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People often hear that real estate is a great investment and wonder how to get started. They research, realize it is not that easy to find the right building to buy, get scared and never invest. Read Investor's Lament. At Safari Realty we can eliminate some of the guess work for you. We have an email newsletter featuring pre-analyzed apartment house investments. Much research has been done by our staff on these properties up to the point where we can almost guarantee the yield. Call or sign up by e-mail to receive our newsletter. We have found and continue to find numerous buildings for investors. See RECENT SOLDS!. Along the way, we have created 3 partnerships for investors using Tenants in Common as the form of ownership, and we have recently added our new LLC: Safari Partners IV. See home page or partnerships page for more information. These properties are then managed by an independent management company. See Property Management. Each partner receives a detailed operating statement and dividend check monthly. Tenants in common ownership works great because it allows the partners to go their separate ways upon disposition of the property, or as is the case in one of our current partnerships, we are exchanging for a larger building and tenants in common preserves the 1031 tax deferred exchange. If you are considering investing in apartment buildings, study Economic Models, then contact one of our investment counselors. Ask him or her about our Real Estate Investment Retirement Account. We can help you choose your investment and management company. With time, you will achieve the specific goals outlined below in the rule of 72. The big advantage of owning real estate is to take advantage of compounding money. This is best explained by "The rule of 72": If you divide your desired compound rate of return into 72, you get the number of years required for your investment to double. Conversely, if you divide the number of years in which you wish your investment to double into 72, you get the required compound rate of return. Keep in mind, you are using leverage in your purchase, so; the doubling your down payment happens quite a bit sooner than doubling your entire investment. Keep in mind inflation plays a part in your return. Click here for an inflation calculator courtesy of the Minneapolis Federal reserve bank. FOR EXAMPLE: You buy an apartment building today for $600,000, ($150,000 down & a $450,000 loan), and you forecast a 07% appreciation rate. The Rule of 72 says: 72 divided by 7% return equals approximately 10 years to double. Ten years hence, you refinance your $1,200,000 building using a 75% Loan to Value Ratio=$900,000 new loan. You pay off your old loan and have $450,000 cash-out proceeds to buy an additional $1,800,000 of apartment buildings (25% down). You now own a total of $3,000,000 worth of apartment buildings, your net worth is $750,000, and you are only 10 years older than today! Leap forward 10 more years, 20 years from today: Your buildings are now worth $6,000,000. You re-finance and employ the $2,250,000 cash-out proceeds (75% LTV), and buy $9,000,000 of new buildings. You now own $15,000,000 of apartment buildings ($6,000,000 plus $9,000,000). You have turned $150,000 into $3,750,000 in equity and $15,000,000 worth of real estate in 20 years! What are you waiting for? We at Safari practice what we preach. One of our groups purchased 4 units last year for $345,000. We sold it for $451,000. The partners then did a 1031 tax deferred exchange into a 14 unit building. Instead of 7% appreciation, our first year appreciation was 31%. When the new 14 unit comes on-line, the return on original cash invested ($15,000 each) will be 27% annually. We are 4 years ahead of schedule! If this sounds like something you might be interested in, call or e-mail us on the website and let’s set up a meeting. 310-493-1999
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