To fully appreciate the seemingly impossible Rate of Return that CARMAP delivers, we like to share with you a new concept of so called “undercurrent cash flow”, which is one of the most essential keys to  unleash the true power of your real estate investment, yet unfortunately it has been one of the few biggest hidden secrets unknown to most of the investors/landlords due to its “undercurrent” nature, which can only being appreciated by the ones who have had the fortune to stumble upon its beauty and appreciate it truly over the time. 

The so-called “UNDERCURRENT” cash flow® is the expenses/costs saved due to the literally 100% occupancy accomplished naturally and unintentionally by great A+ tenants for a long time. Let’s use  the following example to demonstrate how does it work in the real world.

let’s say an rental’s current on-going market rents is $1500.00/month. In a duration of the next 5-year, this rental may go through one of the following 3 typical scenarios (with some simplification for easy comparison)

• scenario 01 – rented to average tenants (instead of A+ tenants) who likely stay 1-year before move-out, and the same process is repeated.
• scenario 02 – same as scenario 01 except you hire a traditional property manager to do it for you. In return, you pay him 10% of rents as the PM fee, or $1,800.00/year, which is a total of $9,000.00 in 5 years. 
• scenario 03 – You use CARMAP service and found A+ tenants who likely stay for the next 5 years. You pay CARMAP service fee of $30.00/month, or $360.00/year, which is $1,800.00 in total in 5 years. 

In scenario 01, due the move-in/out each year, the rental may occur the following:

• the expenses of cleaning, maintenance, advertising, marketing, showing, utilities costs during vacancy; and they are recurred for 4 times within 5-year period, plus
• 0-3+ months vacancy depending on the market condition as well as the other factors such as the home condition, landlord experiences, etc.
• the chances of getting in a below average or less desirable tenants are also likely to say the least during the 4 move-in/out episodes. The lump-sum of months of unpaid rents, extra damages far beyond wear and tear, legal cost of eviction process, junk removal, the endless time wasted and the unthinkable stress to be endured…It is simply way beyond a simple dollar number can ever replace. 

According to our own data analysis in the last 30 years, it is a conservative estimation that the costs for each move-in/out  in total is roughly 2 times of monthly rents, sometimes it could be a lot more.

As for the scenario 02, all the above is likely the same with marginal difference here and there, the only difference is that with a hefty prices tag of $9000.00 in 5 years, you “might” save your expected “less hassle”, and quite often than not, many landlords find themselves ended up with the place not only dealing with headaches of rentals, but also have to manage the property manger on top of all the miseries,  which makes you wonder why did you even bother in the first pace… 

In scenario 03, as the focus is to ensure each individual landlord 100% control over their own rental homes, while empowering them with highly automated service to attract A+ tenants who pay rents on time, take care of the rents, and enjoy the stay for long term (our average stay duration is 5 years or plus). All the above costs for scenario 01 and 02 are being eliminated, or in other words, become the “undercurrent” cash flowing into instead out of the investors/landlords’ pockets, year after year with literally no extra work besides to make sure the pure care and joy of your A+ tenants and your own as well. 

and now let’s put all of the above into perspective, for each scenario, the costs in the five-year period would be 

• Scenario 01 – $12,000.00 = 2 x $1,500.00 x 4
• Scenario 02 – $21,000.00 = $12,000.00 + $9,000.00 PM fee ($1, 800.00 x 5)
• scenarios 03 – $1,800.00 = $360.00 x 5

Now, the number below makes clear the invisible yet real power unleashed by so-called “undercurrent” cash flow:

• Comparing to Scenario 01, CARMAP option will “make” you a whooping $10,200.00 “undercurrent” positive cash flow in a five-year period 
• Comparing to Scenario 02, CARMAP option will “make” you a breathtaking $19,200.00 “undercurrent” cash flow in a five-year period

That is one of the main reasons why so many landlords are struggling year after year, battle after battle, property managers of one after the another, still losing money, and even worse, their insanity. quite often than not, the real root reason of a failed real estate investment after years of struggle is that many people have failed to realize what is working under the surface – it is the undercurrent, not the winds blow in various directions all the time. 

As you probably see now, the undercurrent cash flow is actually what really works for any true success of the real estate investment in the long run, quick frankly, it is most efficient and safest way, as long as you know how to work with the current, not against it. 

PLEASE CLICK HERE FOR DETAILS. 

what is the best rents when it comes to renting your home? One of the biggest misconception is called “cash flow” break-even method. below is how it works. 

• “cash flow” break-even rents – based on all the monthly cash requirements to keep a rental, such as the mortgage payment (principal and interest), the property tax, insurance, maintenance, and all the other related costs, some landlord may work out the number and decide this is the minimum rents to demand in order to be break even or not “loss” money. 
• The issues of this method – there are a few problems of this approach
  • it turns blind eyes on the current market. If the market is a so called “high-renting-demand” market, they may leave too much on the table. If the market is a so called “renter” market, they may keep their rents too high to be rented out – and loss big due to vacancy. 
  • Some landlords may be fooled with the illusion of positive cash flow and ignore the fact this is driven by the fundamental force of the current market – this happens a lot when the real estate cycle is under so called “hot market”, many may experience “positive cash flow” and get a good taste of it, and hold on it tied when the market is into cooling period, hoping miracle will happen just because his rental is special – unfortunately that is not how the market works. That is why many with this illusion have issues with either high vacancy rate or wrong tenants who were desperate to get in somewhere before showing their true color. 

Realizing the above common trap, CARMAP applies a totally different approach, it combines the benefits of so called “market rents” along with the long-term investment strategy to ride off the real estate cycle, regardless it is hot or cold. here is how it works in nutshell: 

• We utilize an automate data collection system to keep track all the market rents and specify the preliminary market rents for a certain home at a certain location at a certain time.  
• further applying so called fine-tune algorithm automatically, CARMAP narrows down the optimized market rent that allows the best market response while recouping the highest rents matching the current market demands. 
• This approach will maximize the profit when the market is going strong, while accumulating a good cash reserve pool for the “rainy days”, namely, when the market turns soft to “renters’ market”, so the landlords do not have to struggle to come up with the additional cash somewhere else. 
• The biggest benefit of market rents is to reduce the unnecessary vacancy due to the unrealistic rent set up blindly under wishful thinking, and in turn save or make big in the end. 
• It works towards landlords’ advantage the most when long-term investment strategy is being employed as well, simply because when A+ home is being chosen carefully, its strength of long term growth over the time will override all short term fluctuations and yield a healthy cash on cash return in the end. 

That is why we apply “market rents” as part of the CARMAP service to make sure your home is always being rented to the right tenants at the right rent with little to no vacancy. 

Click here to find out how CIS Index (Culfidant Investment Success Index) work, and how to use it to evaluate 3 options to find A+ tenants (DIY, via property management company/agent, and via CARMAP automated service).