed IRA to invest in real estate or you have any other questions, please don’t hesitate to give me a call or send me an email. I’d be happy to speak with you.

How My Experience Stacks up Against the Zestimate

You may have heard that the Zillow Zestimate is inaccurate. Today I’m explaining why using an expert like myself to determine value is a much better option.

Many of you have likely heard the news that Zillow is being sued over their Zestimate feature by a dissatisfied homeowner. 

This homeowner is demanding that either Zillow remove or amend the Zestimate on her property’s webpage. 

As you are probably aware, a home’s value is determined by a number of things including its neighborhood, style, age, size, and amenities. These qualities can therefore be used as parameters for creating a fairly accurate estimate. However, according to the woman who filed the lawsuit, Zillow’s Zestimate for her property was inaccurate.

She believes this is in part a result of the Zestimate comparing her property to homes in neighborhoods and styles not relevant to her own. 

Experts have found that 25% of all Zestimates misjudge a home’s value by around 10%. Whether this is 10% more or less than a property’s true value, there is certainly an issue with accuracy. In fact, around 10% of all Zestimates are off by approximately 20%. 

For the past 13 years I’ve provided accurate property valuations to both individual and institutional clients.

This subject is very personal to me. For the past 13 years, I’ve provided accurate property valuations to both individual and institutional clients including banks, asset management companies, credit unions, financial companies, as well as a law group.

I have also been asked to use my expert opinion providing real estate estimates in circumstances where attorneys became involved with the potential foreclosure of a commercial property. 

So even before automated estimation tools like the Zestimate were introduced a few years ago I was responsible for giving my BPO (Broker Price Opinion) in order to determine a number of things such as a property’s value, whether to foreclose, or whether to put it on the market. 

Also, as of 2006 I am proud to say that I’ve been admitted by the county of Ventura Superior Court as a Superior Court receiver. Because of this I can provide my services in front of the Superior Court for many different types of cases. 

With all of this experience I can confidently say that my valuations are very accurate. While Zillow’s Zestimate is sometimes off by up to 20% my valuations are consistently within a 2.5% range of accuracy. 

Not only is using an expert like myself more accurate, but I personally can offer my services free of charge. 

So if you need to know your net worth, home value, or your FICO score, or if you have any other questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Locating a Great Investment Property

When looking for your next investment property, how do you know you’re going to turn a profit? The best way to determine that is by using the 1% Rule.

When looking for a great rental property that you can purchase as an investment, there’s a tried and true trick to ensuring that you’ll get great returns. Before I dive into that, I wanted to help you get familiar with a few terms that we used in the investment world:

Capitalization Rate: The rate of return on a real estate investment property based on the income that the property is expected to generate, and is determined by taking the Net Operating Income / Current Market Value.

Cash Flow: Also called cash-on-cash, your cash flow is usually the proceeds from rent payments after you’ve subtracted any monthly expenses. This cash flow is the return on the money you put in as down payment.

Return On Investment: Every year you pay back 1.5% of your principal balance and add onto your equity.

A good way to identify a great investment property is to look at the value of the property and use the 1% Rule.

A good way to identify a great investment property is to look at the value of the property and use the 1% Rule. For example, if a $500,000 property is generating $5,000 monthly in profit, or 1% of the total value price of the property, then it is considered a great investment property. 

If you find a “One Percenter,” you have an 8% capitalization rate, 12% cash flow, and 16% return on investment. These values go up if the original percentage is higher. However, in California, these types of properties are hard to find. In this current market, finding a property that is priced the same at $500,000 but is taking in $4,000 in monthly profit is still a great investment.

The reason for this is because many areas in California are not rent-controlled. This includes Los Angeles and parts of Southern California. When you invest in a property that doesn’t meet the original 1% Rule, all you need to do is improve the property and you’ll be able to raise the rent. Even so, without the improvements, a property like the one I described above is still seeing a 6.2% capitalization rate, 5% cash flow, and 8.9% return on investment. Those are great numbers.

So the only thing you need to do next is to start looking for those One Percenter investment properties. Even if you can’t find them and you land on a “Point-Eight Percenter,” I can help you restructure your investment to meet your 1% goal.

If you have any other questions about this or any other topic, please don’t hesitate to reach out to me. I look forward to speaking with you soon.