Profile
Mark and Joan are 40 with two young children. He is a finance manager and she is a marketing manager. They had $200,000 in a non-qualified account and $300,000 in a retirement account. Their $1.1 million investment property, a single-family house in Mill Valley, CA, brought in a monthly rent of $3,200. Their personal cash flow was break-even, and their life style strategy is conservative.
Investment Goals
Mark and Joan wanted increased cash flow to allow one parent to stay at home with the young children. Additional goals were to benefit from appreciation and minimize vacancy risk.
SIFF Analysis
SIFF worked with Mark and Joan to develop a full financial profile and determined that they were a conservative investor with low risk tolerance and high cash flow sensitivity.
Solution
SIFF recommended a tax-free exchange to a 4-plex, duplex, and single-family home in another state. The couple chose high down payments over leverage to maximize cash flow. The investment increased cash flow 80% to $5750 per month and decreased vacancy risk. ROI after 2 years is 30%.
“Investment property is the right fit for my financial goals and I would not have known how to make intelligent purchases without SIFF’s guidance. I highly recommend them and would be happy to speak with anyone who is interested in using their services.”
-- Mark R., finance manager, San Francisco, CA
The smart alternative to investing on your own.
We offer full-service real estate investment advice. From developing an investment plan to finding property, hiring property managers, and on-going evaluation of your real estate investment portfolio. Our strategy is to look for markets with the following characteristics:
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Diversified and healthy local economy;
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Steady, not astronomical, real estate appreciation;
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A healthy gross rent-to-value ratio, so that clients can realize an attractive after-tax cash flow;
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Reasonable supply of target multi-unit properties.
We typically recommend purchasing properties in the 2-4 unit range for the best combination of appreciation and cash flow, although single family properties or larger apartment complexes will make sense for achieving client objectives.
