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.

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

Follow Me:  

Share this:  

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

Follow Me:  

Share this:  
elf-directed IRA papers on desk

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.

Follow Me:  

Share this:  

How to Manage Your Apartment Property Manager

As the asset manager of an apartment investment, one of your main responsibilities is to oversee the property management company.

Here is a blog post where we outline all the GP’s duties after the acquisition.

This blog post will address five frequently asked questions about interacting with and managing the property management company after you’ve acquired a deal and assumed your position as the asset manager.

For all of the FAQs, your property management company may or may not be onboard (for example, they may not send you every report that you ask for), which means you must set expectations with them BEFORE finding a deal. You need to ask the right questions based on the FAQs below when conducting property management interviews.

1 – How often do I interact with the property management company?

You should have monthly performance calls with your property management company at minimum. During the stabilization period (i.e., when you are performing renovations), the calls should be on a weekly basis. Once the asset is stabilized, you can continue the weekly calls, change to monthly calls, or have calls on an as-needed basis.

The weekly performance calls should include you and the onsite manager at a minimum, and ideally the regional manager as well.

During the calls, you will review property reports and key metrics (more on these two things below).

2 – What reports should I expect from my property management company?

You will get what you ask for. If you ask for nothing, you will likely receive nothing or just the bare minimum.

The reports you want to receive on a weekly basis are:

  • Box score: summary of leasing activity, including the number of move-ins and move-outs and unit occupancy status (vacant-leased, vacant-not leased, vacant-ready, notice-leased, notice-not leased, model, down, other use)
  • Occupancy: physical occupancy (percentage of total units occupied) and economic occupancy (rate of paying tenants)
  • Occupancy forecast: the projected occupancy based on future occupancy status (i.e., units that are occupied, units with expiring leases that are leased, and vacant units that are leased)
  • Delinquency report: list of resident delinquent (i.e., past due) amounts
  • Leasing reports: summary of leasing activity (traffic information, leasing information, concession information, marketing information, projection information)
  • Accounts payable: summary of money owed to vendors (including to the management company)
  • Cash on hand: the asset’s liquidity

The reports you want to receive on a monthly basis in addition to the weekly reports above are:

  • Income and expense statements: detailed monthly report with all income and expense line items, as well as the dollar and percent variance compare to the budget
  • Deposits: summary of security deposit information (balance, forfeits, returned checks, refunded)
  • General ledger: summary of all financial transactions
  • Balance sheet: summary of assets, liabilities, and capital
  • Trial balance: summary of all debits and credits
  • Rent roll: summary of all unit information (occupancy status, market rent, current rent, move in, lease start and end, other fees, deposit)
  • Expiration reports: summary of expiring leases
  • Maintenance reports: summary of maintenance issues and costs

Again, make sure you set reporting expectations with your management company BEFORE you have a deal.

3 – How do I obtain these reports?

The simplest way to obtain these reports to is to ask your management company to create custom reports using their management software and have them sent to your email on a weekly/monthly basis.

Another option is to ask for access to their management software so that you can have real-time access to these reports.

If your management company doesn’t use a software or if you don’t like the look of their reports, you can create your own custom spreadsheet and ask your management company to update it on a weekly/monthly basis. Click here to download a free Weekly Performance Review tracker.

4 – What metrics should I focus on the most?

The most important metric to track is the cash flow relative to the projections you presented to your investors. Track the forecasted vs. actuals on the income and expense report, focus on the line items with the greatest variance, and create a strategy to bring those line items back on track during your weekly performance calls.

For the value-add business plan, the number of units renovated relative to your forecasted timeline and the rental premiums demanded are important during the first 12 to 24 months because both will have a large impact on your cash flow.

Additionally, certain metrics, like leasing metrics, capital expenditure costs, and total income, may vary from your projections during the value-add portion of your business plan. For example, the total income may be lower than forecasted after owning the asset for 3 months due to a higher number of move-outs than anticipated. Or, you spent a larger percentage of your capital expenditure budget in the first three months because you are ahead of schedule. So, the key metric during the value-add portion of the business plan is the forecasted vs. actual rent premiums for renovated units.

Other metrics to track that may be the cause of a high income and/or expense variance are the turnover rate, economic occupancy, average days to lease, revenue growth, traffic, evictions, leasing ratio and other metrics from the reports outlined above.

Again, the best strategy is to track the variance on the income and expense reports, strategize with your management company to identify the cause by reviewing the other reports and come up with a solution if needed.

