Monthly Archives: January 2014

Investors are betting on Multi for 2014

Just as we predicted: Investors are betting on multi family properties for 2014

Chris Flanagan, MBS/ABS Strategist with Bank of America-Merrill Lynch and MBS Strategist Justin Borst said in their Securitization Weekly Overview, “the December housing starts report provided some confirmation of the theme we discussed last week, which was that it appears as if a structural shift away from getting a mortgage and buying a single-family home to just being a renter is underway.”  This new report show that single-family housing may be decreasing and the multi-family rental market will continue to grow through 2014!

This increase in the apartment rental market is due in part to many young adults renting due to job constraints and other financial factors.

Smart investors are betting on Multi – and so are we: Read More

FREE EDUCATIONAL WEBINAR

donovan-webinar

REGISTER NOW FOR THIS FREE EDUCATIONAL WEBINAR

The founders of Investar USA will take you through a 45 minute webinar about the benefits of investing in multi-family apartment buildings in Houston, Texas.  They will discuss why they see Houston as the top real estate investment market and how you can create true-wealth from investing in multi-family apartment buildings. You will learn how to earn tax free income and equity growth. You will also learn the 4 unique and profitable benefits available to you as a real estate investor.

Join us Thursday, January 30th, 2014

12:00pm (MST) and 7:00pm (MST)

REGISTER HERE

Please Join Travis Cadman and special guests from the property management team. Learn first hand how accredited investors can acquire apartment buildings in Houston.

In 2008 Travis Cadman and Ron Cadman told both Canadian and U.S. investors that the greatest way to participate and profit from the U.S. housing crisis would be to buy and hold Single Family Homes and the place to invest would be Phoenix, AZ.  As of today Phoenix, AZ is #1 in price appreciation from trough to peak. Now they are telling you that Houston, Texas us the next hot market – Don’t miss your chance to invest in another great opportunity.

Travis is a seasoned real estate investor and the principal of Investar USA. In addition to investing in single-family and multi-family apartments, Travis’ passion is teaching others the art of real estate investments. During this webinar, Travis will show you his tried and true secrets to multifamily investing in the hottest real estate market. Travis has helped thousands of Canadian and American investors get started in real estate, so we really hope you can join us!

If you cannot attend this webinar but would like a recorded copy. Please email csmith@investarusa.com and we will send you a copy of the video after the webinar is over.

19 reasons why you should invest in apartments

TOP 19 Reasons Why you should invest in apartments

Historical performance shows that investing in well selected apartment buildings produces returns not commonly seen with other forms of investing such as mutual funds and stocks and here’s why.

1) Leverage – Banks lend money on apartment buildings thus you don’t need to use all of your own money, thus maximizing your return on equity . Real Estate is one of the few investments that offers the power of leverage.

2) Tax Benefits –There are many tax advantages with Real Estate however the main         benefits are capital depreciation, 1031 exchange (U.S. only), and deductable mortgage interest .

3) Transparency – The buildings are already built, through proper due diligence prior to buying the building you can conduct a series of inspections that will provide a solid understanding of the asset. From these inspections you  can build the required budget for immediate and future repairs or simply decide to walk away.

4) Property Management –Due to the number of units in an apartment building we can afford to have professional property management that handles the on-site and tenant matters.

5) Diversification –You can invest in different buildings even in different cities.

6) Market Cycles –   If you watch the real estate market cycles you can time your        purchase so you can maximize your short term appreciation by buying at the bottom of the real estate cycle.

7) Appreciation – Real estate will always appreciate over time and you don’t have to pay for the increase in value until you sell the building. Since 1968 historic appreciation level for real estate have been 6.7% per year according to the National Associate of Realtors.

8) Cash Flow – Acquire buildings where the income exceeds the expenses thus providing cash flow for our investors.

9) In Control –  With apartment investing we are in control, we can improve these assets, improve the management, improve the rental income etc. (tough to do this with a Mutual Fund!)

10) Deprecation –The IRS and Revenue Canada allow apartment owners to deduct a “Deprecation Expense” from our annual income to lower your net operating income from a taxation perspective thus you pay less tax.

11) Refinance – We are able to withdraw cash through periodic refinancing and this is tax free money back to the investor.

12) Asset Protection –Building Insurance – if the building is destroyed insurance coverage willpay to have it replaced.

Rental Loss Insurance – If you have interrupted income due to part or all of the building being destroyed the Rental Loss Coverage which is part of your insurance coverage will pay you money on a monthly basis until part or all of your building is replaced and income is re-stored.

Limited Liability – through proper corporate structure you will be sheltered                          from 3rd party law suits

13) 1031 Exchange (U.S. Corporations  Only) –This allows us to not pay tax on the sale of a building so long as we invest in another like asset within 190 days. This means you use money you would normally pay to the government in tax and buy another building. This is simply a great investment tax savings tool !

14) Inflation Hedge –Real estate investing is one of the few investments that are a hedge against inflation as the cost of goods go up so will real estate.

15) Physical Asset –Real estate is a physical asset. It’s not some cerebral investment that is traded by a click of a button on an online brokerage. You can walk on the grounds, smell the tree’s, talk to tenants and staff,  and inspect the buildings. There’s piece of mind knowing you can touch and feel your investment  .

16) Demand – People always need a place to live. Shelter is one of the basic requirements of life. You can be assured knowing that there will always be demand for residential housing weather the market is up or down.

17) Affordability –Apartment Rentals are considered affordable accommodation thus will always be in demand. Also with the use of Leverage apartment buildings can be acquired using 50%-75% of the banks money .

18) Business Cycles –  Multifamily investments are one of the few sectors of the investment space that are sheltered by traditional business cycles. As the economy slows people need affordable  housing and as the economy pick up landlords typically increase rents as demand increases through this cycle. Note: rising   interest rates are great for landlords as homes become less affordable which simply increases the demand for rental housing.

19) Maintenance – With apartment investing our maintenance costs are spread over a number of units thus utilizing “Economies of Scale”. We will have our onsite maintenance person who will look after repair  issues on an as needed basis.

General Comments:

1) A big advantage of real estate over any other investments is the triple threat of tax advantages, refinancing, deprecation, and the deductible mortgage interest.

2) Besides the fact that there has always traditionally been a huge demand for rental housing, there are a number of factors that will cause demand to go even higher in the next decade; Echo Boomers – This group is comprised of individuals born between 1982-

1995. Over the next decade approximately 4 million “Echo Boomers” will become adults each year. It is estimated that there are around 80 million which will make them the largest demographic group in North America since 1960.

Baby Boomers -  Until their children come along (Echo Boomers) baby boomers were by far the largest demographic in history estimated at 78 million. Baby boomers are generally considered to have been born between the 1940’s 1960’s.  Over the next decade the largest demographic group in forty years will be flooding the rental market”.

For more information of how to buy and Investar USA property contact an Investar USA representative today.