Rehab Projects Are Often Great Investment Opportunities – Why Can They Become Huge Disasters?

A rehab project is easily seen as a great investment opportunity. You are able to purchase the project at a fraction of the replacement cost. After all the cash is invested, the total cost per square foot is far below the competition. You can see an easy path to much greater cash flow after the vacancy is filled and after the rents are increased. Unfortunately, there are a ton of issues that can throw the plan off of the expected course.

A rehab project did not get in the current condition because the owners wanted a run down dilapidated apartment complex. While the situation can be and often is the result of extended neglect, the buyer must consider that neighborhoods change, crime problems develop, basic infrastructure issues become insurmountable.

Where to begin?

First, is the property in a rentable location? Spend time understanding the schools that service the property. Look at access to employment and shopping. Find out what the crime issues are on the apartment complex. Determine what crime in the surrounding area is. Check out the demographics of the area and check with local merchants, consumer, and other sources about the reputation of the area. If too many red flags begin to develop, then you may have identified a project that could resist your best efforts to rehabilitate.

Next, if the property demonstrates solid performance, look at the physical issues with the project. Are the kitchens unable to meet expectations for today’s consumers? Is the foot print to small? What changes are required to meet utility cost expectations? Does the project require central AC? Is parking inadequate? Do the units require washers and dryers in the market and for the demographic the project will serve. What about dishwashers? Are the amenities inadequate? Are the floor plans positioned wrong for demand in the market?

In the case of infrastructure issues like those suggested for review above, the right rehab plan may well be able to resolve the issues. The key considerations are putting together a detailed rehabilitation plan that resolves the issues thoroughly for rentability. If the costs begin to rise to high for the project to be viable, you will know to abandon this prospective project. However, if you can meet the project well below your affordability considerations you have identified a potentially strong performing asset.

While the considerations above can protect against a bad decision because a rehabilitation requires repositioning the project the risk is much greater because rentup may not occur as expected. Renting costs can be too great. Rehab costs may over run. Rent rates may be weaker than expected. Management issues may be greater than anticipated. In all cases, the project can become continually more challenging and lead into failure.

How to Raise the Money to Start Your Internet Business in 5 Easy Steps

So, you have discovered that perfect home-based business that is going to have prospects banging down the door to sign up…but you don’t have the money to invest. The investment requirement may be $1500, it may be $1000, it may be $100.

The point is that you have NO money to spare, if you want to keep a roof over your head and food on the table. This describes most, in today’s economy, but you are special because you are wise enough to realize that if you just keep doing what you are doing now, you are just going to keep getting poorer.

Now mind you, that doesn’t mean you can walk into your boss’s office, drop off your resignation letter, and tell him to pound sand just yet…that comes later. But, you know that while your day job will make you a living, your online business will make you a fortune. Right?

So the challenge is to raise the money to start your business as soon as possible. The methods I am about to teach you will do just that, PLUS generate recurring monthly savings that will become your advertising budget.

Step 1: Where is My Money Going Now?

The simplest and best way of making money is to reduce your costs. But you may already only be buying what you need! So, we are going to reduce our costs WITHOUT sacrificing the goods/services that we need. But first, what ARE our costs?

Exercise: Take out last month’s bank statement and credit card bills. Itemize each of your major costs. Your list may look something like this:

  • Mortgage on house or cost of renting
  • Car payments
  • Health Insurance
  • Car Insurance
  • Homeowners Insurance
  • Groceries
  • Fast food/lunches out at work
  • Telephone/Internet/Cable
  • Gas

These are just a few. It can be frightening to see just how much money you are spending to keep a roof over your head!

So now that we know WHERE our money is going, let’s take action to divert more of it away from other people’s pockets and into our own. We will do that via…

Step 2: Competitive Bidding–Who wants my business?

It is simply astonishing how almost every company utilizes competitive bidding, and yet how few households do! For every item we listed up there, there are dozens, hundreds, or thousands of different companies who would love to have you as their customer!

Let’s make them compete against each other, shall we?

Exercise: Find your policies for Health, Auto and Home Insurance. Find exactly what your coverages are, and your premiums. THEN, go online to a competitive bidding website, fill out your information, and request quotes from dozens of bidders! I personally use LowerMyBills and E-Health Insurance (links are provided in the resource box below). Representatives from these companies will be scrambling all over each other to provide you with their most competitive quotes, especially if you…

Tip: TELL THEM that other companies are bidding for your business! No one wants the competition to get a customer, so they will cut their margins as much as they can!

Tip: Create URGENCY by telling them that you are only accepting bids until X date, at which point you will choose the most inexpensive offer that meets your needs!

You will be astonished at how much this will reduce your monthly costs. This is a service that I perform for clients, in exchange for a % of whatever I save them, and believe me that is a pretty penny. But you don’t need me to do it for you, you can do this yourself!

