Real estate is one of the best ways to achieve financial freedom. Real estate affords you certain benefits that can help build your wealth. Things like depreciation, capital gains, and leverage.

Depreciation

Depreciation allows you to offset the income from the property. For example if you buy a Multi-Family property worth 1 Million dollars you may have actually paid $200,000 for the dirt and $800,000 for the improvements. The IRS expects that you will depreciate the property, so you will divide $800,000 by 27.5 which is the amount of time in years you are permitted to claim the depreciation for. $800,000/27.5 = $29,090 so each year you get a paper loss of $29,090. Most of the time when you hear about top earners paying little or no income tax depreciation is one of the reason.

Capital Gains

When working a W2 job you are taxed at the ordinary income tax rate anywhere from 10 to 37% depending how much you earned. Capital gains is fixed at either 15 or 20%. When you hold an investment for more than 365 days and make a profit on that investment you are taxed not at an income rate but at the much lower capital gains rate. That is much less than the top income bracket of 37% and it’s even under the 22% bracket of most middle class earners.

Leverage

If you were looking to buy 1 Million dollars’ worth of Diamonds / Gold/ Art you would need 1 million dollars. If you were looking to buy 1 Million dollars of real estate you would need $250,000. This is another great benefit of real estate. The use of leverage allows you to control much more real estate then it would of common stock or other assets for the same out of pocket expense.

We concentrate our investments to the Hampton Roads section of Virginia, which includes Norfolk, Portsmouth, Virginia Beach, Chesapeake, Newport News and Suffolk. Where we work closely with property management, bankers and brokers to uncover those hidden gems. Those hidden gems are Multi-Family properties that have deferred maintenance or have been mismanaged. This will permit us to implement our systems of asset management, revive the property to stabilization, refinance our initial investment out and acquire additional properties.

Why Multifamily

Multifamily offers economies of scale. So we now have fewer roofs to worry about, fewer tax bills and insurance policies. We can also take advantage of bulk discounts. Go to any contractor and tell them we have one kitchen that needs a face lift, now tell him we have 20 all on the same property. Makes a big difference to your per unit cost on everything from doorknobs to thermostats to flooring and labor.

Why Hampton Roads

We like Hampton Roads for multiple reasons. With its diverse Military presence the area is partially protected from an economic downturn. Besides the large military presence, the area is also home to Sentara Healthcare, NASA Langley Research Center, Smithfield foods, Old Dominion University and Gieco Direct.

The area boast aquariums, zoos, trails, and miles of beaches. With something to do for everyone. It is a fairly steady market with population and job growth increasing gradually.

A few of the areas Accolades:

Local Beaches take 9 of the top 10 spots for best VA Beaches ~ USA Today

Norfolk Named as one of the best cities to find a job ~Newsweek

Virginia Beach Named to Trip Advisors Most Popular Us Summer destinations ~2019

Norfolk maned as 12^th best city for new college grads ~2018

Virginia Beach named as one of the safest cities in America ~ wallet Hub 2019

Virginia Beach Named to top 10 list for Economic Growth Potential ~ Business Facilities 2019