Do the two-year lease rents cover all costs and give you a little slush fund?
What is the property management fee in two years?
Are you locked into the same property manager for the property after the two year period? (The reason I ask this question, what if you are not happy with the performance of the property manager)
With the furniture included, is this furniture package conducive to the property? Will it attract the tenant profile you would like in two years?
Does the Real Investment Gain or Pain Begin in Two Years?
First, is there any chance of equity growth? Will this property increase in value, or will there be a stampede to sell to get a short term return on equity in two years when all investors’ two years is up? What process in place to ensure all owners don’t try to exit at once?
What are the current rents, and any chance of rent increases in two years?
Can you positive cashflow in two years add in all the costs that are waived?
Is there any value left in the furniture package in two years, or do you have to replace it?
Real Estate, Similar Stories
My brother bought a beautiful downtown high rise condo in a major Canadian city. It didn’t the ending he signed up for.
The development had a significant hotel as the anchor, and the residents were above the hotel floors. He put down a $20,000 deposit; the project never got built after numerous attempts, including digging a hole for the foundation. He had to fight over five years to get his deposit back—no interest earned on deposit over five years.
This is not quite the same situation, but you need to understand the extended deposit structure of the VIP Incentives listed above.
The opportunity sounds excellent in the short term. Over the first two-year period, you have collected positive cashflow, see equity growth, and pay down your mortgage principal, all positive signs of a great incentive.
Is this too good to be true?