5 – What other things do the best asset managers do?

First, look at your property management company as a partner and screen them accordingly. Are they someone you want to work with for a long-time? Does their track record speak for itself? What are the tenants saying about them? How professional are they when speaking with a potential tenant (you can role play as a potential tenant to find out)? Are they willing to change if needed? Do the employees like working at the company? Are they engaged on social media?

Next, the best asset managers always look ahead. You should evaluate the market, evaluate the competition to compare your property to, track and maximize income growth and expense decline, and ensure tenant satisfaction by checking reviews, social media, and hosting community events.

Also, even though the property management company is your partner, you should watch them like a hawk. Most people focus on the front-end activities, like finding deals, sourcing capital, whether they need to form an LLC, etc. Fewer people focus on the back-end activities, like asset management, which take years and decades to do. So much of the asset’s success and your company’s ability to scale is dependent on your property staff and property management company, so you have to watch them like your career depends on it, because it does. If things don’t work out, don’t be afraid to part ways.

Lastly, visit the property at least once a month in-person. If you invest out-of-state, a great strategy is to ask someone local to mount a GoPro on their vehicle and drive the property on your behalf.

How to Manage Your Apartment Property Manager

Set up frequent phone calls with your property management company, starting with weekly calls.

Request the proper weekly and monthly reports to see how well or poorly the property management company is implementing your business plan. Track the most relevant KPIs, like cash flow variance, number of units renovated, rent premiums, etc.

Properly screen the property management company upfront and continuously evaluate their performance.

Visit the property in person to make sure the reports match reality.


Follow Me:  

Share this:  

How to Provide Best-In-Class Customer Service to Your Multifamily Residents

Multifamily investing offers the opportunity to profit tremendously when you sell your property, and a well-managed property will also throw off regular income throughout your ownership period. As a commercial real estate investor, you have devoted a tremendous amount of time, energy and money into the purchase of a great property. You want to do what it takes to optimize your return on investment, but successful commercial real estate investing involves more than buying and maintaining properties. Your tenants are the lifeblood of your investment, and they should receive just as much care and attention as property upkeep and number crunching.

Get to Know Your Tenants as People

While your multifamily property is a financial investment to you, it is the place that your tenants call home. Each of your tenants has unique factors to consider related to their lifestyle, finances, interests and goals, and these are often entwined with their living experience in vital ways. When you get to know your tenants as people rather than as names on a lease, you can offer them a higher level of customer service. In the process, you may decrease turnover and improve online reviews. These factors directly feed into a healthy bottom line. How can you serve your property’s residents as customers rather than solely as tenants?

Be More Than a Rent Collector

Your property’s residents will be more likely to renew a lease and to recommend your property to their friends and family members when they feel valued and respected. In many cases, the relationship between a tenant and a landlord is purely financial, and it is entirely dictated by the terms of the lease. You must abide by the terms of the lease, and you must ensure that rents are collected in a timely manner. However, your relationship with your residents should extend beyond the monthly rent collection process. For example, you can send tenants birthday cards or call to check on their unit’s condition periodically. Small gestures like these can go a long way toward developing a positive relationship with your tenants.

Be Proactive

The top brands today stay on top of their customers’ needs, and they anticipate behavior when possible. Your multifamily property is a business, and your tenants are your customers. With this in mind, you need to nurture relationships and proactively anticipate your customers’ needs. For example, reach out to your tenants a few months before their lease expires to give them renewal options. Implement a loyalty program that rewards renewals, transfers and referrals. A high turnover rate at your multifamily property can dramatically erode profits, so creating a reward system that encourages renewals can be cost-effective for your business. At the same time, the benefits of the reward system likely will be appreciated by your customers.

Support Your Residents’ Goals

While some residents may move out of an apartment building that is poorly managed, others will vacate for reasons that are not related to property management at all. For example, they may need a larger space or may be ready to purchase a home. When your tenants decide to vacate, avoid creating stressful and unnecessary roadblocks. Consider collecting moving boxes and other materials from new tenants and offering these to tenants who are vacating as part of your service. Offer to do a walk-through before the tenants vacate so that they can recoup as much of their deposit as possible. You should support your tenants just as much when they are vacating as you did when they were moving in.

