Wilson Investment Properties
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Wilson Investment Properties
Highest Cash Flow Quality
Turnkey Investments in the USA
The Door to Understanding
Real Estate Investing
Tom Wilson
President / Founder
Wilson Investment Properties
Saratoga, Ca
408-867-1867
tomkwilson@earthlink.net
www.tomwilsonproperties.com
www.TomWilsonProperties.comWilson Investment Properties
Presentation Agenda
RE Investing Fundamentals
Tom’s Top Tips
State of the Real Estate Union
Investment Choices Methodology
www.tomwilsonproperties.comWilson Investment Properties
Disclaimer
I’m an Investor
Not an accountant
Not an attorney
Not an agent or broker
Everything I share is a reflection of my own
experience and education
Seek professional assistance before
making any investment decision
www.tomwilsonproperties.comPath of One Investor - Tom Wilson
BSEE University of Delaware 1969
Silicon Valley 1969; 30 years Hi Tech
2 Start Ups, 7 Companies, 2 VP positions
1st Prop 1971; 1st Rental 1975
1998 Retirement Plan Wake up call
Year Business Plan Research
1999 – Began 1031 Exchanges to DFW
1999-2010; >$100M & >1600 units , 7 multifams,
3 condo conversions, 3 syndications
In 3yrs Cash Flow replaced W2; 3x Net Worth
Founded Wilson Investment Properties 2006
260 Props Rehabbed & Leased Props for Investors
www.tomwilsonproperties.comWilson Investment Properties Team
Home Saratoga
Office Ca
Jody Knauf Joe Hernandez
Operations Acquisitions &
Manager Sales Manager
Tom Wilson
Weegi Wilson
President &
VP & CFO
Founder
www.tomwilsonproperties.comTom Wilson
This is what
I looked like….
Before the crash !
www.tomwilsonproperties.comFasten Your Seatbelts www.tomwilsonproperties.com
RE Investing Fundamentals Review www.tomwilsonproperties.com
Some Key RE Investment Terms
CAP (Capitalization Rate)
ConC (Cash on Cash Return)
IRR (Internal Rate of Return)
ROI (Return on Investment)
Depreciation Tax Credits
GRM (Gross Rent Multiplier)
Rent Ratio (Rent/mo / Prop $)
www.tomwilsonproperties.comTypes of Real Estate Investing
Buy and Hold
Income/Cash Flow
Appreciation
1-4 Residential, Multifam, Commercial
Flips
Preconstruction speculation
Assignments
Added Value
Land Banking
Development
Paper
www.tomwilsonproperties.comReal Estate Returns Outperforming
Stocks Which Remain Volatile
1-year 5-year 10-year
150%
126% 127% 125% 128%
96%
100%
83%
63%
54%
50%
50%
16% 19% 20% 17%
13%
9%
0%
S&P 500 Apartment Office Industrial RetailReal Estate Still the Best Leveraged, sheltered & controlled vehicle for cash flow & the accumulation of wealth
Tom’s
Top
Tips
www.tomwilsonproperties.comTom’s Top Tips
Buy in Top Metros
High Returns
Low Risk
Buy in Best Submarkets &
Neighborhoods
Buy Good Products
Let time be your friend
Most of my purchases were near
market value & 20% down & have done
very well thank you!
www.tomwilsonproperties.comTom’s Top Tips Buy Simply for Best Reward/Risk Ratio Not emotion Not fancy Not live in Not next door Stock market analogy www.tomwilsonproperties.com
Tom’s Top Tips Don’t be a Landlord Be an Investor Always Think About Opportunity Costs www.tomwilsonproperties.com
Tom’s Top Tips
Secure an Experienced Team
Don’t try to do it all
Delegate to experts you trust
Follow Success
www.tomwilsonproperties.comUse, & Don’t Underestimate Your
Generalist Skills
Market Analysis
Supervision
Communications
Marketing
Financial
Project Management
Management by Objectives
Delegate Responsibility &
Accountability
www.tomwilsonproperties.comFocus; Don’t Get Too Much on Your
Plate at One Time
www.tomwilsonproperties.comAnalyze & Compare Local and
Economic Trends
Different regions have different cycles
Submarkets can vary a lot from the averages!!Leveraged Return on
Down Payment
More Important than
Appreciation
www.tomwilsonproperties.comAsset Protection
Holding Title & Insurance
Joint Tenancy Entities vs. Insurance
Living Trust Entities really protect?
