Success coach Trevor McGregor has guided winners, including everyone from Olympians to real estate moguls. One of his most requested subjects? The six rungs on the ladder of success. The little things compound when you invest more in your success and climb that ladder. From step 1 to step 2 is a mile – a big step! However, the farther you climb, the shorter the distance between steps. This ladder principle applies to every aspect of our life, from our real estate business to our marriage, as well as our diet and exercise.
Climbing The Ladder Of Success
What are the six rungs on the ladder of success, from bottom to top? They are showing up:
1. Poor
2. Good
3. Great
———————-
4. Excellent
5. Outstanding
6. Extraordinary
Most people can get to the third rung with a little effort, but can you climb up above that middle line, which leads to the “Excellent” rung?
When your effort is poor, you will get pain as your result. Playing good will only get you poor results, while great work means good results in your future. Excellent effort will get you great results. Outstanding effort results in Excellent Results, but only extraordinary effort will yield outstanding results for you. That extraordinary work is the only way that you can reach outstanding results when climbing to the top of the ladder of success.
Join Our Community
Do you own multi-family properties? If not, do you aspire to do so one day? Then you should definitely consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
In this month’s Gathering, the group starts off with sharing their Personal Development wins in the Report Card segment. Today’s special guest is business coach and mentor Trevor McGregor. If you missed the event live, watch and take notes now!
Rob Rowsell’s personal CPA is here to explain why property investors should form a real estate investment LLC. There are so many tax advantages built into this method of incorporation. Limiting liabilities, using cost segregations, and other investor tax tricks are just a few advantages to forming a real estate investment LLC. Rob also adds a few tips, and reminds us that the government needs to know we spend at least 750 hours on our property business in order for them to consider us a real estate professional.
Why Should Property Investors Form A Real Estate Investment LLC?
Rob’s CPA Kevin Bassett of Bassett and Associates joins the call. His first order of duty is to explain why we should form a real estate investment LLC. An LLC, or Limited Liability Corporation, is a great protection for your business, especially if you invest in multi-family rental properties.
One advantage of an LLC is the ability to use Cost Segregation. This strategy front loads your tax depreciation, but it only works if you have an LLC. Hire an inspector to come in and survey your apartments. If you have a $10 million complex, your inspector could break the units into components, possibly finding up to $2 million worth of accelerated depreciation. Fixtures, parking lots, and electrical items needing repair or updating. You can write this off right away, instead of over decades. This can wipe out some or all of a year’s income, saving you huge on taxes.
Kevin then lists other tax advantages to forming an LLC. These tax strategies include 1031 exchanges and long term capital gains rates, as well as installment sales.
Rob Rowsell Responds
Next, Rob adds the two reasons real estate investors should form entities. First, as we’ve discussed before, is for asset protection. Second, a Real Estate Investment LLC provides anonymity for you and your investors, if you set up your LLC to be managed by another party. This allows you to maximize your tax savings with the variety of deduction strategies Kevin mentioned. This benefit is available in many states, but not all, so consult your legal team and CPA before taking action.
Finally, Rob asked Kevin to outline the requirements one must complete in order to be recognized by the US government as a Real Estate Professional. We must verify that we spend 750 hours per year working in the industry. This means managing, acquiring property, and even long term holds. Construction contractors may also qualify for the real estate trades. In order to be certified, you also must prove that you spent more time working in real estate than any other trade. We discuss how to log these hours in another post.
Join Our Real Estate Investment Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
In this clip, Rob Rowsell talks about his former rehab roommate Jake Garcia’s real estate journey. Like Rob, Jake is also a former drug addict. Years after achieving sobriety, Jake reached out to Rob for advice, in order to advance his new career. Today, Jake and Nicki own over 60 rental homes in the state of Arizona. They are a true real estate success story.
