Al & Shelley DeMelo

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September 2011 Volume 6, Issue 9

Sharing our journey with you...

DeMelo's Da News

Autumn is Here!!

Fall is Here!!

Sweet September! Oh yes, the seasons are changing. We still feel summer is not quite yet over!!! We are missing some of the warmth, but welcoming the beautiful autumn changes.

Real Estate Presentation

Al and I have been attending Toastmasters meetings to build our confidence on speaking in public. Our first adventure in public speaking happened at our Kamloops Real Estate Investment Club (KREIC) meeting on Wednesday, August 30, 2011. Our topic was “Getting Started with Multi-Family Investing”. We must toast "Toastmasters", as we had a great experience sharing our real estate knowledge with everyone. Joining Toastmasters really does pay off! Here are some highlights of our presentation:

  • Having your mentors become equity share partners in your deal makes for a win win partnership. The mentors help prevent you from making costly mistakes.
  • Along with the seven profit centers taught in our previous newsletters, there are also some key indicators to watch out for in order to determine if you should move on with the deal. These are:
  • 1% Rule   - Meaning, if the purchase price of a property is $300,000, the income a property needs to bring in is a minimum of $3000 rental income monthly for that property to cash flow.
  • GRM (Gross Rent Multiplier)  - gives you the maximum you would want to pay for a property, the formula is:. Purchase price divided by annual income = GRM. If the GRM is at least 7, the property may cash flow
  • Cap Rate   - is NOI (Net Operating Income) divided by the purchase price. Most investors want to see this number above 8.
  • Cash on Cash return on your investment   - The formula for this is cash flow divided by the amount of your investment in the property.

Lets say you want a quick analysis of a property but don't have all the details of the expenses. You can use these calculations as a guideline to what the expenses could add up to.

  • Single Family, duplex – 30% of Gross Revenue toward expenses
  • Triplex or Four - plex – 35% of Gross Revenue toward expenses
  • Five or six- plex -45% of Gross Revenue toward expenses
  • Greater than 6 Plex – 50% of Gross Revenue towards expenses


West Coast Gardens 10 Year Anniversary!

Our first day of business for West Coast Gardens was September 11, 2001. So we decided to celebrate with a BBQ with all the fixins'. We even raised some money to go to the Kamloops food bank. We want to thank everyone for the great turnout and community support. We had samples galore donated by Innovating Plant Products, . product representative Rob Kaiser. This company is one of the only companies to have an all Canadian clean product line. We really would like to thank Rob for the fabulous support.

 

The Checklist Manifesto

The Checklist Manifesto is all about creating checklists to keep ourselves organized on tasks we need to do, and the order for getting them done. Basically, they are easily repeatable, for anyone to follow (oh, and then you free some of your time and delegate them to helpers!). In today's world, it is so easy to miss a step by forgetting, or doing something out of order. If you document what you have in your head, then it is easier to eliminate silly mistakes, which could be costly. Think of your checklists as a recipe for any activity you need to have done in a certain way.

 

 

Lots of love your way! Till Next Month,

Al & Shelley