Gem Rental Properties LLC. How I will make my next million $

 Gem Rental Properties LLC. Is my newest company. Founded in 2010 for the purpose of investing in rental real estate. The LLC form of doing business is the simplest from of a company that allows you to hold properties in other then your own name. You are still liable on the mortgage notes but transfer of company ownership is easier then if that actual properties where in the owners actual name.

The owners of this company are experienced real estate investors. The owners are gainfully employed and do not need to make a living from the company. The goal is to grow a real estate company that will make the owners large sums of money. Any one wishing to follow along here and do the same, is welcome to steal all the ideas they want. Just keep in mind these are experienced investors, not big risk takers. As experienced investors and business men they know real estate, accounting, business practices etc. If you have any concerns as to your experience along the way, consult the necessary professionals.

The following are the general plans and structures that this company will operate under.

Gem Rental Properties LLC will deal in income producing real estate, both residential and commercial.

The goal of this company is to earn total returns in excess of 20% per year on the invested capital. In addition we are looking to increase equities by improving properties and repositioning properties to their highest and best use.

Each property purchase is a stepping stone towards building a real estate investment portfolio worth several million dollars. The first goal is to reach 50 rental units or $1,000,000 in value. That goal will then double to 100 rental units and so on. Each rental unit should produce a minimum of $200 gross positive cash flow per month.

Mortgages on the properties should not exceed 66% of the appraised value. This number is lower then the 75% to 80% common with rental properties, but it helps assure that cash flow covers the note payments in the event that extended time of high vacancies occurs. It also reduces the investment risk while allowing for sufficient cash flow for property maintenance.

Properties are chosen after considering the following: The purchase price, opportunity for equity improvement, cash flow, risk, cost of rehabilitation or repositioning, availability of financing and other real estate evaluation factors. We are looking for properties where we can quickly add to our equity.

Properties will be reevaluated after rehabilitation or repositioning for the best use of the property. The considerations might be, holding the property for rental income, refinancing to free up equity dollars for another purchase, selling the property, syndicating the property, or trading it.

When we reach 50 rental units a handy-man type of person will be employed to handle the daily operations. At 100 units a office person will be employed to handle office operations and rentals.

Once a year the operation will be evaluated as whole. Considerations might be to continue as before, condense to larger properties where management companies can run things, sell everything, hold everything and other possibility.

I will be writing 

about Gem Rental properties LLC transactions as we go along. I will not be writing about some of the detail if that information it is covered elsewhere on this site. For example: How we evaluated a property, that is covered in other articles as well in the real estate syndication articles. What paperwork was submitted for a loan, as that to is covered in other articles.

What I am interested in writing about, and demonstrating is how we take one real estate transaction and build on it, to create a large real estate company. How we take what amounts to a part-time job and a relatively small investment and turn that into a million dollars, or rather a good sustainable monthly income.