Savings: (will obviously vary from person to person, this is what I tend to see on average)

Savings on health insurance: $200 per month

Savings on car insurance: $100 per month

Savings on home insurance: $75 per month First-month savings on insurance: $375

Ongoing monthly savings: $375/month

Wow! That’s a nice chunk of change right there towards your business. And your actual results may be much higher or much lower, but chances are that right now, unless you bid out your insurance annually, your provider is probably treating you like a 200-pound 4th-grader taking your lunch money.

Step 3: I Can Pay Less, to Save MORE?!?

Have you been reading the news about the economy? In an effort to turn around the recession, the FED has been slashing through interest rates with speed and vigor usually seen only in Japanese Samurai movies.

Take out that mortgage bill, and see what rate you are paying. 7%? 6%?

We’ll use an average mortgage amount of $200,000, and assume your current interest rate is 7% at a 30 year fixed loan. Ergo, your payment is $1,330.60 per month.

Do you have any idea JUST HOW MUCH money you can save by refinancing now at a lower rate?

With the Fed rate cuts, loans at 5% are easily available. Just that 2% drop in interest will lower your payment on the SAME LOAN to $1,073.64…saving you $237 per month!!

Let’s add that in…

1st-Month Savings on Refinancing at lower rate: $237

Ongoing monthly savings: $237/month

And you can roll in your closing costs to the loan, so you don’t pay anything up front, and STILL be saving this much (a few thousand over a 30-year loan just knocks off about $20 per month from your savings, which is already factored in above).

Step 4: Waste Not, Want Not Now we are going to look at such a simple, obvious, and EASY way to save money, that never even occurs to most people.

What are you doing for lunch at work? Are you getting fast food, because it’s easy and convenient? If so, you are spending about $6-$8 per meal!

Or do you eat out a restaurant? That gets REALLY expensive, anywhere from $10-$20 per meal or more! For this example, we will say that you are like most of working America and you eat lunch at a fast food place, spending $7 per meal.

So not only are you clogging your arteries and getting poor nutrition, but you are spending $210 per month just on lunch!!

Start bringing your lunch to work with you. Make yourself a sandwich, or whatever you please. The groceries will add up to $1-$2 per meal, if that. Let’s say $2 per meal.

1st-Month Savings on Brown-bagging it for lunch: $150!!

Ongoing monthly savings: $150/month

Benefit to your health: Priceless!

And how badly do you REALLY need that $3 Mochachino from Starbucks every morning on the way to work? If you cut that out of your budget, there’s another $90 per month you save!

BUT I LIKE MY FANCY STARBUCKS DRINKS AND DON’T WANT TO GIVE THEM UP!!

Ok, fiiiine! Give it up for just the first month then. If you are going to be able to make $1000′s of dollars per month by starting your internet business, wouldn’t you be willing to make that small sacrifice?

In the words of Jim Rohn, “OF COOOURSE!!”

Step 5: Take Advantage of the Economic Stimulus

By now you’ve probably gotten the letter from the IRS about the Economic Stimulus Plan…you are going to be receiving a check for somewhere between $300 and $1200 in May 2008!

If you spend it on bills, it’s gone, and the bills will be back…with friends. That’s why you want to start your internet business in the first place, right? So that you will have gigantic loads of income streaming in again and again from your marketing efforts?

For this example, let’s assume you are married, below a certain income level, and have 1 child. Your tax rebate will be $900 (or possibly $1200, but let’s be conservative).

Ok, let’s recap. So far, we’ve managed to raise:

Savings on health insurance: $200 per month

Savings on car insurance: $100 per month

Savings on home insurance: $75 per month

Savings on Refinancing at lower rate: $237 per month

Savings on small luxuries like Starbucks: $90 month 1

Unexpected Tax Rebate Coming in May: $900 month 1!

Savings from not eating out for lunch: $150 per month Total Savings for First Month: $1752

Ongoing Savings per Month: $762 per month

WOW! We are there!! You have raised $1,752 to start your business, which is more than most cost! Not only that, but you will be saving almost $800 per month…let’s take $400 of that and invest it our business as our Advertising Budget, and we will have LOTS of prospects coming to our site…and from there, it is just a matter of the Law of Averages to generate out your sales.

My Passport to Wealth business only costs $997 to get started, and an advertising budget of $350 per month gets you a professional Marketing Manager who does all your marketing for you, AND a personal sales assistant who calls all your prospects! I have included a link in the resource box to learn more about this hands-free automated internet business.

So that would leave an extra $752 in month 1, even above and beyond the cost of investing in your business…AND you would have ongoing savings of $412 per month.

Do you think you could find a use for this extra money that you raised?

“OF COOOURSE!!”

Feel free to contact me if you need any help with any of these 5 Simple Steps to Raise the Money to Start Your Internet Business. I believe strongly that giving back to others is the way to wealth.

