Real Estate Investment Strategies

Since I left the advertising world in 2012, I have built a fruitful career as a real estate investor. The reason I get up and do what I do every morning is simple: I want to help my clients gain the financial freedom they need to live the lives they dream about. Of course, doing so is easier said than done. To achieve your goals as an investor, you need to be dedicated, and, most importantly, you need to have the right blueprint. That is where I can help. As I have crafted winning real estate investment strategies, I have gained control of more than $300,000,000 worth of property. To put it another way, I know what I’m talking about when it comes to investing. And you can be my next success story. Maybe you want to make real estate investing your career, not just a hobby. You might be interested in knowing how our current political climate affects our industry. Or, perhaps you are a millennial looking to buy your first house, and you want to make sure the volatile nature of the market does not harm your long-term prospects. To get started, feel free to peruse more than 50 blog posts below on the topic of real estate investment strategies. For more information, check out both volumes of my book and my podcast, Best Ever Show, the longest-running daily real estate investing podcast on Earth. And if you are ready to get to work, click here to find out how you can invest with me today.
Tips for Success After a Bad First Deal with Jamie Gruber

Tips for Success After a Bad First Deal with Jamie Gruber

In the early 2000s, Jamie Gruber was like many other new real estate investments. At the time, zero-down financing was easy to find, and few people were putting up red flags about a possible market crash. Gruber jumped at the chance to enter the market with an 80% loan followed up by a 20% second lien. While some people who purchased property only a few years before the recession hit in full force were unscathed, Gruber was one of the many people who were burned. Nonetheless, he gained valuable insight from his first deal. He recently joined us to share what he has learned.


Jumping In at the Wrong Time

When Gruber purchased his first single-family home in 2005, housing prices in New York were rising quickly, and Gruber was eager to get his feet wet. Because he did not make a down payment, he had minimal equity in the property when the housing market crashed three short years later. At the same time, housing prices in New York plummeted. Gruber’s employer relocated him to Boston, and he was not in a position to either sell the home or to live in it. Essentially, he was forced to ride out the market as a landlord. Thankfully, the rental rate was sufficient to cover the property’s expenses.


Developing a Larger Perspective

While some people who have had a poor investing experience may be averse to making future investments, Jamie Gruber had a different perspective. Despite being saddled with this property for several years at a very inopportune time, he and his wife decided to buy a fix-and-flip home in Boston. They turned a reasonable profit on it, and this encouraged Gruber to look at other real estate investments. Their next two properties were two-unit multifamily rentals in New York, and they were successful investments despite being located in another state.

Through these experiences, Gruber regained a sense of comfort and even excitement about the lucrative potential of the market. Gruber saw the potential for investing in multi-unit properties. However, he was not keen on slowly building a portfolio of two-unit properties. The path to giving up his W-2 job could be traveled more quickly if he made larger commercial real estate investments.


Finding the Right Deal

Gruber learned his lesson from his first deal. After he decided to lean into commercial real estate, he spent time educating himself before he started looking for a property. Then, he waited for the right deal to come along. The property that he ultimately invested in had incredible upside potential with rates that had not been raised in years. Its elderly owners were eager to sell, and they had perhaps not run it as well as they could have over the last several years. Gruber and his partner purchased the 16-unit apartment complex near Ann Arbor for $750,000 with a 7% cap rate.

This particular property had more upside potential than Gruber initially realized. In addition to being able to raise rents after taking ownership, he was able to collect revenue from pet rents, storage fees, the laundry facility, and more. At the same time, Gruber was able to slash many operating expenses that had gotten out of hand. Nonetheless, this property also had an expensive learning curve.

Gruber had the insight not to raise rents on established tenants sharply. He had a rent escalation plan that would slowly get the units up to market rents without potentially creating a vacancy issue unnecessarily. However, the repair costs that Gruber estimated upfront were significantly below the actual cost. In addition, some of the materials that they thought could be salvaged ultimately had to be scrapped, and labor was much higher than he anticipated. Gruber ultimately put approximately $5,000 per unit into the upgrading and updating costs, and this was more than he was prepared for.


Creating His Own Opportunities

Before Gruber found this great investment opportunity, he struggled to get real estate agents to give him and his partner the full attention that they needed. They decided to take matters into their own hands and make something happen. To create a great network of investor contacts and industry professionals, the pair established a multifamily meetup group and a Facebook group. This is how they stumbled upon their 16-unit project, and it is also how they met the other pair of investors who are working with them on their new apartment deal.

This new project is a 22-unit project located in Cleveland. While Gruber will be a remote or hands-off investor, one of the partners will be on-site and responsible for the day-to-day operations. This is one of the reasons why Gruber feels comfortable taking this project on as his second multifamily investment property. Notably, this 22-unit property may also come with a learning curve as the seller has not provided them with solid records.

In hindsight, Gruber says that his best advice for new investors is to network. This is how he found his most recent investment opportunities as well as his partners. Without networking, Gruber would not be in the position that he is in today.


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Learn From These 6 Investing Mistakes

Learn From These 6 Investing Mistakes

While real estate investing can be incredibly lucrative, these investments come with the risk of moderate or even significant financial loss. Often, investing mistakes are tough lessons that come with a high price tag, but you don’t necessarily have to learn those lessons through your own experiences.

United Property Group Founder Dan Gorman has been investing in real estate for more than 22 years, and he has purchased more than $50 million in commercial real estate. Currently, he owns apartments, office space, and a few restaurants. While Gorman has enjoyed incredible success as an investor, he has also lost an extensive amount of money through mistakes with multifamily and commercial real estate. What can you learn from Dan Gorman?


1. Trusting Others With Skin in the Game

When Gorman reflects on some of his biggest financial losses and investing mistakes, he attributes them to not understanding the deals fully and relying on the advice of others. For example, many years ago, he was under contract to purchase a 120-unit apartment complex. The deal was complicated with financing involving bonds, low-income tax credits, and other unique sources of capital. Gorman admits that he did not understand the deal fully. He relied on the advice of others who told him it would be a profitable deal, but those individuals all stood to profit from the transaction. Gorman believes that they were advising him with their own agendas in mind.

Before closing, Gorman rightfully got cold feet. He tried to back out even though he stood to lose a large chunk of money at that stage in the transaction, but his attorney advised him that he could be sued for not following through. Ultimately, Gorman went through with the deal, and he lost a substantial amount of money for many years on end until he sold the property recently.


2. Failing to Understand the Transaction

Gorman recalls specifically asking his real estate attorney about one key aspect of the transaction, and his attorney could not explain that component of the transaction to him. In hindsight, Gorman realized that if an attorney who works with real estate transactions on a daily basis could not understand the structure, this should have been a red flag.

He warns others never to get involved with land contracts, lease options, bond financing, and other situations that are over their head. Take the time to understand all aspects of the transaction fully before committing to it.


3. Relying on Projections

This particular project was a rehabilitation project that involved putting $2.5 million into the property. The rents were below market value with a two-bedroom unit at the time renting for $650. The projection used by underwriting was $750 per month for these units. Gorman’s attorney advised him that the underwriting projections were too aggressive and that they may not be realistic.

Initially, Gorman saw dollar signs and ignored his attorney’s advice. However, he realized as the closing date approached that his attorney may have been right. This realization came too late because Gorman already had $250,000 of hard money invested in the deal. He has learned to use conservative, realistic projections that are based on actual market data.


4. Failing to Understand Contract Terminology

Ultimately, the 2008 real estate crisis led Gorman to go into default on the apartment complex. While he was not behind on payments, the lender backed out of the financing. The only option he realistically had was to file for bankruptcy. However, even though the multifamily property was owned in a protected entity, the bankruptcy triggered defaults in other investments that Gorman owned. Essentially, this one bad deal triggered the collapse of his investment portfolio.


5. Not Understanding the Tax Implications

In addition to dealing with the ramifications of bankruptcy and losing money on this 120-unit multifamily complex transaction, Dan Gorman was hit with a huge tax bill when he ultimately sold the property 15 years later. While he sold the property for exactly what he paid for it, he realized a net profit of $1.5 million. This was a surprise to him, and he states that he still does not fully understand how the calculation was made. Because of this net profit, however, he is now struggling to find a way to mitigate his tax liability with only a few months left in the tax year.


6. Overlooking Building Permits

This is not the only project that has provided Gorman with major life lessons. One of the more recent lessons that he has learned is tied to an office building that he rehabbed. He met with the building inspector and an official from the fire department to discuss his plans for the project, and they both told him to move forward with it. Through a miscommunication, Gorman believed that a permit was not required to do the work. Now, he is backtracking in an attempt to pull together all of the documents related to the permit. Unfortunately, this opened up a can of worms related to maximum occupancy, usage, and more. The project seemed fairly straightforward initially, but it has become overly complicated because he is dealing with the permit application process midstream.


Through his investing mistakes, Dan Gorman believes that residential real estate is easier to invest in than commercial real estate, but both require diligence. He is happy to discuss his investing mistakes with others in the hope that they may learn from them. At the same time, he acknowledges that he still has lessons to learn. Nonetheless, the mistakes that he has made have made him a more conservative, cautious investor.


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Managing Up With Jonathan Ghaly

Managing Up With Jonathan Ghaly

As he looked back on his real estate career, Jonathan Ghaly realized that he first worked for a syndicator before he started doing deals with one. In the mid-2000s, Jonathan got hired as a property manager for a 100-unit apartment building. On his first day, he was handed a keychain full of keys and a cell phone that rang non-stop.

Around 2007, the syndicator started to take risky gambles, unbeknownst to the tenants. He began to take on additional investors while subsequently not paying down the mortgage. With the economic crash, the syndicator turned all of the properties into foreclosure, leaving Jonathan to find his next steps.


Early Success

“I learned a lot. He introduced me to ‘Rich Dad, Poor Dad,’ and the cash flow game. I saw his mistakes, of course,” Jonathan recalled. “During the crash, I had my real estate license already, and no one was hiring. So I just said, ‘Well, I might as well try to sell real estate.’”

Jonathan’s real estate career started to flourish. He started with two deals his first year and steadily grew upwards. In 2013, he transitioned from only selling properties to buying properties of his own.

“I partnered with a friend because I was just too scared to pull the trigger in the beginning, and we bought eight units together,” Jonathan said. “I bought him out a few years later, and then I just kept buying more.”


Coffee Talks

Today, Jonathan’s portfolio consists of 15 rental properties and an assisted living facility, in addition to his investment in multifamily syndications. Reflecting on the community of people who helped elevate him to this place, he said it all started with one friend and a morning coffee session.

“I felt the need to call a friend of mine who I had helped buy his first couple of properties. He was a teacher and he quit to be a fix-and-flipper. I said, ‘I would love to just talk about this stuff — what we’re doing and what to invest in and what not to invest in — with you. Would you have any interest in meeting on Thursday mornings and having coffee at my house?’” Jonathan shared. “He said, ‘Perfect. My kids go to school right near there. I’ll drop them off and come over.’ This beautiful friendship came out of that, and we put everything on the table as far as investment stuff.”

Jonathan’s inner circle of like-minded investors continued to grow larger, with others interested in their open and honest discussion of real estate and real life.

“These investor-mentor meetings or inner circle meetings are amazing, even if it’s once a month. After my experience with it, I would highly recommend it to any investor because you never know what good can come out of it,” Jonathan said.


Shifting the Game Plan

Even with a trustworthy network, Jonathan Ghaly believes that the work is never done with self-education and believing in your own intuition on a deal.

“Experience is a big word in the industry. But even with that, a lot of people can have experience but still go through a protocol. So, are you like a machine just going through protocol without common sense? Or do you really understand real estate where you can get creative, and you can see through these blind spots? Because it’s all about shifting the game plan. Keep educating yourself in real estate, and don’t get distracted,” Jonathan shared. “I can get really distracted, but when I do all this research about these other things, I come back and realize it doesn’t beat the real estate return.”


The Importance of Trust

Reflecting on his journey to date, Jonathan Ghaly believes that the fundamental element of any successful real estate partnership is similar to that of marriage: trust. While some things are learned the hard way, it’s essential to surround yourself with a team that complements your strengths and can compensate for your weaknesses.

“Find a partner you can trust with your life because it is a marriage. I find myself constantly partnering with people who are exactly like me,” Jonathan said. “We should build our teams up so that the strengths and weaknesses, and skills and non-skills, are really evening out and covering everything across the board.”



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Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios.

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How Anthony Chara Scaled His Business From 10 Single-Family Homes to 1600+ Apartment Units

How Anthony Chara Scaled His Business From 10 Single-Family Homes to 1600+ Apartment Units

Anthony Chara impressively increased the size of his business from nearly a decade of looking after single-family homes to overseeing more than 1,600 apartment units spread across the country. Of course, telling Anthony’s story includes sharing investing tips and interesting experiences; however, according to Chara, it all ultimately comes down to one thing: not giving up.

As he mentioned in a recent interview, the most important thing that an investor can do — and the most important thing that people in all walks of life can do —is push past roadblocks and learn from the setbacks we all experience from time to time. The learning that is done during these times is invaluable.

How Did It All Come Together?

Anthony Chara’s housing story started in 1993 when he and his wife moved to a different home but continued owning their former residence and rented it out. That gradually increased to 10 of those types of homes until, eight or nine years later, he started learning and putting into practice new strategies such as fixing and flipping homes and engaging in wholesale deals. He soon realized that doing those things was a combination of hard work and considerable rewards.

He entered the apartment aspect of real estate for the first time in 2003 and quickly discovered that the rent checks that he was receiving from those units were significant, particularly in cumulation but also individually in many cases as compared to single-family homes that he had worked with in the past. In the years that have followed, he has been in business with several 100+ unit complexes with the largest at 410, and this has now become his investing focus.

Working With Insurance Companies

One thing every real estate investor needs to take into account is that it is generally not easy to get insurance companies to pay out what they should when they should — for example, when covered properties are damaged in a hurricane. Anthony Chara learned this firsthand when a hurricane damaged a property that he owned in Panama City, Florida. However, it helped to have a public adjuster looking to ensure that the amount paid out was appropriate given the policy and the incident.

He added that ensuring that you have the right type of coverage prior to events such as these is also a must and, conversely, it can prove to be tremendously damaging from a financial perspective if you do not. He is thankful that he had solid hurricane protection for this property located in a hurricane-prone area.

Benefits and Challenges of HAP and HUD

Anthony Chara has also experienced benefits and challenges from working with the United States Department of Housing and Urban Development (HUD)’s Housing Assistance Program (HAP). One of the most significant benefits that he pointed out is that units that are associated with HAP are ones that he receives steady money from, even if they are empty.

However, many of those who are individual buyers or part of a syndication who want to take advantage of that will need to get a HUD loan; a bridge loan may be part of or a substitute for that process.

Also, consider other issues that could arise when working with HUD. For example, a manager who was working for Chara’s syndicate was blacklisted by HUD for repairs that the individual had overseen at a previous property. That resulted in months being spent on rectifying the situation, on the extensive related paperwork, and on hiring a new manager, a period that was partially extended because HUD must interview and confirm any candidates. In the meantime, HAP-related funds were not being paid.

Chara added that other HAP-related issues can also lead to funding being cut. These issues can include dissatisfaction with the condition of the property or how it is being taken care of. Since this is a relatively unpredictable aspect of the arrangement, it is something that an investor should take into account. As a result, Chara said that a good balance for him is to have about 30% of his units under a HAP contract.

It is also important to consider HAP’s voucher program, which is not as immersive. For example, a renter with a voucher will go to complexes that they like and ask if their voucher will be accepted. Although owners of contracted units have a say in who will live there, HAP employees typically end up making the selections.

What Should Go Into a Pre-Purchase Inspection?

