Jason interviews Sr. Area Manager Karam about two hot growth markets with investments yielding around 40% ROI. Jason also recommends a couple good books: The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin & Blood in the Streets: Investment Profits in a World Gone Mad by James Dale Davidson and William Rees-Mogg.
Announcer:Welcome to Creating Wealth with Jason Hartman, President of Platinum Properties Investor Network in Newport Beach, California. During this weekly program, Jason is going to tell you some really exciting things that you probably haven’t thought of before, or a new slant on real estate, fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible.
Jason is a genuine self-made multimillionaire, who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in nine states. This program will help you follow in Jason’s footsteps on the road to financial freedom through real estate. You really can do it. And now, here’s your host, Jason Hartman.
Jason Hartman: Well, hello and welcome to Podcast No. 20. This is Jason Hartman and I’m here with a special in-studio guest today, Karam, who is a senior area manager and senior investment counselor with the Platinum Properties Investor Network. Karam does a fantastic job and we wanted to do something a little bit different today showing you, or telling you about, some of our areas, some of the actual areas and actual properties that you can invest in that get phenomenal returns, returns exceeding – the lowest projected return for this presentation is 29 percent annually and it will probably do quite a bit better than that.
And another one of the properties is projected to return about 57 percent annually, and both of these do not include tax benefits. Of course, we know real estate is the most tax-favored asset in America and so tax benefits will add to those rates of return. One of the areas we’ll be talking about is a GoZone area and that is the Gulf Opportunities Zone where some tremendous tax benefits are available for those investors who qualify to receive them. And that will be the subject of a future podcast or you can call our office for details on that and talk with Karam or any of our investment counselors, or attend a seminar on that subject, on the GoZone subject. It’s a fantastic opportunity.
Well, Karam, welcome.
Karam: Thank you.
Jason Hartman: Well, it’s good to have you here and I know in a moment, we’re going to go to your live presentation of these two fantastic areas. One is Austin, Texas. The other one is Mobile, Alabama. We both own properties and invest in these areas ourselves because we always like to put our money where our mouth is, but before we go to the live, any comments you wanna make?
Karam: Well, these areas, all these areas that we are going in right now, are under fair market value and, just to give you an example, Austin is 5 percent under fair market value and most of our areas are between 5 percent under fair market value to 23 percent under fair market value. Compared to Orange County, at the peak, about a couple years ago, it was 72 percent over value.
Jason Hartman: You’re referencing the Smart Money Magazine, which is published by the Wall Street Journal, that article. I remember that one.
Karam: That’s correct.
Jason Hartman: Yeah. That was quite an enlightening thing to see and now that we look back in time, because hindsight is always 20/20, of course, that has come to play out as very true as we’re not in a depressed market in Orange County. But other markets are counter to our market and counter to the California market, and the Florida market and the Hawaii and northeastern United States that aren’t doing so well right now.
Karam: Right. And all these are brand new properties. You can buy at under $200,000.00, anywhere from $150,000.00 to $200,000.00, single-family, brand new houses.
Jason Hartman: You know, Karam, that’s a good point and I just wanna mention something about that. What you’re saying is so true and such good advice for the investor because when you buy brand new, you start fresh with a clean slate in a nice, brand new master plan community most of the time, where you’ve got a one-year home warranty. You’re just not going to have any problems for a few years.
I see some of these investors trying to do fixer-uppers and rehabs, and most of them think they’re getting a good deal, but they’re really deceiving themselves, first of all. But also, it is so difficult to invest that way because you just can’t manage the rehab project from 1,000 miles away. And a nice, new property, you’re starting with a clean slate, so that’s a really convenient thing for investors this way.
Karam: That is a plus and if you think about it, in California, ten years ago – or any of these appreciated markets – ten years ago, that’s what we were paying.
Jason Hartman: Yeah.
Karam: $150,000.00 to $200,000.00 for a brand new single-family house and that apportionment is still available in different parts of the country.
Jason Hartman: Yeah, I love how you talk a lot in your presentations about how if you feel like you’ve missed the boat here in any one of the overvalued markets – it doesn’t have to be just California, but any of them, whether it be Arizona, Nevada, California, Oregon, the northeastern states, most of Florida, Hawaii –
Karam: Hawaii.
