Wealth Amplifier Step 3: Large Buildings, Massive Cash Flows

By Gunnar Dylenn

Third in the Wealth Amplifier series, this book will teach you how to profit from large building real estate. Gunnar Dylenn offers practical, down-to-earth advice for aspiring real estate entrepreneurs that will put you on track for success.

• Language: English
• Publisher: Gunnar Dylenn
• Release date: May 28, 2012

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Wealth Amplifier

Step 3: Large Buildings, Massive Cash Flows

Gunnar Dylenn

Smashwords Edition

Copywrite 2009 Gunnar Dylenn

Smashwords Edition License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you're reading this book and did not purchase it, or if it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

Disclaimer of Liabilities

It is the belief of the author that the principle person responsible for your personal finance is you. Although the author tries to bring accurate information, under no circumstances can or does the author warrant the completeness or accurateness of the content found in this course or its usefulness for any particular purpose. Therefore, the author makes absolutely no promises or warranties, nor accepts responsibility for any liabilities, injuries or damages that you may cause or incur when using methods, principles or other information provided within this course. The author strongly encourages the user to research all information provided within this course. None of the methods, principles, or other information provided to the user is meant to be used in replacement of professional advice. It is solely up to the user to determine if the methods, principles, and other information are safe and suitable for their particular situation.

Reproduction of any part or translation of any part of this course without the expressed written permission of the copyright owner is unlawful and will be prosecuted to the fullest extent of the law.

Copyright 2009 All Rights Reserved

Dedication

To Everyone who has overcome the relentless trauma and drama that life throws your way a Gigantic Congratulations and to those who understand that conquering your short comings in life, happiness and fulfillment belongs to you.

To all Doctors, Dentist, and Scientist Thank you for your endless pursuit to answering tough questions, for helping your follow humans to have an enhanced life, and for moving our species forward.

To Kulkulkan, Thank you for putting us on the correct path and for sharing your knowledge.

To Ed Leedskalnin job well done on proving that you cracked the ancient code, being a unique thinker, and living life under your own terms in spite of this, I wish you would have shared your insight and brightness with the rest of humanity.

To Laurence Tureaud Thank you for always having a strong soul, a positive message, and a healthy outlook when life dealt you a losing hand.

Table of Contents

Chapter 1: Why Buy Large Apartment Buildings?

Chapter 2: Valuation of Income Property

Chapter 3: Investment Return Estimates

Chapter 4: Where to Locate Large Properties

Chapter 5: Due Diligence

Chapter 6: Finding Hot Markets

Chapter 7: Financing and Offers Made Easy

Chapter 8: Managing Large Buildings

Chapter 9: Motivation

Chapter Quiz Answers

Chapter 1: Why Buy Large Apartment Buildings?

The successful person makes a habit of doing what the failing person doesn't like to do.

Thomas Edison

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Buying, selling, and holding large apartment buildings offer the fastest way to make you wealthier than in purchasing single family houses. People will always need a place to live. Young people starting out will need a place to live; mature people who do not want the responsibility of owning a property will need a place to live, and people who have just made poor life decisions will always need somewhere to live. This creates a wonderful opportunity for us as investors.

Many times new investors are afraid of the idea of owning a large apartment building. They feel as if they do not have the knowledge, the education, or the background to obtain this type of property nor the skills needed to manage large apartment buildings. If you have these fears you will be able to put them aside after reading this course you will possess all of the skills needed to acquire and to successfully manage large apartment buildings.

Less Risk of Personal Liabilities

When you purchase an enormously large multi-family apartment building there is no way that you alone can make the payment for the mortgage yourself. As a result of this fact, the lending institution that lends you the funds will issue you a loan that is called a nonrecourse loan. What this means is that if the property goes into foreclosure the only recourse the lending institution will have is to repossess the property from you, they can’t come after you personally. Couple this with the fact that you take ownership of the property in the form of an LLC or some other form of legal ownership that can offer you enhanced protection against your personal assets. These facts combined to make a tremendous advantage over recourse loans that you can be held personally responsible for and will have a substantially negative affect on your credit rating, the amount of interest you pay, and the ability to borrow large amounts of capital in the future.

Larger Properties Decrease Your Risk

Visualize for a minute that you own a single family rental house. With a tenant renting it and you have an insignificant amount of cash flow. Then the tenant trashes your rental house and moves out. Now you have to pay for the repairs, the mortgage, the taxes, and the insurance, while you’re waiting to find the next tenant and that’s money straight out of your wallet that you will never recapture. Now visualize that you own a 20 unit apartment building and you have one vacancy that’s only 5% vacancy rate. You will still have other people paying your mortgage, taxes, insurance, repairs, and still would have a cash flow coming into your hands while you’re waiting to find your next tenant. The larger the property the more you will decrease your risk of losing your hard earned capital. Owning a large multi-family apartment building is a superior position to place yourself in when investing in residential real estate.

Less Competition

Once you become interested in purchasing large apartment buildings you will be shocked at the lack of competition. Many investors are afraid of them, lack the education needed to own them, and are not aware of the potential profits that can be made from them, or simply do not possess the funds, nor the access to the funds needed to acquire them.

People have been conditioned for numerous years that the only way to become rich in real estate is to buy run down houses, or try to rehab a house, then resale it for a profit. Think about it, how often have you watched on television, or heard stories about people who sell their house or a rental house and make a so called enormous profit? These types of stories reinforce this conditioning. When an inexperienced or a new investor starts out on their investing career they don’t even consider buying a large apartment building a possibility to make money. That’s why there’s not a tremendous amount of competition to acquire large apartment buildings.

Larger Mortgages Represent Quicker Equity

It’s no huge revelation that the larger your mortgage is the more you will pay down the principle each month. Nonetheless, most people fail to realize or fail to understand this concept. Let me give you an example, if you owned a $1,000,000 mortgage and it was amortized over a twenty year period on your first yearly pay down on the principle of your mortgage would be almost $20,000 or twenty thousand dollars of equity. Now let’s look at a $200,000 mortgage amortized over the same 20 years your first year pay down on principle would be around $4,000 of equity. Which one would you prefer to own? I imagine that you want the $20,000 equity. This only symbolizes one year of paying down your principle and as the years advance you will accelerate your accumulation of equity at an enormously rapid rate.

Able to Become a Full-Time Investor Faster

It should come as no major revelation that the more cash flow a property makes the faster you can walk away from working for some intellectual dwarf. Especially, if you own many properties with large cash flows. Larger properties offer the quickest path of least resistance to a financially independent life style. This is just common sense. You can become a full-time investor faster with a building making $2,000 a month cash flow verses a building making $200 a month cash flow.

Easier to Find Others to Invest with You

With higher returns, more profits, and a quicker appreciation rate, you will have hardly any problems finding other investors to help you attain multi-family apartments. With large multi-family apartment buildings there is a high likelihood of there being all three of these elements in owning, investing, and maintaining a large property in your portfolio. For example if you combined your resources with a couple of other investors and you procured a 100 unit apartment building and you immediately increased the rents in each unit by $30 that would be $3,000 a month in