How to Grow Your Money Fast like a Cheetah and Not a Sloth
Use the Velocity of Money in Real Estate
A smart real estate investor uses tools to help grow their profits. One of those tools is know as the velocity of money. The velocity of money is a simply concept. It’s essentially how quickly money that is invested in a property is returned to its owner to be reinvested in another investment.
Money doesn’t grow if it’s just sitting idly somewhere. Making strategic improvements on a multi-family property produces more income and as a result a higher property value. Pulling equity out of a cash flowing property to buy another cash flowing property, without potentially using any more money, is a great way to build wealth.
A bonus with this strategy is that the equity removed is tax free! You can repeat these steps to purchase other properties. That’s how you can get the velocity of money working for you.
Simple Acquisitions is a big supporter of the refinancing strategy. We purchase properties that are nonperforming and under market value. Then we implement strategic improvements to the property with the goal of raising rents and reducing expenses. This further increases the Net Operating Income. For those learning how to invest in real estate this concept is known as forced appreciation. Increasing the property’s value may permit the bank to remortgage the property enough to provide sufficient equity to pay back our lender partners their initial investment. Or it allow us to further improve the property, or purchase another property of lower value without injecting any more cash in to the venture.
Many Private lenders like this strategy for various reasons.
The velocity of money is an amazing tool for real estate investors. Not many people are content with letting their money grow slowly like a sloth. Are you?
Remember, real estate doesn’t have to be complicated.
With Simple Acquisitions it’s smart and simple!