Jason Hartman: Absolutely. But why don’t you share that with our listeners real quickly.
Karam: Yeah, you know, if you look at it, all these appreciated markets, you think about it. If you can turn the clock back ten years or even eight years, we were able to buy all these houses at a price that was really affordable and today, the prices have gone up three, four times. And the same apportionment is available in the different markets around the country. They’re under performing, but the best thing about it is these are the markets where their economy is really good. For example, Alabama, 3.2 percent unemployment rate, the lowest in the country.
Jason Hartman: Very good, yeah.
Karam: So the economy is good. When the economy is good, jobs are created, income growth is there, the population naturally follows that and the population increase with income, that’s when the real estate markets start going up.
Jason Hartman: Absolutely, and as all of our listeners know because they have listened to our prior podcasts, and if you haven’t, please go back and listen to some of those, that real estate, you know, it’s a multi-dimensional asset, so even though these markets that we’re talking about today have good prospects for appreciation, always remember that real estate is about much more than just appreciation. There are three other pillars to it as well as the appreciation pillar, when you talk about the Four Pillars of Real Estate, so listen to the past podcasts where we talk about that.
Karam, I like both of these areas very much and I own multiple properties in Alabama, and I only have one in Austin. I’m kind of sorry I didn’t buy more there. I’ve made a lot of money on the one I have there. But when you think of Austin, for example, and you think of first-tier cities around the world, what do you think of? Well, you think of places like in the U.S., like New York, L.A., Chicago, and then you probably think of Miami and you think of Dallas. Austin is right up there. It’s kind of a first-tier city now. With many of these other big world cities and if you look international, obviously, what else would you pick? London, Hong Kong, Dubois, etc, Singapore.
But this is a first-tier city because it’s a huge education center. It’s got a fantastic university, and also, the largest employer there is the government. Well, I don’t know if they’re the largest actually. I’m not sure I should say that.
Karam: One of the largest.
Jason Hartman: But they’re a very large employer there and the government never goes out of business, do they?
Karam: No, so does university. It doesn’t go out of business.
Jason Hartman: Yeah, that’s good. But Austin is a very hip, kind of a swanky town. It’s got a big local music scene. It’s got a lot of fun places to go. It’s got a lot of people that come there for the high-tech jobs, very smart workforce. A lot of good stuff, right?
Karam: A lot of good stuff, Austin. Those who have been to Austin, some of you from my audience, if you’ve been to Austin, you know what we are talking about. It’s live music everywhere, rolling hills, lakes, and of course, that smart workforce with the young professionals makes a lot of difference. It’s just growing. The best job growth last year in the entire country.
Jason Hartman: Absolutely, and with Texas being one of the prime states – there are several good states – but Texas being one of the very good ones right now to invest in, I’d say out of all the cities in Texas, Austin would have to be my personal favorite and the most beautiful. Now, I own in properties in San Antonio, Houston, as well, but Austin is definitely the one I would want to live in if I were to pick any of those.
Karam: Yes, and two years ago, there was an article that Austin, seven years from then, would be like Orange County in California.
Jason Hartman: Yeah, absolutely. Well, hey, listen. Why don’t we go to the live take from a recent seminar you did where you talk about Austin and Mobile, and I think you’ll enjoy this and we’ll be back with you in just a few minutes. Stay tuned.
Karam: You know, Jason was talking about how all these large companies go to areas that their cost of living is below the national average, and Austin is one of them, of course. But just to give you an example besides Austin, Mobile, Alabama. A German company, steel maker, is going to invest $4.2 billion just north of Mobile. Look at what they choose. Alabama chosen over Louisiana for $4.2 billion plant. They’re going to employ by 2010, 2700 workers when fully operational and create as many as 38,000 jobs. It’s 25 miles north of Mobile and Louisiana governor, Kathleen, said it was a tremendous honor to be one of the two finalists among 20 states that had bid for the project.
Listen to this one. They went into a town. The plant would be near Calvert, a crossroads town of about 500. Only 500 people live in that town and they are expecting 2700 steelworkers and 38,000 jobs created around there. The town is so small, the residents have to go to the post office to pick up mail because there’s no street delivery. Okay.