Real Estate Success Story
When Rob Rowsell first befriended Jake Garcia, they were both recovering drug addicts. They roomed together on their road to wellness. As Rob documented in his book Addicted To Life, he was done with life on the streets, in an endless cycle of addiction to heroin and crack cocaine. Once each of these friends overcame their vices, they went their separate ways, but kept in touch. Rob’s fortunes grew as he advanced in the auto repair ownership field. Later, he sold his automotive shop businesses in order to concentrate full time on real estate. Jake took notice, and phoned his old roommate for tips on getting into property investing himself.
With Rob’s guidance, Jake and his wife Nicki dove into the real estate field. Before too long, the Garcias had become a real estate success story, investing in dozens of rental homes, 60 of which are in Arizona. To this day, Jake and Rob are good friends, and Jake attends our ATL Inner Circle Community meetings. These two share vast property investment knowledge with other ATL members every month.
Join Our Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
Rob Rowsell started from nothing to become a wealthy investor. In this video, Rob explains real estate wholesale for beginners. Rob has mastered the art of wealth building through property investing. Learn from the best and join Rob’s community!
Real Estate Wholesale For Beginners – How To Start Investing
The real estate market in the United States has exploded in recent years as property values have risen. Naturally, savvy investors have jumped in and reaped huge benefits. If you’re just getting started in property investing, how do you get a foot in the wholesaling game? On a recent ATL Inner Circle Community gathering, Rob unveiled the secrets to the real estate wholesale strategy.
When Rob buys a wholesale property, he approaches the seller with paperwork in hand, and a very small amount of cash. His “Favorite Five” investors are standing by, cash in hand, awaiting the results of the inspection and termite check he has commissioned. Having developed great relationships with these buyers, many of them pitch in for the property sight unseen. God blessed Rob with these connections, and he has worked very hard to cultivate them. As you gain experience in the real estate investing market, it’s up to you to leverage these connections when you find them.
Rob finally sums everything up, stating that real estate wholesale is a great way for beginners to get into buying property. It is also one of his favorite strategies, because of the low barrier of entry, cost wise. As long as you study, network, and choose properties wisely, you are bound to find success.
Join Our Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
Here is successful entrepreneur Rob Rowsell, discussing real estate deal acquisition from a 30 Thousand Foot view. Read on and watch along in order to examine the big picture of a rental property deal with Rob. You can never go wrong when you are learning from a proven multifamily investor and business coach.
What Does Real Estate Deal Acquisition from 30,000 Feet Look Like?
Networking To For The Right Real Estate Deal
In the first segment of this deal flow talk, Rob lists a few of the real estate websites he frequents. Specifically, Loopnet and Crexi are favorites. He does not search these sites for the purpose of finding his preferred property deals. Rather, he uses them as a real estate networking tool. He builds relationships with the brokers who are selling properties in the specific locations that he is interested in. Rob requests that they put him on their email lists. Then, he offers to meet them for lunch to talk business when he is in their town. Eventually, these may just lead to the property deals that Rob likes to fill his buy box with.
Underwriting The Property Offer
Congratulations! You are now ready to make an offer for the property. Underwriting the property offer is the first step. This can be a very tedious and time consuming process. However, it is a necessary task for you to check off your list. Next, after you can make the offer to the seller, you can move on to the LOI (letter of intent) phase. This phase also includes the back and forth negotiation, which takes place between the real estate buyer and the seller.
Get excited, because after that, it will be time for the lawyers to get involved. Each party’s attorneys will work together to draft the PSA, or Purchase and Sale Agreement. Once the PSA is complete, then the real estate buyer will work with a Transaction Coordinator. The Transaction Coordinator is there in order to help open an Escrow account for the property. A Critical Dates Document will then be drawn up. This document outlines when each specific payment will be due for the property.
What Are Lawyers’ Duties In Real Estate Deal Acquisition?
Are you ready to close on your new (to you) rental property yet? Nope, not quite yet! Next, your lawyer will be tasked to do their financial due diligence. This will prove that the property’s value and income are 100% correct. It will also make sure that the billing accounts are all paid up. Nobody wants to buy a run down property that still owes a bundle in delinquent utility bills. Here is a pro tip from Rob: No income statement from a seller will match up 100%. As long at it is close, then you are good to go. Your broker and your attorney should have access to all the records that you requested in your spreadsheet.
