Are you about to buy a dump or is it a cash cow? I mean listen, it all comes down
to cashflow. When you when you get to the point where you say, "I'm looking for some
financial freedom in my life. I need my money to work for me." it means that you
got to place your money in markets where you can maximize that cash flow on doing
a real estate deal. My name is Kris Krohn. Welcome to the channel. Make sure that
you are a subscriber. Every day dropping videos like this. And today, I'm bringing
in my acquisitions director, Tyler Bennett. He and I have done 4,000 deals
together. And we're going to be breaking down the numbers on a Performa to show
you what happens in one of our best cash flow markets and the kind of money you
can make.
Alright, listen up. So, if you've been joining us in our series, we've been
talking about how do you identify the very best markets. We've identified our
best markets. Our growth market in Florida. One of our cash flow markets
being in Memphis. And today is the day where we're actually going to like dive in
on a deal and say, "What are the numbers look like out here in this market?" And
we're going to be looking at a house on... What is this, Tyler? -It's on Godwell
Drive in Memphis Tennessee. So it's in our Memphis market and our cash flow
market. -Awesome. So, that's cash to market. We're going to actually kind of dive in,
break this down. First of all, you got a map of where this thing is? Like, where
are we out in this whole black place here? -So, let me show you where we are in
comparison to the actual city. If you come in here to Memphis... So, you've got
Memphis right here. -Yeah. -There's your Mississippi River,
there's a Tennessee, Mississippi border. And so, where we typically buy is right
around here. So, we're not you know, in the inner city necessarily. We're in these
Suburbs, Germantown, Bartlett, Cordova. So, this particular house is right here just
south of a little community called Germantown. -Awesome. And if you watch one
of our previous video, we're really broken down why this is such a hot
amazing market. And I think you're about to find out when it comes to actually
the numbers. Let's just jump right into this. 1, you can see the picture. It's a
cute little house it was built in 1988. And it's got 1,400 square feet, 3
bedrooms and 2 baths. -That's about as boring and... -Yes.
Exactly. So now, let's look at what what you pay for that type of house. So, if you
come up here to the top left of this pro forma, you've got a purchase price. So,
this house is 122,500. -Which is kind of
in the middle. I mean sometimes we're sub 100 grand, sometimes we're up it's closer
to 140 or 150. -Exactly. -In the middle? -And this house just recently had about
15 to 20 thousand dollars of repairs. So, it's got a newer roof, AC,
furnace, water, heater, flooring, paint. So, we're trying to eliminate any big
surprise repairs in the next, you know, 3 to 7 years in our buying
crate. -This one I think I picked up thru auctions? -It did. Correct. Yeah. -So, we've
got one of our teams out there that goes to the auctions every single week and
they buy up where the numbers look good. And instead of me and my investors
risking our money on that entire process, we've set up a team that basically they
take the risk, they buy these homes of work out, we never have to commit to them.
If the numbers work out, they pass all that on to us. Now, they're experts at
what they do. -And it creates such a better return because if you were buying
this house, you don't to spend that $20,000
after closed on rehab. So, you're able to wrap that
into the price and finance it. You've got a down payment of 20%. So about
$25,000. You've got closing costs for the for the loan. No rehab because this all
just happened. -Yep. -Right? -Beautiful. -Yep. And sometimes we buy houses where
there's a... There's a number right there. And that's because it hasn't happened
yet.Wwe need to do it. We need a plan on it. -Now, this... This number I think is
really important. This is the acquisition fee. Let's talk about that for just a
second here. What you guys to understand that when people work with our team and
we take them into the best markets, that you have licensed individuals and you
have non licensed individuals. So, the licensed individuals always manage to
get taken care of in the deal. Because there will be... The seller will be paying
a realtor fee. There's going to be a lending fee. But then our team that goes
in and evaluates hundreds and thousands of these deals to really find the
winners, you have the research team, that you got the team that's actually right
in the numbers. You got the team that's managing the rehab crews. You got the
crews themselves. You know, that and so many other components, those aren't
licensed positions. And so, instead of charging 10 or 15 thousand dollars
which is what you'd have to pay on a home, we come up with the blanket fee. And
because we have so much volume, we keep it down. It's like, it's pretty crazy that
that number it's one of the lowest we've ever had. It's 3,995. Basically 4 grand.
And it buys you an entire team that helps you hone in and basically get
access to literally cherry picking one of the best cash flow deals in that
market. Which is pretty awesome. -Yeah. -It's a great system to involve all the people,
get everything taken care of. You know, me as an owner buying this house, I don't
really get to see any much of a benefit on that. The big benefit that I pick up
is a team that goes and does all the work and finds the very best of the best.
-Yep, absolutely. So, at the end of the day, it's about a
$33,395 investment to get
this house. -Okay. So, if you watched our previous deal in Florida, if you watch
that video, you know, I think we're closer to 47,000. And in this
market, we're usually seeing anywhere from 20,000. Really on up to 30,000, maybe
$35,000. So, this one is pretty typical. -Yep. And it's going to rent for $1,150.
And your mortgage payment, principal and interest, 564. You've got taxes, you've got
insurance. So, your total mortgage payment is $785. -Now,
if you've watched one of our videos before, you know that the Delta between
that number and also your monthly 1500, we can already kind of
break that down. And that gives us a total cash flow of around... -Just under
$400, year one. Yeah. -So your one, 400. But that number
also gets to grow with time. -Correct. -And by the time you zoom out to 10 years,
here on the other side, you're looking at $598 on
a tiny, cute, little deal. Right? -Yeah. Which is 20% on your money. And
just cash flow. -Yeah. Which is fantastic. -Yep. So, some of the assumptions are the
same that you saw in Florida that you'll see here. Down payment, closing costs,
interest rates. Because those aren't really going to change per market.
