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Gary
Mountain
"Sells The Desert"
from his office.
In 1999 – 2000, 23 homes sold,
By September 2001, 22 sold! |
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Gary’s clients are buying beautiful homes from $160k to
250k and are earning 18 to 23 % returns on cash invested! Forty percent down
payments and the rents pay off the 30yr loans in 8 to 12 years! Gary underwrites
and approves the home loans first. Then he represents your purchase of the investment
property "As an all cash buyer", without a finance contingency, saving his clients
thousands of dollars. Would you like to be a client of Gary’s?
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"A model -- vacation rentals as a business that provides
pleasure"
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| Purchase price |
$168,000.00 |
| Cash Down Payment |
($67,200.00) |
| New Loan Amount |
$100,800.00 |
| |
|
| Total cash Investment required |
$71,736.00 |
 |
New loan amount payment@6.75% |
$653.79 |
| Home Owners Assoication Dues |
$398.00 |
| Taxes |
$203.00 |
| Total payment |
$1,254.79 |
|
Vacation Rental Market |
|
| 1/2 month November |
$1,900.00 |
| 5 months Dec-Apr @3,800/month |
$19,000.00 |
| 1/2 month May |
$1,900.00 |
|
Gross Rents |
$22,800.00 |
| Property Mgt. Fee Replace/Repair |
37.00% |
| Net rent "Cash Flow" |
$14,364.00 |
|
 Original
investment $67,200 + $4,536 closing-cost = $71,736. The cash flow after expenses
is $14,364. If you divide the cash flow by the investment, you'll note an internal
rate of 20%. This is based on a 40% down payment and with the investment to
limit exposure to additional carrying cost. Please consider the total annual
payments are $15,057.48. The net cash flow is $693.48 less than the expense
annually in the first year.
Purchase price and down payment both affect the return on investment and although
paying more may buy you a nicer property... it may not produce as great a return
on investment, purchase price vs. rental income.
| Purchase |
$168,000.00 |
$185,000.00 |
$215,000.00 |
$230,000.00 |
$250,000.00 |
| Down payment |
$67,200.00 |
$74,000.00 |
$86,000.00 |
$92,000.00 |
$100,000.00 |
| Loan amount |
$100,800.00 |
$111,000.00 |
$129,000.00 |
$138,000.00 |
$150,000.00 |
| Closing cost |
$4,536.00 |
$4,995.00 |
$5,805.00 |
$6,210.00 |
$6,750.00 |
| Total cash |
$71,736.00 |
$78,995.00 |
$91,805.00 |
$98,210.00 |
$106,750.00 |
| Gross rent |
$22,800.00 |
$24,000.00 |
$27,000.00 |
$27,000.00 |
$29,100.00 |
| 37% exp. |
($8,436.00)
|
($8,888.00)
|
($9,990.00)
|
($9,990.00)
|
($10,767.00)
|
| Net cash flow |
$14,364.00 |
$15,112.00 |
$17,010.00 |
$17,010.00 |
$18,333.00 |
| PI Loan PMT |
$654.00 |
$719.00 |
$836.00 |
$895.00 |
$972.00 |
| HOA dues |
$398.00 |
$398.00 |
$411.00 |
$415.00 |
$415.00 |
| Taxes |
$203.00 |
$223.00 |
$259.00 |
$277.00 |
$302.00 |
| Total cost/mo |
$1,255.00 |
$1,340.00 |
$1,506.00 |
$1,587.00 |
$1,689.00 |
| Total annual
cost |
$15,060.00 |
$16,080.00 |
$18,072.00 |
$19,044.00 |
$20,268.00 |
| Net cash flow |
$14,364.00 |
$15,112.00 |
$17,010.00 |
$17,010.00 |
$18,330.00 |
| Total annual cost |
($15,060.00)
|
($16,080.00)
|
($18,072.00)
|
($19,044.00)
|
($20,268.00)
|
| Annual negative cash
flow |
-$696.00 |
-$968.00 |
-$1,062.00 |
-$1,943.00 |
-$1,938.00 |
 Rents
increased 8.75% per year during 1986-2001. Consider an appreciation rate of
2-3% a year. Now add that to "personal use during the off-season" and you are
earning 18% to 23% ROI (return on cash invested). Hence, the property is carrying
itself and you are enjoying your investment.
There are no guarantees in life, and none with real estate investments either.
We can't predict the future, and we can't insure an investment. What we can
do is show you what other people have done in the past. This does not mean that
you will enjoy the same results. So understand that anytime that you're potentially
going to earn more interest than a bank is paying that there will be risk vs.
rewards. We prefer the investments secured by real estate.
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