Modeling Your Real Estate Business For Success

Personally, if I had $1 million to invest right now

, believe me, I would not want to buy $1 million worth of real estate. Instead, I would want to leverage that money and buy the same amount of properties, because I would not be using all of my money. That"s how we have built a successful business at HIS Real Estate.

This is just an overview of what our system looks like, but I hope you will find it useful. It is how we have structured our private placement fund in order to generate returns for our investors. For our residential real estate program, our cycle is pretty much about 90 days. It"s about a quarter. We rarely take over 90 days to turn over a property.

We buy it today and within 30 days we get an investor that says, "Hey, I like that property as well. It has potential," and we may end up wholesaling the property for just a 5% profit or something small. But the return is immediate. We have always believed that it is better to take a little today and keep things moving rather than get bogged down by any particular deal.

We have turned over more than 160 properties in the last few years. And we have done some less-than-great deals; deals where we made only $5K or $10K on a house. But we have not had one house where we actually had to come out of pocket and on which we actually lost money.

When we sell a property, the revenue generated from that, after all the outside expenses, is put into our fund, and most of it goes back to our investors. That"s what we do. We try to pay our investors back as soon as possible.

So here"s an overview of our system: What we do is we align ourselves with investors who invest through our private placement fund. When a particular property moves, the investor gets back 70% of their investment, and 30% goes to recapitalizing the fund. The process is repeated until the investor is paid back in full and beyond.

All commercial inventory that we have purchased at HIS Real Estate has been purchased through private placements, and we have since moved into that in our successful residential real business as well. By doing so, we are able to control the money, leverage the money, maximize our purchasing abilities, and return capital to the investor.

And -- as an investor -- getting a return on your money is really the name of the game, isn"t it?

by: Luis Roque

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