Home Based Business – Internet Marketing, Can You Be Successful?

Everyone has a desire for financial freedom. If you are like me you have done all the things you have been told to try and create that financial independence. Here is the blueprint we’ve all been told to follow since high school:

  • Go to school and work hard.
  • Develop good habits.
  • Get a job in the real world.
  • Keep improving in your job and through your hard work, hopefully your boss will give you a raise.
  • If you are talented and play the political games correctly you will keep moving up the corporate ladder and other people will determine your value to the company and decide what you are worth to the company.
  • As you move up the corporate ladder you will be given more money and responsibility and you will have less and less time for the things that are truly important. i.e. Your family and your health.
  • You will do this for your whole adult life, and through proper investing, you will hopefully retire at 65 and be able to live out your final 20+ years. Hopefully you have not missed too many little league games and dance recitals that you are kids had along the way.

Obviously the above plan works really well for corporate executives. From a financial perspective these folks do much better than most. However, most of those captains of industry trade off financial success for their health and family life. In addition, unless you are in a particular career where you have direct control of your earnings, you really have to rely that other people will recognize your value to the company and give you a raise. As you move up though, you are making trade offs with your time and family usually suffers.

So the question is how can we all achieve financial success and independence without the tradeoff of spending less time with our family? Is there a way to do this without having to rely on other people to recognize your value, without having to worry about whether your company will have a lay off, or if your corporate executives are perpetuating an accounting fraud and your retirement savings evaporates in the blink of an eye?

The answer is, yes. There is absolutely a way to create a home based business and be successful. Ways that I would say 99% of people are capable of achieving. But first you have to decide. You have to really decide and get determined that you are ready to take control of your life and your financial independence and build a home based business. You need to believe that the only thing preventing you from this is yourself and then commit yourself to success. Once you make the commitment that you and you alone CAN create financial independence for yourself with a home based business you will achieve it.

Isaac Newton’s first law of motion is an object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force. This law of motion also applies to human behavior. Once you have become tired of having others dictate your worth, and made the commitment to do something about it (an object in motion) then you need to take action immediately. If you wait, you become an object at rest and you tend to stay at rest and nothing changes. Procrastination and fear will cripple you. Take action.

You are probably asking yourself how you should take action to determine what the right home based business is for you. There are a lot of things you can do. Here is my story and what I did to find the right home based business for me. I spent years and years hating the fact that I followed the corporate outline. Deep down I believed that I needed to build something for myself and be my own boss. I researched different programs. I first looked into real estate investing and although I believe it’s a great way to build wealth, ultimately fear got the best of me. I came to the conclusion that for me, those “no money down” programs really did not fit my personality. I was concerned that I would end up holding a mortgage on a property that I couldn’t rent or resell, and that the risk was too great. It turns out that may have been the right decision for me based upon the sub prime market implosion.

However, I did not give up. I made a list of my skills, amount of time and money I could invest part-time building a home based business while I maintained my corporate job. I had made the commitment to change and stayed as an object in motion. I continued to research and read. Ultimately I came to the conclusion that the fastest, least expensive, and least time consuming way to begin a home based business and build financial freedom for myself was through internet marketing.

Internet marketing allows me to get in at low investment entry point, provides multiple business lines in which you can actually make money so you are not reliant on just one product or service, did not require that I buy any inventory or have my own product, and providing so many different methods of marketing that in my estimation the only thing that would prevent success is lack of commitment, patience and perseverance.

So, like the title of this article I believe everyone has the skill set to be your own boss and I believe that internet marketing is the vehicle to do just that. However, internet marketing is not for everyone. Internet marketing is only for people who are tired of not being in control of your earnings, wealth and financial independence and have made the commitment to change. It is only for people who will be patient. Internet marketing is for people patient enough to take the time to work at this business. People willing to study and to build a long term business by being smart and tactical in their approach will be successful. You may not be an overnight success with a home based business but I submit there is no such thing in ANY line of business or ANYTHING of any value in life. Internet marketing is only for people with perseverance. It’s for people who have made up their mind to be successful, who understand that failure is not an option and that in the end, they will succeed.

When I made this commitment to build a home based business I looked at many different internet marketing programs and concluded that Plug In Profit was by far the most comprehensive internet marketing program available today. It provides step by step instruction on how to get started with a minimal upfront investment. In addition to the step by step instructions, their support is phenomenal. You get multiple business streams, multiple ways to market to get people to your site and make money, and a 30 day, step by step instruction guide on what you should be doing. You won’t ever feel that you are out on your own with no support. You will get plenty from the program, as well as links to informative websites, free material and newsletters, etc.

By spending the time to read this article deep down I’m sure you have already made the commitment to change and take control. Now all you need to do is follow Newton’s law of motion and stay in motion. Since you have already taken the first step, I urge you to take the second and do your research on Plug in For Profits. I wish you success and financial independence.