One of the most significant ways to earn more money or, more to the point, not lose more money in the big picture is to inspect properties that are being considered and think of issues that may arise in the years to come. Things to look for, according to Anthony Chara, include the drainage in the area. For example, is there somewhere for rainfall and melting of snow to go? It’s also important to inspect the condition of parking lots, roofs, furnaces, air conditioners, mold, and insects. For example, ensure that asphalt parking lots are regularly sealed and restriped so that they do not turn to gravel and mush as the latter prospect results in a much more significant financial burden than the former one does.

Simply put, being as proactive as possible about things such as these will help investors better scale their real estate business and continue to grow their income.

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7/13—How to Find Good Investments When Prices Are High and Markets Are Competitive

How to Find Good Investments When Prices Are High and Markets Are Competitive

How’s this for a success story? In just the last five years, Steve O’Brien and his team at Atlanta-based Arcan Capital have acquired more than 20 multifamily properties. Together, these assets are worth more than $300 million. How has Steve, Arcan Capital’s co-founder and chief investment officer, prospered in such a hugely competitive marketplace?

Well, Steve’s boiled his strategies down to four main pieces of advice. These tips should help you get ahead in the exciting but extremely crowded real estate industry.


1. Maintain Your Reputation

To start with, Steve stresses how building a stellar reputation takes a long time, but the results are priceless.

In the real estate community, many brokers and sellers know each other well. And many people discuss the firms they’ve worked with openly and candidly.

Therefore, it’s vital that, when you promise to do something, you actually do it. For example, don’t ever make a bid if you’re not sure you can afford it. If you follow through every time, people in the industry will know it soon enough.

Imagine that you bid on a deal, but two other real estate companies place higher bids. If those two companies are new and relatively unknown — or even worse, if their reputations are weaker than yours — it’s very possible that you’ll win that deal despite your lower bid.


2. Data, Data, Data

The only way to build a strong reputation is to really know what you’re doing. And the only way to know what you’re doing is to have thorough and accurate data.

Before you bid on a property, learn as much as you can about it. Study the local renting market as well. What are local renting habits like? What are area renters willing to pay for various options?

On top of that, you should be familiar with practically every contractor in the region. How much do they charge? How does their work compare? Which of them provides realistic quotes?

You should also get permission to tour the property with a trusted contractor. That way, you can find out what renovations are needed and how much they’ll cost.

Similarly, get to know as many maintenance professionals in the vicinity as possible. You’ll want to consult with a few of them to see how much it’ll cost each year to maintain the property.

Consequently, you can make data-driven decisions about which properties will pay off and how much to bid for them. You can be sure that many of your competitors won’t make such insightful choices.

You can also impress sellers and potential investors with the facts you discover during your research stage. For instance, it might be obvious that a certain property needs new windows. However, a contractor could tell you exactly what kind of window and what type of glass would be best.

Later on, when you describe those ideal windows to the seller and to people who might make investments, they’ll probably be impressed. They’ll see that you really know your stuff. And, once again, you’ll gain a distinct competitive advantage.


3. Be Honest With Investors

Of course, your investors are key to putting your deals together. And they definitely have lots of options when it comes to residential and commercial real estate. That’s why you should always take care to strengthen your investor relations.

If these people believe that you respect them and care about their opinions, they’re much more likely to partner with you again and again. After all, that kind of relationship isn’t necessarily common in the real estate business.

Therefore, be straightforward about your expectations for each deal. Never oversell. If you explain that, due to current market realities, a certain deal might yield lower returns than previous deals, most of your investors will appreciate your honesty.

Likewise, don’t take any investments for granted. Maybe there’s someone who’s been investing with you for a long time, and that person is always enthusiastic about your work. Even so, don’t assume this investor will automatically go along with your next deal. Instead, sell them on it as though you were collaborating for the first time.

In addition, you can use different methods to keep the lines of communication open. Business reports, informational newsletters, and phone calls are all great ways to keep your investors connected and updated, even when you don’t have a deal to pitch.


4. Go Your Own Way

Whenever you can, look for properties with less competition for ownership. You might find, for instance, that dozens of firms are trying to buy one multifamily home, yet there’s a multifamily residence nearby with a less competitive amount bidders. If so, consider that less popular alternative.

The second property may need more renovation or maintenance work. Maybe its estimated return on investment isn’t as high as some investors would like. However, you might be able to get it at a low price. And, if you have relationships with contractors and maintenance pros who’ll give you good deals, you could see healthy profits from that purchase.

This approach is known as the blue ocean strategy: seeking discounts and low-demand options in order to claim new slices of the increasingly competitive market.


As you can see, Steve O’Brien’s real estate triumphs have nothing to do with luck. Instead, Steve has grown his company through copious research, informed decisions, honest investor relationships, a reputation for reliability, and the occasional quest for less sought-after properties. These strategies can ultimately benefit anyone seeking to develop a competitive edge in their chosen industry.


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Steps to Stop Trading Your Time For Money with Kris Benson

Steps to Stop Trading Your Time For Money with Kris Benson

Kris Benson is like many other investors who are getting their feet wet with residential properties. He dreamed of generating enough passive income from a small empire of residential properties to pay the bills. However, on his journey toward making this dream a reality, he discovered a more efficient and effective way to make far more money through real estate investments.

Today, Kris Benson is the CIO for Reliant Investments, which is part of Reliant Real Estate Management. However, his incredible story began many years ago when he was a sales professional for a payroll processing company, ADP.


Growing Up on the Fast Track

Kris Benson did not intend to settle down with a wife and kids early in life. An unexpected pregnancy in his early 20s may not have been in the plans, but this was a pivotal moment in his life. This blessing in disguise actually caused Benson to put his nose to the grindstone very early on, and this ultimately took him on a path toward passive investing. In fact, if he has any regrets, it is that he did not start investing in passive income streams even earlier.

He initially worked for ADP, and he later transitioned to a sales job at Intuitive Surgical. Benson worked long hours and had the same thought that so many other people have. He wanted to stop trading his valuable time for money. The solution that he came up with was to build a solid stream of passive income. While Benson could have started a business, he understood that he was not creative enough to walk along that path. Investing in rental properties was the clear option.


Amassing a Small Empire of Duplexes

Benson’s initial investment goal was to slowly build a solid portfolio of two-unit residential properties. He figured that if he had 25 buildings that were producing $200 per unit per month, he and his wife could live a comfortable life without the need for a 9-to-5 job. After he had 22 units across 11 properties, however, he realized this plan was not going to work for him. Even with a great management team in place, he did not want to deal with the stressful hassles associated with residential tenants. He also did not want to endure the stress of purchasing many additional duplexes.

He and his wife decided to divest. They ultimately sold all but one of the buildings. The property that they continue to own is one that Benson’s brother currently lives in. At this point, Benson had capital available to invest, and he was looking for a more effective way to generate passive income.


Co-Developing an Apartment Complex

Benson made the move that many others make when they gain more experience and have more investment capital. He decided to invest in an apartment complex. While he does not recall where he heard the advice, he attributes this move to the idea that big deals and small deals require the same amount of effort and time. The difference is that you make less money on small deals. Essentially, Benson believed that the return on an apartment complex would be more aligned with his output.

He teamed up with a partner who he knew from his childhood. While his partner was a construction expert, Benson was the capital investor. The pair built a large apartment complex in four phases. Initially, the project required Benson to put out a $200,000 investment. However, a shortfall in planning required him to front another $270,000 after the first phase was complete. When only a quarter of the property was constructed, he was already committed for almost a half-million dollars. However, he says he never thought about not following through with the other three phases. They made up some of the initial phase’s overage on future phases, and Benson recouped the majority of his capital later through refinances.


Transitioning to Storage Investments

Finding additional multifamily investment opportunities was a challenge for Benson. Through his research, he decided to pursue self-storage properties. Specifically, the National Association of REIT Data indicated that self-storage properties had a 17% annual return for the 23-year period between 1994 and 2017. This is compared to a 13% annual return for apartment complexes during that same time period.

Kris Benson used a storage industry publication issued by MiniCo to research the top self-storage operators in the country. MiniCo’s publication listed the top 100 operators, and he personally reached out to the top 30 operators on the list to find investment opportunities. This was how he connected with Reliant Investments. Specifically, he met with Todd Allen, who is one of Reliant’s principal partners. Todd was responsible for finding investors, but he preferred to manage operations. With Benson’s strong background in sales, he was the perfect individual to join the team and head up the equity committee.

He proactively structured a deal with them that allowed him to earn equity in the properties for those he assembled investors for. This ultimately transitioned into an extensive amount of passive income for Benson and his wife. On top of that, Benson also joined the company officially as its CIO.


Reflecting on the Past

As he reflects on the past, Benson attributes his success to several pivotal points. While he was stressed by his duplexes, he does not regret starting his journey with them. Getting started is often one of the most difficult parts of real estate investments and investing in his duplexes got the wheels moving in the right direction. He also states that his most successful investment to date is the apartment complex. If he were to give advice to a new investor, that advice would be to educate yourself as much as possible. However, you also need to jump in at some point and be prepared to learn more along the way.


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Big Goals in the Big Apple With Melissa Jameson

Big Goals in the Big Apple With Melissa Jameson

With big goals for her professional development and real estate portfolio, Melissa Jameson shares how nurturing the growth in others has helped her thrive in both.


On the Move

After growing up in Connecticut, Melissa Jameson decided it was time for a total change of scenery. She moved to California to earn an undergraduate degree in political science from the University of San Diego before crossing the continent again to land in Washington, D.C., where she would work on Capitol Hill while also obtaining her master’s degree from George Washington University.

While in Washington, D.C., Melissa earned a job as an advisor to the Department of Justice, where she worked closely with the FBI and DEA on money laundering investigations. She continued to excel in a constantly evolving field, providing investigative support and specialized knowledge to support active federal criminal cases and help the government “follow the money.” That is, until 2014 when an opportunity presented itself to join PricewaterhouseCoopers’ Financial Crimes practice in New York City— somewhere she had always dreamed of living.


Becoming a Real Estate Investor

With her new job away from Washington, D.C., she could now focus on other opportunities. A family property was Melissa’s first entry into real estate and where she started developing a genuine interest in the potential of real estate investments for wealth generation.

“I had always been interested in real estate and then ended up with this family property that I decided to renovate and rent out. And as I started to do that, I realized there’s definitely more money to be made in real estate, and I got my feet wet,” Melissa said. “I realized lots of people were making a lot of money in real estate. I can be doing something here, too, even though I’m obviously working a full-time job. I started getting an interest in buying other properties to rent out, so I started actively investing in Atlanta. I also started passively investing, partnering with operators investing in high-growth areas in the U.S.”


Keys to Success

As Melissa has continued to grow her real estate portfolio, she realized that many skills fluidly transfer between the corporate world and the world of a real estate investor.

“Having good mentors is really important, and personally, I’m still trying to develop those mentoring relationships in the real estate industry. I have those mentors more on the corporate side, just because I’ve been in the industry for so long,” Melissa shared. “The network and mentors, in particular, can be so helpful because you can bounce ideas off of them and potentially avoid making the same mistakes.”

Learning from the past is another foundational element that drives Melissa’s investment strategy. In her formative years, she didn’t have financial role models in her life. Healthy money management wasn’t practiced or discussed.

Taking the Lead

Today, she is looking ahead and lives her life in a way that positions herself for a secure financial future, focusing on building a portfolio of diverse financial investments, and taking calculated risks.

“If other people can do this, other people are making money off of it; I had that confidence in myself that I can, too,” Melissa said. “I’m not perfect. I’m still learning and making some mistakes along the way, but it’s just that I have that confidence in myself that I can really learn, that I can make the connection and that I can be successful in this industry.”

With confidence comes support, and whether it is in the professional realm or with a team of fellow real estate investors, giving support is a fundamental element of every successful team. For Melissa, it’s essential to how she’s grown and managed her own team to ensure their continuous success.

“I love leading people. I’m really passionate about it because I like to see people grow and develop, and I love mentoring, building relationships, and building that trust,” Melissa reflected. “At the end of the day, we all want to succeed and we all have the same objective, so I want to make my team feel like I really support them and that I’ll do whatever I can to really help them in whatever ways they need.”



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Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. 



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Real Estate Lessons From the Ralph Lauren Story

Real Estate Lessons From the Ralph Lauren Story

I have a unique topic to share with you. You might be wondering from the title, what does Ralph Lauren have to do with real estate? Is he a real estate investor? Did he write a real estate book? Not exactly.

I’ve been reading a lot of biographies lately. Greenlights by Matthew McConaughey, Can’t Hurt Me by David Goggins, and most recently the story of Ralph Lauren: Genuine, Authentic by Michael Gross. The reason I wrote this blog is to highlight a few parallels between Ralph Lauren’s story (the story of building his fashion brand) and investing in real estate. My hope is that you find these lessons impactful and inspirational.

Before we begin, let me ask you a question: When you think about long-term investing, what comes to mind? For me, I think of building something generational. Some people use the term generational wealth.

Said another way, what does money mean to you? If you had a billion dollars in your bank account tomorrow, what does it mean? What would you convert the money into? Would you travel more? Spend more time with family? Be more charitable? Buy exotic cars and houses? Everybody is different — but what would you do?

These are big questions, so we will come back to them at the end of the blog. For now, let’s explore some of the takeaways from Ralph Lauren’s story and relate them to real estate.


Leverage Other People’s Expertise to Build a Team

Ralph Lauren is a master at building teams. Did you know Ralph Lauren never went to design school? He didn’t go to college to be a fabric or clothing designer. He doesn’t even do his own sketches for design concepts. What’s the lesson?

Ralph leverages a team of experts who work at their own highest and best capacity to run his company and create designs. Ralph has a gift for finding inspiration and he’s a visionary; in other words, he has the “eye” for design. I’m not underplaying his talent; I am highlighting that he’s built a team and he focuses on his own highest and best potential. He outsources the majority of the other tasks to free up his time.

You and I can do the same in real estate. Take investing in apartment syndication for example. If you are not the expert in all areas of real estate or do not wish to do all the work, you can simply partner with teams who are experts in underwriting, finding off-market deals, property management, construction, and technical analysis. You might consider this investment model so you can focus on your highest and best potential. That’s the lesson; real estate and business are team sports. What role do you want to play in the team? You have a choice.


Think Alternatively

Ralph Lauren went against the grain in terms of the fashion industry. In the 1960s, he took a look at what everyone else was doing and he chose to go in a different direction. This same concept can be applied to investing. Most people are investing based on their parents’ advice, mainstream marketing, billboards, and TV advertisements. These outlets mostly suggest that you follow the herd and turn your money over to Wall Street. In other words, put your money in a 401(k) or IRA, and buy annuities, stocks, bonds, and mutual funds. There’s nothing inherently wrong with these investments. As many of you know, I used to work for a very large, well-known brokerage firm to learn this type of investing and stack it up against real estate. You may find, as I did, that there are sometimes superior investment vehicles in the alternative sector.

To think “alternatively” in terms of investing is to think private real estate, private businesses, precious metals, oil and gas master limited partnerships, and so on — typically, investments that are not publicly traded. There are thousands of investment options outside the world of Wall Street.

Ralph Lauren never set out to be a “grand designer.” He didn’t say to himself at an early age, “I’m going to launch a mega clothing line one day.” In fact, he refers to himself and his company as “anti-fashion.” Going against the grain, thinking alternatively, and finding your own way can often be the best approach. As poet Robert Frost might add, “I took the [road] less traveled by, and that has made all the difference.”


Start Simple, Then Build From Your Foundation — the Key Is to Start

Ralph Lauren started with a simple idea. He was observing men’s fashion in the 1960s. At the time (generally speaking), everybody was conforming to a standard gray or black suit and black or neutral colored tie. Most everyone shopped at the big box retailers, and there wasn’t much of a “designer’s touch” in men’s fashion.

