The CDC Eviction Moratorium – What You NEED To Know

You may have seen recent headlines referring to an “eviction crisis”: 

The COVID-19 Eviction Crisis: an Estimated 30-40 Million People in America Are at Risk – The Aspen Institute 

 

Experts fear the end of eviction moratoriums could plunge thousands of people into homelessness – CNBC

President Trump signed an eviction moratorium order that effectively bans evictions nationwide through the end of the year. According to the Centers for Disease Control and Prevention (“CDC”), the moratorium order has been issued to provide housing stability and to prevent the further spread of COVID-19. However, it is important to note that rent is NOT cancelled through the end of the year. Let’s dive into how this order effects landlords and owners of real estate…

 

According to the moratorium, there are stipulations in order to receive this “eviction protection.”

Those who are eligible must meet additional criteria before presenting their landlords with a declaration, which will be made available on the CDC website. This criteria includes: 

  1. The resident has sought all available government rental assistance
  2. The resident will earn no more than $99,000 in 2020 (or $198,000, if filing jointly)
  3. The resident can’t pay their rent in full due to a substantial loss of income 
  4. The resident is trying to make timely partial payments, to the extent they can afford to do so
  5. The resident would, if evicted, likely end up homeless or forced to live in a shared living situation

What to do if you (the landlord) receives a CDC Declaration from a tenant?

 

According to Colton Addy from Snell & Wilmer Law, if a landlord receives a CDC Declaration from a tenant, the landlord should respond in writing to the tenant to encourage the tenant to make partial payments of rent (and similar housing-related payments) to the extent the tenant is able, in accordance with the CDC Declaration. Additionally, the landlord’s written correspondence should remind tenants that the rental amounts are not forgiven and will ultimately need to be paid. 

 

Additionally, many tenants may not be aware of the government assistance programs that are available to tenants to help tenants pay their rent during the COVID-19 Pandemic. Landlords should include a list of available resources that tenants can use to pay their rent. The Department of Housing and Urban Development (HUD) has stated that nonprofits that received Emergency Solutions Grants (ESG) or Community Development Block Grant (CDBG) funds under the CARES Act may use these funds to provide temporary rental assistance to tenants. 

 

The following websites provide information on federal assistance that is available:

 

www.hudexchange.info/programsupport

https://www.hud.gov/coronavirus

https://home.treasury.gov/policyissues/cares/state-and-local-governments 

 

Additionally, landlords should include other programs that may be applicable in their jurisdiction. Landlords may also consider filing an eviction proceeding for one of the reasons permitted by the CDC Order, but landlords should use caution in pursuing such actions as eviction proceedings in the current climate are likely to draw additional judicial scrutiny.

 

Penalties:

 

The penalties for individuals who violate the Order are severe, including:

 

 

  • A fine of up to $100,000 and up to one year in jail, if the violation does not result in a death; or
  • A fine of up to $250,000 and up to one year in jail, if the violation results in a death.

 

The penalties for an organization violating the Order are even more severe.

In summary, the moratorium order provides temporary relief to those residential tenants facing eviction who submit the required declaration, through the end of the year.  The order, however, does not absolve a tenant from paying rent or restrict a landlord from applying penalties, interest, or late fees on the tenant’s account for non-payment of rent.  Additionally, the order does not relieve landlords of their debt service obligations if a tenant seeks relief under the order. 

 

Disclaimer: The materials contained in this blog post are for educational and informational purposes only. Nothing in this blog post is to be considered as the rendering of legal advice. Readers are advised to obtain legal advice from their own legal counsel. Additionally, please note that the orders and laws related to the COVID-19 Pandemic are changing on a daily basis and your jurisdiction may have stricter rules related to evictions in place. Please verify the rules currently affecting your property at any given time.

 

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The S.O.S. Approach to Managing an Investment During Coronavirus

As I am sure you are aware, CDC is responding to an outbreak of respiratory disease caused by a novel (new) coronavirus that has first detected in China and which has now been detected in almost 70 locations internationally, including the United States. The virus has been named “SARS-CoV-2” and the disease it causes has been named “coronavirus disease 2019” (abbreviated “COVID-19”).

Consequently, the DOW Jones has dropped by nearly 10,000 points over the past 30 days.

Per the CDC, “the best way to prevent infection is to avoid being exposed to this virus.” Therefore, social distancing has been one of the main methods to combat the virus. As a result, many people are working from home and many others have been laid off or furloughed.

From a business perspective, when a crisis – like the coronavirus, hurricane, fire, earthquake, etc. –  occurs and you have an investment property, you need to have a process for approaching the situation, and even more so when you have passive investors. The procedure I use is the acronym S.O.S, which stands for Safety, Ongoing Communication, and Summary.

 

S – Safety

The first step when a crisis occurs is always and most importantly safety. That is, safety for both the people and the money.

So, you first want to ensure the safety of both your residents and your team members on the ground. We sent all of our residents safety notices outlining the CDC’s guidelines for preventing the spread of the disease, which includes:

  • Wash your hands often with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol based hand sanitizer
  • Avoid touching your eyes, nose, and mouth with unwashed hands
  • Avoid close contact with people who are sick
  • Stay home when you are sick
  • Cover your cough or sneeze with a tissue, then throw the tissue in the trash
  • Clean and disinfect frequently touched objects and surfaces

We also provided URLs to the CDC webpages with more information on the coronavirus:

The money side of the safety equation is still up in the air. It is hard to tell how the coronavirus will impact multifamily real estate. The stock market is going down which means more money should flow into real estate. At the same time, many people are losing jobs, which means they will have difficulty paying rent. We will have to see how rent collections are impacted over the next few months.

One interesting strategy I’ve seen is to allow residents to use their security deposits to pay for rent over the next few months. For example, investor Julie Fagan will allow her residents with a $1000 per month rent payment and a $1000 security deposit to apply $500 to this month’s rent and $500 to next month’s rent, reducing their rents to $500 per month. In exchange, the residents sign a new 12 month lease and sign up for security deposit insurance. I like this strategy because it helps the resident as well as the bottom-line at the property.

Investors will need to start getting creative if the coronavirus does negatively impact multifamily collections.

 

O – Ongoing Communication

Once we have ensured the safety of the people, we sent an initial communication to our passive investors.

The communication we sent to our investors was similar to what we sent to our residents. The major difference is that it also included information on what we are doing to ensure the safety of both the people and the money.

In addition to the relevant CDC information, we mentioned that we are working closely with our property management partners to monitor the operations at the property and that we will have more information for them by the middle of next month. We also mentioned the coronavirus will not impact their distribution for the previous month.

So, we sent one email to let investors know that we are aware of and monitoring the situation and when they can expect another update. It is hard to tell how long the coronavirus pandemic will last, so the plan is to continue to provide monthly updates to our investors about the status of the rent collections at our properties.

Overall, I think it is better to only send emails when there is sustentive information to provide as opposed to hourly or daily updates.

 

S – Summary

Once things return to normal, we will send our investors a final email with a summary of how the coronavirus impacted the operations at our property and distributions, as well as any changes we will have moving forward to make up for lower cash flow and distributions, if applicable.

 

When a crisis occurs, like the coronavirus, the three step procedure is S.O.S. – safety of the people and the money, ongoing communication to provide your investors with status updates, and then providing a summary once things return to normal.

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Tips for Balancing Real Estate Investment Deals with Family During the Holidays

The end of the year and the holiday season can be an exciting time for many reasons. While this is a great opportunity to focus on your real estate investment deals and planning real estate investment strategies for the upcoming year, it is also a time to spend with friends and family. It can be tough finding a balance between work and family any time of year, but this is especially true during the holidays. So what can you do to ensure that your deals don’t fall through as the end of the year approaches? Here are my top 3 tips for balancing business with family during the holidays.

Prioritize What Really Matters

With so many different things going on at the end of the year, the most important thing to do is prioritize your responsibilities. Make of a list of your top 5 to-dos for the end of the year and only focus on those specific things. Whether that means closing your last real estate investment deal, finalizing your new marketing plan, or making sure to spend every Saturday with your family and friends. These are the top things that you want to focus on in order to finish the year strong.

Expert Time Management

Time is the most valuable asset that you have. If you are able to properly manage that, you will be able to better manage a hectic holiday schedule. Having a career in real estate can be incredibly time-consuming if you don’t manage your time effectively.

Break down your day into sections that focus on your top priorities. For example, if you know that you’re most productive in the mornings, block those off to work solely on your real estate investment deals or completing research. You can save responding to emails, calling investors, and any meetings for the afternoon. Having clear sections for your day will make it that much easier during the holidays to plan time away from work and celebrate with family.

Set Actionable Goals

Goal setting is a technique that many of the world’s most successful people use to stay ahead. An actionable goal is something that is specific and clear for you to work towards. Setting actionable goals you can accomplish before year end is a great way to stay ahead this holiday season and ensure that you have a strong start to the next year.

To get the best real estate investment advice ever, visit my blog to learn more about creating wealth and financial freedom through real estate investing.

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Real Estate Investing Lesson From Amazon’s New York HQ2 Cancellation

In a statement released today, Amazon announced that they will not move forward with their original plan to build their HQ2 in Long Island City, Queens in New York.

For more information on the logic behind their decision, click here to read Amazon’s full statement.

This decision is going to cost the region up to 25,000 new high-paying jobs, is a major revenue loss for the city and the state, and is a missed opportunity for New York to further transform itself into the tech capital of the world.

As real estate investors, we closely followed the Amazon HQ2 competition between cities and states. We knew that the city chosen for the HQ2 would benefit in many ways. More high-paying jobs in an area means lower unemployment, higher median income, more migration, increased likelihood of other business moving to and investing in the area, etc. All of these benefits also result in a greater demand for real estate – both rentals and owner-occupied homes.

Once Amazon announced the location (it actually ended up being multiple locations – New York, Northern Virginia, and Nashville), I am certain that many real estate investors began to look in those markets for deals. And some proportion of those investors actually invested in deals based on the expected future benefits to the real estate market once the HQ2 project was completed.

With Amazon’s announcement today that they are backing out of the New York location, the major lesson for real estate investors is don’t invest based on a business announcing its intentions to move to an area.

The first law of my Three Immutable Laws of Real Estate Investing is “don’t buy for appreciation.” Buying for appreciation is like gambling. Sometimes you win, most of the time you lose. A variation of this rule is “don’t buy for new headquarter announcements,” not until they physically move to the market.

Those who “gambled” on New York and underwrote their deals based on the Amazon HQ2 project will ultimately lose money on those deals, while those who “gambled” on Northern Virginia and Nashville may still ultimately end up winning. However, Amazon could have just as easily (and they still might) pulled out of both of those locations. We won’t know until the red ribbon is cut on opening day.

Don’t leave the preservation and growth of your or your investors’ hard earned money up to chance. Follow the Three Immutable Laws of Real Estate. Don’t get sucked into a new market for the sole reason that a major company announced plans to move their headquarters to that location. Wait to see if they actually move and then enter the market. Sure, you will pay more for the same piece of real estate than you would have before or directly after the announcement. But, you are completely eliminating the chances of losing most, if not all, of your money because you speculated on a deal and then the company ultimately reneges on their decision.

Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.

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Top 9 Cities with the Largest Increase in Renter-Occupied Units

In a recent blog post, I outlined the three economic metrics that will encourage you about the impact a potential market correction will have on the multifamily industry (which you can read here).

 

Essentially, the economy has been extremely strong since the last market correction in 2007-2009 while, at the same time, the overall number of renters and the overall share of renter-occupied units has also increased.

 

In 9 cities, the percentage of renter-occupied units has increased by 30% or more. And in one of those 9 cities, the increase was more than 50%.

 

Those 9 cities are:

 

9 – Glendale, AZ

AZ Sedans

  • 2006 % renter-occupied: 34.6%
  • 2016 % renter occupied: 44.9%
  • 10-year % change: +30.0%

 

8 – Mesa, AZ

desert scenery

Hotpads

  • 2006 % renter-occupied: 31.6%
  • 2016 % renter occupied: 41.2%
  • 10-year % change: +30.1%

 

7 – Virginia Beach, VA

Virginia Beach real estate

Unpakt

  • 2006 % renter-occupied: 28.6%
  • 2016 % renter occupied: 37.4%
  • 10-year % change: +30.9%

 

6 – Fremont, CA

Elegant cityscape

City of Fremont

  • 2006 % renter-occupied: 32.1%
  • 2016 % renter occupied: 42.1%
  • 10-year % change: +31.0%

 

5 – Toledo, OH

International Cash Systems

  • 2006 % renter-occupied: 38.3%
  • 2016 % renter occupied: 50.3%
  • 10-year % change: +31.3%

 

4 – North Las Vegas, NV

North Las Vegas sign

Review Journal

  • 2006 % renter-occupied: 33.4%
  • 2016 % renter occupied: 46.2%
  • 10-year % change: +38.5%

 

3 – St. Petersburg, FL

beach apartments

St. Pete Rising

  • 2006 % renter-occupied: 28.6%
  • 2016 % renter occupied: 39.8%
  • 10-year % change: +39.4%

 

2 – Plano, TX

Plano Texas apartment real estate

Cross Country Moving Companies

  • 2006 % renter-occupied: 24.2%
  • 2016 % renter occupied: 33.8%
  • 10-year % change: +40.0%

 

1 – Gilbert, AZ

Street Scout

  • 2006 % renter-occupied: 19.9%
  • 2016 % renter occupied: 30.6%
  • 10-year % change: +53.4%

 

Source: US Census

 

 

 

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Why I Am Confident Multifamily Will Thrive During and After the Next Economic Correction

In March of 2008, the Dow Jones was at 12,216.40. One year later, the Dow Jones plummeted to 6,626.94. Nine years later, the Dow Jones has skyrocketed – nearly tripling to over 24,000. During that same period, unemployment decreased from nearly 10% to 4% and GDP increased from $15 trillion to $19.39 trillion.

All-in-all, the economy has seen a strong bounce back since the 2008/2009 recession.

With such a strong performance over the past decade, there are fears in the air about a looming correction. And everyone who was investing in 2008/2009 knows firsthand the effects a correction/downturn has on real estate.

The economy is a complex animal that is nearly impossible to predict. However, by studying the impacts of economic corrections on real estate in the past, you can have an idea of how real estate will be impacted by any correction in the future– big or small, in the next few months or the next few years.

One major fact that will encourage you about the impact a potential economic correction will have on the multifamily industry is that renting has increased as the economy has gotten better.

Say what? There are more renters even when the economy has gotten stronger?!

Yep.

One of the most telling statistics is the increase in the number of renters during the past decade. Between 2006 and 2016, the US population grew by 23.7 million. During that time, the number of renters increased by over 23 million and the number of home owners increased by less than 700,000. In relative terms, the overall renter population grew by more than 25% in a decade. In fact, according to Pew Research Center, more U.S. households are renting than at any point in the last 50 years!

Sure, a large portion of this growth occurred immediately following the economic recession (an increase of 1.4%, 3.1% and 4.4% in 2007, 2008, and 2009), which is expected. The economy tanks and people cannot afford nor qualify for a mortgage, so they are forced to rent.

But what is surprising is that the increase in renters didn’t stop. In fact, while the Dow Jones tripled, unemployment was cut in half, and the GDP rose by nearly $5 trillion, the renter population increased nearly every single year (3.4%, 3.3%, 3.1%, 2.0%, 2.0%, 0.9% in 2010 to 2015).

And a lot of this growth has been concentrated in big cities across the US (population greater than 200,000).

That said, the number of overall owners in the US still exceeds the number of renters (63.8% owners to 36.2% renters). However, the gap is closing. Because the number of big cities where more than 50% of the population choses to rent increased from 20% to nearly 50% during that same period. In other words, more and more people are choosing to rent over buying in big cities.

Additionally, renter growth outpaced homeownership in 97 of the 100 largest cities in nearly every year between 2006 and 2016. That means that the number of owners grew at a faster pace than the number of renters in only 3 major cities across the county.

Even more staggering, during a robust economy in 2015 and 2016, rent growth outpaced homeownership in 46 of these major cities!

Okay, more people are renting now, but they plan on buying a home eventually, right?

Well, in a 2017 survey conducted by Freddie Mac, renters were asked a series of questions, including when they expected to move and whether they expected to rent or buy when they move.

Because of the turnaround we saw in the economy, you might think people would move out of their rental and into their own home. But, only 14% of renters expected to move within a year while 37% said they didn’t know and another 9% said they expected to never move. But what was even more shocking was this – only 41% expected to buy, which is the lowest it has ever been.

Another interesting fact is that 55% said they either strongly agree/somewhat agree with the statement “I like where I live and don’t plan to move despite the changes in my rent.” And only 31% said they would move into a different rental property if their rent increased in the next year.

 

Now the question is why did more people decide to rent while the economy was booming?

Well, there are many reasons, including:

All of these reasons will be with us for the immediate future.

The fact that the number of renters increased by over 25% in the decade following the recession, even while the economy dramatically improved, gives me confidence in the prediction that when the next correction occurs, the same percentage of people or more will rent. And when the economy begins to improve again, the same percentage of people or more will rent. Which means that the multifamily investment strategy will continue to thrive now and in the foreseeable future, regardless of which correction takes place.

That said, you want to always make sure you are adhering to my Three Immutable Laws of Real Estate Investing to maximize your real estate portfolio during any part of the market cycle.

 

Take the first steps towards passive investing.

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5 Proven Ways to Attract Passive Apartment Investors

I was recently a speaker at Dan Handford’s virtual multifamily summit. The topic of my talk was how to attract passive apartment investors. More specifically, I provided 5 proven ways to attract passive investors based on my experience raising capital for over $470,000,000 worth of apartment communities, interviewing over 1,000 passive investors, and writing the best-selling book on apartment syndications – Best Ever Apartment Syndication Book.

The main thing I’ve discovered through my money raising experience is that passive investors don’t chose to invest with apartment syndicators who offer the best returns, who invest in the most favorable market, or who implement the greatest investment strategy. These are all reasons why someone choses to invest, but not the primary reason. Primarily, passive investors will invest only with someone they trust – both personally and as a business person.

And it must be both. I trust Jim Halpert from The Office as a person, but I would never invest in Jim’s apartment syndication because I don’t trust him as business/real estate person.

The best way to gain a passive investor’s trust is through time (to gain their trust personally) and expertise (to gain their trust as a business person). So, a more apt title to this blog post is “5 proven ways to build trust with passive apartment investors,” and here are those 5 ways:

 

1 – Thought Leadership Platform

A thought leadership platform is an interview-based blog, YouTube channel, or podcast on which you publish valuable content for free on a consistent basis.

You gain both types of trust with a thought leadership platform.

With a thought leadership platform, you are reaching hundreds of potential investors every day. This provides you with a head start in gaining people’s personal trust, because when you eventually hop on an introductory call with them, they’ve already heard you speak for hours. At the same time, since you’re interviewing other real estate experts and offering your own expertise on the apartment syndication process, you’ll become recognized as an apartment expert, which covers the “business person” type of trust.

My overall thought leadership platform and online presence (via podcast, YouTube newsletters, Facebook, and Forbes) has attracted a large portion of my passive investors.

 

2 – BiggerPockets

There are 1.2M members on BiggerPockets and only 6,702 (~ 0.5%) have received the “addict” award. To receive the addict award, you must visit the BiggerPockets website every single day for a month.

When I was first launching my apartment syndication business, I made it a habit to visit and engage on BiggerPockets every day, which is why I am one of the 0.5% who’ve received the “addict” award. And these efforts have paid off greatly, because another large portion of my passive investors have come from BiggerPockets.

To get the most out of BiggerPockets, you need to be engaged in the forums and member blogs and add value on a consistent basis. Set up apartment syndication and passive/accredited investor keyword alerts so you are immediately notified when those keywords were used in the forums.

Answer questions in the forums. Reply to direct messages quickly. Provide referrals to other investors in your market. Republish thought leadership platform content to the forums and member blogs.

In doing so, just like the thought leadership platform, you will build a personal connection with people you haven’t met in person, as well as become recognized as an apartment syndication expert, especially if you make it on the Top Contributors list on the multifamily or private lending forum.

 

3 – Create a Local Meetup

Creating a local meetup group in your market is very similar to a thought leadership platform. The major difference is that the meetup group is an in-person event. You will form personal connections with the followers of your thought leadership platform, but you can form deeper personal connections faster at an in-person meetup.

By being the host of the meetup, you will instantly gain the trust and respect of the attendees, and even more so after you host the meetup month-after-month and it continues to add value to their investing businesses.

Start small with a monthly meetup group in your target market. Then, slowly scale over time. Capture content provided at the meetup (via speakers or conversations you’ve had/overheard) and share it on social media, ideally on a Facebook community you’ve made for the group. On that same Facebook community, have attendees post their monthly goals. Also, use that community to create Facebook ads that target passive investors within a certain radius of the event.

Once you’ve successfully scaled your meetup group, the next step is to create a yearly, in-person conference, where you’ll gain even more respect and trust from potential passive investors – both those who attend and those who simply hear about how great your conference was.

 

4 – Transparent and Quick Communication

Who do you trust more? A colleague who is constantly shows up to work late, takes 2 to 3 days to reply to emails and texts, never answers their phone, and brings up problems without solutions? Or a colleague who shows up 15 minutes early, replies to emails within a few hours, always answers the phone, and is a problem identifier and problem solver?

It should be a no brainer. We trust people who are punctual, transparent, and quick communicators. And that also holds true for apartment syndications.