LLC Economics
Entity Cost vs. Insurance
LP Gates prior to entity
Corp S & C protection
Event
Unresolved
Lawsuit
Lose or Unresolved
Insufficient Insurance
www.tomwilsonproperties.comReal Acquisition Cost Items
Rehab
Trash out Closing costs
Flooring Taxes
Landscape Debt service
Paint Insurance
Kitchen & baths Utilities
Roof Property mgmt
Fixtures plumb & Advertising
elec
Appliances & HVAC
Lease up fee
Windows
Staging
Garage door
Rehab surprises
www.tomwilsonproperties.comOften the Tortoise Beats the Hare!
Don’t be in too big of a hurry
Doing it right is better than doing it fastLearn From Your Mistakes Don’t Run & Forget
Be Careful What Persons with Influence Tell You
“We’ve never had a decline of
housing prices on a nationwide
basis. What I think is more
likely is that house prices will
slow, maybe stabilize. I don’t
think it’s going to drive the
economy too far from its full-
employment path, though.”
Ben Bernanke
July 29, 2005
www.tomwilsonproperties.comState of the Real Estate Union www.tomwilsonproperties.com
Easy Money Last Two Decades www.tomwilsonproperties.com
It was Really a CREDIT Bubble
Tightened Credit Caused Price Declines
www.tomwilsonproperties.comNatural Cycles Return to Mean
www.tomwilsonproperties.comDoes Real Estate Really Appreciate?
www.tomwilsonproperties.com10.0%
12.0%
Source: LPS, ForeclosureRadar.com, and The Norris Group.
0.0%
2.0%
4.0%
6.0%
8.0%
Delinquencies vs. Foreclosures
1.3%
Q1-2007 0.2%
Delinquent % (LPS)
1.7%
Trustee Sale Progression
Q2-2007 0.3%
2.4%
Q3-2007 0.4%
3.4%
Q4-2007 0.6%
4.2%
Q1-2008 0.8%
Foreclosures Sold %
5.1%
Q2-2008 1.1%
5.9%
Q3-2008 1.2%
1.2%
7.3%
Q4-2008 0.7%
1.5%
9.0%
Q1-2009 0.7%
1.8%
Trustee Sale Progression
9.7%
Q2-2009 0.8%
2.1%
10.0%
Q3-2009 0.8%
2.6%
11.3%
Q4-2009 0.8%
3.2%
11.0%
Q1-2010 0.8%
3.4%
10.50%
Q2-2010 0.8%
3.5%Shadow Inventory www.tomwilsonproperties.com
40% of Delinquent Loans Have Not
Made Payment in 2+ Years
Source: LPS, April 2011.www.tomwilsonproperties.com
Percent of Owners Intending to Repurchase
www.tomwilsonproperties.comUnemployment Recovery after Recession
www.tomwilsonproperties.comFederal Debt % GDP www.tomwilsonproperties.com
>2030!
www.tomwilsonproperties.comGet a Grip:
The Appreciation / Speculation Game
is Over!
So What Do You Do?
1. Wait until everybody knows
everything is going back up ?