Now think about it. These huge companies, when they’re investing $4.2 billion, don’t you think they have done their due diligence? Where are the people going to come from? The town has only 500 people, not even 500 workers. Just the population is 500 in total. So they’re going to draw from Mobile, Alabama, and Mobile is already, like I said earlier, 14.2 percent in appreciation.
So what I’m saying is, just like rolling back ten years, I gave you that example. All these places are booming. The jobs are being created. All of Alabama, you know our perception about Alabama; it’s a poor state. You visit there today. I was there about three weeks ago. I was driving through Montgomery. I took a break, took an exit off the freeway, the brand new shopping center, and with the kind of quality of the shopping center and the type of shops there are in Montgomery, Alabama, that’s matching Fashion Island here.
All of Alabama, 3.2 percent unemployment rate; lowest in the country. These places are booming. You name it, Huntsville or Birmingham or Tuscaloosa. Tuscaloosa has Mercedes manufacturing plant, the only plant in the United States for Mercedes, and 4,000 employees. They started with 2,000 employees. I gave you an example of $4.2 billion investment – Greenville, South Carolina, BMW manufacturing, C4 and X5. They manufacture that.
Back in 1993, they started with $2 billion investment. This $4.2 billion today, you know, back then dollars, it’s about the same, a $2 billion investment. So this is a huge investment and these are the places that are booming. So if you buy the houses there now in all these places.
Let’s go over Austin, Texas. Mike is our agent there, lived there forever, knows in and out about Austin, very knowledgeable, and does an excellent, excellent job. All these are in your handouts. Major employers: Dell Computer headquarters there with 20,000 employees. University of Austin, University of Texas at Austin with 50,000 plus students. Talk about smart work force, 60 percent of the graduates stay back in Austin after graduation. These are the things all these major companies look for. IBM, Samsung is building a second chip plant in Austin.
Look at this article. Back in January 23, 2005, more than two years ago, California Sees Gold in Austin Homes. Okay. Austin was my No. 1 area in ’05, ’06, and still today, it’s my No. 1 area. Houses are getting rented very quickly; appreciation last year was 8.8 percent. It’s very small appreciation compared to what we experience here, but compared to our 6 percent appreciation, we are doing better there. And 8.8 percent is over all Austin, entire Austin, but the zip codes that we go in, Pflugerville, Round Rock, Kyle, all those are appreciating at 10 -12 percent.
Beautiful place; Lake Travis, rolling hills, Lake Pflugerville. Retirement in Austin. I have heard a lot of people say about, you know, I want to retire in Austin. Well, have you been there? They say no, I heard a lot about Austin. Men’s Journal, this week – this month’s Men’s Journal, 50 Best Places to Live, Austin is No. 1 on the list of 50 best places in America. Guess what is No. 2? San Diego. The only difference is San Diego is a lot more expensive to live or to do business than compared to Austin. 1.4 million population back about four or five years ago. Now, it’s more than 1.5. Very legendary, lively city and great place to live. Live music everywhere, all these major employers, that’s all in your handout.
Look at the employment growth. Back in 2002, this is comparing Austin, Texas, and U.S. as a whole. Austin was doing very well back in 1994 and it started going down, and in 2002, it bottomed out and started climbing again. Forbes Magazine, type up Forbes Magazine, forbes.com. You will see the list of metro M.S.A. area, Metropolitan Statistical Area. Austin is No. 3. Guess where Orange County is? No. 27. Look down here. Look for the economy to rebound to 7 percent a year through 2008, and if you go to Austin today, it’s booming everywhere; new shopping centers, freeways, new toll roads. These are not expanding. Just they’re totally brand new, they’re building it.
Population, anywhere jobs are growing, income is growing, guess what? People are going to move in. That’s where they need all these rental properties. Population in Austin, at the rate of 42 percent; compared to Texas as a whole, 21 percent, and U.S. is 11 percent. Education, I talked about smart workforce. Capital of Texas. And income, look at the median household income. Austin is $51,000.00, Texas is $41,000.00, and U.S. as a whole is $44,000.00. Per capita income, $27,000.00, $21,000.00, and $24,000.00.