One of the voicemails I have saved on my phone is from a passive investor who was thanking me for my communication skills. He appreciated our monthly recap emails and the fact that we sent accurate distributions and accurate K-1s on-time. And I’ve received countless more phone calls, emails, and texts from investors saying the same thing, so what we are doing is clearly appreciated. Here is a list of what we do to ensure that we are effectively communicating with our investors:

  • Send detailed, transparent monthly recap emails with images for all deals
  • Send profit and loss statements and rent rolls on a quarterly basis
  • Provide information on new business and economic developments in the surrounding market
  • Send accurate monthly distributions on-time
  • Reply to emails, texts, and voicemails within 24 hours at most
  • Provide investors with cell phone number
  • Record new investment offering calls to send to investors who couldn’t attend
  • Send accurate K-1 tax statements on-time

 

5 – Volunteering

Volunteer at a nonprofit organization that aligns with your values, interests, and beliefs. The primary reason is to give back. But while you are giving back, a secondary objective is to get on the board.

A board member at a nonprofit organization is likely affluent with a high net-worth and has a circle of influence consisting of other high net-worth individuals. So, find a nonprofit organization, volunteer for a few months, and work your way onto the board. Once there, focus on building genuine personal relationships with your fellow board members outside of volunteering (which covers the personal trust). Then, organically bring up passive investment opportunities and see where the conversations lead.

Let me reiterate: the primary objective is to give back. Do not show up to your first day of volunteering and ask others to invest in your deals. Focus on giving back. Try to get on the board with the intentions of giving back even more. When you are volunteering, focus only on volunteering. But once you start to build relationships with other board members outside of volunteering, you can begin to organically bring up things that interest you, with apartment investing being one of them.

 

There are many ways to attract passive investors and this list is by no means exhaustive. However, I have used every strategy on this list to raise capital for my deals (hence the “proven” in the title). I recommend picking one of the strategies that interest you the most and focusing on scaling it for at least 6 months. Once it is rockin and rollin, pick a second strategy and repeat until you’ve built yourself a passive investor lead generating machine.

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Top Best Real Estate Investing Advice Ever Shows of 2018

Here are the most downloaded Best Real Estate Investing Advice Ever Show episodes of 2018, which were listened to over 200,000 times!

 

Top 5 Regular Shows of 2018

JF1231: Leveraging Technology to Automate The Money-Raising Process with Craig Cecilio

JF1227: 3 Apartment Buildings Closed in Just 12 Months with Mark Yuschak

JF1217: 2018 Market Predictions from Expert Economist with Peter Linneman

JF1225: Deal Machine Helps Investors Find Property Owners Faster with David Lecko

JF1330: BRRRR 101 – Real Life Examples of Scaling Using This Famous Method of Investing with Joe Cornwell

 

Top 5 Follow-Along Fridays/Friday Shows of 2018

JF1228: Two Unique Ways to Find Your First Off-Market Apartment Deal

JF1221: Your Guide to Evaluating an Apartment Community Before Making an Offer

JF1291: What Is the Best Apartment Investing Strategy?

JF1305: The Psychology of Success: Why Your Mindset Will Make or Break You with Rod Khleif

JF1340: Can Your First Investment Be An Apartment Community?

 

Top 5 Situation Saturdays of 2018

JF1229: Hard Money Lending & Business Consulting All-In-One with Doug Fath

JF1306: He’s Got Capital For Your Deals with Dan Palmier

JF1313: Making the Move From Single Family to Multifamily Investing with Anna Simpson

JF1362: Make $500k in One Year with BRRRR with Adam Kitchener

JF1299: Finding a Niche, Creating & Executing a Business Plan with Nathan Tabor

 

Top 5 Skillset Sundays of 2018

JF1230: Find an Asset Class with Less Competition and Dominate It with Tyler Sheff

JF1244: FBI Negotiating Strategies for REI Deals with Chris Voss

JF1223: How to Professionally Generate & Convert Leads with Scott Corbett

JF1314: Raising Capital & Finding Funding with Lee Arnold

JF1307: Apartment Due Diligence – How to Evaluate the Mechanics of a Deal with Nathan Tabor

 

Comment below: What was your favorite episode of 2018?

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Joe Fairless Top Blog Posts 2018

Top 8 Best Ever Blog Posts From 2018

Happy New Year everyone!

To start the new year, I wanted to share the most viewed Best Ever blog posts from 2018 with the purpose of creating a one-stop shop for your favorite blog posts from the past 12 months:

 

8 – Apartment Syndication School

Syndication School is a weekly, two-part podcast series focused exclusively on providing aspiring and active apartment syndicators with the knowledge and the tools (we provide FREE documents and spreadsheets for each series) needed to launch, scale, and maintain an apartment syndication business. We update this page each week with new podcast episodes and documents, so be sure to bookmark this page!

Read this blog post by clicking here.

 

7 – 6 Creative Ways to Break into Multifamily Syndication

The two main requirements before becoming an apartment syndicator are experience and education. You’re a loyal Best Ever follower, so you should have the education piece covered. However, if you are lacking in the experience arena, here are 6 ways to get hands-on apartment syndication experience in preparation for venturing off on your own.

Read this blog post by clicking here.

 

6 – BRRRR Strategy: Formula to Buy 5 Rental Properties in 2 Years and Payoff in 7

This 2:5:7 strategy implemented by Andrew Holmes is one of the fastest strategies to achieve financial independence that I’ve ever come across. A variation of the renowned buy, rehab, rent, refinance, repeat aka BRRRR strategy, follow this strategy to purchase a minimum of five properties every two years and pay off the debt in seven years to set yourself up for long-term success and debt-free wealth.

Read this blog post by clicking here.

 

5 – 16 Lessons On Buying Apartment Buildings From Over $400,000,000 in Apartment Syndications

This blog post is a beast. Coming in at nearly 6,000 words, it covers nearly every lesson I’ve learned since doing my first apartment syndication deal in February 2014.

Read this blog post by clicking here.

 

4 – Best Ever Apartment Syndication Book

In 2018, Theo and I released a 450 page textbook on how to launch an apartment syndication empire from scratch. We’ve received a TON of positive feedback about the immense value provide by the Best Ever Apartment Syndication book for which my team and I are eternally grateful. Head on over to Amazon today and pick up a copy. Be sure to leave a review and send a screenshot to info@joefairless to receive a free package of additional apartment syndication resources and have the opportunity to be featured on Follow-Along Friday.

Read this blog post by clicking here.

 

3 – Success Blueprint: How to Find Tax-Delinquent Properties & Contact The Owners Via Direct Mail

Written over 2 years ago, this article, which summarizes the Best Ever advice of wholesaler, fix-and-flipper, and buy-and-hold investor Mikk Sachar, is one of our all-time most popular blog posts. Learn everything there is to know about conducting direct mailing campaigns to delinquent tax lists.

Read this blog post by clicking here.

 

2 – The Top 14 Best Ever Apartment Investing Books

Remember the two requirements to becoming an apartment syndicator? That’s right – education and experience. Read the books on this list and you will cover that education requirement, and then some.

These are the 14 books that I attribute in part to my ability to go from making $30,000 a year in a corporate 9 to 5 job to controlling over $400,000,000 in apartments in less than 5 years.

Read this blog post by clicking here.

 

1 – Passive Investor Resources

The most popular page from 2018 is our passive investor resources page. If you are a sophisticated or accredited investor who is interested in learning more about investing in apartment syndications or a syndicator who wants to learn more about why a passive investor choses one general partnership over another, this is the go-to, comprehensive resource created specifically for you!

Read this blog post by clicking here.

 

Again, Happy New Year and I wish you continued success in 2019!

 

Comment Below: What is a topic you want to see us cover in 2019?

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What is Wholesaling Real Estate Investing & How to Get Involved

Want to build wealth sooner rather than later? You generally can’t go wrong with real estate investing, as long as you know what you’re doing. In fact, research shows that 90% of millionaires across the globe achieved their financial success as a result of real estate investing.

 

Of course, breaking into the real estate field can be a daunting task. Fortunately, that’s where wholesaling real estate investing comes in!

What is Wholesale Real Estate?

This refers to properties that are drastically discounted — or significantly under market value. If you choose to take part in wholesaling, you’ll essentially look for a discounted property that you can control via a purchase agreement. Then, while you’re under contract via this agreement, you’ll look for a buyer who wants to buy the contract.

What Else Is There to Know about Wholesaling?

As a wholesaler, when you decide to sell contracts, you’re not actually selling properties themselves. Rather, you’re selling to other buyers your right to purchase these properties. Basically, you’re looking for deals and then passing them along to end investors. The benefit of the wholesaling process is that it helps you to avoid risk and also avoid tying up your capital for as long as it would take to complete a rehab.

Steps for Wholesaling Real Estate Investing

To get started, it’s critical that you first research the local market in which you plan to find deals. For example, you should take a close look at what housing prices are there to see how low they go (the lower, the better). Then, you should start working on your list of buyers.

The buyers list is one of the most important tools you’ll use when wholesaling, or serving as a middleman between sellers and buyers. A practical way of building your buyers list is to attend local real estate networking meetings or to even going on real estate investing podcasts. The more individuals who know you in the industry, the more likely you are to get leads regarding properties you can pursue as a wholesaler.

The Capital Angle

It’s also paramount that you line up the capital you need to bring your deal to fruition. This is possible by aligning your wholesaling service with a hard money or private seller right away. In this way, you can purchase the house if you end up needing to do so.

Get Started!

If you are eager to create more wealth for yourself and your loved ones, wholesaling real estate investing is a smart place to start. However, failure to make the most of each step of this process will prevent you from experiencing the level of profitability your competition is quickly realizing. Take your time and review as many resources as humanly possible to learn all you can about wholesaling.

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New Year’s Resolutions Every Real Estate Syndicator Should Have This Year

For the longest, you dreamed of becoming a thriving real estate investor. The only problem was, you needed money to make money and you did not necessarily have all of the funds required to kick start your real estate investment empire. Fortunately, you decided to become a real estate syndicator and now it’s all about continued growth and sustainability for your business.

Here’s a look at a few New Year’s resolutions and real estate investment strategies that every syndicator like you should have:

 

Take Diversification More Seriously As Part of Your Real Estate Syndication Business Plan

Your job is to manage every aspect of a property purchase that you and other investors take part in after pooling your resources together. You’ll also likely help with managing the property you found for the deal. A major benefit of being a real estate syndicator versus just an investor is that you can reap acquisition fees along with a portion of the rental profits that your property generates over time for all investors involved.

However, a lack of diversification is a major mistake that many syndicators make when choosing their properties. Let’s take a look at a couple of different types of diversification you should strive to achieve in the new year.

Niche-Related Diversification: 

Your portfolio ideally should feature various types of real estate. For example, you should take time to learn about areas such as apartments, mobile home parks, and even undeveloped land, to name some. After all, these assets are more stable and thus might fare better than office properties would in a struggling economy. Understanding asset trends and cycles is key to having a robust portfolio.

Geography-Based Diversification: 

In addition to purchasing various types of real estate properties through the syndication process, you should make it your mission in the new year to diversify your holdings geographically. This is wise because, if you have all of your real estate properties in one state, for example, this exposes you to regional economic risks that are hard to overcome if you don’t also have properties in healthier markets at the same time. Complete serious market analysis before diving into investments, but consider branching out.

