subject: Keep Track Of Investment Property Equity [print this page] What is an equity report? Allow me to explainWhat is an equity report? Allow me to explain. I was buying all of these bank repo homes and with everyone I bought, I increased my equity. Thats why we buy bank repossessed houses.
I wanted to know how much equity I had. So I broke it into categories by purchase price.
Now when someone moved into one of my properties and trashed it, then I had to clean up their mess and rehab the place. This included hauling out their trash, cleaning it, repainting it, landscaping, carpet and other expenses. I had a lot to pay for and lost money on the houses.
Having equity reports illustrates what I lost, even though I really didnt want to know.
This equity report includes the property, the sales price, how much of a down payment was put into it, what the mortgage is and what the equity is. We can see how much equity we have in the home. Its laid out from lowest to highest.
We list what the cash flow is on the property. It is set up month by month and step by step. The cash flow summary looks at the mortgage payments, private lender payments and rent payments.
Empties are going to be negative. So I put a tenant in and it becomes positive. I can see where I am bleeding and where I am positive. At the end of the report, hopefully everything will be positive.
I have another report that I use, its called the rent increase report. I had lease option tenants coming into my life a few years back. I wanted an easy and quick system that says They moved in on this date. It makes it so I dont have to go into a file folder for each tenant to figure out when they moved in. Its very simple.
This way I know the date is a year behind me when its time to raise the rent.
It is important to always push the lever of raising rent. Dont feel too bad about it. The tenant expects it.
We have a monthly meeting to review the rent increases. I ask the mortgage liaison person if they are cooperating with their payments. If they arent cooperating, I might whack them with a pretty steep rent increase.
Now, if they are cooperating, I dont raise the rent right away. Why would I turn them off? I can see that a sale is coming.
We have the statistics on these tenants listed out so we know when they moved in, when the lease date ends and what increases theyve had/
Also, remember, I have to make a decision on empties sometimes. I would rather have someone moving in with low rent than have no rent.