By far, the best of all the comparisons. These are the comparisons between Austin and Orange County. It’s in the handout also. These are the different sample properties. But one thing I want to address, earlier Tina asked a very good question that’s been a concern of a lot of my clients, you know, when I sit down one-on-one. That question always comes up. I’m borrowing from my line of equity and I’m paying 8 percent, 10 percent. Think about it. This is Austin. Marcus went through earlier how Texas has a higher property tax rate. That’s why the return on investment here is 29 percent. After tax benefits, it is 58 percent.
If you look at other places like Mobile, Alabama, and all over Alabama, Indiana, for example, those are 40 percent before tax and 66 percent plus after tax benefits. If I have to – I’m paying 8, 8.5 percent on my line of credit when I – HELOC is what Tina mentioned – if I have to even pay 10 percent, or let’s say the interest rate goes up and I have to pay 15 percent even, won’t it be beneficial when my 15 percent I’m paying to borrow that money and investing it is returning me 60, 70 percent after tax benefits. That’s like four or five times more than what you are paying for it, so it has a great return.
And over periods, this is not a quick-rich scheme. We’re not suggesting that you buy today and after a year, two years, you sell it and you will make tons of money. Not like that. This is a long-term investment scheme and when you do that, this direct investment, which you control, over a year’s period, it’s going to pay off handsomely. So with that, don’t wait to buy real estate. Buy real estate and wait.
Jason Hartman: Karam, do you wanna address the issue – I haven’t mentioned it yet – but one of the great, great values that we provide is that we exert a lot of leverage over the property managers. Remember I said the Achilles Heel of this whole thing is management. You gotta be a good manager of your managers. You won’t deal with your tenants directly, but you do have to sort of manage the manger just a little and one of the things we do is we exert a lot of leverage over that manager to make sure that they’re doing a good job for you. And here’s why and Karam can elaborate on it.
You know, we tell you “diversify.” I think you probably all agree that that’s good advice; diversify. So spread your investments around, but the problem when you diversify is that you don’t have – you’re not a big account for that property manager, and property management is a thankless, low paying job. So the property manager in Austin or Jackson or whatever city might earn a $100.00 a month from your house, for managing your house, and you know, they’ve got 200, 300 accounts, so losing one is no big deal if you’re unhappy.
But we, on the other hand, might have four dozen accounts with that property manager. So if you have any trouble getting them to be motivated and do their job, just email your investment counselor, the area manager for that area, and we’ll call them, we’ll get on their case, and when we say jump, they better say, “How high” because are a big customer for them. You are not on each individual investment because you’ve diversified, so you buy six in six different places, you’re one and one and one with each manager. So that’s one of the important things we wanna mention to you. All right, you wanna elaborate on that?
Karam: This property management company, for example, in Austin, we have given them so many houses to manage. Last February, Bart called me. He says we have stopped taking any properties locally from anybody. We are just going to manage – whatever they have already, plus they’re just going to concentrate on our network properties. So we are a big account to them and before even hiring them, before even selecting them, we interview, we screen them, we look at their reputation in the community and what is their achievements. You know, what they do. After doing all those things, we expect that they will be doing a good job and they really are.
And top of that, when we give them so many properties, dozens of properties – now Austin has more than 100 properties from our network – don’t you think they will try to keep us happy? We talk to them by phone or via email two or three times a day. We are staying in touch so closely. Sometimes they come to our area and they address our seminars.
So yes, occasionally, I do get from my homeowners association that okay, a car is parked where it’s not supposed to be, the yard is not mowed, or the trash can is not rolled back, and things like that. All you do is you just fax that to them. I don’t even say anything; don’t write anything. I just fax that to the property manager and they take care of it. So they are there to do our job. Like Jason says, I don’t know my tenants name even and they deal with them. You don’t want to talk to your tenant even. You just keep property managers happy; say hi, thank-you card and all those things, and things work.
Jason Hartman: Okay, good. Thank you, Karam.
Welcome back. Karam, that was a fantastic presentation.
Karam: Thank you.
Jason Hartman: Where can people reach you with questions?