Ralph started his business by creating a men’s necktie. In the 1960s, men’s ties were typically two-and-a-half inches wide. Skinny ties — think about the TV show Mad Men. Ralph decided to mix things up and he created a four-inch-wide necktie, nearly twice as wide as the industry standard. He also added vibrant colors, patterns, and designs to top it off. Bloomingdale’s (a major NYC retailer) took a gamble and partnered with Ralph Lauren and, lo and behold, the neckties sold. Then customers started realizing, “If I have this necktie that’s vibrant and colorful, I need a new dress shirt that goes with it.” So, Ralph started making men’s dress shirts. Then his customers had a new shirt and new tie — why, they needed a new suit to go with them, right? He expanded into the suit business. And so it began.

As we know, Ralph Lauren today has expanded into women’s clothing, home décor, perfumes and colognes, activewear, watches, and the list goes on. It has become a mega-company, but it has taken decades to get there. The lesson is to take action; start with a single step forward.

How does one begin investing in real estate? Some prefer to start with buying shares of a publicly traded REIT (Real Estate Investment Trust) for as little as $10 per share. I use that number for example purposes, of course — each REIT will be priced differently. Some may be $10 a share, $20 per share, $100 per share; it depends on the company. The point is, it doesn’t take millions of dollars to get started. In fact, this is what my nephews are doing to start their passive income journey, and they’re starting in their teenage years, which is incredible… if they keep it going.

You could invest in single-family homes. This might require $25,000 to $50,000 in the form of a down payment. You could house hack (rent spare bedrooms), flip it, turn it into a vacation rental, or purchase a buy-and-hold rental. You could also invest in real estate syndications as I do. You may have to come up with $50,000 to $100,000 to invest in a private placement offering; however, the passive benefits may be worth it. The bottom line is that everybody is different. Everybody has a different risk tolerance. Do what makes sense to you, start with what you’re comfortable with, evaluate your risk tolerance, and leverage licensed advisors if you need help making a decision or strategizing.

The takeaway is that building a business or investing in real estate is not an overnight success. It can take decades to get where you want to be. The key is to start your foundation, then build from your foundation.


Setbacks Are Part of Life — Be a Realist

This next lesson is not as pleasant, but it is necessary to discuss. Setbacks are part of life. There was a point in the 1970s when Ralph Lauren almost lost the business and nearly went bankrupt. It came at a point of rapid expansion. You would think from the outside looking in, that the company was doing great, but the inventory, overhead, and payroll began to exceed the cash flow of the business.

Hopefully, if you and I are investing in cash-flowing real estate, we’re not taking on such risk. At least not that of a venture capitalist running a startup company. There will always be hurdles and setbacks with investing, in business, and in life. There’s always a recession around the corner and not every deal you invest in is going to be a home run. In fact, you might lose money in some deals. That is why diversification is so important. Just be a realist. In other words, you and I can’t bank on consistent 10–15 percent returns for the next 50 years; it doesn’t work that way. Since we know there will be setbacks, let’s plan for them. As Warren Buffett’s business partner Charlie Munger says, “Prepare for the worst, hope for the best.” He refers to himself as a “cheerful pessimist.” Excellent billionaire advice.


Design Your Own Path and Live It

The final lesson that I want to share with you is to design your own path and live it. This is one of the most inspirational takeaways from Ralph Lauren’s story. What did he actually do? Ralph Lauren created a lifestyle image for his brand, similar to that of a Hollywood film. He designed an imaginary lifestyle of romance, freedom, abundance, optimism, and a vision of the American Dream, and he sold that vision to his customers. The most inspiring part came after decades of creating this fantasy lifestyle. Ralph began living that lifestyle in real life.

If you have ever seen Ralph Lauren, he wears his own brand, he lives in the houses you see in the photoshoots, and he drives the collector cars you see in the ads. Genuine and authentic. That is the beauty of it all, and also why I’m so passionate about teaching you and others about the benefits of investing for passive income. The purpose is not about money, it is about designing the life that you want to live.

At the beginning of this blog, we explored what money means to you. What would you do if you had time freedom? In other words, if you freed up your time by generating more passive income each month compared to your monthly expenses. I encourage you to get started on your passive income journey if you haven’t already. Get started with designing your life. A life on your terms.

Thank you for tuning in and reading this blog. I don’t blog much anymore, but when I do, it comes from inspiration, passion, and the desire to help you achieve your goals. I hope you found these takeaways and lessons inspirational, impactful and valuable. Until next time…



To Your Success,

Travis Watts


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Commercial Real Estate Tips for Investors Ready to Retire From Their Full-Time Jobs

Commercial Real Estate Tips for Investors Ready to Retire From Their Full-Time Jobs

Many people who invest in commercial real estate do so in hopes that they’ll be able to quit their full-time job. While your day job may fund your initial investments, the promise of a passive income is enticing. Anna Kelley is a real estate investor who made this dream happen. She is also a wife, mother, and author. Wearing all those hats means that her time is limited. She has perfected the art of achieving her retirement goals through real estate investing.

That’s not to say that investing in commercial real estate is easy. You have to put in the work, which involves planning and executing your moves intelligently. Her story uncovers some excellent tips for a commercial real estate investor who wants to transition away from their full-time job.

Start Small

Thinking big is a great idea. But starting small can help you get experience so that you can work out the kinks without bottoming out.

One of the best ways to begin the investment strategy that will take you to retirement is to buy property that you can live in. This would need to be a multi-use or multifamily building. If you can cover your mortgage with the rental fees for the areas that you don’t live in, you’ll save thousands of dollars a year. Then you can put the money that you’re saving on your mortgage into new investments.


Talk to people in the areas where you’d like to buy property. You might find unlisted opportunities. You’ll make sellers aware that you’re in the market. You never know when an opening for a lucrative deal will arise. As you make more acquaintances, word of mouth will help you find new prospects.

Negotiate Better

Negotiating doesn’t mean low-balling people or making senseless offers. It involves poring over numbers, knowing your budget, and understanding what adds value.

Some factors to consider include:
• Rental history
• Current tenants
• Environmental concerns
• Reasons that the owner is selling
• What the competition is doing

One way to test the waters is to discuss a lower offer with the broker. If the owner is willing to drop the price, you know that they have wiggle room. Be patient and see if the listing price drops over time. Then, make your lower offer. It’s more likely to be accepted.

Researching the factors above and knowing the market will help you make knowledgeable points. If you present a clear case for the property’s value, you’re more likely to be taken seriously.

Don’t Chase Cash Flow in the Wrong Market

The research that you undertake to make negotiations will help you make effective decisions. If a property doesn’t have great cash flow now, consider what it would take to improve it. You can’t always add value if the market isn’t favorable.

Also, remember that no one cares about your cash flow more than you. You may think that you can wash your hands of a less-than-perfect deal by hiring a management company to fill the space, collect rent, and reduce expenses. But you’ll likely spend more time and money than it’s worth to keep things profitable.

Consider Syndication

You don’t have to do it alone. Owning a larger property can deliver a larger passive income. But you can’t benefit from that if you can’t afford it.

Syndication allows you to merge resources, skills, and capital. As a syndicator, you can put in time and effort instead of capital. Your investors will provide you with the majority of the funds to launch the investment. You may receive an acquisition fee and a portion of the return when you sell. If you don’t use a third-party management company, you can ask for a property management fee.

Add Value

Most people think about adding value by enhancing the property physically. But flipping a property isn’t just about the upfit. You can achieve a similar result by looking at the operations.

Can you reduce expenses? Can you raise rents? Can you fill vacancies? You can often add value to a commercial property just by managing it more efficiently.

Don’t Underestimate Rehab Costs

It’s important to estimate repair expenses when calculating your budget and negotiating a purchase price. Structural issues aren’t always obvious, though. Some buildings are prone to problems that crop up down the road even if they’re not evident at the time of the sale.

This is where networking and research come in. Work with inspectors, realtors, and contractors who are familiar with the area. They’ll give you a good idea of what to look for now and what to expect in the future. You’ll be able to factor in the expenses associated with those rehab costs to come up with an appropriate offer.

Maintain a Strong Vision

Although commercial real estate can provide you with passive income, you can’t sleep through the process. It takes a great deal of work, determination, and perseverance to achieve your retirement goals. When obstacles arise, your vision will help you press on.

Your vision should include your business plan, which combines a structure for your business operations. It will include your goals and the framework that you’ll use to achieve them. But your vision should also take into account the reasons that you’re putting in the effort. Knowing your “why” will help you endure when the “what” becomes challenging.

A vision doesn’t have to be set in stone. As you progress, you’ll learn more. You may adjust your vision as necessary as you enhance your cash flow, develop more equity, and build capital.

If you plan to retire on your commercial property investments, you should focus on consistent cash flow, low vacancy risk, and optimal leasing contracts. You may not be able to retire today, but creating a solid vision that’s based on research and market analysis can help you execute your business plan and quit your full-time job.


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How to Provide Value to a Partnership Without Capital

How to Provide Value to a Partnership Without Capital

How does one bring value to a partnership? I was asked this question last week while speaking with a young man who is interested in real estate investing. His conundrum is that he only has a small amount of capital. Thus, he wanted to know how he could provide value to a partnership that would provide him an equity stake in a deal. Unsurprisingly, this exact question is bandied about among new investors and old. Not all partnerships are on equal footing from day one. Within this blog post, I hope to provide some insight into how to provide value, earn equity, and become a partner when there is no money to invest on your end.


Bird-Dogging the Deal

The first and most popular way to obtain an equity stake in a deal is to be the one to find the deal. This means that if you are the hopeful investor with no money, your value is in finding the property, seller, or bringing people together. So how does one find the deal or bird-dog? Answering that is not as simple as it sounds. The short answer is that there is a lot of time spent scouring neighborhoods, property listings, tax records, looking over tax dockets at the courthouse, going to those properties, talking with the owners or agents, and becoming familiar with every aspect of the property. Once a property is identified, what is the deal?

Any investor that will bring money to the table will want to know the numbers. The non-money investor needs to have all the numbers crunched and know that deal backward and forwards. Know the value add and how this deal can be a good buy. Is it simply return on investment or is it an appreciation play? What is the value of the deal? Know the goal of the deal. Simply buying a property is not enough; it is important to know how the deal will bring value to the partnership.

Once you have found the property, be it commercial or residential, you then have to be able to show the money investors how they are going to see returns on their investment. There are numerous apps, programs, and websites that can help you prepare a pro forma on the property. Investors want to see numbers. Numbers control the deal. Know your numbers.


Finding the Right Partners Once You Have the Deal

Once you have a deal put together, how do you find the right partner? It is simple to say “networking” and shrug, but that is not a genuine answer. Websites like Best Ever Commerical Real Estate, meet-up groups, and talking with your banker, real estate agent, lawyer, accountant, or insurance agent are good places to start. Those points of contact need to be cultivated to grow relationships. Organic relationships will generate more leads than you can possibly imagine. That said, there are plenty of money investors out there that are looking for deals. If you look enough, they will be everywhere. Investors are always on the lookout for new deals.

Once you have found a potential partner, it is paramount that you and they start the vetting process. You need to learn as much as you can about your partner. That does not mean their blood type and mother’s maiden name, it means that you need to make sure that your soon-to-be partner has the capital, has experience in investing, and is willing to be transparent with you — after all, this is a marriage of sorts.


Structuring Your Equity Stake

What does all your effort calculate up to in the deal? Is it 5%, 10%, 15%, 20%, or more of the deal? Is there an equity earn-out? Meaning, does your equity in the deal increase once the money investors have recouped their down payment? The answer to this question is that you need to have this number in your head when you create the deal. You need to understand and realistically value your efforts in putting this deal together. In the context of syndication, this is the role of the general partners. The GPs bird-dog the deals and it is the limited partners (the money investors) that bring the cash to the table. However, not every deal is a syndication. Most deals are simply buying a building, house, or multifamily property, but the concepts are the same.

Spend the time with your potential partner in outlining your partnership agreement. It is time well spent. Speak with a lawyer who handles partnerships, LLCs, and does real estate work. Do not cheap out on getting the right advice — these boxed agreements online will do you more harm than good. Get a tailored partnership agreement. Ask questions and understand the agreement as well as you understand your deal. Learn about the new ideas of the lawyer or your partner. Structuring your deal is as much an art as is putting the deal together. Find the right structure for you.


Good luck out there!


About the Author:

Brian T. Boyd, JD, LLM,


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Boost Your Investment Growth in 2022 With the Best Ever Conference

Boost Your Investment Growth in 2022 With the Best Ever Conference

It’s official — the Best Ever Conference is going to be back in person and better than ever in 2022 in Denver, Colorado.

Attendees will have the opportunity to take full advantage of engaging keynotes, workshops, and networking with top real estate investors and innovators, all while forming long-lasting relationships with other high-quality attendees.

Investors eager to boost their growth in 2022 will want to mark their calendars for this game-changing event.

We asked Hunter Thompson, Managing Principal of Asym Capital, to share his thoughts on the Best Ever Conference. “There’s a part of me that wants to try to say, ‘It isn’t REALLY the best ever!’ but, you know what — it actually is,” he said. “When it comes to the caliber of the speakers, the networking opportunities, and the overall energy of the event, it just might be the ‘Best Ever!’”

Hunter added, “If I’m going to take the time out of my schedule to travel to a conference, it needs to be a five-star experience. Best Ever never fails to deliver on that requirement, which is why I attend every year.”

Purchasing a ticket today will allow attendees access to monthly virtual group discussions known as Mini Masterminds, which have already started. These Mini Masterminds provide the opportunity to immediately begin connecting with other attendees and continuously build relationships prior to meeting in person at the conference.

The BEC three-day agenda is going to be packed with next-level value and opportunities for growth. Not one day will be the same.

Want to elevate the experience? There is a limited amount of VIP tickets available. These tickets include everything in General Admission, plus additional exclusive opportunities to meet conference speakers, attend private social events, and more.

To purchase your ticket today, visit


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The Path to Profit: From Airbnb to Commercial Real Estate Enterprise With Rock Thomas

The Path to Profit: From Airbnb to Real Estate Enterprise With Rock Thomas

If you’re an aspiring property investor but are not ready to buy, you might think you should wait. With the right strategy, however, you can start investing now. We spoke with Montreal-based investor Arvin “Rock” Thomas, who shared his investment wisdom about an opportunity waiting in plain sight.


About Rock Thomas

Rock Thomas has built a real estate enterprise that earns over one billion dollars yearly. He has steadily grown the business despite economic and personal challenges. As a neuro-linguistic programming (NLP) practitioner and champion of motivational thought, Rock models a remarkable level of self-discipline.


Start in real estate without purchasing property.

Rock stumbled into a lucrative answer to this conundrum when renting out his house while traveling. To his surprise, people paid up to $1,000 per night to stay in his residence located in a ski area. He soon realized Airbnb was a path to profiting from real estate you don’t own.

Unlike multifamily or apartment investing, a short-term rental venture doesn’t require a steep initial investment. The key is to find a residential property in a desirable location. Then, you lease the property from a willing owner and manage the rental as a business.

Your upfront costs include the lease and furnishing the unit. Expect ongoing expenses for utilities and maintenance. Unless you can manage it yourself, you’ll want to budget for cleaning and repair experts.

If Airbnb is potentially so lucrative, why isn’t everyone doing it? Rock stresses the importance of treating it as a business and employing strategy and humility.

To succeed, you want to mind these steps:

  • Find owners willing to let you sublease.
  • Do your homework on the market.
  • Partner with more experienced investors.
  • Master your mind.


Get owners on board.

How do you convince a property owner to let you lease the unit for your short-term rental business? Rock notes you should expect to knock on many doors and refine your pitch as you go. Your primary selling point is that the arrangement benefits owners.

As the lessee, you’ll keep the unit in top condition and curate all occupants. You’ll handle normal wear and tear, turnover, and minor repairs without disturbing the landlord. The landlord gains a stress-free experience with guaranteed rent and pristine property.

To successfully woo owners, focus on extracting lessons learned from each encounter. What went well, and what fell flat? You’ll improve your transactions by objectively evaluating them and committing to improving.


Do your homework.

