Strategic Plans for Clients

What are you aims and objective for real estate investing?

Determining the objectives of the client, and therefore the strategic plan, is crucial in planning an investment strategy

• What is of primary importance – cash flow or appreciation?
• What is your investment level?
• Are you looking to achieve maximum asset acquisition with minimal investment?
• What is your risk level?
• What return on investment do you expect?
• What is the time period for your investment (to achieve maximum return) – 5 years? 10 years?
• Are you looking to invest in specific areas?
• Are you looking to acquire a single asset or develop a diversified portfolio?

Aims and Objectives

Goal is to

• acquire a portfolio for future security
• develop a long-term investment strategy
• to maximize the return / growth (appreciation) of the portfolio

Requirements

• to develop a diversified real estate investment portfolio
• to acquire assets on an ongoing basis over a period of time (6-12 months)
• to diversify the portfolio with regard to type of real estate
• to diversify the areas of investment

Initial resources available for investment

• $300,000-$500,000
• 2 colleagues to invest together

Suggested Investment Level

• $100,000 in residential real estate
• $200,000 – $400,000 in commercial

Investment Strategy Outline

Phase 1 Individual Investment

Months 1 – 3 after contracts signed  Acquisition of residential real estate

• 3-5 assets
• Starts to develop the portfolio using minimal investment in the form of down payments
• Client can acquire $1M+ residential portfolio quickly
• We coordinate the property management
• We confirm commercial asset criteria and produce detailed analysis for suggested assets

Suggested assets

• Property value approximately $220,000
• Down payment 5-10% (depending on finance programs in place, requirements of client)
• The level of down payment chosen will influence whether the client is cash flow neutral or positive and also the level of cash flow
• Potential annual appreciation 8-12%

Costs

• Closing costs 3%
• Down payments = 5-10%

Phase 2 Dual Investment

Months 1 – 6 after contracts signed   Acquisition of commercial real estate

Potential assets

1. Commercial building, Utah, Colorado, New Mexico, Idaho
• Value $600,000
• CAP rate = 8%
• Down payment 20%
• Already tenanted

Total investment = $155,000
 (total cost dependant upon level of down payment dictated by loan programs available and number of clients sharing asset)

2. Medical office building, Utah, Oregon, Colorado

• Value $2,000,000
• CAP rate = 8%
• Down payment 20% (depending up loan program available)
• Already tenanted

Total investment = $500,000
(total cost dependant upon level of down payment dictated by loan programs available and number of clients sharing asset)

Portfolio Established for clients over first 6 months

• Potential Total Investment $700,000
• $350,000 per client
• Step-wise investment strategy (i.e. investment funds as assets acquired)
• Residential Real Estate acquired each $1M+ million
• Commercial Real Estate acquired jointly $2.6 million

Phase 3 Continued Acquisition / Asset Management