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Buy It, Rent It, Profit Masterclass

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  1. PART I: You Can Build Wealth Through Real Estate

    Welcome
  2. About Your Instructor
  3. Setting Your Goals
  4. Download Your BRP Masterclass Workbook
  5. PART I: You Can Build Wealth Through Real Estate
    Invest In Yourself
    6 Topics
  6. Buy It, Rent It vs. Fix It, Flip It
    7 Topics
  7. The Seven Keys To Becoming A Successful Apartment Investor
    3 Topics
  8. PART II: Investing In Rental Property
    Where Should I Buy A Rental Property
    9 Topics
  9. How Do I Get The Best Deal On A Property?
    8 Topics
  10. How Do I Pay For It? Getting The Right Financing
    8 Topics
  11. Lender Requirements And Mortgage Brokers
    14 Topics
  12. Syndication
    7 Topics
  13. Are Foreclosures Too Risky
    3 Topics
  14. Establishing Your Company And Property Management
    6 Topics
  15. PART III: Landlording Essentials
    11 Topics
  16. When Can They Move In? Understanding The Basic Components Of A Lease
    11 Topics
  17. What Do I Do When My Tenants Break The Rules?
    7 Topics
  18. How Do I Move My Tenant Out? Ending The Lease Term
    8 Topics
  19. Maintenance: Inspect What You Expect
    8 Topics
  20. PART IV: Building Wealth Through Real Estate
    The Tech-Savvy Investor
    1 Topic
  21. How Do I Protect Myself?
    3 Topics
  22. Course Wrap Up
    2 Topics
  23. How Do I Grow? Building Your Real Estate Empire
    3 Topics
Lesson 8, Topic 7
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Step Three: Examining The DNA Strand Of A Property—The Beginner’s Safety Net

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Just as person’s genetic makeup makes them who they are, a property’s genetic makeup tells us what it’s made of structurally and financially. I am now going to teach you the financial DNA of an investment property—the fundamental makeup of a property’s financial performance. First, let’s learn what the DNA is. Then, I’ll teach you how to inspect each component of the DNA to see if you can make this property produce more than it currently does. Understanding how the DNA is calculated also greatly reduces your risk of getting “one put over on you.”

There are several things to look for to help create a safety net when determining a property’s financial performance: 

  • Look for add-value properties. An add-value property is one for which the current owner does not realize its full potential. This potential is realized through the rental rates. Typically, these add- value properties are located in areas where there is a greater demand for rental units than there are units currently available.
  • Look for properties that are at most fifteen years old. Anything older than that, unless it has been recently renovated, will be costly in repairs and upkeep. Older properties typically require more extensive repairs to major systems like roofs, electrical, plumbing and heating, and cooling.
  • Look for properties with pitched rather than flat roofs. As a general rule, flat roofs collect moisture. Moisture causes rotting, and rotting requires repair or replacement.
  • Depending on your geographic location, look for homes that are masonry block or brick. Wood-framed buildings and wood-sided buildings are more costly to maintain, more susceptible to termite and other damage, and are a higher fire risk.
  • Note: Now that we understand the DNA makeup of a property, let’s explore some definitions and calculations that will help us determine the property’s financial makeup. Don’t worry, you don’t have to have a background in calculus! We’re going to do simple math that’s easy to learn and execute.