Rock emphasizes that success means doing your homework on properties and having a team and system in place. As with any property, location is critical. Units close to public transportation, colleges, and hospitals will attract renters. Unless you have trusted local partners, start near your home so you can manage the rental in person.

You’ll also want to consider the timing. Long weekends are the most popular, and you may struggle to fill the middle of the week. However, urban properties close to employment and tourist spots can draw steady customers.


Know your data.

To know what you’re taking on financially, you need to run the numbers. Rock and his team analyze opportunities using a sophisticated system not available to most people. The system helps set daily prices based on fluctuating demand. If you’re considering a property, the software can provide projection data to help you decide.

What if you’re crunching your own data? Rock recommends checking similar listings neighboring your property’s location. Enter different date ranges and other variables to evaluate price and demand. You may be tempted to price low to get a renter, but you could leave hundreds or even thousands on the table by not educating yourself first.


Partner with experience.

Rock learned this pricing lesson firsthand, along with the importance of mentorship, when beginning investing. He rented his house for $300 per night to an eager renter and passed on the investing course his friend was teaching. The actual nightly value was $600 to $1,000, so Rock left far more money on the table than the cost of the course.

Rock’s takeaway? Invest in learning from experts, and you’ll make fewer mistakes and escalate your game.

If you’re not handy with maintenance and repair, you’ll want a dependable maintenance expert on call. Handling minor repairs promptly is essential to an excellent tenant experience and fast unit turnover.

Consider how you’ll address common issues such as renters locking themselves out in the middle of the night. For example, remote-controlled keyless entry lets you unlock the front door or garage from wherever you are. In addition, make sure your renters can quickly reach you at any time for home emergencies.


Mind your headspace.

As a successful business owner dedicated to personal development, Rock has some candid words of wisdom for the rest of us. Growing up on a farm taught him resourcefulness, a fierce work ethic, and the value of a morning routine.

He notes that many people expend far more energy wishing for different circumstances than doing anything about them. So instead of having gratitude for what the universe has provided, people send the message that its bounty isn’t good enough. As a result, they miss opportunities and live joylessly.

If you aren’t doing so already, stick with a beneficial morning routine to propel the day’s success. For example, Rock starts his day with pushups to remind himself that his mind controls his body.

The bottom line is that to improve your professional performance, first control your mind. As a new investor, you want to start with good data and self-management basics. This way, you’ll prime your short-term rental venture for long-term success.


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How to Make Financial Freedom Your Reality in Just 10 Years

How to Make Financial Freedom Your Reality in Just 10 Years

There comes a time in our lives (or maybe a couple of these moments) when we pick up our heads, look around and realize that we aren’t where we thought we’d be by this point in time. Maybe it’s just before a milestone birthday or when one of your kids hits a milestone of theirs.

Maybe it’s at a rock-bottom moment where you’ve been passed over (again) for a promotion, your relationship is waning, and you feel like you’re always working. You ask yourself how on earth you got to this point and attempt to trace back your steps from years ago.

Sometimes we can’t quite pinpoint where it went wrong or what went wrong, but the glaring truth is that things don’t look the way we imagined when we were young, naive dreamers.


Why Are You Stuck?

Maybe you followed all the rules, got the degree and the corporate job, saved diligently into your 401(k), budgeted, and even snagged a couple of rental properties. Unfortunately, you’re still feeling held back, hampered by an invisible ceiling. In complete opposition to your grand vision in your twenties, you still managed to become a cog in the wheel, get stuck spending time to earn money, and the life you dreamt of seems a little out of reach.

What’s worse is, looking into the future, you can’t see how this path could ever change. Maybe a property appreciates, and you sell it; perhaps the stock market spikes, and your retirement savings get a boost, but then what? How is it protected? How can you depend on appreciation and Wall Street spikes?

You can’t. So, you start trying to crack the invisible code. You know there’s a way that the ultra-wealthy do things that must work, so you begin exploring how to get there.

Ryan D. Lee felt this same way. That was his story before he founded Atlas Wealth and Cashflow Tactics. You see, as Ryan says, most financial advice is archaic, and 97% of it is dangerous, misleading, or flat out wrong.  However, it’s what most of us are taught, and what so many of the financial gurus out there are peddling, thus what the majority of the world believes.


Your Most Valuable Asset, Revealed

It took Ryan a few years of suffering through a high-travel career, a diminishing connection with his wife and family because he was gone so much for work, and the 2008 stock market crash for him to step back and start to question the path he was taught to follow. Does any of this sound familiar or parallel to your experience?

The number-one thing you can realize is that YOU are your greatest asset. Now, that doesn’t mean you should silo yourself and struggle harder, longer, alone. That means you can and should harness the power of knowledge, connection, and innovation when it comes to your wealth strategy.

To get out of a rut — any rut — you’ve got to surround yourself with others who are inspiring, more intelligent than you, maybe a couple of steps ahead of you, and who share (or are already on their way to achieving) your same goals or desires. If you want to lose weight, surround yourself with really fit friends, a nutritionist, a health coach, yoga instructors, runners, and the like. Lifestyles and habits are contagious, and Ryan knew that, so he surrounded himself with people who craved financial freedom.

He began to examine how other successful, wealthy people lived and noticed that they have a team on which they rely. He immediately immersed himself into a mastermind/book club where the group read Rich Dad Poor Dad, The Creature from Jekyll Island, and Becoming Your Own Banker, and would discuss how they could implement these books’ principles into their lives.


Leveraging Life Insurance Differently Than “Everyone Else”

Once you cross into that alternate mindset of educating yourself and leveraging your relationships, you become unstoppable by the standard money myth-conceptions (Ryan’s words). Ryan and his now co-founder started to reverse engineer the banking system, explore new interest and appreciation-earning opportunities, and evaluate how they could increase their control while decreasing their tax liability.

Together, they learned a little-known way high cash value life insurance policies are used to create your own banking system. At first, the idea of using a life insurance policy while you’re still alive seemed ludicrous, especially as a part of a wealth-building plan, but the concept goes so much further than that. When a high cash value life insurance policy is set up and used properly, you can earn interest inside the account while also using the cash to propel your real estate investment strategy.

This is where the knowledge-gathering piece collides with the networking piece. First, you learn about the tools and how funding a high cash value life insurance policy can efficiently fund your real estate investments.

Next, leveraging your network of property management professionals, brokers, financing, insurance professionals, and other key relationships creates accessibility to the components needed for your accelerated wealth-building strategy.


Connecting the Dots

Maybe you’ve done the math and it’s already clear to you that $300K in your retirement account earning an average of 8% or even 10% or 12% per year just isn’t going to cut it. So, there are two options, right?

  1. Invest more principle.
  2. Earn more interest.

Wrong. This is the archaic way — the old way. This way is assuming your money can either be spent or saved, not both and definitely not at the same time. So, take a step back with me once more.

You already know real estate syndications are a great way to invest, earn great returns, reduce your tax liability, and protect yourself and your money from the volatility of Wall Street. Right?

So, combine that knowledge about real estate syndications with this fresh perspective on life insurance policies. An investment strategy that combines high cash value life insurance with real estate syndications opens up a new world of possibilities because it allows your money to work for you in two places simultaneously.

When you fully fund a high cash value life insurance policy, borrow against the policy, and use that to fund your real estate syndication investments, you’re successfully making your money work for you in two different places.


The cash value policy continues to grow while your cash flow from the real estate syndication deal begins to trickle in. Suddenly you’re earning interest inside the life insurance policy AND getting checks in the mail. Mind. Blown.


Final Thoughts

You’re already on the right path because you’re here, reading this. But know this with all truth and conviction: Your success with investing well and achieving financial freedom depends on your ability to increase control over your cash, increase the appreciation and returns you’re receiving on your investments, decrease the risk you face (overall and per deal), and decrease your tax exposure.

Like you, Ryan craved time freedom. He wanted to be home with his family while also being confident that he could provide financially now and in the future. So, he became obsessed with implementing a set of core principles within his personal financial plan to achieve that goal as fast as possible. He now teaches others about the Core 4 and how to use them to create velocity with their money.

We’ve found that investing in real estate syndications with cash borrowed against our fully-funded high cash value life insurance policies is one of the best, most lucrative ways to make sure our money is working as hard as possible for us and not the other way around.


About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: 


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7 Real Estate Experts on What to Do if There Is a Housing Market Crash in 2022

7 Real Estate Experts on What to Do if There Is a Housing Market Crash in 2022

For realtors and investors, planning ahead is one of those things that separates winners from losers. While odds are that we won’t witness a housing market crash in 2022, what would you do if it did happen?

This article is a sort of fear-setting or worst-case-scenario approach to real estate market predictions. What 2020 clearly showed us is that it’s usually hard to predict the ebbs and flows of real estate. No one could have thought there would be an influx of millennial first-time homebuyers pouncing on homes while the coronavirus vaccine was still in view. Real estate activity in 2020 had a significant effect on the U.S. economy’s rebound. So, I asked some real estate experts the question: If the housing market crashes in 2022, how would you keep your business afloat? Here are the responses I received.


Jeb Smith, Broker Associate and GRI with Coldwell Banker Realty in Huntington Beach

“I want to be clear that I don’t believe there will be a ‘housing market crash’ in 2022, but if the market were to change, I would do exactly what I’ve done my entire career, and that’s focus on relationships. As a realtor who receives the majority of his business from past clients, friends, and family, I would continue to nurture those relationships and be a source of information to help guide them through the tough times ahead.

“At the same time, I have experience in selling foreclosures in the last housing debacle and would work on redeveloping those relationships to take advantage of any new opportunities that could arise. I don’t believe you need to change your business model entirely if you’ve been focused on the right things the whole time, so I would just continue to focus on those people that know me, like me, and trust me, and things will be just fine.”


Ken McElroy, Real Estate Analyst and Investor

According to Ken, there are four main opportunities for investors right now in the housing market:


1. Cost to Build vs. Cost to Buy

“Let me give you an example: Right now we are in the process of buying a property in Katy, Texas. We’re buying two apartment complexes of 648 units in Katy and paying $73 million for both projects. That’s under $130,000 per unit, which equates to $120–$130 per foot. So, I’m buying a property at well below the cost to build. If I was to build another property right next door to that property, it would be well over $200 per foot. In Phoenix, that same exact property we bought in Katy, Texas will cost a little over $200,000 a unit. And of course, we went down to Katy because the rents are not that much different because the property is right across the street from the Texas Medical Center.”

In other words, give more weight to locations where buying real estate is comparatively cheaper than building — employ considerable due diligence.


2. Supply vs. Demand

“Take a look at the supply — where are people going? What’s the occupancy? If occupancy is really high in an area or about ready to be high because the area is growing, then that means that your rental demand is going to be there, and rents will grow like we just saw for the last 10 years in Austin, Texas.”


3. Follow the People

“People vote with their pocketbooks and their feet — the rider trucks, the U-Hauls, etc. Florida, Texas, and Arizona are good markets right now. But it’s very hard to buy properties in many places because people are moving there right now. And you’re going to see rental rates go up in these places because people are buying properties for investment and renting them for the long term.”


4. Cash Flow vs. Capital Gain

“Don’t buy properties for capital gains. This is not the time, for example, to buy a house for $300K and flip it for $400K. You want to make it cash flow. You want to use the strong rental rates so that whatever you buy will put cash in your pocket over the long term and you’re building a primarily tax-free passive income.”


Kristina Morales, Realtor,

“Regardless of the condition of the housing market, I am confident that my business will stay afloat. The market is currently hot. However, it is hot for sellers, not buyers. So, when it shifts to a buyer’s market, it will be a hot market for buyers.

“For me, there are a few key things that I plan on doing to position my business for sustainable success. The first key to my business is to continue to invest in the right places — systems, automation, marketing, and people.

“Another key is anticipating market shifts and being nimble enough to skill up and prepare for the new market conditions. For example, if we find ourselves in a market where short sales become prevalent, then I will be sure to prepare myself for this environment.

“The last key is to continually innovate. The client experience is the number-one driving force in my success, and constantly trying to innovate to improve and deliver value to my clients is essential.”


Bill Gassett, Realtor and Owner of Maximum Real Estate Exposure

“When markets correct themselves, it is important for agents to be ready to adjust. It is very difficult to go from having to do little work to sell a house to all of a sudden having very few people to work with. In the last significant real estate downturn from 2007 to 2012, there were significant hardships. Numerous homeowners lost substantial equity in their homes. The economy was awful, and people were losing their jobs.

“This led to many financial hardships including foreclosure. As an agent, I began to notice fairly quickly there was a demand for someone who could help homeowners short sell their property rather than letting it go to foreclosure. To keep my business running full steam ahead, I became a short-sale expert.

“While other agents were floundering, my business skyrocketed. Doing short sales in addition to my traditional business, I was doing 80–100 transaction sides by myself. Needless to say, these were some of the best-earning years of my career.

“All great real estate agents need to be able to adjust to their environment. Whether that means learning something new, investing more money back into their business, or doing something different. Change is inevitable. A real estate correction will happen again. It always does. Agents who can recognize this early on will be able to put themselves in a better position not to skip a beat.”


Marina Vaamonde, Real Estate Investor,

“Experienced housing investors realize that the economy works in cycles and that they have to prepare for slow times. In tough times, cash is definitely king. Investors who recently got into the market have probably not had time to set aside reserves. Even some experienced investors ignore the need for adequate reserves. They had better start now.

“High prices make this a good time to sell properties that you previously bought at lower prices and have held onto. Investors with a sizable portfolio should consider selling some assets to increase their bankroll. Short-term investors with properties that are market-ready are in a good position. If the rapid acceleration of housing prices results in a crash, there will be opportunities for those who have cash to spend.

“Decreased demand will probably not last long. There was already a housing shortage prior to the pandemic. According to Freddie Mac, the U.S. had a housing shortage in 2018 of 2.5 million units. With the right preparation now, a housing investor will still be in business if the housing market declines.”


Aleksandr Pritsker, Realtor and Founder of Team Blackstar at eXp Realty

“Realistically speaking, if there’s a market crash, that means investors will start coming in and buying up everything as per previous market crashes. I always make sure to keep my business on a steady diet of all types of buyers and sellers, because you never know what type of market it will be. So, I try to make sure that I’m fully prepared for any market scenario and have the right contacts to be able to thrive and succeed in any market that may come up. You never know what tomorrow will bring, but you always have to surround yourself with the right business people to keep you going no matter what the situation is.”


Jordon Scrinko, Realtor,

“The great thing about real estate, in general, is that transactions occur regardless of price action. People have to buy and sell homes for a number of reasons — jobs, relocation, upsizing, downsizing, etc. My experience suggests that in a down market, sellers flock to the realtors who really know their market and produce results, rather than in a frothy market where any realtor will do the trick. Product knowledge is key in a down market.”


What is a housing market bubble?

When there’s limited supply and rising demand due to speculation or a deregulated real estate financing market, we have a housing bubble. It appears that currently, we’re in a housing bubble as home buyers overpay on homes in hot markets and investors compete with cash on overpriced homes. A housing bubble typically lasts for four to five years.

According to Wikipedia, “Bubbles in housing markets are more critical than stock market bubbles. Historically, equity price busts occur on average every 13 years, last for 2.5 years, and result in about 4 percent loss in GDP. Housing price busts are less frequent, but last nearly twice as long and lead to output losses that are twice as large (IMF World Economic Outlook, 2003).”

Eventually, price growth rises to a point where there isn’t a demand to sustain it, and it stagnates or falls — i.e., a sharp drop in prices or a housing bubble burst.


Will the housing market crash in 2022?

A recent Reuters poll of 40 housing analysts suggested that house values in the U.S. will rise more slowly in 2022. The surveyed analysts estimated that values would rise by 10.6% this year, followed by a gain of 5.6% in 2022. According to the Reuters report: “Beyond this year, U.S. house prices were forecast to moderate and average 5.6% growth next year and 4.0% in 2023.”