Karam: Well, they can reach me at my direct line. They can call me at (949) 262-9833 and you can go on our website and look at the properties posted, the most recent inventory that is available, and what you will see is a lot of details there. The square feet, number of bedrooms, bathrooms, garages, and the price, and also, the rate of return. That is so very important. Our assumption is always the same, which is on the right hand bottom box and right above that, you will see the rate of return before tax and rate of return after tax, and that’s what you want to pay attention to. Anywhere from 29 percent for Austin, all the way in the 50s and 60s, these are before tax benefits, and after tax benefits, it’s even higher.
Jason Hartman: Isn’t that phenomenal? Rates of return well over 30 percent for properties. You can’t touch that in the stock market or a mutual fund, or most real estate investments even. And even commercial real estate investments rarely perform this well. And one of the things we do on the website, and by the way, that’s www.jasonhartman.com, is all of Karam’s properties in all of his different markets – and he’s going to tell you what other markets he covers in a moment – they’re all standardized formats, very clean, very easy to look at. When you learn to read one sheet of paper, one Performa, you really can analyze an investment well and we have a few other metrics beyond what’s on that sheet; RV ratio, rent to value ratio; LTI, land to improvement ratio.
We’ve talked about these things on other podcasts, but we really want our investors to have an easy time of screening the best properties and analyzing the best properties, making sure everything makes sense the day they buy them. So Karam’s got a lot of stuff on the website. Take a look at that, www.jasonhartman.com and then click on the properties button.
Karam, what other markets do you cover?
Karam: Well, besides Austin, Texas, Indianapolis, Indiana is one of the very surprising markets. It has done very, very well.
Jason Hartman: And Indianapolis, that’s a little bit out of our normal area and I have to admit I was a little skeptical when you brought that one to the network, but of course, you know the rule here. Everybody has to buy their own properties there before they can recommend it to our clients, so we’re doing exactly what we recommend to our clients.
But that’s been a pleasant surprise in Indianapolis, a city known as the crossroads of America. Maybe we’ll do a future podcast talking about that one. A lot of trucking and a lot of commerce going on there.
Karam: A lot of industries, growing industries. Honda Manufacturing plant is establishing their second manufacturing plant in Indianapolis. Rolls Royce has a turbine manufacturing plant, the largest establishment outside of United Kingdom. And besides Indianapolis, the active markets right now are Tuscaloosa, Alabama. That’s where Mercedes Manufacturing plant –
Jason Hartman: And that’s a GoZone, right?
Karam: That is a GoZone.
Jason Hartman: Okay, that’s GoZone.
Karam: And a university with 27,000 students. And Mobile, Alabama, another growing area, with a lot of growth; ship building, ship repair, chemicals, paper products, Coca-Cola bottling, Coast Guards, and above all, German steel company announced starting a new plant by 2010 with $4.2 billion investment.
Jason Hartman: Wow, that’s a big investment in an area. You know that means growth. Where else?
Karam: That’s correct. And another active market is Baton Rouge, Louisiana. That’s another up and coming, growing market.
Jason Hartman: Excellent. And then you’ve got other markets that you’re not recommending right now because we’re area agnostic and when the markets don’t make much sense, we stop recommending them, and we recommend the ones that do make sense. So Karam has connections in several other areas all around the country, but we won’t mention all of them here necessarily.
Okay, great. Karam, anything else you wanna mention?
Karam: Again, if you want to reach me, my direct line is (949) 262-9833.
Jason Hartman: Give Karam a call about your investments and he will steer you right. Our clients have nothing but just wonderful things to say about him. He’s been with the company here almost six years now and just does a tremendous job, so call Karam for help on any of these areas or other questions regarding investments.
I wanted to recommend a couple of books to you. I’ve been meaning to do this on our podcasts. The recent podcast we talked a lot about inflation. I think inflation as an investor is just such a tremendous benefit to us. If you wanna understand the way a lot of the financial world works, you have got to understand central banks, their impact on monetary policy, and stuff like this. You’ve got to understand the Federal Reserve.
Now, not to sound too conspiratorial or anything, but there’s a great book on this subject and it is a famous book. It’s called The Creature from Jekyll Island, and The Creature from Jekyll Island was written by G. Edward Griffin, and you can find it on Amazon.com or at any bookstore, and it is just a very in-depth analysis of the Federal Reserve and why it was created and what’s going on there. And as much on the surface, I sort of hate all of this stuff, I hate inflation, as a real estate investor, I really love inflation, so take a look at that.