 

Investigate Properties Thoroughly Before Risking Your Money

Another smart New Year’s resolution to have as a real estate syndicator is to master how to keep control of your target property long enough to finish investigating it as an investment. In this situation, your aim is to maintain control of the property without risking your money.

If you’re interested in purchasing a property with other investors, note that the seller’s aim is to obtain from you the most money possible and to do this in the quickest manner possible. However, you can structure the purchase contract in a way that will minimize your exposure while maximizing your time simply by including contingencies that are well structured.

A Closer Look at the Purchase Contract Structure: 

As a real estate syndicator, you can make your deposit and the purchase of the property subject to your acceptance of several conditions, which will give you enough time to fully investigate the property. The conditions you should look for include, for example, an acceptable property condition and status of all leases. You should also be happy with the property’s history of expenses and income, the title’s state, and any other items that can impact the property’s value, such as the presence of a man-made or natural hazard.

Special Contingency: 

You can also include a special contingency in the purchase offer that states that you have the right to cancel the property purchase transaction if you’re unable to subscribe your group of investors during a specific time period. In other words, if you can’t raise enough cash in time, your transaction will be canceled and your deposit will be returned to you.

 

Take Advantage of Options to Purchase

Another smart New Year’s resolution to adopt as a real estate syndicator? Start using purchase options. Let’s take a look at why this is.

Sellers may quickly become uncomfortable with you if you include several contingencies in the purchase contract that feature lengthy removal periods. Rather than working with you and your group of investors, they may simply wait for faster buyers. However, by using an alternative tool known as a purchase option, you gain the undeniable right to buy a given property in the period of time you specify in your purchase option.

More Details about How Purchase Options Work:

An option may range from a single week to an entire year, depending on the situation. However, most are around three to six months. In addition, you may be able to make a smaller option payment for a briefer period — an arrangement that is known as a “free look.” This smaller option payment may be a few hundred dollars, for example.

Pros and Cons of Purchase Options:

 A major benefit of using purchase options is that they are typically less costly than escrow deposits because nobody becomes tied up in the purchase contract. However, options do come with a downside as well: They are not refundable. That means if you fail to purchase the given property, you lose your option payment.

Still, the ideal situation is for you to structure the option so that you receive an extension period in the event that you decide you’d like the property. Note that you’ll need to submit more money each time you take an extension, though. Also, you’d be wise to still outline contingencies in your purchase contract. The difference in this situation is that you won’t have as much time to approve the several conditions you call attention to.

 

Hone Your Real Estate Syndication Business Plan Today!

Being a real estate syndicator can no doubt be exciting, but it can also be intimidating if you don’t know what steps to take to protect your money. Work with me to learn more about how you can minimize your risk and maximize your profits for the coming year and beyond!

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Top 4 Real Estate Market Trends & Red Flags to Look For, Before Investing

You no longer have to sip your cup of joe on your way to your 9-to-5. Instead, you’re sipping coffee as you browse the Internet from home, looking for the next piece of real estate to flip for a profit. All of a sudden, you shake your head and snap back to reality. You were daydreaming. But who says your dream of becoming your own boss as a real estate investor can’t become your reality?

 

Research shows that investment in commercial real estate in particular increased 17% between the fall of 2017 and the fall of 2018, and residential real estate also remains attractive to investors. So, if you’re asking yourself, “What is the best long-term investment?”, now appears to be as good a time as any to seriously explore investing in single-family homes, apartment communities, or even business spaces as your next career move.

 

Of course, just like the greater economy, the real estate market goes through various highs and lows, so it’s critical that you assess the current market before simply diving in. Here’s a rundown on the top four real estate market trends or red flags to look for before investing in a deal.

1. The Demand for Property

If you notice a slip in property demand and/or you see businesses folding in a real estate market, this is a sign that you should not invest your money in the area right away for two reasons.

 

First, if companies are shutting down rapidly, this means that property values overall may start to decline as people move away and seek new job opportunities. Second, if business owners are avoiding the area, this might mean that the demand for properties in that area is low for one reason or another. If you ignore these signs and move ahead with a property purchase there, you may not get much return on your investment when you decide to sell. Or it might take a while for you to unload it.

 

Reasons for Low Interest in an Area

If a certain area is not piquing the interest of buyers, the culprits could be increasing crime rates, new developments close by, subpar school systems, or a less-than-stellar economy. No matter what the situation may be, it’s a good idea to select locales that are established or are rising in popularity if you want to avoid profit loss in the future.

2. The Job Market

In a similar vein, before purchasing real estate in a certain market, you should take a detailed look at your target area’s current job trends. For instance, are hiring volumes climbing and what kinds of positions are available?

 

This is critical because job market trends have a correlation with real estate market trends. For instance, if jobs in an area are not high-paying and don’t offer much growth potential, there will be fewer reliable renters or buyers available to you.

3. The Commercial Sector

A commercial sector that is stagnant in an area is a major red flag for investors. If businesses in a locale haven’t been there very long or if there aren’t many new companies moving in, this area might not be the wisest place to pursue an investment property. Many companies invest in their communities, so areas with lots of industry or other businesses are likely more financially sound.

 

Also, see if any major employers are planning to close their doors or downsize in the near future. If it appears that large employers plan to stay put long-term, this is good news for you. You can find information about which companies are planning to stay or go by reviewing local newspapers or even city council meeting and zoning board meeting minutes.

4. Community Planning

If the community you’re targeting for your investment property has a solid master plan in place, it’s likely a good one to stick with. That’s because master plans essentially lay out communities’ visions for themselves, and visionless communities will likely end up fizzling out at some point.

 

Elements of a Solid Master Plan

 

A strong master plan at the community level should explain not only how the community sees itself but also how it plans to turn its vision for itself into a reality. This plan outlines truly realistic and relevant changes, and it also focuses on actual solutions. Furthermore, it fosters innovation and promotes problem-solving. If there is little evidence that a community’s master plan is being executed, you may want to bypass that community when it comes to looking for a real estate investment property.

Start Real Estate Investing Today!

If you’re asking, “What is the best long-term investment?” and you are interested in getting your feet wet in real estate investing, I can help. In no time, you can experience the unique monetary potential that real estate has to offer. Get in touch with me today to find out more about the current real estate market trends and to start earning money as a real estate entrepreneur.

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Basics You Should Include in Your Real Estate Investment Strategies

One of the smartest moves you could make as you search for streams of reliable revenue (both passive and active) is to get serious about real estate investing. That’s because research shows that real estate is among the safest types of investments you could make.

 

The question is, how exactly can you get started? Here’s a rundown on the basics you should include in your real estate investment strategies.

Active Strategies: Rental Properties

When it comes to investing in property, you have a couple of avenues that could lead to real profits for you: active real estate investing and passive real estate investing. We’ll first take a close look at active strategies, which include rental properties.

 

Investing in rentals—which is among the most frequently used strategy—basically involves buying homes or apartment communities, advertising for tenants on social media or rental websites, and then renting out your properties for amounts that will cover your mortgage payments and operating expenses with cash flow left over. As an investor, you can choose to manage your properties on your own, but the process may be easier if you hire a property management company to oversee them instead. The property management company can locate and interview potential tenants, collect rent payments, and address complaints that might arise.

 

Real Estate Investment Strategies for Beginners: Who Should You Target with Your Rentals?

 

Note that research shows that millennials should make up around 30% of the pool of buyers over the next decade. In addition, nearly 50% of them live in the suburbs. Therefore, purchasing rental properties in the suburbs versus urban areas may be a smart move for your business.

Vacation Rentals

Buying vacation rental properties is another excellent component of some real estate investment strategies. After all, many people around the world prefer to stay in homes that are privately owned versus hotel rooms these days. You can simply purchase either a turnkey property or one needing repairs and get it ready for guests. Afterward, you can list your short-term rental on a website such as VRBO or Airbnb. The particular booking agency you use will likely handle correspondence and payments on your behalf for a portion of the profits you receive.

 

Vacation rental properties can be especially invaluable investments if you live in a location that receives many tourists. At the same time, you’ll need to be okay dealing with constant tenant changes, repairs, money handling, and cleaning, for example.

Property Flipping

If you are interested in fix and flip properties — perhaps because you’ve seen it done repeatedly on television — you are in good company. Research shows that home flips reached their highest number in 11 years in 2017 at more than 200,000.

 

If you decide to flip a house, you’ll need to look for properties that need multiple repairs. The great thing about these homes is that you can generally get them for very low prices. You can oftentimes find them on online real estate listings or even via word-of-mouth through local real estate investing clubs. Then, you can fix up the property and sell it for a larger amount than you poured into it. The process can no doubt be daunting, which is why many investors hire professionals to help them with it.

How Quickly Can You Sell Your Property?

Research indicates that homes featured on the Multiple Listing System (MLS) are selling much faster today than they did years ago. In fact, homes’ median length of time on the market was 91 days back in March 2012 compared with 34 days in March 2017. This is great news for investors like you who are interested in flipping and selling homes in the coming months!

Passive Real Estate Investment Strategies: Real Estate Investment Trusts (REITs)

Passive real estate investing is generally a good option if you don’t have much experience with managing rental properties or if you have significant funds and would like to diversify your income. For starters, you can invest in REITs—companies that finance or own commercial properties via equity investments or debt. REITs usually offer real estate portfolios, rather than single properties, to investors.

 

These companies will basically sell REIT shares to you and you’ll earn dividends on them. The benefit of this strategy is that you can earn money from various properties in a less risky manner than you might with rentals.

Online Real Estate Investing Approach

With today’s increasingly popular real estate investment platforms online, you as an investor locate portfolios that align with your interests and needs. In this way, you can choose which portfolios to invest directly in. Then, the team associated with the platform will identify, acquire, and manage real estate assets on your behalf.

 

These online platforms are a lot like today’s in-demand crowdsourcing platforms. One of the benefits of this approach is that it doesn’t have to cost you a lot of money. In fact, you can begin online real estate investing with a site such as Fundrise, which requires just $500 to get started.

Real Estate Limited Partnership (RELP) Approach

A RELP is a group of people who invest in properties together. Joining these types of partnerships is yet another one of today’s many promising real estate investment strategies.

 

RELPs usually have development firms or property managers as their general partners. Once they are formed, they seek extra financing from investors like you for their real estate–related projects. In exchange, they’ll give you ownership shares, and you can be a limited partner. In this role, your influence on real estate decisions might be limited, but you also limit your liability. Therefore, if your RELP ends up facing a hardship, you won’t be liable for anything beyond your own capital contributions.

Start Implementing these Real Estate Investment Strategies Today!

If you are eager to boost your income or even quit your 9-5, now couldn’t be a better time to start tapping into the above-mentioned strategies. Get in touch with me today to learn more about the many real estate investment strategies that can help your company financially.

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What it Means to be an Accredited Passive Investor & the Requirements to Become One

Being an accredited passive investor gives you the ability to make and participate in a wide variety of real estate investments. These may include single-family homes, commercial spaces geared towards businesses, and even apartment syndications.