Experts believe we’ll see the high home price growth rates reduce to near-normal levels in 2022 and 2023. Another reason why there is probably not going to be a housing market crash in 2022 is that there have been tighter lending standards. A major reason for the 2007/2008 crash was that there was a high rate of mortgage fraud. The mortgage denial rate halved between 1997 and 2003. The cost of lending increased, and the federal reserve loosely supervised banks and lenders, leading to price corrections in many markets. The culmination of these things led to a housing bubble burst.

This led to hundreds of thousands of homes going into foreclosure, multiple subprime lenders declaring bankruptcy, and the real estate market requiring federal bailouts. Based on a survey of 5000 realtors by real estate MarTech platform Real Estate Bees, 56.6% of realtors don’t believe we’ll witness the same kind of foreclosure and short sale swamp that was witnessed in 2008. On the mortgage front, we don’t see the same kind of indiscriminate lending being practiced in the face of new legislation and federal oversight. Yet, there is still uncertainty, since “whatever goes up must come down.” But based on the facts, the housing market crash isn’t about to crash in 2022.


Final Thoughts

The key to navigating a housing market crash is having a good strategy in place. During the 2008 housing market crash, realtors and real estate investors who embraced innovative marketing strategies grew their businesses even while the overall market declined. While a housing market crash isn’t expected in 2022, it’s still a good idea to plan for every eventuality.



About the Author:

Agnes A Gaddis is a writer for Inman News, Influencive, and the TSAHC (Texas State Affordable Housing Corporation). She has over 7 years of experience writing for the real estate industry. Connect with her on Twitter: @Alanagaddis



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Are You Asking the Right Questions When It Comes to Private Investments?

Are You Asking the Right Questions When It Comes to Your Private Investments?

I am not much for sizzle, glamour, or sensational TV. However, now and again my teenage daughter will put something in front of me that grabs my attention. Have you seen the Nightbirde ditty from America’s Got Talent on YouTube? You should take a moment; it is touching. When competing as a singer on AGT, artist Jane is asked about her life. Her answers are jarring and painful. What follows is amazing.

This grabbed my attention because, without the panelists’ questions of the artist, the performance would have been sensational. But within the context of Jane’s life circumstances, her performance was beautifully profound. My point? The right questions allowed the audience to experience the strength of an undaunted human spirit mired in the most challenging tragedies of human life.


Asking the Right Questions

Hitting closer to home, you too must ask the right questions related to your private investments (think self-storage, multifamily, and industrial). The art of finding the right question is critical as you determine value and find facts and truth.

As you approach investment opportunities, you face a significant risk because your assumptions about how the investment will function might not be accurate. Oftentimes in life, the subject matter is awfully complex. How are we to know the right answer when we see it if our assumptions are flawed?

I will return to this point at the end of this article, but let me stress this again: If the assumptions we make about how the asset will function are invalid, we face a meaningful risk in the world of private investments.


Unpacking the World of Private Investments

My dear wife Melissa works at a biotech company. When she talks to her colleagues, I do not have a clue what they are talking about other than they are trying to make drugs that cure cancer. Recently at a post-COVID gathering with friends, I started talking about prohibited transactions in IRAs. Melissa gently pulled me out of the weeds, reminding me that a subject matter that is common ground is a better place to spend time socially.

Thank goodness I married up and can rely on her to be my guardrail in life. She was spot on and is better at reading social cues than I am. I was off in the weeds on a topic nuanced with smart-sounding 20-dollar words, enjoying myself as I put on a clinic of technical precision and accuracy. Everybody else was thinking, What a dork.”

I mention this because many areas of life are specialized. And not just a little. The world of private investments can be one of these areas. Let’s focus on a topic that is often confusing to investors and packed with 20-dollar words. Just as Melissa’s world of oncology is a maze of SOPs, tangled multinational partnerships, and real people who are dealing with cancer, the world of private investments also needs to be understood, evaluated, and unpacked.


The “Safe” Investments That Led to the Great Recession

Back in the ’80s and ’90s at banks and brokerage firms, investors frequently purchase mortgage-backed bonds. These bonds were called Ginnie Mae, Freddie Mac, and Fannie Mae bonds. These bonds are still around today, but the shine partially faded due to the Great Recession.

Remember 13 years ago (2008–2010) when we first heard about TARP (Troubled Asset Relief Program) from Hank Paulson? He was our Secretary of the Treasury at the time, as well as the former Goldman Sachs Chairman and CEO.

Back then the mortgages were packaged and sold as presumably safe investments. What we discovered in the great recession was that these packaged, mortgage-backed securities were not actually the high-quality collection of mortgages they were presumed to be. Frankly, they contained poisonous high-risk mortgages that subsequently defaulted. Think Countrywide Financial, civil fraud, and Angelo Mozilo. Creepy stuff.

Remember that home mortgages are assets that are bought and sold by various banks, institutions, and entities as their marketability provides the liquidity needed by the underwriter. The underwriting entity can package a tranche of home loans and sell them into the market and go back to new borrowers to underwrite additional loans, then rinse and repeat.


Chasing Cash Flow

Investors viewed these packaged loan portfolios as reasonable and safe assets for investment. Investors would frequently purchase GNMA bonds (often referred to as Ginnie Mae) with the anticipation of using the cash flow provided by the asset to service lifestyle needs.

Where it gets tricky for investors is when a mortgage in the tranche is refinanced. Think about it — when a mortgage is refinanced, the lender is repaid their principal as a new lender now carries the note. In the context of a GNMA bond, the investor receives a portion of their original principal back as the borrower is no longer paying interest since the debt has been paid.

To the investor, the sum of the monthly cash flow is higher than the bond’s anticipated yield due to mortgages in the tranche being refinanced. But because the principal was mixed in with the interest payment on the bond, the investor did not care. They just knew they liked the cash flow, and the cash flow was relatively high. Until that is, they realized the remaining principal was less than what was originally invested.

That was when it got tricky. If you expected to receive a payoff of $50,000 at the maturity of the bond, which equaled what you invested, you would be disappointed when you received something less.


Your Capital Account

Some private investment syndicators apply a similar approach when accounting for the invested principal. Here is some terminology to be watchful of. Not that the following is wrong, it is just a distinct way of handling things:

“Any capital that is returned on the aggregate is considered a return of capital.”

What this means is that your capital account will be diminished during the life of the investment. That is not to say that your ownership is diminished — just your capital account. So, if you invest $50,000 in a deal with the assumption that you will participate pro rata in the gains at the end of the deal, plus receive your original principal back, you will be disappointed.

In the above scenario, you will most definitely participate in the gains on the investment as your ownership does not change based on the balance of your capital account. It is just that, because your principal is being returned to you during the life of the investment, you will not have a singular event where you receive the original amount invested being returned to you.

Additionally, your preferred return, if contingent on the balance of your capital account, will cash flow less to you each month/quarter based on the decreasing balance of your capital account. This may be significant. Admittedly, cash will build more quickly in an investment where the burden of preferred payments declines. Your ownership remains the same, so you eventually get the bucks. Only you can determine which you prefer.


Thinking Beyond the IRR

Remember that the Internal Rate of Return (IRR) calculation of your investment is only one method for measuring performance. Strong IRR numbers can be impacted by providing a return of principal early on. I feel the truest measure of performance of an investment is the equity multiple within the context of the number of years for the life of the investment. In other words, an equity multiple of 2 within 5 years tells me almost everything I want to know. An IRR of 18 only tells me part of what I want to know.


Final Thoughts

Now, please re-read the second paragraph of this article. My advice? Before you talk with an investor relations representative about a private investment, compile a list of your assumptions, and during your conversation, ask the representative to validate or contradict those assumptions.

Investors make their best decisions when they are well informed. Talk to your friends and ask for their advice. Spread your investments out in position sizes of 2% to at most 10% of your net worth, and diversify by year of maturity, type of asset, and geographic location of the investment.


All my best as you manage the tension between risk and return!



About the Author:

Ted Greene is part of the Investor Relations team at Spartan Investment Group. Spartan syndicates self-storage assets for investment. Ted has 24 years of experience in the financial services industry as an investment advisor and Chief Compliance Officer. Ted can be found on LinkedIn at or

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6 Tips to Succeed in Uncertain Times

6 Tips to Succeed in Uncertain Times

These have been uncertain times over the past year-plus, and they have made the act of investing in apartment properties much more unpredictable than before. Although there will always be demand for homes, the value of properties such as these will tend to fluctuate even more during uncertain times.

One of the best things that an active investor can do upon investing in single-family apartments and engaging in multifamily investing is taking a close look at what the competition is doing.

For example, consider all of the ways that you can simplify the renting process for the prospective renter. If you can place the entire process online, from providing basic information about your rentals to the signing of a lease, that would be preferred. However, if that is not possible, whether permanently or temporarily, make as much of it as easy to research and complete as possible.



Having photographs of the property both inside and out is a must-have. Probably around 25 would be the best balance of not too few and not too many.

In addition, consider offering virtual walkthroughs to allow your virtual visitor to experience their prospective new home more fully without needing to leave their screen. This allows them to either be sold on it on the spot or be intrigued enough to want to learn more or see it in person. This can be done through one or more videos or through a more immersive walkthrough experience.

Of course, these online visuals have become especially important over the past year-plus as so many have felt that it is not in their best interest to actually come on-site unless they must. A lack of a virtual walkthrough or a poorly put-together one can turn off prospective renters, particularly if your competition is offering this feature.

Regardless of what visuals you are providing, keep in mind that prospective renters will also want some visuals of what the neighborhood is like and what is nearby. Is it near a park? What is the view like from its windows? As is commonly known among those involved in apartment investing, location is one of the most important features that renters consider.

You may also want to consider uploading a drone-flyover video.


Thorough Listings

Another step that you should take as an active investor in these types of properties is being thorough in the text of the listings for each place you own. Well-written, engaging text that both educates and draws in the visitor is preferred. At a minimum, you want some prose there. Not only is this essential to draw the reader in, but it is also important for SEO-related reasons.

Regardless, make sure to include all of the necessary specifics within the listing, such as its price, location, number of bedrooms, type of flooring, if it includes a balcony, if pets are allowed, how much a security deposit would be, and if utility costs would be included in the rent or paid for separately.

This limits the need for potential renters to contact you with questions, saving time for yourself and your staff. It also removes what could be a mental stumbling block that may cause them to move on and consider different properties to rent.


Applying, Being Screened, and Completing a Lease

Active investing at a high level also means that you should make the application, screening, and lease completion process as simple as possible. Group those steps together as part of a procedure on your website or, in lieu of that, otherwise simplify them as much as possible.

One of the benefits of investing in a significant number of apartment properties is that you can have one application take care of the application process for all of them. The same goes for screening; the more places that a prospective renter can be simultaneously screened for, the more apt they will be to ultimately decide to rent one that they have been approved for.

The lease-signing step of the process might be the most difficult one to incorporate into your website, and this may require the prospective renter to instead make a trip to your property, but do consider doing this if you can.



As you progress in this active investing opportunity, it is important to keep abreast of your metrics. For example, keep up to date on how many of your visits turn into applications and, of those, rental agreements. See how those figures vary from apartment type to apartment type and see how tweaking certain aspects of your listings affect these things.

One of the best examples that you should consider mimicking as an active investor is See what about its design impresses you when you put yourself in the shoes of a prospective renter. Of course, you could also simply use their services for listing your rentals if that ends up making the most sense financially and otherwise from your end.


Non-Apartment Properties

Of course, many of these recommendations can be applied to commercial investing and commercial properties as well. Whether you are taking advantage of a multifamily investing opportunity or a commercial investment opportunity, you want to ensure that your properties are being shown in the most positive, informative light possible and that those who want to take advantage of any commercial properties that you own may do so with ease, from the inquiring stage to agreeing on a rental.



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A woman holds a silver smartphone, speaking into it using voice technology.

The Advantages of Voice Technology in the Multifamily Industry

Not only has the next generation arrived — they have arrived with a loud bang. Businesses have been forced to listen to their voices and needs like never before. Over generations, different aspects of our social lives have been affected by new innovations and have been incorporated as daily necessities. Electricity, machines, automobiles, etc., played a part in revolutionizing society and the way business is conducted. Today, it is voice technology’s turn.

How the voice technology revolution is changing business

No longer do you have to physically input commands into a device. Now almost everything can be voice-activated. Using a simple command, you can switch on your TV, lights, fans, or air conditioner, and the limit is almost endless. How did this voice revolution come about? Other than the obvious reason that it makes life simpler, the subtext lies in the much wider availability of smart devices.

No manufacturer would be stupid enough to market a smart device without voice command capability. Even the employees would not buy such a product. Alexa, Siri, etc., have become ubiquitous at homes and workplaces, so much so that we take them and their capabilities for granted. More than 70% of owners of smart devices say that they use voice commands routinely to activate or deactivate their voice-powered devices.

By incorporating voice technology into all available digital assets, voice searches will become easy and routine. Even though today traditional text search is still popular, it is slowly giving way to voice search as a means to find information on the internet. About half the routine searches conducted on the internet are voice commands, and it is an even larger figure when searching for local businesses. This underscores the importance of voice search features, not only for businesses but also for multifamily units.


Some advantages of voice technology in the multifamily industry

The multifamily industry has been quick to realize the advantages of incorporating voice technology into the development of multifamily units. This technology can be leveraged as a selling point since it adds more facilities and other convenient features to be offered to investors and/or renters. The multifamily industry will be positively impacted in many ways on a day-to-day level as well as in the long term.


  • Voice technology can be integrated to make marketing the lease easier.
  • Renters’ FAQs can be handled by chatbots, especially during after-office hours.
  • Installing chatbots and using natural language processing will help reduce labor costs while ensuring queries get answered.
  • Apartment residents will benefit from voice-tech-activated smart appliances such as thermostats, lighting, etc.
  • When this technology is incorporated, even mundane things like heating up dinner become simple and convenient.
  • The on-site property manager can utilize voice tech to ensure prompt rent payment, stay on top of maintenance issues in real-time, and more.


Incorporating voice technology into your multifamily properties


Speak the users’ language.

Developers of multifamily units have been strategizing the needs of the end-user. Voice commands during internet searches tend to be longer than text searches. End-users generally build up a rapport with their smart devices and talk to them like a family member or friend. When introducing voice tech, it is better to incorporate various forms of speech that tend to reflect the type of interaction between friends. It will be informal commands to a large degree and the incorporated voice technology should be able to accept this in stride.


Create a more inclusive environment.

Voice tech, being inclusive in nature, will make for an easier and more accessible leasing process. It helps those with impaired vision and motor skills, which is an important advantage. Due to its usefulness, voice tech has become routine and a necessity for most consumers. Such technology, incorporated within the multifamily unit, contributes greatly to ease of living.


Optimize your website for voice search technology.

Voice searches in multifamily units also tend to be almost totally local. To ensure the search throws up relevant material, the community details should be accurately and consistently displayed on your website. Since such local searches tend to be reflected in social media platforms, ensure your pages are in total sync with such platforms. Update your profile with relevant and important details, which will ensure that search engines give prominence to your listing. It will score a big plus with consumers.


Voice tech is here to stay, and multifamily developers have a very valuable tool in their hands to positively impact their bottom line.



About the Author:

Veena Jetti is the founding partner of Vive Funds, a unique commercial real estate firm that specializes in curating conservative opportunities for investors.


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an apartment building surrounded by green trees and blue sky

10 Tips for Your First Apartment Syndication Deal

Getting into multifamily syndication can be one of the most lucrative areas of commercial real estate, but it can also be quite intimidating. You’re not only responsible for your own money and success, but you also have other investors entrusting you with their finances.

We recently spoke with Mo Bloorian, a 25-year-old investor who has acquired over 100 units in just two years. Mo’s best-ever advice is to just get started. Don’t worry about your age or experience level — if you want to get into syndication, you’ll make it happen. Read on for more of Mo’s best tips for doing your first apartment syndication deal.


