Investing 101

    At Republic Investment Group, we understand that investing in real estate may seem like a complicated process, especially if you’re new to it. Our company strives to empower you to take a more active role in your wealth maximization strategies. We do so by providing you with the information you need to succeed.

    How to Invest With Republic Investment Group

    We’ve broken down the typical steps you would take when you invest in real estate with us.

    Step 1: Determine the Source of the Funds

    You can utilize your:

    • Self-directed IRA
    • Private savings account
    • Cash, in case your loan is not accepted
    • Loan, such as a hard money loan
    • 1031 exchange

    Step 2: Work With Us to Find the Right Investment

    Choose from:

    • Distressed property: Invest in single-family or multifamily homes, land, condominiums, townhomes, or commercial properties.
    • Private loan: Create promissory notes for other investors.
    • Rental: Purchase existing turnkey properties or create a new rental.
    • Portfolio: Manage all your assets in one location.
    • Crowd-funding/REIT: Join other investors on opportunities.

    Step 3: Conduct the Acquisition of the Investment

    You’ll need to gather certain documents and perform a variety of tasks to start the acquisition process. These may include:

    • Working with a mobile notary: Use electronic signatures where possible, and have a mobile notary finalize your legal documents.
    • Create a Power of Attorney (POA): Depending on your schedule, it may be more convenient to have your spouse or family member make transactions and sign documents at our office.
    • Agreements: Exercise or designate complete authority and direction on what can and cannot be done.

    Step 4: Sit Back, Change, or Repeat When Ready

    You can choose to:

    • Sit Back: Monitor online property portals.
    • Change: If something doesn’t feel right or if an investment isn’t the right fit for you, you can meet with your project manager to make the necessary changes.
    • Repeat: You can opt to find new or similar investments.

    Terminology

    The real estate industry uses terms that may be unfamiliar to you. To help our clients, we’ve provided a short glossary of some of these terms as well as explanations of key concepts. If you need further assistance, please don’t hesitate to get in touch.

    The Gross Rent Multiplier (GRM) is a valuation approach used in the commercial real estate industry. It calculates the approximate value of income that a property produces based on its gross rental income. Simply put, it is an estimate of how much money your property will make and how long you need to wait until your property pays for itself.

    Gross rental income includes income derived not just from rent, but also the money you earn from the property in other ways. Some examples are parking fees and vending machine profits. Gross rental income does not include property taxes, utilities, insurance, and other expenses.

    To calculate GRM, simply divide the property’s annual gross rental income by its purchase price. So if the property costs $150,000 and its gross rental income for one year is $40,000, the equation will look like this:

    $150,000 / $16,800 = 8.9 GRM

    Like golf scores, the lower the GRM, the better. Your findings will come in handy when you’re comparing potential investment properties.