According to federal securities laws and the Securities and Exchange Commission (SEC), an accredited passive investor is defined as a person or entity that is able to invest in securities, such as apartment deals, and non-registered investments. Both securities and apartment syndications are an extremely lucrative way to build sustainable passive income. Whether you’re looking to build your investment portfolio or simply want an additional stream of income, becoming an accredited investor is the first step to making that a reality. So what are the accredited investor requirements and how can you ensure that you become one?

Your Income and Net Worth

In order to qualify as an accredited investor, you must meet at least one of the following requirements: have an annual income of $200,000 or more ($300,000 if you have a joint income with your spouse) for the last two years or have a net worth that exceeds $1 million, either individually or joint. Basically, this ensures you can manage the risk inherent in investing.

When determining your net worth, be sure to exclude the value of your primary residence. Add the value of all your other assets (investments, bank accounts, vehicles, vacation homes, etc.) and subtract any liabilities (various loans, home equity line balance, etc).

Verifying Your Claims

Once you have met the accredited investor requirements, then you are considered an accredited passive investor. There isn’t a certificate, form to fill out or formal process to recognize you. You’re either accredited or you’re not. However, the SEC may require that individuals or entities selling to accredited investors verify that these requirements are met, depending on the investment offering type.

For apartment syndications, if the deal is a 506(b) offering (which is what we do), you can self-certify your accredited investor status. If the deal is a 506(c) offering, you must submit your financials, including W-2 forms, tax returns, and any additional documentation that further confirms your financial standing, to a 3rd party to verify your accredited investor status prior to investing.

Benefits of Accreditation

There are many benefits to becoming an accredited investor, particularly when it comes to real estate investing and building sustainable wealth through real estate. If you are able to meet the accredited investor requirements, then you will be able to meet with apartment syndicators, venture capitalists, hedge fund managers and more to further discuss your investment opportunities.

As a passive investor, it is possible to eventually live on cash flow brought in by your investments. When buying into an apartment deal, for example, you will get a portion of the rent from the residents, as well as the eventual sale of the property. This means bringing in money for bills and leisure while making time for the activities and people you love.

For more detailed information on becoming an accredited investor and to learn more about investment opportunities for accredited investors, check out my comprehensive Passive Investor Resources guide.

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How to Increase Your Return on Investment for Apartment Real Estate

There are many different ways to generate a return on investment for your real estate, but starting with your current apartment syndication could be a relatively simple way to generate some additional money. Here are a few ways to help you increase your profit, as well as the investment property value.

Keep Turnover Low

One of the best ways to ensure that you are getting a successful return on investment (ROI) is to make sure that you keep turnover low. As an investor, constantly losing renters and bringing in new ones increases costs in a variety of ways.

When a tenant moves out, you must then clean and repair the property to ensure that it is up to date. This means painting, repairing minor damages, and overall clean up to prepare the apartment. In addition, you must assume any advertising costs associated with listing the property in order to find a new tenant. All of these costs can quickly add up. By keeping turnover low, you not only minimize your costs, but also help to create steady income. Having high-quality tenants is another key aspect of keeping turnover low. The right tenant will pay their rent consistently and also take care of the apartment.

Increase Rent

Another way to increase the return on investment for real estate deals is to gradually increase the rent for long-term tenants. But, before changing the rent, be sure to do a full cost-benefit analysis to ensure that you are raising the rent by the correct amount. There are a variety of websites available today to check rent prices in your area and compare properties. It is also incredibly important to look at the market and discover the current trends across the industry so you’re staying competitive.

Another great way to increase rent is to coordinate maintenance to the buildings and related facilities with increased rent. Maintenance is an important part of sustaining your investment property value while also creating additional value for your tenant. For example, if you are planning to replace one of the appliances in the kitchen, it could be a good idea to coordinate the replacement with lease renewal so that your tenant can see the value in the additional cost.

Charge Late Fees When Necessary

Having tenants who pay consistently and on time is an important aspect of any apartment investment. At the end of the day, your tenant has signed a contract and it is your job to ensure that all transactions are done on time and according to the lease. If your tenant pays rent late, then you are entitled to charge a late fee. Late fees allow you to make additional revenue but also encourage your tenant to pay on time. Not charging could mean that your tenant learns it is okay to pay late or that they will get away with it. Always charge a late fee when necessary to ensure timely payment.

Have Multiple Revenue Streams

Having additional services that you offer is another way to generate additional revenue from the property. For example include cleaning, laundry, or landscaping services that you offer to your tenants for a fee. You can then work with a contractor so that you are able to make a profit. For example, you can hire a cleaning service to come and clean the apartment for $65 every month while charging your tenant $100 for the service. This increases your revenue by $35 every month or $420 every year per unit! Whatever the needs of your residents, see if there is a way for you to offer an additional service to help generate profits and keep tenants happy.

There are a variety of ways to not only increase your real estate profit but ultimately maintain and improve the value of your investment. To learn more about return on investment real estate and investment property values, check out my blog, which focuses on giving you the information and tools you need to become a successful real estate investor.

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Top Trends in Real Estate Investment

Real estate trends and investment opportunities are always fluctuating and changing along with the market. This year has been no different. Being aware of recent patterns will help you to better navigate the market and to make better investment decisions overall. Whether you’re looking to start investing in real estate or are an experienced, accredited investor already, here are some of the movements to pay attention to.

Single-Family Homes

Single-family homes have continued to be a real estate trend as the market continues to grow. This property type is defined as a single unit structure that is detached from anything else. As more and more individuals are looking to rent more than just apartments, this is creating a growing market for rental homes. As a result, investors are increasingly becoming more active in building this market segment.

Single-family homes can be a great long-term investment option depending on your individual financial goals. But there are a variety of important considerations that should be made before investing in a single family home. First and foremost, location is a huge factor that must be considered. Is the property located in a good area? What is the local school district like? Particularly since this property type attracts families, you want to ensure that you are taking that into account when developing an investment strategy.

Interest in Texas

It’s no secret that Texas is a state that continues to generate huge opportunities when it comes to real estate trends and investments. This year in particular, the industry has seen continued interest and growth in Texas. With the growing and profitable oil and businesses, there are more and more companies that are flocking to the Lone Star State. This growth is creating more and more real estate investment opportunity in the state, including commercial spaces.

A Rise in Rentals

Another trend that has been steadily growing over the last few years is the increase of rental rates, particularly in cities. As cities continue to boom and grow, so does the number of people looking to rent property. What this means for real estate investors is that there will likely continue to be more and more opportunities to invest in apartment syndications. This means making passive income from monthly rental fees and the eventual sale of the property!

If you’re interested in learning more about investing in apartments, I created an entire FREE apartment syndication school to give you a solid foundation on the subject and the basics you need to be a successful investor.

New Construction

Another real estate trend that has been sweeping the country recently is a rise in new construction. This property type is defined as a building or home that is brand new and has never been occupied before. As the population grows, there is a need for new houses or rental spaces. As a real estate investor, purchasing a new construction property or apartment complex in a stable area could be a great addition to any investment portfolio.

Use of Technology

All aspects of the real estate market have been impacted or updated due to the continued use of technology, and this especially applies to marketing and online listings. More and more, the use of online marketing is helping to build awareness of what’s going on in the real estate industry. With the popularity of apps continuing to grow, you can now search for property listing, check housing prices, and see what realtors are active in your area all at your fingertips. This access to information is also making it easier to meet and connect with other investors that are also interested in purchasing or investing in real estate.

But the technological impact has not just be limited to apps. This includes the use of professional photographers and videographers, as well as staging floor plans and designs. This means that, when looking at a property online or via an app on your phone, the quality and level of both photography and interaction has improved. This continued use of technology will raise the bar for investors and buyers alike. Technology is truly shaping the way that all stakeholders in the real estate industry interact.

Last Thoughts

Real estate trends and markets will continue to grow and develop with time. As you become more and more familiar with real estate investment trends you will be able to better recognize what opportunities you can capitalize on. Being aware of the trends and regularly keeping up with the latest market regulations will help you to be a more informed and successful investor.

To learn more about real estate investing and to get detailed advice on how to grow as an investor, check out my blog.

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Raising Real Estate Investment Funds

Getting involved in real estate and starting your own investment company is one of the best ways to generate sustainable income and build wealth. To enable you to buy into larger deals, such as apartment syndications, however, it may be necessary to get real estate investment capital from accredited investors who want you to go out and find the properties while they provide a portion of the financial support.

There are a variety of advantages that come from raising funds this way, including:

  • Larger Deals
    You may not have the real estate investment funds to purchase a 500-unit apartment community or a large commercial building, which is where your fellow investors come in. Combining forces (and capital) means you are able to bring them larger investment opportunities.
  • Additional Support and Advice
    It’s possible the passive investors you work with have been involved in real estate for a while, and you can gain some wisdom from their experiences and advice. Maybe you want the low-down on recent market trends in the area or you’re not entirely sure how to find potential buyers once you’re ready to sell. Similarly, being responsible for other people’s money will give you a great incentive to invest in only those properties you know will offer a big return!
  • Long-Term Capital Gains
    The larger the deal, the larger the potential return on investment (ROI). Your cut of the sale will obviously depend on the terms of your agreement with investors, but the revenue earned from an apartment deal is likely to be more than on a single-family home, for example. Plus, while a rental property is still in the hands of you and your investors, you will collect that rent as well.

It’s easy to understand why so many people today are interested in getting involved in real estate. But how do you know where to start looking for accredited investors? Particularly if you’re just starting out in the business, raising real estate investment funds can be challenging.

Here are my top 3 recommendations on how to raise real estate investment capital:

Build Trusted Partnerships

One of the best ways to raise the capital you’ll need is by using your network. Especially if you don’t know where to start, start with what, or in this case, who you know. Think of every person you’ve met and whether or not you think they would be interested in real estate. Once you have narrowed down your list of both personal and professional contacts, begin scheduling time to meet with everyone on that list to discuss your plan. Even if they are not interested in investing with you, they may be able to introduce you to someone who is. It is always important, particularly in business and real estate, to build trusted partnerships and relationships. Keeping in touch with the right people could help you land your first big real estate investment.

Develop a Strong Back and Forth Conversation

Once you’ve started identifying potential investors and contacts to target, you’ll need to offer them the deal and center the conversation around why you think it will be a good investment for them. Having a strong plan that grabs the attention of your investors, while also providing an overview of the project, is key.

One of the most important things to remember when preparing for the discussion is to be authentic. You’re asking people to invest their money in you and your knowledge, so you need to make sure that it is something that you fully believe in. Don’t be afraid to practice and rehearse until you have a strong command of what you want to say.

Time is precious, so you should be able to quickly brief anyone on your idea in a few minutes. After you’ve been able to get their attention, you can then go into greater detail about your idea and the investment opportunities.

Build Your Brand

Building credibility is one of the most important aspects of raising real estate investment funds. Investors only want to give their money to people they trust and know are credible. Building your own brand is a great way to build legitimacy when first starting out in the real estate business. One of the most effective ways to do this is by creating thought leadership content.