1. Don’t Wait — Just Get Started

Mo can be an inspiration to everyone. Many of us feel that we’re too young and too unfamiliar with the real estate business to get started. We may make excuses that we’ll invest when we’re a little more secure in our careers and when we’ve taken the time to learn more.

Mo did the opposite. He jumped in and he’s been learning as he goes. He started as a real estate agent and then used some of his equity to buy a duplex. From there, he was hooked, and he’s been taking risks ever since. Mo’s bold attitude has helped him get successful quickly.


2. Sometimes You Have to Look Outside Your City…

If you live in an area where multifamily syndication is difficult to turn a profit, you may need to look outside your city. Some cities and regions are just naturally better for multifamily properties. If you, like Mo, live in an area like New York City, it may be too expensive for you to invest.

Instead, Mo started looking in upstate New York. He found the properties to be much more affordable and he did really well on turning a profit. Just start widening your search circle until you find an area that will be profitable.


3. …But Stay Within Driving Distance

While some apartment syndicators will work with commercial real estate from all over the country, Mo prefers to stay within driving distance from where he lives. His properties are all only a few hours’ drive for him.

He suggests keeping your properties relatively close, especially if you’re working closely with management or if you’re involved with value-add properties. For active investing, you need to be able to visit the property in person. When there’s an issue, sometimes the best way to handle it is to take care of it yourself. You can have a more hands-on approach if it’s somewhere you can reach in a few hours.


4. Look for Hidden Gems

While some properties are an obvious win, there are some that are hidden gems. These properties often seem like they’re in such disrepair that they’d be too much trouble to renovate. However, don’t just overlook a property without giving it a chance.

You may be surprised that some properties that look awful may just need some simple repairs and some changes in management to give you a significant value-add.


5. Network and Cultivate Strong Friendships

One of Mo’s biggest accomplishments comes from networking with other young professionals who are passionate about investing. He made it a point to connect with others and learn as much as he could from them. As a result, he was tipped off about some of his best deals.

Investing is difficult to do completely alone. If you are willing to work with others, you’ll often be considered when they have new deals come up. You may even find out about prospects before others if you’re friends with the right people.


6. Work With People Whose Skills Complement Your Own

While it’s great to have friends who share your interests, you also want people who can complement you when it comes to active investing. Mo and his partner each handle different parts of their business and each play to their own skills.

You’re not going to be great at every aspect of being an active investor. Instead of trying to do it all, surround yourself with people who excel at the areas where you don’t. You’ll have a much greater chance of success. Focus on what you do best and find talented people to handle the rest.


7. Management Skills Are Important

There will be times when the people you’ve hired to manage, maintain, or renovate properties aren’t quite meeting your expectations. If you want your investment to be worth it, you’ll have to step in and manage the situation.


8. You Don’t Have to Break the Bank to See a Return on Value-Add Properties

Many investors think that value-add properties involve spending tens of thousands of dollars in order to increase their profit on a property. However, Mo feels that in many situations, you’ll only need to sink a few thousand into each unit to get a really good return.

Focus on the areas that’ll make a big difference, like the kitchen and baths. If you can improve these areas, you can definitely increase the rent.


9. Consider Using Local Banks

When you’re just getting started, you may not have a lot of equity. It can be difficult to get larger banks to lend you money. Instead, you can work with local banks. Local banks are much more willing to take risks on a new investor.


10. Build Trust With Your Investors

When you’re working in apartment syndication, it’s imperative that your investors trust you. You can gain trust with a proven track record. You can also be upfront about everything. Your investors will appreciate your honesty and will be more likely to work with you in the future.


Final Thoughts

As an active investor, getting your first syndication deal can be challenging, but you can be successful. Remember to find the right people and play to your skills. Above all else, follow Mo’s top advice: jump in as soon as possible and start making money.


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Commercial real estate

Handbook for Real Estate Market Analysis

Originally published on Groundbreaker here.

Having a real estate market analysis strategy is an important part of real estate investing. Knowing which metrics to look at and how to use online tools and in-person visits can help you decide if a deal is right for you. This guide covers the best practices for conducting a real estate market analysis based on my experience syndicating over $1 billion in apartments in multiple markets in the U.S.

But it’s important to note that while identifying a strong real estate market is important, it isn’t a guarantee of success. Something you hear a lot about in real estate investing is, “Location, location, location. The location is the most important factor that determines the success of a deal. You make money buying in the right area and lose money buying in the wrong one.”

While I get the sentiment, this is only partially true.

Yes, you can lose money buying properties in the wrong real estate market. But you can lose money buying in the right real estate market, too. Your investment team is far more relevant to the success of the deal than the real estate market. An apartment syndicator can buy a deal in the hottest real estate market in the country but lose their passive investors’ money by overpaying, failing to implement the business plan, making incorrect underwriting assumptions, or for any other number of reasons. At the same time, another apartment syndicator can buy a deal in a real estate market that is horrible on paper and double their passive investors’ capital if that is what they specialize in, and they can find deals and buy at steep discounts.

With that said, all other things being equal, you will likely make more money investing in a good real estate market than in a bad one. As a result, apartment syndicators should spend a lot of time on real estate market analysis — both prior to and after investing.

The best strategy for real estate market analysis is a combination of online and in-person analysis. Here is a quick rundown of the ideal approach:


Online real estate market analysis

Review the established or up-and-coming real estate markets across the U.S. and narrow them down to a handful of markets. Then, perform a more in-depth analysis of these markets. This includes doing a lot of online research, reviewing commercial real estate reports, analyzing raw demographic and economic data, and catching up on local news (both general and business news).


In-person real estate market analysis

Visit the market in person for a boots-on-the-ground analysis. Drive around the real estate market looking for the best neighborhoods, visiting properties, and meeting with local commercial real estate professionals.

Based on your online and in-person real estate market analysis, select one or two real estate markets to target.

Apartment syndicators should follow this approach both when selecting a real estate market for the first time and when they are ready to expand. But what metrics should they be looking at during their online and in-person real estate analysis?


What is the right real estate market to target?

The real estate market you target shouldn’t be a metropolitan statistical area (MSA) nor a city. Instead, you should be targeting a submarket within an MSA or city. A neighborhood within a submarket is even better. Data on the entire city or MSA can be misleading due to the amount of territory included in the information, so the more specific the area the better.

For example, the population of New York City is over 8 million, and its footprint is nearly 500 square miles. It is broken into five boroughs, each with hundreds of neighborhoods. A few neighborhoods will align with the overall market statistics of the entire city, but most will be either better or worse. The only way to know for certain is to analyze the neighborhood.

Therefore, the best practice for a real estate market analysis is to focus your online research on finding the best MSAs and cities in the U.S., as well as the best submarkets within the large MSA or city. Then, focus your in-person, boots-on-the-ground efforts on finding the best neighborhoods in those top submarkets.


Finding the nation’s top real estate markets

A best practice I use with my private apartment syndicator clients is to select seven real estate markets to analyze. I always recommend that at least three are real estate markets they are already familiar with, two are within driving distance, and two are considered “top market.”

The first two categories are self-explanatory, but how do you find the “top markets?” A best practice is to leverage the market analysis of the top commercial real estate investment institutions in the country.

These institutions invest a lot of time and money into creating monthly, quarterly, biannual, and annual real estate historical and forecast reports. Some of my favorites are:

  • Marcus and Millichap’s quarterly market-specific reports
  • Marcus and Millichap’s annual multifamily investment forecast
  • CBRE’s quarterly cap rate survey
  • Deloitte’s commercial real estate outlook
  • IRR’s commercial real estate trends report
  • PwC’s emerging trends in real estate report
  • IPA’s annual multifamily forecast
  • IRR’s annual multifamily report

Review these reports to see which real estate markets the big players are focusing on to select the final two target real estate markets.

The next step is to narrow your list down to one or two markets. The best practice is to perform a detailed online real estate market analysis, finding relevant data on the demand of multifamily in those submarkets. I’ve found that the metrics that best indicate demand are:

  • Population demographics
  • New and existing businesses
  • Top industries
  • Absorption rates
  • Unemployment
  • Occupancy and rent trends


Population demographics

Population age

Different demographics demand different types of apartment communities. For example, Generation Z (born in 1996 and later) desires smart amenities, affordability, and communal spaces. The Millennial generation (born 1977 to 1995) prefers resort-style living experiences and high-tech amenities and services. Generation X (born 1965 to 1976) prefers urban areas, high-tech home furnishings, concierge services, and family-friendly features. Baby Boomers (born 1946 to 1964) prefer larger living spaces, state-of-the-art fitness centers, and common areas. Understanding the dominant generation in the target market will let you know what the most in-demand properties are.

For demographic trends, and all other market data, I recommend analyzing at least the last five years. That way you can determine how the metrics are trending. Most of this data is located on the website unless otherwise indicated.


Population growth

The more people moving to an area, the greater the demand for housing. A good resource to use is U-Haul’s annual migration study. They rank each state in the U.S. based on the number of one-way U-Haul trips. also has detailed data on annual population trends.


New and existing businesses

Fortune 500 companies

If a multibillion-dollar company is moving their headquarters to a market, they are doing so because they’ve determined through research that it is the ideal location. The market is pre-qualified in a sense. Looking forward, this will also result in an influx of new jobs and new potential renters as well as other businesses moving into the area.

Go to Google News and search “[target market name] + Fortune 500” to see if any large corporations are moving or have recently moved to the area.


Other businesses

Smaller businesses moving into the market is also a positive sign. While not as positive as a Fortune 500 company moving into the area, this will still result in new jobs and new potential renters.

Go to Google News and search “[target market name] + new businesses” and “[target market name] + new jobs” to see if any smaller corporations or businesses are moving or have recently moved to the area. New business news is also usually included on local chamber of commerce and economic development websites.


Top industries

If a large portion of the population works for one company, or even just a few companies, the market is riskier. If the company or companies decide to leave, this will have a major negative impact on the market. Similarly, the market is also riskier if many people work in one industry. If that job industry were to decline or disappear, it would have a major negative effect on the market.

Ideally, the real estate market does not have one or only a few dominant companies, and no more than 25% of the population is employed in a single industry.

Google “[target market name] + top employers” for a list of the major corporations in the area. The industry breakdown can be found on the website.


Absorption rates

The population is the demand. The apartment communities are the supply. Both are important in determining the strength of the market. The ideal situation is if construction cannot keep up with the growing population. The worst-case scenario is a lot of new apartment construction and a declining population.

The metric that best measures the supply situation in a market is the absorption rate. The absorption rate is a ratio of the number of units rented to the number of available units over a given period of time. The higher the absorption, the less supply can keep up with demand.

Integra Realty Resources (IRR) publishes yearly multifamily reports that label U.S. markets as being in an expansion, hyper supply, recession, or recovery phase. The markets in the hyper-supply and recession phases have poor supply and demand metrics. One of the metrics included in their analysis is the absorption rate.

Fannie Mae also publishes absorption rates in their biannual multifamily market outlook reports.



The more people who are working, the greater the supply of high-quality renters who are capable of paying their rent on time. Markets with higher unemployment rates are fine as long as it is decreasing. The worst-case scenario is a target market with a high, increasing unemployment rate over the previous five years. Ideally, the target market has a low, decreasing unemployment rate over at least the previous five years.

You can find unemployment data on your target markets on


Occupancy and rent trends

Occupancy rates and rental rates are also a measurement of supply and demand. The greater the demand, the greater the occupancy rate and rental rates. The best real estate markets have increasing apartment occupancy rates and increasing apartment rental rates over at least the previous five years.

Occupancy and rental rate data can also be found on


Narrowing down your real estate market analysis

Once you’ve gathered your data, rank your seven real estate markets based on the metrics outlined above. The most important metrics are related to supply and demand (absorption rates, occupancy, and rent trends) and job diversity (top industry). Therefore, I recommend ranking each market based on those metrics and then, assuming the other metrics aren’t disqualifying (e.g., a massive unemployment rate or a plummeting population), using the other metrics as tiebreakers.


Performing an in-person analysis

Once you’ve narrowed down the list to the one or two markets with the best supply/demand and job diversity, move forward with the in-person, boots-on-the-ground real estate market analysis to find the best streets within the best submarkets/neighborhoods.

To accomplish this, start by meeting with local professionals to find the best submarkets/neighborhoods. Then, visit properties to find the best streets.


Meet local professionals

There may be tens or hundreds of submarkets/neighborhoods in any one market. The most effective way to narrow them down is to ask local real estate professionals for their opinions. The best professionals to speak with are property management companies and commercial real estate brokers. They are actively managing and selling apartments every day, which means they are experts on the market.

Contact at least three local property management companies and three commercial real estate brokers. A simple phone call will suffice to start. Explain your investment criteria (i.e., what types of apartments you invest in) and ask them for the top submarkets/neighborhoods in the market to focus on.

Once you have a list of a handful of submarkets/neighborhoods from the local experts, focus on becoming an expert on each submarket/neighborhood.


Visit properties

I have my apartment consulting clients begin the process of becoming an expert in a submarket/neighborhood by finding and logging information on actual (yes, real) properties in the market. I recommend a total of 200 properties for each market. Thus, the exercise is called the 200-Property Analysis. The purpose of this exercise is to have street-by-street-level expertise on your target submarket/neighborhood. Plus, you may target these properties with off-market lead generation strategies in the future, so it is not only an academic exercise.

To begin the 200-Property Analysis, create a spreadsheet to track the following 17 data points:

  1. Market Name
  2. Property Name
  3. Property Address
  4. Submarket/Neighborhood
  5. Total Units
  6. Rentable Square Footage
  7. One-Bedroom Rent
  8. Two-Bedroom Rent
  9. Three-Bedroom Rent
  10. Year Built
  11. Who Pays Utilities?
  12. Value-add?
  13. Source
  14. Owner Name
  15. Owner Address
  16. Appraised Value
  17. Year Purchased

Using, you can generate a list of well over 200 properties in a market, as well as find data to complete most of the spreadsheet. I recommend finding properties that are scattered across the submarket/neighborhood rather than a concentration of properties in one area. Remember, the goal is to learn about the market and find the best neighborhoods.

I am a value-add apartment syndicator and teach others how to be the same, so we want to know if the property is a potential value-add opportunity. One strategy I like to use is to look at pictures to see if the interiors look outdated or if there is only one photo listed. If the interiors have been recently upgraded, the owners of the apartment will likely list a bunch of pictures to highlight the renovations.

Another strategy is to determine whether the owner pays the utilities. This indicates an opportunity to bill back utilities to residents via a ratio utility billing system (RUBS) program to increase revenue.

In addition to, you will need to locate the apartment on the local county auditor/appraiser site to find the owner’s contact information, appraised value, and year purchased.

This may seem like an arduous process, but no two streets are the same in a real estate market, and this can save you and your investors from years of headaches because of acquiring an asset on the wrong street or in the wrong neighborhood.

Once your spreadsheet is completed, print it out and set aside at least one weekend to visit as many properties on your list as possible. At the property, you will want to perform the following tasks:

  • Take a general picture of the property. You will be viewing many properties, so this main image will be your visual reminder.
  • Take another picture of something noteworthy. Examples would be large green spaces, fresh landscaping, a newly paved parking lot, and/or an interesting monument or signage. Be creative here. When you eventually begin reaching out to owners to see whether they’re interested in selling, you can bring up this noteworthy item during the conversation.
  • Look for any signs of distress and take pictures of anything noteworthy. Examples would be an uncovered pool in the winter, a pool closed for the summer, poor landscaping, peeling paint, old roofs, and old HVAC systems. Signs of distress relative to other assets in the same area signal a potential value-add opportunity and/or a motivated seller.
  • Number of cars in the parking lot. This is important, especially during the day, since it will indicate the employment situation at the property.

This will give you an understanding of the types and quality of apartments in each neighborhood.


Drive around the real estate market

While you drive between property visits, pay attention to your surroundings to get a “feel” for the overall neighborhood and each street.

