Apartment Ownership- yet another month
June 2008 Update
Hi future partner,
I read a funny article recently on the increasing use of the word "Headwinds" by politicians when speaking about the dete ...
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Commercial Real Estate Agent |
RAINER 1,523 |
| Steve Nauert | ||
| location_on Canyon Lake, CA — IRA Real Estate Management .com | ||
| insert_link http://www.IRARealEstateManagement.com | ||
| web Steve Nauert's (safaristeve) Blog | ||
Get to Know Steve Nauert
My primary education was at Palos Verdes High School in California. I then attended various classes and correspondence classes relating to Real Estate and Real Estate finance. My first Real Estate experience was in the 1980's working for a business brokerage selling liquor stores, dry cleaners, restaurants etc. I spent two years there, then another at Wagoner Jacobson, an apartment building brokerage in Los Angeles.
The majority of my early business career was spent in the restaurant business. I owned and operated 5 restaurants over a 20 year period. I learned operations at both Denny's and El Torito. I spent years studying Diners and authentic american dishes. Three of my restaurants were a success, 2 were failures. The restaurant business is very tough one, but it taught me a powerful Lesson; go into a business with little or no competition, where you can raise prices along with demand. This is what Warren Buffett calls a "business with a moat around it." I found that business and the moat in apartment building ownership.
Ten years ago I re-entered the Real Estate business with Shorewood Realtors, primarily a residential brokerage. The Internet was just picking up speed and I created a website,Safari Realtors, for apartment building buyers and sellers. This website turned out to be a smashing success, I was able to leave Shorewood Realtors and open Safari Realty & Loan in 2002. Since that time, I and my staff have helped negotiate over 100 transactions for buyers, sellers and our LLC partners.
Through the process of putting together numerous partnerships I discovered a real need that IRA holders have for a higher yielding and more reliable investment vehicle than the stock market. IRA Real Estate Management.com is solving this need for our IRA holding partners.
The nitty gritty of apartment building operations
Hi new viewer. Every month we mail out this newsletter to our partners. We attach the individual operating statements of each of our partnership properties. I h ...
Certifications
There is an old saying that if you want to learn anything, teach it. I teach a class at Keller Williams in Temecula on apartment buildings. Years of experience distilled down to this formula:
INFLATION + LEVERAGE + COMPOUND INTEREST= PROFIT
Inflation historically runs about 4% per year. Annual rental increases monetize inflation in real time. Definition of inflation: too much money chasing too few goods.
Warren Buffett quote: " Our outlook for inflation is always the same. We feel there's a big bias toward inflation-both in the U.S. and around the world...It's a world where prices are going up and up. It's just a question of how much. You could definitely have some explosive inflation at some point. Printing money is just too easy. I'd do it myself if I could get away with it." Annual meeting in 1988.
LEVERAGE is the use of borrowed money to increase profits on a real estate investment. Example: You purchase a house for $100,000 cash. The home increases in value to $110,000. You have made 10% on your money. You purchase the same home for $100,000 using a 10% down payment, and the home increases in value to $110,000. You have made 100% on your
COMPOUND INTEREST $1,000 turns into $33,000 in 50 years. Here's how it works: Interest is added to principal, the interest is then calculated on the new amount. Example: $1,000 + 7% interest = $1,070. Interest year two is 7% on $1,070 or $75, and on and on. If you invest $1,000 simple interest in fifty years you have $4,500. With compound interest you have $33,000. Einstein called compound interest the greatest mathematical discovery of all time!
We put this formula in parctice for our clients. You can see th eapplication on our website, IRA Real Estate Management.com on the Formula page.
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We manage the Real Estate portion of our clients IRA/401Ks. We purchase apartment buildings, have them professionally managed, then let inflation, leverage, and compound interest do all the work.