Having your own thought leadership channel is a great way to build your brand and also reach a broader audience. Examples of thought leadership channels include having a podcast, YouTube channel, blog, or being a contributor for a notable website or financial magazine. The key is to actively get your ideas and content published so that you are able to reach as many people as possible. In addition, regularly sharing your strategies, ideas, tips, and tricks is a great way to build your audience but also your credibility.

Raising real estate investment funds is a great way to begin your journey of investing in larger and larger deals. As the real estate market continues to grow and change, there are endless possibilities. By creating lasting relationships, having a strong conversation, and building a solid brand, you’ll be able to lay the foundation for a success in real estate.

Learn more about raising funds through various means here.

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What Every Passive Investor Should Know About Apartment Syndication Deals and Income

Last Updated: 3/12/19

Apartment syndication is becoming an increasingly popular real estate investment strategy for many reasons. Being a passive investor who is involved in apartment deals gives you the flexibility and freedom to use your time to pursue other ventures while still generating income.

While this is definitely a trending strategy today, apartment syndication is by no means simple. Learning the ins and outs of investing is crucial to becoming a successful real estate investor, particularly when it comes to closing deals. Here’s what every passive investor should know about apartment syndication:

The Basics

To start, gain a brief overview of apartment syndication from the perspective of a passive investor. Your role during an apartment syndication deal is to provide the general partner (GP) with capital to invest in the purchase of apartment complexes. This investment is similar to other investments in stocks or bonds but typically offers a much better return.

Essentially, you help fund the deal, which does not require that you be actively involved in the day to day management of the project. Most apartment syndications will require a minimum investment amount, so it is important to do your research and know exactly how much you are able to invest. Additionally, how often investors are paid depends on the general partner and overall business strategy. However, most investors are typically paid on a monthly or quarterly basis.

How to Make Money

There are two kinds of passive income investments when it comes to apartment syndication. You would be either an equity or debt investor. There are advantages to both investment types and which option you choose depends on your financial goals and risk preference. For equity investments, a passive investor is able to make money through 2 different aspects: preferred returns and profit splits.

  • Preferred Returns
    A preferred return is defined as “the threshold return that limited partners receive prior to general partners being paid”. This amount is typically between 2-12% per a year, depending on the investment.
  • Profit Splits
    Profit splits involves sharing the profit of the investment between general partners and passive investor or limited partners (LP). This could mean a 50/50 split or 80% to the LP and 20% to the GP. Typically most deals will involve a mix of both preferred returns and profit splitting.

For debt investments, a passive investor makes money from interest payments. The interest rate is typically set by the general partner and will vary depending on the deal structure. Debt investors will also usually get their investment capital back before the apartment syndication is complete and the property sold.

Becoming an equity or debt investor depends on your individual investment goals. All passive income investments are different and will require you to thoroughly research and review the deal in order to determine if it will make sense for you financially.

Types of Apartment Syndications

Every passive investor interested in apartment syndication should be aware of the two key types of deals that are available: a distressed property or value-add property. Each property type has its own specific opportunities and risks. A distressed property is defined as a non-stabilized apartment complex. This type of property likely suffers from poor operations, problems with tenants, outdated facilities, and more, which all contribute to an economic occupancy rate that is lower than 85%.

In comparison, a value-add property is defined as a stabilized apartment complex that is well maintained but is either outdated or operating inefficiently. This type of property is stable with an economic occupancy rate that is more than 85%.

Know the Business

Regardless of what deal you are considering as a passive investor, it is always important to know how the real estate business works. This includes understanding both the opportunities and risk associated with a particular apartment syndication deal. Take the time to really analyze and discuss the benefits of the deal with the general partner before making any decisions.

Some key terms to know and study:

  • Accredited Investor
  • Net Operating Income (NOI)
  • Cash Flow
  • Breakeven Occupancy
  • Internal Rate of Return (IRR)
  • Profit and Loss Statement
  • Exit Strategy

Here is a full list of important terminology, with definitions and examples, that will help when reviewing any apartment syndication.

Every general partner should be open and transparent when it comes to any potential risks involved with the deal. Every investment has risks, so don’t believe anyone that tells you otherwise.

Having experience in the real estate business, and particularly apartment syndication, is incredibly valuable when looking for new passive income investments. Be sure to discuss with the general partner all of the previous deals they have worked on and how they performed based on the business plan. This will give you an idea of the level of risk, particularly if the rest of the team is inexperienced.

The Bottom Line

When it comes to passive income investments it is important to work with the right group of investors and general partners in order to make sure that you are meeting your financial goals. Part of being a passive investor is giving your control to other partners who ultimately make decisions on how your money is invested. Having the right team of people will limit the amount of risk in your investment.

For more information about this type of investment, check out my comprehensive passive investor resources!

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How to Earn Tons of Extra Cash-Flow While Still Working Your 9-5 with a Real Estate Passive Income

Most people know what it’s like to sit at a 9-5 job everyday and wish there was a way to simultaneously make more money. Real estate passive income is one of the best ways to not only generate passive income while still working your day job, but also to build wealth to one day not have to actively work at all. Investing in real estate doesn’t have to just be a dream. With the right tools and training, you can begin investing in real estate and turn your dream into a reality.

So how do you get started in real estate and set yourself up for financial success? Passive income through investing will take some time and research to set up but is well worth it in the long run. Doing the research to determine which investment strategy is right for you will allow you to make decisions that align with your overall financial goals. Having clearly defined goals is also important in guiding the entire investment process.

One of the first steps to getting started with real estate passive income is figuring out exactly how much money you have to invest in a particular strategy or deal. Once you know how much you can spend, you will be able to identify your target market. After that, you will then be able to explore which passive investment option is best for you.

Rental Properties

One of the most common ways to create real estate passive income is by owning a rental property. By renting out an apartment or home every month, you have the ability to generate significant income. As long as the price of rent exceeds the amount of the mortgage, maintenance, and management of the property, you will actually make money every month. That revenue can then to used to expand your investment options, retirement fund, or savings.

Having the right tenant and being able to easily attract tenants is also an incredibly important factor that should be taken into consideration when deciding to rent. With the right tenant who pays on time and cares for their space, investing in a rental property is one of the best sources of passive income.

Apartment Syndication

Apartment syndication is another profitable option for creating real estate passive income. This will often require you to partner with a syndicator who brings together capital from multiple investors like yourself to purchase an entire apartment complex. The process can be complex and is considered an advanced real estate investment option.

However, the complexity of the process is often well worth it. One of the biggest advantages of being a passive investor is being able to get the benefits of owning an apartment complex without having to commit all of your time like active investors. This option is similar to investing in stocks or bonds and is a long-term investment strategy.

Diversify Your Investments

One of the key rules to investing in real estate is to diversify your portfolio. This is particularly true as a passive investor just starting out because diversification helps to mitigate risk and increase profitability.

As an example, this may mean investing in both rental properties as well as single family homes or investing in rental properties in multiple states to expand your investment to a variety of different markets.

Learn More About Passive Investing

The more you learn about real estate investing and passive investment options, the better you will get at identifying the right opportunities. Take advantage of all the information available regarding becoming an accredited passive investor by taking online courses, attending training programs, and diving into as many books on the top as you can. Having a solid understanding and knowledge of real estate will give you the ability to make the best decisions for your financial situation.

Earning tons of extra cash flow while still working your 9-5 job is possible with real estate passive income. With the right preparation and research, you can start investing and work toward financial freedom.

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Investing in Apartment Complexes: What It Takes to Become an Apartment Syndicator

Apartment syndication, which means making deals and investing in apartment complexes, is a complex strategy that can lead to an incredibly lucrative career. Whether you’re interested in active or passive investing, understanding the basics of apartment syndication is invaluable.

Here’s what it takes to become a successful apartment syndicator:

Some Basic Industry Knowledge

First and foremost, in order to become an apartment syndicator, you need to have a strong knowledge and understanding of the real estate industry as a whole. This means knowing and understanding basic real estate terminology, legal implications, and industry buzzwords.

Investing in apartment complexes requires meeting with potential investors and outlining all of the key aspects of a deal. Knowing the basics of real estate investing and apartment syndication, such as passive investment, target markets, due diligence, and off-market deals will give you a competitive advantage and is fundamental to not only getting a deal but closing the deal.

You can gain extensive industry knowledge through academic courses, online trainings, or certificate programs. There are a variety of ways to augment your real estate knowledge and expand your general knowledge.

Stay in the Loop

Continuing to stay up-to-date on all the latest industry trends and topics will also ensure that you have a strong foundation to rely on when becoming an apartment syndicator. This includes keeping up with the latest market trends and any updates to legislation that will impact the real estate industry and overall economic climate.

Staying in the loop is key to truly keeping up with the market. For real estate, this means understanding the property values and demographics in the area you’re investing in. Even following popular real estate blogs, podcasts, and thought leaders will give you an advantage and help you to learn about the issues impacting the industry.

Regularly reading industry magazines and publications will also help to make sure that you are staying up to date on the latest information available. Being aware of what is going on in the market will also allow you to have in-depth conversations with investors and can help with negotiations.

Business Savvy

Once you have developed a solid amount of industry knowledge and education, another key aspect of investing in apartment complexes is having overall business skills.

Basic business skills that are applicable to apartment syndication include:

  • Project management skills
  • Negotiating
  • Business plan development
  • Problem-solving
  • Communication skills
  • Marketing
  • Networking
  • Finance

Apartment syndication involves managing large amounts of investment capital and being able to determine a successful overall strategy that will offer investors timely return on investment. Just remember, find partners and create a team of experts so you don’t have to wear all the hats at once.

Becoming a Successful Apartment Syndicator

Investing in real estate is one of the best ways to generate wealth and create passive income. Combining extensive industry knowledge, business know-how and overall real estate experience will give you the foundation you need to be successful in apartment syndication.

If you want to learn more about investing in apartment complexes and apartment syndication, check out the only book available today to offer a comprehensive deep dive on the subject: Best Ever Apartment Syndication Book.

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10 Fastest Appreciating Housing Markets in the US

Veros recently released it’s third quarter VeroFORECAST, which predicts property value trends in metropolitan statistical areas (MSA) across the US between September 2018 and September 2019.

According to the report, the top 100 most populated MSAs will appreciate 4.5% over the next 12 months. Of all MSAs, Vero predicts that 97% will appreciate and 3% will depreciate. The VP of Statistical and Economic Modeling at Veros, Eric Fox, said “This is the 25th quarter in a row where this index has forecasted overall appreciation.”

VeroFORECAST predicts that seven MSAs will experience depreciation over the next 12-months:

  • Torrington, Connecticut: -0.2%
  • Texarkana, Texas-Texarkana, Arkansas: -0.2%
  • Ocean City, New Jersey: -0.4%
  • Peoria, Illinois: -0.7%
  • Danville, Illinois: -1.2%
  • Vineland-Millvilee-Bridgeton, New Jersey: -1.6%
  • Farmington, New Mexico: -2.2%

Now, that doesn’t mean that you should invest in these markets, because when we follow the Three Immutable Laws of Real Estate Investing, we don’t take appreciation into account. It is just a bonus. However, if you want to increase your chances of receiving this appreciation bonus, you should consider looking into these 10 markets that are predicted to experience the most appreciation in the next 12 months.

