3 Things to Learn About Passive Profits From a PIP Group Deal from April 2020

When PIP Group purchased the property that became our “April 2020 Passive Profits Example,” we did so at a deep discount.

In fact, we bought it for just over a quarter of what it is worth today, which is why we spent about 19 months renovating this charming rental before selling it to net our investors a very solid 19% annualized return that equated to nearly $52,000 net profit.

That profit and those return numbers are noteworthy for a number of reasons, the most obvious of which being that they are great numbers! However, what makes them even more noteworthy is that they were delivered in April 2020, a time when many real estate investors were tearing their hair out wondering how they would survive the nationwide coronavirus-spurred economic shutdown that was shuttering businesses, skyrocketing unemployment, and sending landlords over the edge wondering if their tenants would ever pay them rent again and if they would ever be legally allowed to evict a delinquent resident who was gaming the system.

At the height of that uncertainty, our investment property on 42nd Street in Savannah, Georgia, closed with solid numbers and delivered a healthy dose of certainty into many investors’ uncertain portfolios. We were proud of our performance in the middle of the COVID-19 pandemic, but we were also proud to have access to one of the best markets in the country both before, during, and after this crisis. It’s why this deal went so well and, furthermore, it’s why we are able to post a monthly passive profits example every month for our investors.

Here are three things that our April 2020 example demonstrated very clearly when it sold:

  1. Single-Family Residential Properties are Still Strong

Many real estate investors who might previously have been considering investing in large multifamily properties are taking a second look at single-family residential investments in the wake of the emergence of the coronavirus in the United States. Not only are residents willing to pay a premium in order to live in a property where they will be happy to “shelter in place,” but landlords have far better luck collecting rent and working with tenants in forbearance when they are dealing with single families rather than large groups organized for “rent strikes”.

  1. You Don’t Have to Be New to Look New

This house was last fully remodeled in 1985, and it was built in 1930. How did we find a buyer ready to pay a premium for the property? Easy! We simply implemented a tasteful and judicious renovation focused on the key elements we know residents and owners require. For example, we brightened up the color scheme both inside and out, spruced up the back porch since outdoor living at home is more important than ever, and removed outdated fixtures. The result was a charming property that will be a great residence and, if the new owner chooses, a great rental property as well.

  1. Flooring Matters

It used to be that vinyl flooring looked as cheap as it is. These days, however, luxury vinyl plank (LVP) and other realistic flooring designs enable you to create beautiful hardwood looks (like the ones in this property) without breaking the bank – and you can avoid dealing with the issues that arise when you have carpets in a rental! This property generated great returns for PIP Group investors in the middle of an economic meltdown because it is a great property, but it also will “work hard” for the new owner by providing preventative maintenance in the form of stylish floors that are durable and trendy.

If you want to see before-and-after pictures of our April 2020 Passive Profits Example property, you can see them on our blog. You can also get all the details and the “cold, hard numbers” on the deal as well. And always remember: If you invest in the right deals, you should be standing firm while others sink around you!

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About the Author

Charles Sells is the founder and CEO of The PIP Group, a turnkey service provider that focuses on investments in distressed real estate assets including tax liens, tax deeds, traditional foreclosures, fix-and-flips and long-term cash flow acquisitions. He has been involved in tax lien investing for over 20 years, during which time The PIP Group has grown to become one of the largest agencies of its kind with nearly 1,000 individual and institutional investors worldwide.

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