We are focusing on three primary strategies today.
- Rehabbing and selling turn-key rental properties
- Wholesaling
- Building our portfolio of long term cash flow rentals
Both the rehabbing and wholesaling strategies are cash based strategies…this is our business and how we make most of our revenue. However, as we all know, you make cash and spend cash, once the deal is done it is done and we need to go hunt for the next opportunity. Cash Flow is how we are building a long term income stream to support our retirement, as well as a significant aspect of our tax strategy.
Above is an actual Duplex we own in Ohio. As you can see the cash on cash return is 16.93%, and will be over 20% in year 5. This is after we have factored in maintenance, vacancy, utilities, move out repairs, etc… The even better news is that this property depreciates according to the IRS, which give us a tax benefit. The property value is $70,000, lets assume that the land value is $10,000 (the land does not depreciate) so we depreciate $60,000 over 27.5 years, so we reduce our taxable income by $2,182. Effectively the rental income I receive is almost tax free.
Of course I have painted a fairly pretty picture here, and the reality of owning rental property is not with out challenges, which is why continually advocate education, mentorships, and partnerships for new investors. One way you can continue your education is to register for our free calls and webinars listed on our events page.
