DOUBLE The ROI On Your Rental Property With "The Right Tenant!"
How To Crush The Risk And Increase ROI On Your Rental Properties With Greater Impact
In Today’s Issue:
🔎INSIDER INSIGHTS: Why Most Real Estate Investors Fail & How To Make Sure You Don’t!
🤿A DEEPER DIVE: DOUBLE The ROI On Your Rental Property With “The Right Tenant!”
📝THAT’S A WRAP: Help Us Help You!
Why Most Real Estate Investors Fail & How To Make Sure You Don’t!
Statistically speaking, 80% of small businesses fail within the first two to ten years. Real estate is no different.
One Major Reason Real Estate Investors Fail
One or more of the parties involved is setup to lose!
Considering our history with real estate in the United States (we started out by forcibly taking land from each other), it’s no wonder that most people think that real estate investing is a zero sum game. We’ve been conditioned to believe that in order for anyone to win, someone else has to lose.
There are three things we need to understand about real estate investing:
Real estate investing is a business
Real estate investing is a team sport &
Real estate investing is a wealth game
However, up to this point, no one has ever considered that it may be beneficial to invite the tenant into the wealth game.
There Is A Flaw In The Traditional Single-Family Buy & Hold Investment Model
Sometimes the numbers say that the best economic strategy for the landlord is to do only what is necessary to repair a rental property just enough to make it functional.
For the landlord, it’s tends to be more about the numbers.
On the other hand, some tenants feel unincentivized to take care of the landlord’s property as if it were their own.
For the tenant, it tends to be more about the quality of living.
It’s not difficult to see how needs can go unmet or how resentment can manifest itself within this set of dynamics.
Mindset: Abundance vs. Scarcity
What if we could level the playing field and significantly exceed everyone’s conditioned expectations?
The real question is…
Do you believe there is enough wealth for everyone?
If the answer is yes, let’s explore the concept of collaborative real estate investing, the Rental Property Mastery (RPM) Partnership System.
“You don’t lack abundance, you lack awareness of the access that you have to abundance”
Myron Golden
DOUBLE The ROI On Your Rental Property With “The Right Tenant!”
Finding “the right tenant” to double your ROI requires a transformation into a new type of real estate investor:
An investor with the ability to innovate with new investment models that create win / win real estate deals — NOT the win / lose real estate deals associated with the traditional investment model
An investor with the ability to create opportunities for other investors to accelerate wealth creation with less risk
An investor with a strong desire to help others access the abundance available to us all
A New Breed of Real Investor: The Real Estate Collaborator
A Real Estate Collaborator is a real estate investment consultant that specializes in helping real estate investors collaborate to monetize their real estate experience effectively.
Five Key Inputs For a Successful Collaborative Project
Skill
Team
Funding (cash, lines of credit, & mortgages)
Deal
Time
Four Leadership Skills Of A Real Estate Collaborator
Strategic Listener (the observer)
Investor (the hunter)
Visionary (the creator)
Seller-Buyer (the communicator)
As a real estate collaborator, you will develop & use these skills to operate a system, lead a team, and structure real estate deals with optimal risk and maximum profit potential for all parties involved.
Who Is “The Right Tenant?”
Once invited into the wealth game, the tenant is no longer a traditional tenant. They are guided and transformed into what we refer to in the RPM Partnership System as a Tenant-Buyer Partner (occupant investor).
The Tenant -Buyer Partner has the same objective as we do: achieve “real” financial freedom in 6 years or less. They simply have a different starting point and will be utilizing different tactics.
The Most Important Qualifier:
Traditional landlords and property managers tend to qualify tenants with credit scores, credit reports, minimum gross monthly income (3 to 3.5 times rent), and rental history.
All of these things are important but, as RPM Partners, we believe the most important qualifier is…
Minimum Net Monthly Cash Flow
If a tenant has positive net monthly cash flow, they are more likely to be able to afford the rent AND collaborate with you to create wealth.
As a collaborative partner in the project, the Tenant-Buyer Partner has three responsibilities:
Service the debt
Preserve and/or improve the condition of the asset
Provide passive income for the RPM Landlord Partner
In exchange, the Tenant-Buyer Partner is allowed to share in the cash and/or equity of the project to help execute their own plan to create wealth as well.
How can you validate the net monthly cash flow?
You validate the Tenant-Buyer Partner’s net monthly cash flow by analyzing at least 3 months of their most recent bank statements (more guidance in upcoming issues & workshops).
Two Key Metrics To Focus On To Accelerate Wealth Creation
Cash on Cash ROI: A rate of return of a rental property based on comparing the yearly cash flow to the total invested cash. (i.e. if my net annual cash flow is $1,500 and my initial investment is $30,000, my cash on cash return is 5%: 1500/30,000 = 5%).
Equity Multiple: A ratio that shows the total rate of return of a rental property based on comparing the total net equity from your investment to the total invested cash. (i.e. If I invest $20,000 and the my total net equity over and above my invested cash is $20,000, my equity multiple is 1.0)
As discussed in provious issues, when executing the leap frog method, our initial focus is creating forced equity in the acquisition of four single family homes and then selling those assets to access the capital (taxe deferred) to redeploy into a small apartment - at which time we shift our focus to cash flow.
The collaborative nature of the RPM Partnership System provides adequate flexibility to navigate and accomodate the precise timelines and nuances associated with this particular strategy.
Single Family Case Study:
The RPM Landlord receives $20,000 on top of their $30,000 (66%) in equity on day one to be applied to the acquisition of a small apartment when the time comes.
The Real Estate Collaborator receives $20,000 in equity to be applied to the acquisition of a small apartment when the time comes.
The RPM Tenant-Buyer Partner will receive $10,000 to put toward their first acquistion when the time comes.
This project is structured in such a way that each participant can make progress toward the same collective goal; achieve “real” financial freedom in six years or less (including the tenant).
Are you Ready?
Let’s GO!
Stay tuned for more details in upcoming live streams and free workshops!
That’s A Wrap: Help Us Help You!
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