Real Estate Investment 101

Todd Miller: Hello and welcome to Todd Miller Tv. I’m joined today with Adi Mor who is the guy in charge of the Mor group. Expert real estate agent, property management, works with a lot of investors and thanks for being on the show.
Adi Mor: Thanks for having me.
Todd Miller: So, let’s talk investments. A guy comes to Vegas from who knows where. They’ve got 100,000 bucks, why should they take and put money into a real estate asset in Las Vegas versus buying something on the nazzdack or investing in a cd or some other form of investment.

Adi Mor: Okay, frst of all everybody’s money is falling asleep. Money is in the bank collecting half a perecnt of interest. Cds giving you some sort of better return over the long, long turn. Quesiton for you, am I supposed to be looking at the camera or you?
Todd Miller: Doesn’t matter.
Adi Mor: Okay, so you wanna start if over?
Todd Miller: No.
Adi Mor: Okay, I’ll continue. Alright.
Todd Miller: So if you’re investing in a bank you’re getting one percent?
Adi Mor: Exactly. Less than one percent even. You get like, one percent if you’re doing it for three years. Prople want to keep their money liquid. Most of the thigns I see is investors, they’re money is falling asleep in their banks , they’re making nothing, they have money and they don’t know what to do with it. Best bang for the buck is investment in Las Vegas. Residential real estate whether its condos, houses, as long as you’re holding cost and your net returned, it makes sense for the most part. I have Investors calling me telling me I have 3 daughters and they’re going to college in 7 years and I want to buy a condo for each one but, they go to college I’ll be able to sell it and the profit will pay for their tuiton.
Todd Miller: So they buy a place today, and in 7 years they’ll get their money back and the profit will pay for the kid’s school.
Adi Mor: Exactly that. They’re buying a palce today, in the meanwhile they’re making about 10 percent return on their money, and anywhere to 4, 5, 6 years, whenever it takes for their kids to take and grow up and go to college they’ll sell the place and actually pay for their college tuition with the proceeds.
Todd Miller: So you’ve got some numbers here, and these are some interesting numbers, let’s say I’ve got maybe 70 grand to invest in a house or condo and I put my 70,000 dollars in a house, how do I get money back?
Adi Mor: Ok, when you’re talking about 70,000 dollars hopefully you’re talking about the total investment amount you wanna spend is 70. If that’s the case then we have to work backwards . 70,000 is the total amount you want to invest. It actually means you’re real investment, you’re looking for a house or condo in the ball park between 60 to 63,000, that way it gives you room for closing cost, transaction fees, and also rehab of the property, bringing it to rentalable conditions, so you’re total investment is about 70,000. We’ll work from that. We have all sorts of holding costs associated with their investment. Holdin costs starts with Home Owners association, property taxes, home warranty, insurance, maintanance, miscellaneous, and thr management fee that we take. These numbers vary from neighborhood to neighborhood, from house to house, case by case scenario. We have a pretty good estimate using very conservatie numbers so it could only be better. For the most part, we’re finding that the holding cost including management, property taxes, insurance, maintenace, miscellaneous, anything that can happen , its coming to about $400 a month. So we buy a $70,000 house, for the most its like 3 bed, 2 bath 1 car garage , may even be 2004, 2005 product, so its nice stuff. Rent it out for about 9,500, let’s be conservative 900 dollars, holding costs is 400, you’re netting 500 a month . 500 a month times 12 months is 6,000 a year against you 70,000 total investemtn, 6,000 a year against the 70,000 is a little bit under 10 percent. 6,000 divided by 70,000 dollar investment is 8 and a half percent.
Todd Miller: that’s conservative. Low end rent and high end all your other costs and that’s summing you do have 5,000 dollars of rehab to the house. You may not have to, you might get a rent premium.
Adi Mor; But that works throught the investor’s bonus. Let’s say we don’t have to spend 5,000 in rehab , if the property sits vacant for a month or two you’ll count into those numbers. Besides that, HOA fees, they vary from neighborhood to neighborhood, I have units that are 350 a month and I have properties that are 45 a month.
Todd Miller: Yeah because just with this area here you’ve got $100 for HOA, if yout not in an HOA…
Adi Mor: That’s gonna bump you over 10 percent. For the most part, these numbers are very conservative and we see higher results .
Todd Miller: So this isn’t a buy and wait 5 years to get a return, you’ll be a return immediately.
Adi Mor: This is immedite rammification, is that the word I’m looking for?
Todd Miller: So given that, what would you say to the person who said’ yeah but I heard prices are gonna 7 percent next year’?
Adi Mor: 7 percent on 60, 70 thousand dollars is about 5 grand, you know in the meanwhile we’re buying them, renting them, and collecting 10 percent of our money so it takes a year for it to fall to 7 perfecnt but we’re already renting and making 10 percent of out money and meanwhile, none of my investors are afraid of the decline, the Las Vegas market is pretty much skating the bottom, I cn’t rally see it going anywhere else unless we’re talking about high end homes, for the most part these properties are already at their lowest maybe go down, 5 percent on nothing is nothing.
Todd Miller: And you do it all, help them invest it, help them manage it.
Adi Mor: Definitely. We help you find the property , we help you acquire it, we help you with the rehab of the property and bring it into rent condition, and then we will blast it on all our secret websites where we find all the renters, and we’ll get a renter in there, we’ll screen the renter, we’ll put them in, we’ll move them, condition report, get the squared away where he’s happy, collect the rent, deposit it in their account, the whole 9 yards and then when it comes time in 5, 6 years to sell, we’re gonna do it for you.
Todd Miller: How do they find you?
Adi Mor:,, call Todd, my mentor,
Todd Miller: Alright, well that is the update for today, I hope this was informitive for you. If you’re an investor this is the guy and thanks for tuning into the show.