RENT Magazine Q2 '22

Remember all of the ADDITIONAL benefits to owning rental estate: ✓ Appreciation over time

✓ Plus, all the non-financial benefits, such as: • Being a total bad a$$ and bragging to your dog • Pride that you’re DOING IT! • Knowing you’re taking care of YOUR future instead of relying on the government to do so (they’re just not the best at managing money)

✓ Mortgage paydown (every month when your tenants pay you, you use that payment to pay down the loan and eventually, the mortgage is paid off. Your tenants bought the property for you!) ✓ Tax benefits ✓ If you’re consistent with managing your asset and raising rents every year (even if it’s just a little), you’ll also maximize your cash flow

Finally, you always want to know how your money is ACTUALLY working for you. This is where Cash on Cash Return (COC) comes in. We get that by annualizing the cash flow and dividing that number by the amount of your investment.

Cash on Cash Return = Annual Cash Flow / Your Investment

Let’s use an example to demonstrate. If the down payment is $32,000 and your closing/lending costs come to $5,000, your all-in cash is $37,000.

We start by annualizing our cash flow:

Monthly Cash Flow $441

Annual Cash Flow $5,292

12 months 12

Next we divide the annual cash flow by our investment amount ($37,000 in this example): Annual Cash Flow / Investment = $5,292 / $37,000 = 14.3% Cash on Cash Return

The whole idea is to keep taking deals like this down so you can finally say BYE, BYE 9-5. The more you know about these terms and numbers, the more quickly you can make decisions and get into action. Getting into your first or next deal doesn’t

have to be terrifying. You just need a general understanding of the process, and as you go through the motions, you’ll start to see that the unknown isn’t as scary as you thought. Once you have the basics down, you can explore building a portfolio, getting into apartments and eventually find the financial freedom you sought to discover.

JEN AND STACY CONKEY Founders Warriors of Wealth Coaching Click here to watch free Multifamily Real Estate Investing videos

Jen and Stacy Conkey have a combined 20+ years as entrepreneurs and real estate investors. Through their diverse real estate experiences, Jen and Stacy Conkey know what it takes to identify deals and make offers on properties that will build a long-lasting wealth portfolio. With over a decade of experience sharing knowledge with other investors, Jen and Stacy have taught thousands of people across the globe on what it takes to succeed in real estate investing, with actionable strategies that make cashflow real estate fun and easy.

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