 

10. Seattle-Tacoma-Bellevue, Washington

The Seattle city skyline showing the Space Needle

Belkins Northeast

 

Projected appreciation between 10/1/18 and 10/1/19: +9.3%

 

9. Denver-Aurora-Broomfield, Colorado

A pink and blue sky behind Denver skyline at dusk

Denver.org

 

Projected appreciation between 10/1/18 and 10/1/19: +9.5%

 

8. San Francisco-Oakland-Fremont, California

The San Francisco skyline behind a cloud-covered Golden Gate Bridge

Lonely Planet

 

Projected appreciation between 10/1/18 and 10/1/19: +9.6%

 

7. Reno-Sparks, Nevada

Residential houses and tall buildings in front of large, sandy mountains

Think Stock

 

Projected appreciation between 10/1/18 and 10/1/19: +10.0%

 

6. Carson City, Nevada

"Welcome to Carson City, Nevada's Capital" road sign

Flickr

 

Projected appreciation between 10/1/18 and 10/1/19: +10.1%

 

5. Olympia, Washington

Blooming cherry blossom trees in front of Olympia capitol building

Wild Tales Of

 

Projected appreciation between 10/1/18 and 10/1/19: +10.3%

 

4. Bellingham, Washington

A Bellingham, WA aerial view showing harbor, land, and mountains

Wikipedia

 

Projected appreciation between 10/1/18 and 10/1/19: +10.6%

 

3. Las Vegas-Paradise, Nevada

An aerial view of Las Vegas lit up at night

Time Out

 

Projected appreciation between 10/1/18 and 10/1/19: +10.8%

 

2. Boise City-Nampa, Idaho

Snowy mountains behind Boise City cityscape

OneClass

 

Projected appreciation between 10/1/18 and 10/1/19: +11.2%

 

1. Bremerton-Silverdale, Washington

A Bremerton-Silverdale, WA aerial view

Wikipedia

 

Projected appreciation between 10/1/18 and 10/1/19: +11.7%

 

Want to learn how to build an apartment syndication empire? Purchase the world’s first and only comprehensive book on the exact step-by-step process for completing your first apartment syndication: Best Ever Apartment Syndication Book.

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SFRs Vs. Apartment Syndications: Which Is The Better Passive Investment?

We’ve weighed the pros and cons of passive apartment investing versus investing in REITs, but what about another type of real estate — single family residences? To passively invest in single family residences (SFRs) is to purchase an SFR with the purposes of holding it as a rental property from a turnkey provider who handles every aspect of the transaction. To passively invest in apartments is to invest in an apartment syndication — a partnership between a sponsor who handles every aspect of the transaction and the passive investor who funds a portion of the down payment — and share in the profits.

 

Related: What is Apartment Syndication?

 

Since both strategies are passive, they’re equal in regard to control (or lack thereof). However, being two distinctive types of real estate, the benefits and drawbacks of each are different. So, in order to determine which passive investment strategy is better, let’s compare and contrast them based on three categories: time commitment, returns and risk.

 

1. Time Commitment

There is no such thing as a 100% passive investment. There are similar time commitments for both strategies: You must initially qualify the sponsor/turnkey provider, qualify their deals before investing and stay up-to-date on the progress of the deal after close.

There are also differences.

Because it is a one-unit residential property, understanding and evaluating an SFR is not that complicated. You likely have the education to acquire a passive SFR investment. On the other hand, apartments are a more complex asset class. Before becoming a passive investor, you’ll likely need to educate yourself on the apartment syndication process.

It’s easier to scale by passively investing in apartment syndications. After you’ve qualified the sponsor, it’s as simple as they send you a deal, and you decide whether to invest. For each SFR investment, you’ll select from a menu of deals. It can take months until you find one that meets your investment goals, at which point the process repeats itself.

Additionally, since you’re limited to the number of residential loans you can obtain, you’ll eventually have to either purchase SFRs with all cash or with creative financing, both of which take more time than traditional financing. For apartment syndications, you can usually invest any amount — although a minimum investment of $25,000 to $50,000 is common — an unlimited number of times without having to worry about securing or qualify for financing. This reduces your ongoing time commitment and increases your ability to scale.

 

2. Returns

In regard to returns, the two factors to address are cash flow and equity. Cash flow is the profit distributed to the passive investor on an ongoing basis, and equity is the profit captured at sale and/or refinance.

As a passive SFR investor, you have 100% ownership of the property, which means you receive 100% of the profits. Since an SFR has one rentable unit, the returns are more fragile. If you have one vacancy, you’re 100% vacant. If you have one maintenance issue or expensive turn, your cash flow for a few months to a few years can be wiped out.

As a passive apartment investor, you only have partial ownership of the property, which means you receive a smaller percentage of the profits. But, since apartments have hundreds of units, a few vacancies, evictions or maintenance issues have a lower impact on the cash flow. At the same time, you are typically offered a preferred return, which is a threshold return distributed to investors before the sponsor receives payment. A greater number of units combined with a preferred return results in more certainty as it relates to cash flow.

The value of SFRs is dependent not on the rents but on the market, which is out of your control. Sure, in an appreciating market, you could double the property value. But you could also get unlucky with a stagnating or depreciating market.

The value of an apartment is dependent on the revenue, not the market, which is in your — or technically, the sponsors’ — control. The sponsor can increase the rents through renovations and increase the revenue by offering certain amenities (i.e., coin-operated laundry, carports, storage lockers, etc.). Luck is removed and replaced with skill. If the sponsor executes the business plan and increases the revenue, the property value, and thus your investment, is increased.

 

Related: 27 Ways to Add Value to Apartment Communities

 

3. Risk

You have 100% ownership as a passive SFR investor, which means you participate in 100% of the upside and 100% of the downside. You hold all of the risk. Since you sign on the loan, you are responsible for 100% of the debt. Default on a payment, and you are the one who is impacted.

Again, the SFR cash flow is more fragile due to having one rentable unit. However, this risk is reduced once you’ve scaled to a certain number of SFRs. But having a passive portfolio of 100 SFRs is different than passively investing in a 100-unit apartment community. The SFRs are scattered across the market, which means you don’t benefit as much from economies of scale. Management and contractor (i.e., landscapers, maintenance people, etc.) fees are costlier. The benefit, however, is that you have 100% ownership of the 100 SFRs as opposed to partial ownership in the 100-unit apartment community, which means you’ll have a greater long-term upside potential.

Passively investing in apartment syndications is less risky because you aren’t signing on a loan. The risk is also reduced from day one because you are investing in multiple units right away as opposed to having to scale to hundreds of units. And with hundreds of units in one centralized location comes economies of scale, which means lower management and contractor costs.

 

Related: Active vs. Passive: Which is the Superior Investment Strategy?

 

The Winner?

Apartment syndications have a lower time commitment, more certain returns and less risk. SFRs have less scalability, more risk and fragile returns in the medium-term with a greater long-term upside potential.

Ultimately, the best strategy comes down analyzing the pros and cons of each and determining which one aligns the best with your risk tolerance, time commitment and return goals.

 

Want to learn how to build an apartment syndication empire? Purchase the world’s first and only comprehensive book on the exact step-by-step process for completing your first apartment syndication: Best Ever Apartment Syndication Book.

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What 16 Real Estate Investors Are Grateful For This Thanksgiving

This blog post was originally constructed and written for Thanksgiving of 2018. We enjoyed reading about what our fellow real estate investors are thankful for so much, we wanted to refresh this post for 2019. In the lines that follow, you’ll read about what some real estate investors from our Facebook group were thankful for last year, and what (if anything) they would change or add, along with some new perspectives from fresh faces. Specifically, we hear from real investors sharing what has helped them get to where they are in the business. Surrounding yourself with the right people, reading the right books, attending seminars and conferences, all has a direct impact on your success in this business. Here are what some successful investors say has been the most influential part of their business in 2019.

Happy Thanksgiving!

Real estate investing is a field that rewards hustling. Most of us are chasing down opportunities seven days a week. With Thanksgiving upon us, I thought it would be a could time to reach out to other leading investors to find out what they are thankful for. So I posed the question many of the country’s leading real estate entrepreneurs, What is a property or deal, person, experience, book, video, or conference that has been influential to your business’s success and you are grateful for?

Thank you to the 16 active investors who responded. Read on to learn about the people, books/podcasts/videos, and events/moments have been influential to active, successful real estate entrepreneurs:

Best Ever People

  1. Theo HicksJoe Fairless. Would have never gotten the confidence to pursue my first apartment syndication deal if I had never met Joe!
    • 2019: Theo’s update for 2019 might take the cake. As a new dad in 2019, Theo is thankful for his son. Writing this update right now, I can’t help but think about how his first answer was Joe Fairless, and now it’s his son. Theo has done fantastic work for Joe and in a way, is being taught the real estate investing world (and now teaching others too) through his work with Joe. Now Theo takes on the mentor role for his son. Full circle.
  2. Holly Williams – I would say this really smart kid named Joe Fairless from Texas in the Big City. Happy Thanksgiving to the Growing Fairless clan, my friend.
  3. Whitney Elkins HuttenLane Kawaoka and Chris Miles. Future Apartment Syndication Goals: Joe Fairless.
  4. Mike Knudstrup – 1. My local real estate entrepreneur group where a few presenters owned MHP’s (mobile home parks). 2. Parents of friends and acquaintances who owned parks and it worked for them.
    • 2019: This year, Mike takes a moment to appreciate all those who are loyal, honest, and faithful. In his words: “I especially include those people who work with/for me but also my tenants who honor their agreements. This year it has become increasingly apparent that I am unable to keep this thing going without them” being thankful for those who surround and support you is what this holiday is all about.
  5. Julia Bykhovskaia – My man Tony Robbins! It was at the right place at the right time for me two years ago. All I’ve heard is “you have to burn the boats,” have to “make a decision and have absolute certainty,” and “you don’t need to know how; the how will come.” Three months later I read Rich Dad, Poor Dad and got even more convinced that being an employee is not the way to go. Fifteen months later, I left my J.O.B.! the “how” of course became real estate.
    • 2019: Julia mentions that nothing has changed for herself, the answer is still Tony Robbins. She does add that a strong mindset, taking consistent action, and managing your emotional state are all crucial for success in business and life. I’m slightly jealous of her attending Date with Destiny next week, definitely a bucket list item. If you’re unfamiliar with Date with Destiny, check out “I Am Not Your Guru” on Netflix.