2. Invest in a location that soared and
crashed, hope it doesn’t go down
much more & hope to catch the
next wave ?
www.tomwilsonproperties.comBuy Assets That Produce Income Now
www.tomwilsonproperties.comInvest for Cash Flow Single Family Homes
Cash Flow & IRR Sensitivity
% Bottom Line Change for 20% Change
in Income & Expenses
3Br/2Ba $125,000 home, $1250 Rent, DFW
120
CoC
100
IRR
80
60
40
20
0
Rep Ins Occ Prop Tax Int Rate Rent
Mgmt Ratio
www.tomwilsonproperties.comSo You’re Looking for Cash Flow?
Look no further……..
High Rent Ratio
=
High Cash Flow
Monthly Rent $
Market Value of Investment
Monthly Rent $
Or Total Invested $$
$1000/mo rent = 1%
$100,000Selecting
A Region
www.tomwilsonproperties.comMajor Metro Rent Ratio Avgs www.tomwilsonproperties.com
SFR Rental San Jose vs. DFW
San Jose DFW
$600,000 6 X $100,000 =
$600,000
$2000 Rent
6 X $1000 Rent
(.33% Ratio)
$6000 Rent
(1% Ratio, X300%!)
www.tomwilsonproperties.comFuture Performance
& Risk Indicators
Historical & Projected Home Prices
Employment Growth & Diversity
Population Growth
Historical & Projected Rents &
Occupancy
Negative Equity & Foreclosures
Government Stability & InterventionPrices Single Family Homes
For All Types of Investing
Short Term or Long Term:
What Direction Will Prices Go in the
Region I’m Considering Investing In?Bruce Norris – Market Timing Expert
www.tomwilsonproperties.comMarket Direction Indicators
•Historical Trends
•Affordability Index
•Inward Migration
•Negative Equity
www.tomwilsonproperties.comCA / FL / TX / USA Appreciation
www.tomwilsonproperties.comCase Shiller : MSA Declines
L.Vegas Dallas
Worst Best
www.tomwilsonproperties.comDelinquency By State www.tomwilsonproperties.com
Negative Equity 25% US, 35% CA
www.tomwilsonproperties.comTexas vs US Foreclosure Rate
www.tomwilsonproperties.comJobs Economy
Dallas Job Growth Leader
www.tomwilsonproperties.comTexas vs USA Employment Growth
www.tomwilsonproperties.comDallas 24 / San Jose 13
www.tomwilsonproperties.comState Government Financial Stability
www.tomwilsonproperties.comCost of Living www.tomwilsonproperties.com
Population Growth
Population Growth by MSA
www.tomwilsonproperties.comMigration Paterns www.tomwilsonproperties.com
Vacancy and Rent www.tomwilsonproperties.com
Selecting a Property
www.tomwilsonproperties.comLower Risk, More Predictable ROI www.tomwilsonproperties.com
Quality Properties
Price : $123,000
Rent : $1295 4/2.5/2
Sq Ft : 2400
Year Built : 2005
www.tomwilsonproperties.comAaahhh – The Future…….
www.tomwilsonproperties.comDr. Doug Duncan
VP & Chief Economist Fannie Mae
“If anyone tells you that
they know how this
market is going to play
out, run like heck!”
www.tomwilsonproperties.comWIP Investment Conclusions
The Good News………!
Shadow Inventory &
Government Intervention
Are Giving the
Well Educated &
Careful Investor
Great Opportunities
www.tomwilsonproperties.comWIP 2012 RE Investing Conclusions
Cash Flow Now is King
Best Cash Flow is Still Out of State
Speculation for Appreciation is Risky –
Expect Long 5-20yr Recovery
Be Honest About True Cost of
Acquisition
Get an experienced team or Provider
www.tomwilsonproperties.com“A crisis is a terrible
thing to waste.”
Paul Romer, Senior Fellow at Stanford University
www.tomwilsonproperties.comWilson
Investment Properties
Investor Education Resources
tomwilsonproperties.com
1.WIP Website Investor Info
2.WIP Weekly Newsletter
3.Report: How to Select the Best
Investment Region & Property
4.Real Estate 360 Wed 3pm - KDOW 1220am
www.tomwilsonproperties.comYou can also read