A great strategy is to print out a map of each neighborhood. Bring a green, yellow, and red highlighter. Highlight the map green to denote a “great” street, yellow for “okay,” and red for “avoid.”

Other things to look for when driving between properties are:

  • Starbucks/McDonald’s: these businesses are nearby for a reason
  • Parks and trails
  • Schools: especially in “family-friendly” markets
  • Entertainment hubs
  • Restaurants
  • Major highways and roadways: this means the location has ease of access to jobs
  • Traffic: could be a good thing because of walk-ins
  • Road quality: a lot of potholes and trash or newly paved
  • Quality of cars: indicates the resident type in the area

Another best practice is to drive the neighborhood at night to see how “safe” the area feels.

Based on the in-person analysis, you should have a better understanding of which neighborhoods are the best.


Bonus tip

Another recommendation is to set up Google Alerts for the target markets you are interested in. Just because a market is qualified today, that doesn’t mean it will remain qualified this time next year. Therefore, use Google Alerts to receive automated email updates on any changes, good or bad, in specific markets.

Good keywords to set up for each prospective target market are:

  • Apartment
  • Multifamily
  • Real estate
  • Jobs
  • Unemployment
  • Absorption
  • Vacancy
  • New business
  • Fortune 500


Real estate market analysis summarized

In summary, the real estate market itself is not as important as your ability to implement your business plan. However, selecting the right real estate market does increase the likelihood of preserving and growing your passive investors’ capital.

Therefore, to select the best real estate market, follow my tried-and-true real estate market analysis:

  1. Select seven real estate submarkets.
  2. Perform online analysis to rank these real estate submarkets.
  3. Narrow your list down to one or two real estate submarkets.
  4. Perform in-person, boots-on-the-ground research to locate the best neighborhoods.


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7 Reasons You’ll Love Investing in the Midwest

I’m a Midwestern kid. Born and raised in Cleveland. Went to college in Dayton. Lived and worked in both Chicago and Detroit. And I currently live in Cincinnati.

With that noted, I’m a firm believer of live where you want, invest where it makes sense. So it may come as a bit of a surprise that I prefer to invest in the Midwest as well. But here’s the thing – you should too. Yes, I know the Sunbelt is the darling of multifamily investing, and rightfully so. But don’t sleep on the Midwest. There are excellent markets with sound fundamentals and compelling narratives that rival some of the hottest markets in the country.

But don’t just take my word for it, here’s what George Tikijan of Cushman and Wakefield had to say about it:

“Investors who previously focused on coastal markets, especially New York and New Jersey, shifted focus to more stable locales, and that’s benefited markets such as Indianapolis; Cincinnati; Louisville, Ky.; Kansas City, Mo.; Columbus, Ohio, and Nashville, Tenn.”

And here’s more from Tyler Hague of Colliers International when describing the allure of the Midwest:

“Great yields, less competition, and steady rent and income growth. Investors can realize 75-150 basis point premiums in the greater Midwest for a similar product on the coasts…The demographic and market fundamentals are sound in almost every large secondary market in the Midwest.”

While some may be quick to dismiss the region as “flyover country,” savvy investors are eager to explore the returns available in the region. And the Midwest offers investors more than just cash flow, kind folks, and cornfields. The region delivers a unique blend of culture, affordability, and stability. Here are seven reasons you’ll love investing in the Midwest.


Seven Reasons You’ll Love Investing in the Midwest

1. Attractive Markets

When some people think of the Midwest, they may think of farmland, but there are major metros with thriving nightlife, culture, and universities to attract the ideal renter demographic. 11 Midwest MSAs have populations of more than 1 million people. Some of the world’s largest companies call the region home, like McDonald’s, Walgreens, Caterpillar, Procter & Gamble, General Motors, Eli Lilly, and many more.

The Cleveland Museum of Art is widely recognized as one of the best in the world. Minneapolis ranks 2nd in the nation for live art per capita after New York City. Detroit is reinventing itself as a burgeoning tech hub. Summertime Chicago is the best place on the planet! And as far as the farmland, it’s worth noting that California has more farms than Ohio.


2. Superior Yields

If cash flow is king then the Midwest serves as a bountiful palace. Cincinnati, Cleveland, and Detroit are perennial stables on the list of top multifamily markets for yield. This means that you will see a higher return when investing in a similar quality of properties compared to other markets. Even through COVID, the region performed well as investors prioritized cash flow over appreciation potential. According to CBRE, the following Midwest markets were among the best in the country for 2020: Indianapolis, Detroit, Columbus, Cleveland, Cincinnati, Kansas City, Louisville, and St. Louis.


3. Less Competition

Investing is about finding opportunities and creating value. There are excellent markets across the country that are seeing population growth, job growth, and have a diverse economy. The only drawback is every other multifamily investor is seeing the same data, causing enormous competition and driving up acquisition prices. This is great for sellers, but not so good for buyers.

Some markets are seeing return expectations reduced to the 4% range for B-class properties. Instead of accepting this lower return, explore better returns in other cities with less competition. The Midwest offers some great alternatives with Columbus and Indianapolis being the most popular. Other options for higher returns with less competition are Louisville, Cincinnati, and Kansas City.


4. Affordable

Many value-add strategies rely on increasing rents, but there is a point where residents can no longer afford the hikes. Recently, there has been a fair amount of residents fleeing expensive cities such as New York and San Francisco in search of more affordability. This is where the Midwest shines, boasting 7 of the top 10 most affordable states. These markets are positioned well for potential inflation with room to absorb increased rents. For comparison, check out the chart below with the average rents for select Midwest markets and key destinations in the Southeast according to RentCafe.


City Avg Rent Avg Sq Ft Rent Per Sq Ft
Indianapolis $947 880 $1.08
Cincinnati $1,022 869 $1.18
Louisville $1,009 936 $1.08
Chicago $1,862 748 $2.49
Dallas $1,263 848 $1.49
Atlanta $1,527 975 $1.57
Orlando $1,432 963 $1.49
Charlotte $1,301 941 $1.38



5. Less Volatility

There is a perception that properties in the Midwest do not appreciate in value. This simply isn’t true, although other regions certainly experience greater appreciation. While the area may not shoot up to the moon, it also won’t plummet to the Earth’s core. The Midwest is stable. Part of the reason is people in the Midwest genuinely like the area and choose to live here. This provides a strong baseline for demand with less volatility than coastal markets, even if they don’t grow quite as fast.


6. More Space

Space has quickly moved from a luxury to a necessity for many renters across the country. In fact, 73% of renters say larger living spaces are highly important to them, according to a 2021 Multifamily Housing Study. However, affordability and connectivity are also important so they’re seeking places that offer the trifecta. Midwest markets serve as a great blend of space, affordability, and connectivity to meet these demands.


7. Community

There are good, hard-working people in the Midwest. Many grew up on a set of values that prioritizes family, faith, and community. I’ve traveled throughout the country and lived all over the Midwest and the people I’ve met here have been caring, creative, and charismatic. They like people who care about the community and welcome the chance to convert strangers into friends. You don’t have to live here to invest like a local and take advantage of all the area has to offer.

The Midwest may not be the sexiest region but there are a lot of great reasons to love investing here. Consider diversifying your multifamily portfolio with a few Midwest markets and experience firsthand what the rest of us love about the region.

John Casmon has helped families invest passively in over $90 million worth of apartments. He is also the host of the #1 rated multifamily podcast, Target Market Insights: Multifamily + Marketing. Prior to multifamily, John was a marketing executive overseeing campaigns for Buick, Nike, Coors Light, and Mtn Dew:

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9 Strategies of the Top Commercial Real Estate Investors in the Nation for 2021

Each year, CBRE releases an annual “Americas Investor Intentions Survey.” CBRE asks real estate fund managers, developers/owners/operators, REIT managers, investment managers, insurance managers, pension fund managers, and high net worth individuals about their investment strategies for the coming year.

By reviewing the survey results, you can learn about the investment strategies of the top commercial real estate investors with billions of dollars of assets under management. As an active operator, you can implement some of the strategies into your investment approach. As a passive investor, you can determine if the operators you invest with are implementing the most up-to-date best practices.

Click here to download the full results from their 2021 survey.

Here are my top 9 takeaways from 2021’s survey results.


1. 2021 will be a seller’s market.

70% of survey respondents plan to purchase at least 20% more real estate, while only 30% of survey respondents plan to sell at least 20% more real estate. Because of the expected imbalance of supply and demand, expect more competition and higher pricing when buying commercial real estate.


2. Investors are seeking higher returns on riskier asset classes.

Survey respondents expect returns at least 200bps higher for value-add (~5% of respondents), opportunistic (~10% of respondents), and distressed (~30% of respondents) mostly due to the intense competition for good-quality assets and uncertainty related to the length and impact of the pandemic.


3. More investors than ever will pursue riskier investments.

The percentage of investors seeking opportunistic and distressed assets increased from 16% (16% opportunistic and 0% distressed) in 2020 to a record-high of 29% (19% opportunistic and 10% distressed) in 2021. Another 29% will seek value-add assets.


4. More investors than ever will seek hotels/resorts assets (but at a discount).

A record-high 11% of survey respondents will target hotels/resorts in 2021 because of the expectation of distressed sales of assets that are closed, priced undervalue, or delinquent on their mortgage. 55% expect a large discount (30%+), 41% expect a mid-discount (10% to 30%), and 4% expect a small discount of less than 10%.


5. Investors are seeking alternative real estate investments.

50% of respondents plan to invest in real estate debt, 30% plan to invest in life sciences/medical offices, 30% plan to invest in single-family rentals, 25% plan to invest in data centers, 25% plan to invest in cold storage, and 20% plan to invest in student housing.


6. Investors favor the Sun Belt markets.

The top eight markets respondents will target in 2021 are all in the Sun Belt. They are (from 1st to 8th) Austin, DFW, Greater Los Angeles, Phoenix, Denver, Atlanta, Miami/South Florida, and the San Francisco Bay area. Seattle and New York City (tied for 9th), and Charlotte, NC rounded out the top 10 markets.

(Here’s more on the best markets for multifamily in 2021.)


7. The biggest investing institutions are transitioning from gateway markets to secondary markets.

In 2020, the top markets that firms with more than $50 billion in assets under management invested in were Greater Los Angeles, San Francisco Bay area, Boston, Seattle, and Greater New York City – all gateway markets, except Seattle. In 2021, the top markets they plan to target are all secondary markets – Austin, DFW, Denver, Atlanta, and Phoenix.


8. Investors don’t expect office demand to bounce back for at least three years.

52% of respondents expect demand for office to decrease slightly (up to 10%) in the next three years while 27% expect demand to decrease significantly (10% to 30%). Only 2% expect demand to increase slightly while 0% expected demand to increase significantly.


9. Operational strategies focus on long-term trends and credit quality.

When asked about their top operational strategies during the COVID era, 60% of respondents have a stronger focus on long-term demographic and technological trends, and 50% are placing a greater emphasis on tenant credit and rent roll growth. Interestingly, only ~10% have reduced their CapEx budget and ~10% are focused on economic relief measures to retain tenants.


What do commercial real estate investors expect in 2021?

Expect 2021 to be a sellers’ market, as there are more investors who plan on buying more than there are investors who plan on selling more.

Investors will pursue riskier investment types (distressed, opportunistic, and value-add) with the expectation of higher returns.

More investors will seek hotels/resorts at significant discounts.

Investors will also seek more alternative investments, like debt, medical space, SFR rentals, data centers, cold storage, and student housing.

The Sun Belt markets (essentially the southern third of the US) will be the most in-demand.

The nation’s largest commercial real estate investment firms are transitioning from nearly all gateway markets to all secondary markets.

Investors do not expect demand for office space to return to pre-pandemic levels for at least three years.

The top operational strategies in a COVID-19 world are long-term demographic and technology trends, as well as tenant credit and rent roll growth.

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45 Quarterly Multifamily Market Reports from Marcus and Millichap

Each quarter, the commercial real estate investment brokerage Marcus and Millichap release their analysis of every major metro in the US.

Reviewing national commercial real estate reports is beneficial. For example, Marcus and Millichap also release annual multifamily forecast reports for the upcoming year (here is their forecast for 2021). However, I believe there is more power in reviewing market-specific commercial real estate reports. The national state of the commercial real estate market is, in a sense, an average of all markets. Some markets outperform the national averages. Others underperform. The only way to know which category a market sits in is to analyze that particular market. Marcus and Millichap’s quarterly market reports expedite this process since you can review their research as opposed to pulling the data yourself.

This blog is a one-stop shop for Marcus and Millichap’s quarterly multifamily market reports.

Click on your market below to download the 2021 Q1 report for your market:

  1. Atlanta, GA
  2. Austin, TX
  3. Baltimore, MD
  4. Boston, MA
  5. Charlotte, NC
  6. Chicago, IL
  7. Cincinnati, OH
  8. Cleveland, OH
  9. Columbus, OH
  10. Dallas-Fort Worth, TX
  11. Denver, CO
  12. Detroit, MI
  13. Fort Lauderdale, FL
  14. Houston, TX
  15. Indianapolis, IN
  16. Jacksonville, FL
  17. Kansas City, MO
  18. Las Vegas, NV
  19. Los Angeles, CA
  20. Louisville, KY
  21. Miami-Dade, FL
  22. Minneapolis-St. Paul, MN
  23. Nashville, TN
  24. New Haven-Fairfield County, CT
  25. New York City, NY
  26. Oakland, CA
  27. Orange County, CA
  28. Orlando, FL
  29. Philadelphia, PA
  30. Phoenix, AZ
  31. Pittsburgh, PA
  32. Portland, OR
  33. Raleigh, NC
  34. Riverside-San Bernardino, CA
  35. Sacramento, CA
  36. Salt Lake City, UT
  37. San Antonio, TX
  38. San Diego, CA
  39. San Francisco, CA
  40. San Jose, CA
  41. Seattle-Tacoma, WA
  42. Louis, MO
  43. Tampa-St. Petersburg, FL
  44. Washington, DC
  45. West Palm Beach, FL

Bookmark this page and return each quarter for the most up-to-date multifamily reports from Marcus and Millichap.


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How to Scale Raising Capital For Your Syndication Business Using The Deferred Sales Trust™ (DST)      

A Deferred Sales Trust offers a unique way to unlock capital from accredited investors who are selling highly appreciated assets of any kind. Armed with this information and insight you can position your business as a solution for your current investors and attract future investors like never before.


Why use the Deferred Sales Trust™ (DST)?

A Deferred Sales Trust marketing campaign unlocks many different ways to raise capital.

Examples of this include:

  • The sale of a primary residence.
  • The sales of active investment real estate (this includes saving failed 1031 exchanges).
  • The sale of a business.
  • The sale of cryptocurrency or stock (public or private).
  • The sale of artwork, collectibles, rare automobiles.
  • The sales of carried interest.
  • The sale of GP or LP positions in your existing syndications.
  • The sale of any kind of asset which is subject to U.S. capital gains tax.


What is a Deferred Sales Trust?

The Deferred Sales Trust has a long track record of success and has withstood scrutiny from both the IRS and FINRA since 1996. Since it is a tax strategy based on IRC §453, it allows the deferment of capital gains realization on assets sold using the installment method prescribed in IRC §453.

In simple words, if you sell an asset for $10 million using an installment sale contract, and finance the sale, you as the seller may not have received full constructive receipt of the cash. You have become the lender. You do not pay tax on what you have not received if you follow IRC §453 since it allows you to pay tax as you receive payments. The buyer you lent money to will typically pay an agreed-upon amount of down payment to you upfront (you would pay tax on this) and then pay the rest of the purchase price to you plus interest in installments over a specific term of time. The deferral takes place as you wait to receive payment, which is typically 3-5 years.

