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Buying and owning real estate is an investment strategy that can be both satisfying and lucrative. Unlike stock and bond investors, prospective real estate owners can use leverage to buy a property by paying a portion of the total cost upfront, then paying off the balance, plus interest, over time.
Though a traditional mortgage generally requires a 20% to 25% down payment, in some cases, a 5% down payment is all it takes to purchase an entire property. This ability to control the asset the moment papers are signed emboldens both real estate flippers and landlords, who can, in turn, take out second mortgages on their homes in order to make down payments on additional properties. Here are five key ways investors can make money on real estate.
At Caperock Holdings Limited, We aim to protect the investors from any risk in the market through enabling better investment decisions and portfolio distribution. The portfolio is diversified into different sectors of the economy (agriculture, hotels, residents, small businesses, etc) to reduce the risk on the downside due to volatility.
As usual the power of making sustainable returns from real estate lies in our ability to use leverage to purchase properties. Caperock Holdings Limited leverages on her track record to acquire properties in little or no cost (good debt). This helps us focus on our core abilities and maximize profit.
We have in our company a team of educated people that help investors have access to multifaceted knowledge (our core value) and the networking required to bring this knowledge into fruition. With our experienced and competent team, we consistently identify available opportunities and “flip” supposedly low value assets into valuable long term properties.
Caperock Holdings Limited is mainly target assets that has the diversity and potential to a create long-term sustainable cash flow.
This strategy has some components of our ‘Maximizing Opportunities’ and ‘Value Addition’ strategy.
Caperock Holdings Limited concentrates on maximizing opportunities. We create an opportunistic system that maximizes profit potential as we understand that the majority of profit from the industry is amassed by assets that might have been originally perceived to ‘undervalued’. Our well to do team focuses on understanding the pros and cons, and trying to strike a balance between the risk and the reward of such onetime deals.
One of the importance of striking deals and making purchases is to increase its market value. At Caperock Holding Limited, we focus on adding value to lowly funded income producing assets and structures and then adding value to them either by increasing their perceived value or by making them produce more value.
Most properties are purchased for different purposes like for self-use, leasing, short and long term selling, etc. The purposes will be considered together with other factors like location.
Caperock Holdings Limited try to discern to what extent short and/or long term cash flow will be favored by inflation. We do this through deep cost-benefit analysis, understanding depreciation, etc.
There are 3 major approaches that can be used to value real estate properties. The first is the ‘comparison method’ which seeks to compare the price of a property with other properties in the market with same characteristics. The second is the ‘cost method’ which takes into consideration the cost the construction if the property as well as the cost of the land, while subtracting the depreciation – this is suitable for newly constructed properties. The Third is the ‘Income Method’ that has the income from cash inflows as a valuation matric – this is suitable for rental properties
As a good company we don’t just look at the current situation of the location, but we consider the long term development potential of the region as the current valuation of the location can be a bargain
Revean Capital Limited is driven and focused on creating long term values. We believe in an industry with integrity and always partner with companies that practices high standard of corporate governance and business ethics.
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