Another one you might want to consider is about Wall Street and any of you who have been listening to the podcasts for a while or been to our seminars and talked with me, I believe that Wall Street is a pretty lame deal, by and large. I’m not too keen on it. I do invest in stocks because even though there’s a lot of greedy people taking their cut off the top in Wall Street, whether it be the fund managers, the brokerage houses, the CEOs of companies, etc, etc.
You know, it does historically perform better than money in the bank, so I invest in stocks and I’m relatively keen on what’s going on there. But a book that does look quite interesting that I have on my list is called Blood in the Street, the sensational inside story of how Wall Street analysts duped a whole generation of investors. And take a look at that. I’ve read the reviews on Amazon and that one is on my list because it looks quite fascinating. In a lot of our podcasts, we chronicle some of the Wall Street fiascos.
Also before this podcast, I was reading an article from “In the News.” “In the News” is a huge real estate news source, which is on the internet at www.inthenews.com and this article is dated July 16. It talks about real estate going global and how it is such a global real estate market we’re in nowadays, where these properties that you’re investing in today in various areas around the U.S.A. with great financing, lowest rates in decades, and great tax benefits and excellent investment potential, it’s really a world market. And I will bet you that a lot of the properties you invest in today, you will be selling to foreign buyers years from now, so the real estate market is going global. That creates a lot more demand for American real estate and as our dollar continues to weaken, it makes our real estate look really cheap to foreign investors, even when we think it’s expensive.
So take a look at some of these issues. Keep listening to the podcasts. We’re going to be interviewing a lot of these authors, these various books and articles, and I think you’ll enjoy them.
I wanted to also mention a couple of great quotes that I really like. If you have fear about investing, keep some of these things in mind. Marilyn Ferguson said ultimately, we know deeply that the other side of every fear is a freedom. Make yourself financial free by prudently investing in real estate, properties that make sense the day you buy them. And then, of course, Frederick Wilcox had that famous quote, “Progress always involves risk; you can’t steal second base and keep your foot on first at the same time.”
A lot more information, great educational videos and articles on our website at www.jasonhartman.com. And one last thing that I wanna mention to you is I have a foundation and it is called the Jason Hartman Foundation, which its mission is to teach financial literacy to young adults, the kind of education that none of us got in school, and if you are interested, have any groups or causes that you’re interested in getting donations for, go visit the site at www.jasonhartmanfoundation.org and you can fill out a quick grant request. If you have any suggestions for things that are in alignment with the foundation’s mission, we would be happy to consider a donation.
Hey, it doesn’t get much better than that. You listened today and I told you how to get free money. I do not accept donations for the foundation at this time. It’s purely to give money away, so check that out and we look forward to talking to you on the next podcast. And I believe the next podcast is on the subject of GoZone. We’ve got an expert who is coming in to talk about that tomorrow and if that one’s ready to go, we’ll get it out to you real soon. Thanks for listening and happy investing.
I’m here with Senior Area Manager, Karam and we wanted to talk to you quickly about his recent trip. He just returned yesterday from Jackson, Mississippi. Karam, what did you find there?
Karam: Well, Jason, it was a very interesting trip. Unlike other areas, this is a very unique area in the sense that we live here in California and we go to all these markets, and every market is different. Jackson, Mississippi, on the other hand, the way it is different from the other areas is they don’t have the apartment complexes like we have in most of our metro areas.
Jason Hartman: Yeah, so you don’t have that high density attached housing, huh?
Karam: That’s correct. So what happens is all these houses have high demand of rental, and on the rental side, there is not too many houses available for rental, so there’s a quick rental and you get the high rents, so the cash flow is better. But you have to drill it down to the micro area, the communities that we want to invest in, buy the investment properties. The first thing we look at is the school system. Now, if you look at any particular city and suburb, it may have a good school system or it may not be in the good school system. Now, one particular city may be half in one county and the other half is in a different county.
Jason Hartman: So that was true of Hattiesburg, right?
Karam: That’s correct, yes.
Jason Hartman: So if you look at Hattiesburg, you can’t choose by just Hattiesburg. Some of the area is not so good –
Karam: Not so good.
Jason Hartman: And some is a desirable investment area.
