Investment History
Below are actual transactions that we purchased and were involved with for our clients. These are good examples of how we analyze a transaction and the different tax and financial ratios we calculate when we analyze an investment opportunity for our clients. To protect the identity of our clients, we have listed partial addresses.
If you have any questions, or would like more detailed information on a property listed below, please do not hesitate to call David Silkman, CPA, MST, Broker at 310.478.9200 x301 or email him at david@SilkRoadRealtyInc.com.
20155 Keswick St., No. 11X, Winnetka ,CA YB 1981 - 1,066 sq. ft. - 2bd + 2.5ba - Townhouse
Sold for $205,000
Purchased for $174,527
Profit $30,473
Cash on Cash Rate of Return = 17.46%
This property was purchased on March 22, 2010 and it was sold on June 2, 2010. The investor was familiar with this complex since he purchased and flipped the property listed below as well. The complex is FHA approved and therefore, it was a safe investment because a buyer could purchase this property with as little as 3.5% down. The investor made over $30,000 in little more than 2 months.
20155 Keswick St., No. 10X, Winnetka ,CA YB 1981 - 1,250 sq. ft. - 3bd + 2.5ba - Townhouse
Sold for $215,000
Purchased for $184,322
Profit $30,678
Cash on Cash Rate of Return = 17.30%
This property was purchased on August 17, 2009 and it was sold on February 9, 2010. The investor purchased it and flipped it. The builidng was FHA approved and therefore it was a safe investment because a buyer could purchase this with as little as 3.5% down. The investor made over $30,000 in little more than 5 months.
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283XX Casselman Lane , Saugus ,CA This property was purchased October 2009. The investor on this property has numerous passive activity investments that generate taxable income. Therefore, in order to reduce his taxable income, he purchased this property with 50% down and financed the rest with his existing home equity line of credit at 3.15%. He took advantage of the down market and he made a long-term investment betting that real estate prices will increase within the next 5 to 10 years. Furthermore, he will be able to offset the taxable loss this property generates against his investments that generate a income. Thus, reducing his total taxable income.
This property is currently rented to a family member way below fair market value at $775 per month. The above rate of loss of 2.61% and a net monthly loss of $233 is based on the below market rent of $775. If this property was rented at its fair market value of $1,700 per month, then the cash on cash rate of return is 7.78% and the monthly net income is $692.
20253 Keswick Street, No. 3XX, Winnetka ,CA
Purchased for $122,000 - YB 1988 - 880 sq. ft. - 2bd + 2ba - Condo
Cash on Cash Rate of Return = 28.02%
Cash on Cash Rate of Return After Taxes = 21.30%
Monthly Net Income = $513
Monthly Net Income After Taxes = $291
This property was purchased August 2009. The same investor below liked the first deal so much that he purchased another unit in the same complex. The investor put approximately 18% down and financed the balance with his home equity line of credit at an interest rate of 4.24%. He is currently receiving $1,545 rent per month and his total expenses including mortgage payments, property taxes, insurance (fire and earthquake), HOA dues and property taxes equal to $987 per month. It is rented to a Section 8 tenant. For more information on how to rent to a Section 8 tenant, please click here.
20253 Keswick Street, No. 1XX, Winnetka ,CA
Purchased for $125,000 - YB 1988 - 880 sq. ft. - 2bd + 2ba - Condo
Cash on Cash Rate of Return = 24.75%
Cash on Cash Rate of Return After Taxes = 19.96%
Monthly Net Income = $414
Monthly Net Income After Taxes = $189
This property was purchased April 2009. The investor put approximately 16% down and financed the balance with his home equity line of credit at an interest rate of 4.24%. He is currently receiving $1,430 rent per month and his total expenses including mortgage payments, property taxes, insurance (fire and earthquake), HOA dues and property taxes equal to $1,016 per month. It is rented to a Section 8 tenant. For more information on how to rent to a Section 8 tenant, please click here.
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7211 Cozycroft Ave., No. X, Winnetka ,CA |
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215 W. Palm Avenue, No. 1XX, El Segundo ,CA This property was purchased September 2009. The investor was in need of office space for his corporation. Instead of renting and making somebody else rich, he purchased this 2bd + 2bd condo for his office needs and works out of it. He is currently leasing it to his corporation for $3,000 per month which pays for all of the expenses of the property plus a little profit. Therefore, in reality his corporation is paying for the property and receiving a tax deduction for it.
Again, this investor made this purchase for long-term investing and wanted to take advantage of the down real estate market. He did not want to waste his money and not have anything to show for it by paying rent to someone. His corporation is now paying him the rent!
The above are some examples of what we can do for you regarding your real estate investment needs. If you have any questions or need additional information, please do not hesitate to call David Silkman,CPA, MST, Broker at 310.478.9200 x301 or email him at david@SilkRoadRealtyInc.com. Thank you.