The Importance Of Physical Inspections In Property Deals
Often, your chosen property management company will need to walk through the doors for a thorough inspection. The company will physically inspect everything with you before the sale. You should expect to pay them a reasonable fee for the walk through service. After all, you will get what you pay for. Make sure that you take the initiative to hire some third party specialists to inspect the roof, plumbing, and the HVAC. Many times, the person who is selling the property is unaware of the existing problems in these areas.
Rob usually likes to purchase the rental properties which require a few renovations. One of the most important parts of his standard real estate business plan includes setting a schedule for these much needed renovations to take place. Once the property renovations are through with, then it can command a much higher amount in rent payments. Make sure you inform the potential new tenants of the fact that these improvements will be worth the extra charges on their rent.
The Final Steps of Real Estate Deal Acquisition – Engage With Your Power Team and Investors
Does everything check out with your new real estate deal acquisition? Then you will need to make sure that you keep engaging regularly with your Power Team. This team will include your lawyers, your lender, and your property management company, as well as your insurance company. You should also preferably assemble a team of reliable investors who have pledged capital to your venture. Keep them in the loop through each and every step of the buying process. This is mission critical in order to ensure good faith with them.
Now, take over the property and celebrate! Wow, that real estate deal acquisition sure was a whole lot of work! There are plenty of tasks yet to come though, for you, new multifamily property investor. You should take a break and reward yourself now!
Join Our Real Estate Investing Community
Do you own multifamily rental properties? If not, do you aspire to do so one day? Then you should definitely consider joining our online discussion group, the ATL Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
Wouldn’t it be great if someone explained the kinds of real estate deals in easy to understand language? In this video, successful multi-family property investor Rob Rowsell does just that. Are you a cash flow investor? Perhaps are you looking for back end equity instead? Either way, you will learn the nuts and bolts of these investment deals in this video.
What Kinds of Real Estate Deals Are There? How Do They Work?
Rob starts the discussion off on the kinds of real estate deals. He explains that a cash flow investor puts his or her money into an investment and receives a regular return on it quickly. A back end deal, however, works differently. An extreme example of a back end equity play involves injecting capital into a new construction project. You may have to wait a long time in order to get a return on your investment. Some factors in that deal include waiting on the land purchase to go through, hiring contractors, and building inspections before getting paid. Depending on the specifics of your deal, your payout could come at different times during the life of the building. Many times, a balloon payment is made to catch investors up when the building is sold.
Other factors to consider is turnover of tenants and renovations to an existing property. If you are in a position to wait these out, you could conceivably make a greater return than you could over the life of a cash flow deal.
Join Our Community
Now you know about the kinds of real estate deals. Why not consider joining our online discussion group, the Addicted To Life Community? Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
Rob Rowsell explains to the group the process of property retrading. Namely, he mentions the example of a multi-family real estate investment he is doing due diligence on now. Unfortunately, the rental property value is looking to be a lot less than what the seller expected. Namely, the HVAC and electrical will need costly replacements, numbering in the six figures. Sometimes you have to retrade, or negotiate, with the seller. Do not get emotionally attached to a property, especially before the sale goes through!
Property Retrading Explained
Rob began by updating the Community on a 168-unit property that he was looking into. The prospects of this multi-family complex were looking bleak. Specifically, Rob’s team found through their walkthrough that it was was worth about a half million dollars less than the seller’s asking price in its current state. Yikes! Imagine having to break that news to someone.
In that instance, Rob had to go through the process of propertyretrading. That means asking the seller for a price reduction, because of issues you have found with the property. If you retrade often, it could hurt your reputation as a real estate investor. Make sure you identify property issues as soon as you can in the process.
The Insurance Cost Downside
Not only that, if you find a lot of issues with multi-family home complex during discovery, the insurance costs could skyrocket once you take over. The property in question needed a $175,000 upgrade in electrical boxes alone, or Rob’s company couldn’t even take out a new policy on it. The seller won’t lose his existing insurance policy due to the outdated equipment, but there’s no way he can sell the property in the state it is in. We can all learn from this situation not to slack off on keeping our properties up to code. When we go to sell in the future, we could be in the same position as this seller.
