What's Your Business Model?

[Michael Rossi]

We talk a lot in the forums about deals, business plans, and other aspects of real estate investing. However, I don't recall ever having a thread on business models (in other words, what we do). Therefore, I'd like to use this thread to ask specifically about everyone's business model.

Please try to keep your model to a few sentences. This is not your business plan, but rather just a simple statement of how you make money in real estate. Please include pertinent details, like cash flow targets; profit margins; minimum purchase discount, target sales audience, advertising method if appropriate, etc. In other words, how do you make money in real estate.

I'll start:

My business model is to buy rentals at a big discount to market value (30% minimum in normal times, 50% minimum starting in January 2008 due to the economy) AND with a minimum positive cash flow of $100 per unit per month with 100% financing, assuming expenses at 50% of the gross rents (50% Rule). In addition to the $100 per unit per month cash flow, I do all the management and maintenance myself, which generates an additional $100 per unit per month.

Mike