According to the Oklahoma Bar Association, IRC §453 was designed to “eliminate the hardship of immediately paying the tax due on a transaction since the sale did not produce immediate cash. Furthermore, if the purchaser defaulted on the installment note, the seller may have paid tax on money he never actually received.”


How a Deferred Sales Trust can help you scale your syndication business.

The reason why a Deferred Sales Trust marketing campaign allows you to scale your syndication business is that it rapidly increases the money-raising process. Without a Deferred Sales Trust, you need to manually raise capital from family, friends, and others in your circle of influence, one person at a time after they sell their highly appreciated asset and after they have paid the capital gains tax which can be 30-50% of their gain. When the pain of paying the tax outweighs selling and investing with you, many elect not to sell and therefore not invest those funds with you. To raise the capital you need to solve the problem your investor is facing.

Capital Gains Tax Solutions Case Study 1: Saving a failed 1031 exchange. Dave’s story.

Steps to Dave using the Deferred Sales Trust:

  1. Sold 128 unit apartment complex for $7.6M.
  2. Funds sent to 1031 Qualified Intermediary.
  3. 1031 failed and funds sent to Deferred Sales Trust (DST) Bank Account including deferral of $1.1M of capital gains tax.
  4. Some of the funds sent to an apartment syndication fund and to an individual apartment syndication deal.


Have you done a survey of your existing investors to ask them where their capital is? Here are two questions to ask your existing investors right now:

1) Do you have highly appreciated assets of any kind you would like to sell, defer the tax, and invest the funds into real estate all tax-deferred?

2) What would converting your highly appreciated asset, which may not be producing cash flow of any kind, to cash flow from passive real estate mean to you?

I believe you are more likely to stay top of mind and unlock capital when you can help your investors by providing valuable solutions to their capital gains tax.


Capital Gains Tax Solutions Case Study 2: Selling a business and building 70+ multifamily units in Tennessee. Shea’s story.

Steps to Shea Using The Deferred Sales Trust:

  1. Shea sold his marketing business for $2.6M. (It did not qualify for a 1031 exchange)
  2. Funds sent to Deferred Sales Trust (DST) Bank Account including an extra $600,000 of capital gains tax-deferred.
  3. Some of the funds invested into active new contraction of 70 units in Tennessee which he is building with his partner.


About the Author:

Brett Swarts is considered one of the most well-rounded Capital Gains Tax Deferral experts and informative speakers in the nation. His audiences are challenged to create and develop a tax-deferred transformational exit wealth plan using The Deferred Sales Trust™ (“DST”)  so they can create and preserve more wealth. Brett is the Founder of Capital Gains Tax Solutions and host of the Capital Gains Tax Solutions podcast. Each year, he equips hundreds of high net worth business professionals with the DST tool to help their high net worth clients solve capital gains tax deferral limitations.

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Key Investment Tips for Real Estate During Inflation

Investors have a lot to consider when they weigh the pros and cons of their investment choices – and that includes real estate assets.

Real estate investing has a reputation for being an asset that steadily increases in value over time. In fact, historically, real estate has indeed reliably risen in value year over year, with a few exceptions, including the housing market collapse that began in 2006. That makes investing in real estate a reliable investment choice for many long-term investors.

Here, we’ll review the key points you should know about the definition of inflation, what causes inflation and how real estate investments tend to perform during inflation. Along with gaining an understanding of the basics of inflation, you’ll find strategies for helping you hedge your portfolio against the pitfalls of inflation trends. With the right information, long-term investors can think more strategically about how to achieve their financial goals.

Understanding What Inflation Is

You may have heard the term “inflation” in the news in connection with stories about the economy, and you might have guessed that when prices are inflating, they’re growing, just as a balloon grows when it inflates.

To be more specific, inflation is the rate at which prices of goods and services in an economy, such as the U.S. economy, rise in a specific time period. For investors, inflation comes with many different advantages and disadvantages.

Is Inflation Good or Bad?

Inflation is neither good nor bad. Instead, whether inflation is beneficial depends on your personal financial situation.

Primarily, we think of higher inflation leading to the unfortunate situation in which your money buys you less – it has less purchasing power. So, if you’re in the market for buying, higher inflation would be considered a negative for you because wouldn’t be able to buy as much due to inflationary higher prices.

In other words, if you hold a lot of cash during inflation, then inflation would be working against you because the value of your money would decline.

On the flip side, if you are holding a lot of goods that are increasing in price, then you can see where inflation would be a positive.

That’s because you could sell those goods for more money, so the value of your holdings would increase.

What Causes Inflation?

A number of factors can cause inflation. Basic economic principles can explain many price increases. First, inflation can occur when demand for a product or service rises, assuming the supply stays the same.

Second, if the demand remains the same, but the supply shrinks, then prices rise. Prices can also rise for the consumer when the cost to make the product or provide the service increases.

As an example of how supply and demand can affect prices, consider how much you pay for gas.

You’ve probably noticed that price changes regularly. That’s mainly based on how much supply is available at that particular time, which is determined by how much producers release, as well as how often drivers are driving and using gas.

For instance, if people are not driving as much and the supply is higher, you’ll see much lower gas prices at the pump, whereas when producers hold back on releasing their oil and gas products, you’re likely to see higher gas prices.

Another factor that can drive inflation is when a central bank intervenes to adjust interest rates. Government regulation can lower interest rates, which might cause more inflation, or increase interest rates, which can basically pump the brakes on inflation.

Finally, the government can also play a role in causing inflation simply by printing more money. With more money in the system, the value of the current money declines, which leads to lower purchasing power – that’s exactly what inflation is.

How Inflation is Measured

One common way inflation is measured in the U.S. is through the Bureau of Labor Statistic’s (BLS) Consumer Price Index (CPI). It tracks changes in the price of different categories of goods and services, like food, clothing, cars, commodities, and gas, among many others.

Another measure of inflation is the Wholesale Price Index (WPI). This kind of index measures how prices from wholesalers or manufacturers change, instead of how prices for the consumer change as the CPI measures.

What You Need to Know About Investing During Inflation

Inflation trends have a number of consequences for investors, depending on what kind of assets they have and what kind of decisions they plan to make for buying and selling assets.

First, let’s consider real estate. Most intelligent investors and savvy advisors will recommend holding real estate, in part for how such investments can benefit an investor during an inflationary period as an asset that consistently retains and increases its value. Housing prices over the last 100+ years have tracked, if not exceeded inflation. As the value of your property rises due to this inflationary effect, together with general rising prices over time, the overall value of your real property asset increases two-fold.

In this inflationary scenario, the cost of goods goes up, wages follow, and so does rent. If you’re a property owner, you can increase your rents to meet inflation. Furthermore, consider that if you took out a fixed loan on the property, your payments will remain the same for the duration of the loan, but your property value will likely appreciate with inflation. Stop and think about that for a second. You’re paying the same amount, which dollar value is actually less, for a more valuable piece of property.

In contrast, some stocks can be very volatile during inflation as the market adjusts according to consumer behavior. How a stock performs generally depends on how each particular company is impacted by inflation. Hence, the stock market roller coaster.

The Bottom Line

Intelligent, informed investors often invest in real estate as a way to diversify theirportfolio and hedge against inflation so that they can better ride the ups and downs of inflation trends. However, keep in mind that no investment strategy is a guarantee.

Author Seth Bradley from

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Which Strategy Is Best Right Now: Cashflow Or Gains?

You’ve come a long way, but now the path splits and you don’t know which route to take. To the right, you’ve got consistent cashflow.  To the left, there’s appreciation on the property and opportunity for massive gains. How do you know which strategy is best, not just for you but based on today’s economic climate and market cycles?

You’re all clear on the risk, rates of return, and how real estate syndications work but, the election, stock market volatility, high-priced real estate in your area, and murmurs from the real estate investing crowd have you hesitant.

Whether you’re new or seasoned in real estate investing, it’s worth taking a step back and re-evaluating your strategy sometimes. New babies are born, kids move off to college, you might change careers – life happens!

The only constant in life is change, so the important thing is that you know what the main two strategies are and why each is important. From there, you can make an informed decision no matter how complicated your family life, the economy, or market conditions become! 

The Two Most Common Investing Strategies

Most real estate syndication investors are after one of two things, either cashflow or gains. Both are essential pieces of the puzzle, and you’ve got to know about each one and the role it plays toward your investing goals to strategize appropriately. 

A gains-focused investor is focused primarily on buying low and selling high, creating gain (or profit) between the purchase price and sale price. Foreclosures and fix-and-flips are often aligned with this strategy because you’d buy undervalued property at a discount, do some light renovations, and sell at a much higher market price. 

On the other hand, a cashflow-focused investor would buy and hold a property with the expectation of consistent rental income. There might be some natural appreciation in the deal, but the most attractive quality is the predictable returns. 

The Gains Investment Strategy

The main requirement to effectively executing a solid gains strategy is your knowledge of the asset’s actual value and the market cycle. 

In real estate, there’s a saying – “You make your money when you buy, not when you sell.” 

You have to know (not guess) what the true value of the asset is AND where the market is headed. You can’t rely on what you think the price should be, you can’t rely on appreciation, and you definitely can’t bank on renovations to magically make the property profitable. 

In other words, you must buy at a discount so that you can sell for a profit

On top of that, a practical gains investing strategy requires you to have a separate income. Assuming the property isn’t providing you any cashflow, you still have your own bills, transportation, and food to pay for, including mortgage, management, and possibly renovations on the investment property. 

A narrow focus on investing for gains comes with an inherent business risk since you have to cashflow everything until the dotted line is signed and funding goes through. You must be prepared to hold and sustain the asset through market dips, without any returns from the investment, until you can sell for your desired gains.

The Cashflow Investment Strategy 

Pursuing the cashflow strategy is about reliable distributions over the long-term. It’s not about timing the market, buying low, or creating a big spread. In an ideal cashflow investment, there’s enough distributed each month to cover property costs like the mortgage and insurance, plus renovations or repairs needed, and still have some profit left. 

On cash-flowing properties, you always have to assess the longevity of the yield. Meaning, how sustainable is the profit each month? If you’ve got $100 after the mortgage and insurance are paid, fabulous, and yes, the property is cash-flowing. 

But what happens when you have to pay $500 for plumbing repairs? That means for five months, you have $0 in profit. So you have to decide if the profit each month is sustainable for the long-haul and if the investment property will still be profitable if you have a repair or two. 

Focusing solely on cashflow investment properties can leave you blind to the long-term wealth-building potential of appreciation, especially if the cashflow is funding your lifestyle instead of being reinvested. 

Why Not Both?

Here’s the thing, the answer to the strategy question isn’t binary. In fact, it’s a great strategy to invest in both! You can have a steady passive income from the cashflow and enjoy the long-term wealth-building power of appreciation by pursuing real estate investment opportunities with both features at the same time. 


  1. Corner yourself into cashflow properties that have little to no long-term expected appreciation
  2. Hamper your cashflow by investing in properties that are only focused on gains 

We believe the best way to build wealth is to invest in real estate syndications with predictable cashflow and appreciation built into each deal. Instead of hitting a home run in one strategy or the other, you have a balanced approach to building wealth and creating an income. 

How to Decide Which Strategy is Best for You

Your personal situation and your investing goals will determine which investment strategy you’ll choose. If you don’t need cashflow right now and are focused on building your retirement account only, then the gains strategy might be your jam. 

On the other hand, if some monthly distributions would change your life, then the cashflow strategy could be your golden ticket. 

Before you pick a particular strategy, take a step back and visualize what changes, events, and people might be in your life five years from now. Ask yourself about any significant shifts that might occur within the next five years, like graduations, weddings, daycare, public schools, new cars, moves, additional education, or career changes. 

Then, explore how investing in real estate syndications might help support that vision. When you have a clear destination in mind, it will be much easier to determine which investment strategy might support those goals. Only then will you know to invest for gains, for cashflow, or both. 

Author: Whitney Elkins-Hutten, Goodegg Investments

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How to Invest in Real Estate with a Self-Directed IRA

Self-Directed IRAs are great ways to buy real estate by tapping into your retirement nest egg. If you have a 401(k) you will have to roll that investment vehicle to a Self-Directed IRA before you can use those funds to purchase real estate. Below is a thumbnail sketch of this Investment Strategy. I encourage anyone interested in this approach to talk with your financial advisor, CPA, and attorney.

With a Self-Directed IRA you can purchase single-family, multifamily, apartments, commercial properties, raw land, and other types of real property. While not as easy as buying shares of a mutual fund on your retirement brokerage’s platform, it is easy enough if you know the rules and can navigate those properly.

It Must Be A Self-Directed IRA

Before you can do anything, you must first have a Self-Directed IRA. Alternative forms of investments are allowed under this type of investment vehicle. (Alternative forms of investment for purposes of this blog post means real estate.) A self-directed IRA is independent of a brokerage, e.g. Schwab or Fidelity, etc., so the restrictions that generally preclude investing in real estate are not hindering you from now investing in that apartment building you have had your eye on.

In order to buy real estate you must have a custodian, which is an entity that specializes in self-directed accounts that will manage the transaction, paperwork, and financial reporting compliance. The custodian is your gate-keeper and protector to keep you between the lines and away from any rule violations. These custodians charge a fee for their administrative service.

Of note about this type of property purchase is that you don’t actually own the real estate- your Self-Directed IRA does. Real estate purchased through a Self-Directed IRA will be titled “ABC Trust Company Custodian FBO Jane Doe IRA.”  Thus, the property is not titled in your name, but in the name of your IRA since it is an asset of your new Self-Directed IRA.

Qualified vs. Disqualified

Critically important to know about the property is that it cannot be your vacation home. It MUST be held purely for investment. This is true even for your family who are considered by the IRS as “disqualified persons.” The following is a list of those “disqualified persons.”

  • Your Husband or Wife
  • Parents, Grandparents, and great-grandparents
  • Children and spouses, grandchildren, great-grandchildren
  • Any service vendor to your IRA
  • Any entity that owns more than 50% of the property

Additionally, you CANNOT buy from these people either. They are “disqualified” in every sense of the word for this investment vehicle. Should you buy from one of these individuals, you will get flagged for self-dealing. Violating this cardinal rule of Self-Directed IRA ownership could subject your entire Self-Directed IRA funds to immediate taxation.

Buying The Property

It is important to know that Self-Directed IRAs have a difficult time obtaining mortgages. So, most investments will be cash purchases or investments. Make sure to factor this into your rate of return when analyzing a deal.  Leveraging deals gets tricky and oftentimes not possible thereby impacting your return on investment.

If you can find a bank to finance a deal for you, it is important you speak to your CPA about §511 of the Tax Code. This particular section of the code is related to unrelated business taxable income (UBTI). The revenue from this property could fall into the purview of this code section.

No Deductions

A Self-Directed IRA is not taxed. If the entity is not taxed, it logically follows that the entity cannot take deductions. One of the lures to owning real estate, in my opinion, are the tax benefits of ownership. This tax benefit is all but eliminated by the use of the Self-Directed IRA. In short, there is no depreciation, no interest deduction, no property tax deduction, no maintenance deductions, etc.

The bright side to this ugly truth is that you don’t have to pay for the associated costs of ownership. Your IRA will pay for all of those costs. But, what happens if the IRA doesn’t have enough funds to cover those costs? Unfortunately, you cannot pay for those out of pocket. Instead, you have to contribute to the IRA and if you have exceeded your contribution amount for the year, you will have to incur the penalties associated with that contribution.

Selling The Property

All sales of the property are conducted through the custodian. Any funds received will go back into your IRA tax-deferred or tax-free, depending on your IRA’s constitution. As with most property sales, it is never fast. Bear that in mind as you consider this type of ownership.

There are benefits and drawbacks to this type of ownership. It is not for everyone. In fact, there are some people who have completely liquidated their 401(k)s and other investment vehicles to take the penalties and taxes so they are free to use the remaining funds more freely. You will need to read more about Self-Directed IRAs to understand the details more fully. Also, speak with your investment advisor, CPA, and Lawyer.

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