Daily Meeting - Personal Finance 28: The Transfer of Leverage

• Antonio’s goal is to acquire 3 single-family homes and 1-3 apartment complexes
• For one of the apartment complexes Antonio is acquiring, the rent is $500-$570 ($300 less than fair market rent)
• They’re asking for $1.2 million, but are only bringing in $147,000/year

Antonio’s Guide to Multi-Family

1. Investors take advantage of the market

• Investors don’t make it emotional
• When the market gets saturated, that means something has changed
• The single-family home is saturated, which means the rental market is booming
• The goal is not to buy; the goal is to buy intelligently

1. As an investor, you need to do the opposite of what the masses are doing

• When someone gives you their check, it pays your expenses and should pay your debt services.

Numbers for the Multi-Family 

• Fair market rent for apartment complex
• $950 — 2B 1B (14)
• $850 — 1B 1B (8)
• $1,200 — 3B 2B (1)
• Get $255,600/year
• When Antonio offers $325,000, he can get it back in 1 1/2 years
• If you have hard income0-producing assets that can pay for that loan while you’re transferring renters, you can play any game

Closing Thoughts

• To find out if the customers following you mean no good, raise your prices
• If you raise your prices and no one complains, your prices are too low
• When 10% of your audience start being grumpy, you’ve got a good price

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