Best Ever Books/Podcasts/Videos

  1. Grant Rothenburger – Mine is lame but honest: Rich Dad Poor Dad for opening my eyes to real estate in the first place.
    • 2019: Another classic book, Think and Grow Rich, is added to Grant’s running list of what he’s thankful for in 2019.
  2. Trevor McGregorThink and Grow Rich by Napoleon Hill has been a game changer throughout my entire Real Estate Journey. I highly recommend it to anyone who hasn’t read it, or if you have read it, pick it up again or be sure to listen to the Audio Version (When you’re not listening to the Best Real Estate Advice Show Ever – Podcast with Joe). Happy Thanksgiving Everyone!
  3. Glen Sutherland – Long time listener of the show (Best Real Estate Investing Advice Ever). Appreciate all your time you put into it.
  4. Michael CollinsThe Strangest Secret, Earl Nightingale. Timeless advice. Thirty-one minutes long on YouTube, loaded with great information.
  5. Newcomer for 2019: Cody Rubio – Now that Cody is somewhat up with the times, he’s read Rich Dad Poor Dad, and has Think and Grow Rich queued up next. Those are undoubtedly two of the most influential books for many real estate investors. Another classic that Cody attributes some success to is Purple Cow by Seth Godin.

Best Ever Events/Moments

  1. John Jacobus – The first Best Ever Conference in Denver in 2017. This was a game changer in terms of forming new partnerships with real estate entrepreneurs, sparking new actions, and building momentum.
    • 2019: John took that 2017 momentum all the way to the end of 2019. Now with about three hundred mobile home pads across five properties, John has a tremendous start on a growing business. His 2020 is looking up!
  2. Adam AdamsBest Ever Conference
  3. Charlie Kao – A lot of moments but being on my very first podcast which happened to be BiggerPockets. I kept getting asked to be on other podcasts and had a lot of people reaching out to me for advice and it dawned on me how much more I was really capable of. I have doubled or tripled our business every year since the podcast.
    • 2019: This year, Charlie is most thankful for his wife Casity Kao. Thanks to their “explosive growth” they can enjoy the fruits and spend their time a little more freely with each other.
  4. Cory Boatright – 1. My first short sale that I stumbled into with negative equity and created a short-sale empire that made millions in revenue. 2. The first time I sold six-figures in one hour from stage in front of 500 people. 3. My experience at the end of 2012 with thyroid cancer. 4. I am grateful it happened because of GratefulProject.org and the many miracles that came from waking up and being aware of life in a new way. 5. Meeting my wife and two step kids. Skydiving to overcome my fear of heights?
  5. Dustin W. Miles – I wouldn’t say it was any one experience/book/conference, but a collection. One of the first memories I recall is from childhood. I played soccer on a team with a kid (we were around 10). His parents owned many skyscrapers around Fort Worth. I would say that first opened me up to the idea of “why not me?” I would ride my bike around Fort Worth wondering who owned all the other buildings. Fast forward to today, we are working on our ninth syndication in the past five years.
  6. Jason Stofer – For me this is easy…I just came from it! Adam Triple A Adams event Raising Money Summit!! I have already rewritten my business plan, reworked my website, and am now working on my mind-map.
  7. John Fortes – Grateful for real estate entrepreneur communities and networks such as these and all educational platforms whether it comes from books, podcasts, videos, and conferences as you mentioned. At the end of the day, I’m just happy and grateful to be here breathing this beautiful air and sharing this earth with my loved ones. Thank you for asking. Happy Thanksgiving & God bless!
    • 2019: New partnerships through those communities, platforms, and conferences he referenced last year, are what John is most thankful for (in his real estate business) this Thanksgiving. An important part to building relationships, according to John, is to be yourself and listen to them. People enjoy talking about themselves, so ask intelligent questions that allow them to do so.

Conclusion

What are you thankful for? Add your comment below and tune into my Best Ever Show for more conversations between experienced real estate entrepreneurs!

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12 US Cities Experiencing the Most Explosive Rent Growth

One of the most important factors used to evaluate a potential target investment market is supply and demand.

The demand side of the equation is measured in part by the change in median rent year-over-year – an increase in median rent indicates an increase in the demand for rental properties in a particular area, and vice versa.

Ideally, the change in rent for your target market is positive (obviously) and is greater than the average national change in rent. From October 2017 to October 2018, the average national change in rent was +1.1% (compared to +2.8% and +2.6% over the same time period in 2016 and 2015 respectively). This would indicate that rent growth is sluggish on a national scale compared to previous years. However, the top markets in the country are continuing to outpace the current and past two year averages.

Here are the top 12 US cities where rents increased the most from October 2017 to October 2018:

 

12. Richmond, Virginia

Sean Pavone/Shutterstock

Median 1BR rent: $891

Median 2BR rent: $1,028

Year-over-year change: +2.6%

 

11.Tampa, Florida

Tampa skyline at night

Shutterstock

Median 1BR rent: $1,011

Median 2BR rent: $1,258

Year-over-year change: +2.6%

 

10. Jacksonville, Florida

Jacksonville real estate market at night

Shutterstock

Median 1BR rent: $881

Median 2BR rent: $1,078

Year-over-year change: +2.7%

 

9. San Jose, California

large metropolis from above

Silicon Valley Stock

Median 1BR rent: $2,102

Median 2BR rent: $2,634

Year-over-year change: +2.7%

 

8. Arlington, Texas

Live! building in Texas

Kid101

Median 1BR rent: $990

Median 2BR rent: $1,230

Year-over-year change: +2.8%

 

7. Riverside, California

city at night

Flickr

Median 1BR rent: $1,064

Median 2BR rent: $1,330

Year-over-year change: +3.0%

 

6. Mesa, Arizona

Pheonix real estate market

Redux

Median 1BR rent: $865

Median 2BR rent: $1,078

Year-over-year change: +3.0%

 

5. Phoenix, Arizona

Phoenix New Times

Median 1BR rent: $846

Median 2BR rent: $1,054

Year-over-year change: +3.0%

 

4. Corpus Christi, Texas

Corpus Christi, TX real estate market

Expedia

Median 1BR rent: $846

Median 2BR rent: $1,057

Year-over-year change: 3.1%

 

3. Knoxville, Tennessee

Mapio

Median 1BR rent: $776

Median 2BR rent: $953

Year-over-year change: +3.6%

 

2. Las Vegas, Nevada

Vegas real estate market

Visit Las Vegas

Median 1BR rent: $927

Median 2BR rent: $1,149

Year-over-year change: +3.6%

 

1. Orlando, Florida

Orlando, FL real estate market

iStock

Median 1BR rent: $1,063

Median 2BR rent: $1,273

Year-over-year change: +4.4%

 

If you are investing in one of these markets, do not assume that the future rent growth will be the same. Always conservatively estimate the annual income growth factor – 2% to 3% maximum. That way, if the rental rates slow, you’ll still hit your projections. And if the rental rates continue or increase, you’ll exceed your projections, which means more money for you and your investors!

 

Want to learn how to build an apartment syndication empire? Purchase the world’s first and only comprehensive book on the exact step-by-step process for completing your first apartment syndication: Best Ever Apartment Syndication Book.

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apartment syndication quiz

Test Your Knowledge with the Apartment Syndication Quiz

One of the two key requirements before becoming an apartment syndicator is education. You must comprehend the important apartment syndication terminology to execute the apartment syndication business plan and communicate with your team and passive investors.

There are many ways to gain this education: real-world experience, studying the glossary of apartment syndication terms, reading the Best Ever Apartment Syndication Book, hiring a mentor, etc.

But the question is, how do you know if you are educated enough?

 

Enter the apartment syndication quiz!

 

Test your apartment syndication knowledge by taking this 20 question, multiple choice quiz. After submitting your answer, you will be given a “correct” or “incorrect”. If you answer the question incorrectly, read the note below for an explanation on the correct answer. Then, based on your results, you will know if you are ready to start on the path to your first deal or if you need to spend more time on your education…

And there is only one way to find out…

 

CLICK HERE TO START THE APARTMENT SYNDICATION QUIZ

 

Good luck!

 

Want to learn how to build an apartment syndication empire? Purchase the world’s first and only comprehensive book on the exact step-by-step process for completing your first apartment syndication: Best Ever Apartment Syndication Book.

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foggy forest of trees

10 Real Estate Tours Turned Haunted House Experience

When you attend a haunted house or haunted trail leading up to Halloween, you expect to be frightened – in fact, you want to be filled with fear! That’s because you know that the experience is pretend.

Unlike haunted house, when you attend a property tour at a prospective deal, you typically do not expect to be surprised, let alone terrified. However, every once in a while, you will enter a property and walk away more frightened than you would coming out of even the most intense haunted house.

Here are 10 investors who expected an uneventful property tour but who instead walked into an unmarked haunted house.

1. The Nudist: During Michael Beeman’s strangest property tour, he knocked on the door and was greeted by a screaming naked man. The property was sold through a real estate auction. Michael won the auction with a bid of $7500 – because he was the only bid, which likely had something to do with the screaming nudist. But, the bank decided to hold onto the property in order to sell it at a higher price in the future. 5 months later, the property is still for sale, and the screams of the nudist still echo in Michael’s mind!

2. Bloody Babies: When Jordan Moorhead walked into the living room during a property tour, he was confronted with baby doll heads covered in fake blood strung up on the ceilings.

3. Fried Racoon: While touring a vacant duplex, Chuck Darling approached the furnace in the basement and discovered what looked like a furry towel hanging from one of the panels. Upon further inspection, the towel transformed into a racoon tail, with the remainder of the raccoon, cooked medium rare, inside of the furnace.

4. Adult Cartoonist: During a tour of a multifamily building, Tyson Cross walked into a unit that was covered in little kid cartoons. The weird part was that no children lived there. And the weirdest part was when a grown man walked out of the closet and said “hey, I’m filming in here.” To this day, no one knows why the unit was covered in cartoons or what was being filmed…

5. It’s Hammer Time: Robert Lawry II toured a REO property that had a bloody handprint on the wall. And it wasn’t a prank. It was because someone had been murdered in the unit with a hammer, which explained why the doors and windows were covered in police seals and tape.

6. Wow, What a Hole!: A wholesaler sent Whitney Elkins Hutten a deal and mentioned that there was a hole in the roof. No big deal, right? Well, when Whitney arrived at the property, the hole turned out to be caused by the neighbor’s large tree falling on the home. The damage was so severe that the entire second story needed to be replaced.

7. Scratch and Sniff Cat Picture: Dave Roberts toured a home that was previously inhabited by a cat hoarder. The staple of the home was this beautiful scratch and sniff masterpiece (the picture wasn’t actually the source of the urine and feces smell. That was coming from the carpet below…).Large cat painting on a wood-paneled wall

8. Wigs, Masks, and Chalk: At an REO listing, Lisa Rush found a chalk outline of a person who had died in a fire. All of the content remained in the home, including the previous owner’s wig and scary mask collection.

9. Leaning Tower of Feces: I think this picture taken by Colin Smith during a property tour speaks for itself…

Trash piled on top of a toilet in a dirty bathroom

10. Black Cats: Matthew Mesick bought and flipped a house that had over 150 black cats who were terrorizing the neighborhood. It was such an ordeal that it made the local newspaper, which you can see by clicking here.

 

What about you? Comment below: What was the scariest thing you’ve come across during a property tour?

 

Want to learn how to build an apartment syndication empire? Purchase the world’s first and only comprehensive book on the exact step-by-step process for completing your first apartment syndication: Best Ever Apartment Syndication Book.

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