In addition to the electrical issues, half of the HVAC units were well past their expected lifespans. Rob predicts none of them will survive the heat of this year’s summer in Texas. Most of the cap ex budget Rob’s team planned for consisted of interior renovations. None of them foresaw $500,000 in necessary upgrades.
Rob’s team did not expect the seller to accept a property retrade proposal of subtracting the full 500k, but they were hopeful he would meet them halfway. Thus far, he is not playing ball at all. Sometimes, you put a ton of sweat equity into property discovery and writing up a deal, just for it to fall through in the end. It’s easy for Rob to say, but don’t get emotionally attached! It’s just business after all, so put it in God’s hands and move on to the next deal.
Join Our Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
Rob Rowsell talks with our Addicted To Life Community group about how to do a property walkthrough. If you intend on investing in a real estate property, you need to do your due diligence. Walk the halls and examine every nook and cranny. Get to know all of the staff at the property. You must ask a LOT of questions, so that there are no surprises. That way, you will make sure you won’t invest in a lemon!
How To Perform an Effective Real Estate Property Walkthrough
Rob started the video recalling a property walkthrough he did with a seller. When the session took place, Rob’s partners walked the vacant units with the seller, while Rob joined via live video. He requested phone numbers from the seller and maintenance manager. Get these contacts, if at all possible, since you will think of something you missed asking about while walking the property.
While walking through the property, you should ask questions and get to know everyone you can who works there. They may not realize it, but you are effectively interviewing them for their own jobs! If and when you take over, you may or may not want to retain their services. If you use a property management service like Rob does, you will save some future headaches by passing that information on to them.
Current tenants can also be a great source of information. They may not know their property is for sale, so tread lightly. If renters see you walking the property with their landlord or property owner, you may give off the vibe of a maintenance worker inspecting issues with the property. Don’t be surprised if they start spilling their guts to you about their leaky faucet or broken air conditioning unit! All of this, of course, is useful information. Take notes of what problems people are experiencing. Knowing their issues have been going on for months without a fix can be a real eye opener.
Remember, a property walkthrough is a fact finding mission. Leave no stone unturned in searching for the information you need to make your investment choice.
Join Our Real Estate Investors Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
In this clip from our Addicted To Life Community Gathering, Rob Rowsell lays out the Cash On Cash Return Real Estate Formula. If you are an aspiring cash flow investor who is looking to replace your business income with recurring passive earnings, then this video is a must watch!
Rob Explains His Cash On Cash Return Real Estate Formula
Rob starts the clip out with a review of two real estate deals he is raising money for. Both of them would qualify as momentum plays. Over time, each investment will yield an average of 7% cash on cash return. Through renovations and rent increases, these properties’ values will increase. When he sells these properties, Rob uses a formula to calculate total returns. The back end equity earned, plus the cashflow from the five to seven year ownership will equal the total.
Rob then explained the principle of the 2X multiple, which is his goal typically with real estate holdings. In order to reach his stated goal of doubling his money, Rob may need to hold the investments longer than he had originally planned. For example, let’s say you had invested $100,000 in a property, kept it for six years, and earned back $140,000. Then you would divide $140,000 by six in order to arrive at around $23,000 profit per year. You will have roughly gotten a 23% return on your initial $100,000 investment after six years. That cash on cash return may sound too good to be true. However, in reality, it’s not!
Join Our Community
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!
Why Should Property Investors Form A Real Estate Investment LLC?
Real Estate Success Story
Real Estate Wholesale For Beginners – How To Start Investing
What Does Real Estate Deal Acquisition from 30,000 Feet Look Like?
What Kinds of Real Estate Deals Are There? How Do They Work?
Property Retrading Explained
How To Perform an Effective Real Estate Property Walkthrough
Rob Explains His Cash On Cash Return Real Estate Formula