Two Simple Tricks to Save up to 11% on Real Estate Rehab Costs

I flip properties and I own apartment complexes.  As such, I am always looking for ways to save money.  I have been using two simple tricks lately to garner up to 11% discount off my maintenance and rehab costs.  I have spent about $45,000 this year on a rehab project and these two tricks saved me about $4,000 in real money.  It is unbelievably simple and it was cash right back in my pocket.

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Cash-on-Cash Return with Equity (COCE)

The primary objective of investing in real estate is for cash flow and appreciation, but just because an investment property has a positive cash flow and appreciates does not make it a “buy.”  A property must produce enough cash flow and equity to provide an acceptable return for the amount of cash invested [1] .  In other words, the return on investment needs to be adequate enough to make the investment successful.   So, if cash flow and equity are major components of the investment strategy, how does one properly measure them against the needed investment capital?

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Don’t lose out on rental real estate losses

If a person owns rental properties, there’s a good chance at least one of them will generate a loss during ownership.  But the passive activity loss (PAL) rules can make it difficult to deduct those losses.  If rental real estate is a significant activity, it pays to review the situation to determine whether one meets the IRS’s definition of “real estate professional.”  This article explains some of the circumstances in which one may qualify and how it might be possible to convert passive losses into non-passive losses, creating substantial tax benefits.

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Crunching Now Will Save You From Being In A Crunch Later

As a CPA specializing in the real estate industry and working with hundreds of real estate investors, one of the biggest mistakes I have seen investors make over the past few years is buying real estate without first crunching the numbers to determine the property’s cash flow and whether the property will  generate a respectable return on investment.  Although it is true

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