However, you will have property management. So, in this particular market
where 8%. Which is still below market averages. -So, that's part of the
growth and having a team that you just, you bully yourself in the market
with volume. And volume is king. They always the cash flows King. The person
that's doing the most deals, that's the king. You're looking at the king. -Haha! I
do want to say something to that number. Because we could go out and negotiate
with somebody to get slightly better pricing. But there's this point where
it's not worth it to first service. Right? We want to make sure that somebody's on
our team and and understands our long term vision and goals with these
properties. That they're not just going to place any tenant. Or that they're not
going to ignore service calls or they're not going to do drive-bys and look at the
inspections of the houses. And so, there's this point where we don't drive pricing
so low that we, that it ends up costing us. Right? More than we potentially can
make. And so, each markets different and each partner is different. And this
particular market, I feel like we get a great value for this price. Vacancy
repairs, 10%. So, a little bit higher than the last house. This house is a little bit
older. Of course, we have a lot of newer improvements that have just happened on
the house. But that's we're out there. And then
appreciation. So, it's slower than Orlando, right? Because it's more cash flow than
it is growth. So, those are the assumptions we're using. So, as you looked
at you know, that just under 400 all the way up to close to 600
over the 10-year period of time, that's what's behind the scenes calculating
those numbers. And that growth. -Awesome. -And then let's look at the fun part of
this. And we know more emphasis in this market is on cash flow than it is on
growth. But there is a growth component. But before that, we still have principle
reduction and we still have tax savings and those are just awesome. So, I'll
highlight those really quick. And again, it's going to be very similar for most
houses. You're 4%, right? We're paying down $1,400 a year. So, just
over $100 a month, our tenants are paying down on our mortgage
that we're going to get back and we sell it. And then we're saving about a
thousand dollars a year in taxable taxes that we would have paid. Which equals
another about 3%. So again, another 7% on top of that
8, 9, 10 percent that we were looking at earlier. -That's awesome. -Yeah. -If those
numbers don't get you up in the night and kind of like browse around and get
you excited, you haven't caught the vision yet. Watch the video again. -Yeah.
-Good stuff. -If it doesn't get you exciting for year 1, look at year 2,
then look at year 3. And just the compounding effect is so awesome in
real estate. And then we look at growth, right? We're at 6% the
first the first 3 years. So, you see this this 7,300. The
7,700. I mean, you're talking about an additional 20 and that
tailors off but about a 15 to 20 percent on average. Potential upside and growth in
addition to that 15 percent-ish cash on cash return. -Yeah. Amazing returns. It's
almost like you're winning on the cash flow, you're winning on the buy down,
you're winning in on the long-term appreciation. You're winning on the cash
flow. You just you win and win and win. And when you stack it all up,
let's talk about what the overall ROI numbers look like? -So, you're looking at right
here, just on the cash on cash and this is after assuming vacancy, repairs,
everything you can think of. Net, net, net. Yep. You're looking at this, you know,
close to 9% up to 12%. -Yes. -So, right? A step up from
Orlando. About 3% higher across the board than Orlando. And then
you're looking at mid 20s for overall gain. -Yeah.
-So, we're Orlando. You know, it's about 10% lower in overall gain. Because of
the growth that Orlando offers versus Memphis. But you get a little bit more
along the way. And cash flow. -So, friends if we take a look at this deal, I mean
honestly, the really exciting part about this is
that when you're maneuvering a large team to go in and make this available
for the right people all over the world, the very fulfilling part is that we've
been doing this for such a long time. We know how these perform with time. And on
any given property, a nightmare can always occur, right? But you get prepared
for it, you have your Sleep Well at Night account and that's what we're doing here.
So... -Yeah. -Just a fantastic property. Looks super
typical in relation to what we're normally doing. And friends, that's
a good example of a cash flow market. Now, we've got our other cash flow markets.
But if watching this video inspires you to say, "Man..." First of all, if you're a
partner watching this, congratulations on being a partner. Hopefully this is like
hyper educational for you. And for those of you that are sitting out feeling
maybe a little left out saying, "Man, how do I get it on the action?" We can supply these
properties to you maybe. If you're the right person with the right attitude
that we feel like we really want to work with. And we feel like we're the
right team for you, all you gotta do is go into the description below, click the
link and talk to a member of my team. We've got some information on the
website. And you have a chance to say, "Hey, I want to talk to somebody and have them
say if they put themselves in my shoes, what could you actually see
happening? What could you actually do?" And I'm going to tell you that whether you got
a ton of money or whether you got nothing, we have a game plan that will
make sense for you. And if you're interested in actually partnering, you'll
learn on that website what it actually looks like to meet that criteria. Either
way, it's a way for you to get in the game. And with winter coming and where
we're headed in the economy, you need to get in the game and start building a
track record. Because for some of you, this next recession holds millions of
dollars of possibility. A whole new level of financial freedom. And we hope
that you're going to ride with us to really get your piece of the action.
If you're not a subscriber, take care of that and check out all the videos in
this particular playlist. Because that's us pulling that curtain and giving you
everything you need to know about how some of the most intelligent investors
doing thousands of deals are doing it in today's economy, tomorrow's economy,
yesterday's economy. It is your time to step up and freaking make this stuff
happen. So, we'll hopefully see in the link below or we'll catch you on the
next video where we're going to dive into what happens once you get your deal
under contract. And how do we get this puppy performing.