Karam: Right.
Jason Hartman: You were telling me about how they gave you a list of 131 properties that the broker thought would be good for our investors and the process of you narrowing it down and what you narrowed it down to. Why don’t you tell everybody about that?
Karam: Well, I just narrowed it down to 21 properties.
Jason Hartman: Out of 131.
Karam: Out of 131, and that’s all I will sell from, 21 properties, and they are in a good school system, good quality product. Looking at the communities, the location of the communities, location of the properties, and that’s all I came up with.
Jason Hartman: Excellent. So Karam, talk to us about this specific property you’ve got in front of me. This one is $179, 760.00, so we’ll call it $180,000.00. It’s almost 1700 square feet. The projected rent is $1500.00 a month and return on investment, Karam?
Karam: Yes, 42 percent believe it or not.
Jason Hartman: Forty-two percent projected ROI and if you qualify for all that goes on tax benefits, projected first year ROI is 128 percent. Don’t try that in the stock market, huh?
Karam: That’s correct. The reason is these areas, not only the high rent, but the property tax is very, very low.
Jason Hartman: Only $195.00 a month on that property. Wow.
Karam: Right.
Jason Hartman: Good stuff. Okay, Karam, anything else you wanna talk to us about. Let’s – you’ve got one more property. Maybe this one in Indianapolis; that looks kinda interesting. There’s some big discounts on this.
Karam: Yes, Indianapolis really surprised us, that market, and we are getting great deals.
Jason Hartman: Yeah, we weren’t expecting this one to be so good.
Karam: Yes. Great deals and I’ll give you an example of the property that I saw yesterday. Twenty one hundred and one square feet, four bedroom, two and a half bath, brand new single family house, comes with a rent-ready package, meaning washer, dryer, refrigerator, blinds, garage door opener, front and back yard sodded, for only $127,000. You know what that means, Jason, per square feet price?
Jason Hartman: Yeah, that’s amazing. You’re buying like very close to the cost of actual construction here. How much?
Karam: $60.00 per square feet only.
Jason Hartman: $60.00 per square foot. That is unbelievable. It’s like the downside risk is almost nothing. Go back and listen to our podcast on risk evaluation.
Karam: And again, return on investment is 41 percent.
Jason Hartman: So 41 percent projected return on investment, and these are some good properties. Give us a call or check out our website for more properties and all the details are listed there. And we will look forward to talking to you on the next podcast. Thanks.
Hey, I just wanted to announce a couple of quick things for you. If you are able to come to one of our live events, we would love to see you and meet you in person. We’ve had people fly in from all over the U.S. for them. So hopefully you can join us for some of those events. Also, remember our rental coordinator is here to help with your rental properties. If you need assistance with your rentals, your property managers, your advertising, remember we’re here to help and we stay with you through the life of the investment. So feel free to call our office anytime and ask for the rental coordinator for assistance on your rentals.
Also wanna remind you, listen to our old podcasts. At least go back to podcast No. 13 forward and listen to all the podcasts after that. You’re welcome to listen to all of them. The ones before No. 13 are older, but they’re also good, but the newer ones are No. 13 and forward, which are really good ones to listen to, so please take advantage of that.
And remember, the overall market commentary right now, due to the mortgage meltdown, the subprime issues that are going on out there in the market, is that rents are going up all across the nation. When people cannot qualify as easily to buy a property, they are forced to rent. So let that work in your favor by accumulating more rental property assets and don’t be afraid to ask for more rent and raise your rents. That’s a good thing to do.
Also, if you are interested in career opportunities with us, our company is growing quickly and we would love to talk with you about career opportunities. We’re in the process of getting approved for franchising. If you’re interested in a Platinum Properties Investor Network franchise, we’d be happy to talk with you about that and get you set up there once we are finished with our approval process.
Be sure to see appropriate disclaimers and disclosures on our website at www.jasonhartman.com. Remember that we are not tax or legal advisors. So give us a call on any of these issues, and remember, we are here to help, and we will look forward to talking to you on the next podcast.
This material is the copyrighted creative work of either Jason Hartman, the Hartman Media Company, Platinum Properties Investor Network, Incorporated or the J. Hartman Company, all rights reserved.
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Duration: 41 minutes