Approach Rent Increases Transparently

For the majority of your tenants, their monthly rental payment may be their largest expense. An unexpected increase can create immediate stress and anxiety, and this may be followed by a kneejerk reaction to look for a new and more affordable place to live. From your perspective, maintaining rents at market rates is essential in order to optimize profitability. How can you maintain market rents while also retaining happy tenants? Create a small report for your tenants that shows current market rents in the area. This report should substantiate the rental increase at the time of renewal. If you launch a rewards program for loyal residents, consider outlining any savings that they may enjoy by renewing their lease. This type of detailed and customized report could actually help your tenants to feel positive about renewing their lease at a higher rate.

Be Readily Available

Tenants commonly reach out to their landlord or property manager because they have a complaint or a repair issue that requires prompt attention. In many cases, tenants are provided a single phone number to call for assistance, and landlords may let those calls go to voicemail to screen them for urgency. To tenants, the inability to quickly and easily reach you when they need assistance with their home can be stressful. More than that, it could create the impression that your tenants are a bother to you. To counter this, offer multiple communication channels. In addition to a phone number for verbal communication, offer text communication, an email and a website. Make a point to always answer the phone when a tenant calls and to respond to all other methods of communication promptly.

Cross-Sell with Your Other Properties

Do you own more than one multifamily property? The apartment that a tenant lives in today may no longer meet their needs, but one of your other properties could be a better fit. If you have provided excellent customer service to the tenant throughout his or her residency period, the tenant may be happy to consider relocating to one of your other properties as long as the property meets their current needs. Likewise, consider extending the rewards for your referral program to all of your properties. These practices will help you to maintain higher occupancy rates overall, and the increased options can bolster customer satisfaction.

Ask for Reviews

Your existing tenants will directly impact your bottom line from multifamily investing long after they move out. This is because potential tenants often read online reviews from past tenants to learn about important factors like property management responsiveness, rent increases, property maintenance and more. Because unhappy tenants may be more likely to post reviews than tenants who have loved living in your property, soliciting feedback from satisfied tenants is essential. Consider asking tenants to leave reviews at different stages in their experience. For example, you may ask for feedback about the move-in process after they get settled. You may also ask tenants to leave comments when they renew a lease or after they move out. In addition, use feedback from negative reviews to make improvements.

As is the case with other types of businesses, you will not be able to please all of your tenants at all times. However, because success from multifamily investing is intricately linked to tenant satisfaction, it is essential that you develop a sound customer service policy that touches your tenants throughout their experience. Properly managing tenant relationships may require more time and energy than you initially anticipated. Consider hiring a reputable property management firm if you are challenged in this or other critical areas of commercial real estate investing.

Follow Me:  

Share this:  

Webinar Recap: Looking to Note Investing in the Global Health Crisis

The performance of real estate notes was a bellwether for the economy in the last recession, so in this Best Ever Webinar we explored the performance of 1st position and 2nd position notes, how the market has been affected by COVID, and what the data indicates about the real estate market at large.

As a servicer of tens of thousands of first position notes, Jorge Newbery pointed to the $4MM loans currently in forbearance, which are on the precipice of foreclosure after government intervention comes to an end.

The counterargument speared by Kathleen Kramer was that the $4MM homes don’t represent the volume of homes in trouble, but in part those taking advantage of the situation. She also pointed to all-time highs in homeowners equity relative to average debt amounts and record low interest rates that could allow troubled homeowners to be bailed out by refinances.

Jim Maffucio added that we see the unemployment rate dropping and average HHI of homeowners being significantly higher than the last recession where subprime mortgages were provided to low wage earners.

Regardless, all agreed that the amount of unpredictability in the future has returned to normal along with pricing for notes, suggesting that for the time being the market has an optimistic outlook on the future of residential real estate.

What the future holds for commercial notes is a larger question with retail and hotels going to double digit CMBS special servicing rates. Will there be opportunity to buy distressed office notes? Whispers of the opportunity are just beginning and it could be too early to see what the future holds.

Watch the on-demand playback of this webinar and past webinars on our conference platform NOW! Our networking has started for this year’s Best Ever Conference, don’t miss out! Use code WINNERS30 for 30% off your ticket here.

Follow Me:  

Share this:  

Planning for the End

All new relationships start with a bit of nerves, a lot of excitement and typically, big hopes for the future. Whether it is a new marriage, a new friendship or a new business partner.

For the Passive Investor, we are focusing on the business partner. As you are interviewing sponsors, often times the focus is on their business plan, track record and overall experience. But, how much time are you focused on the end, the exit, the divorce? Particularly in real estate investments, the exit is a primary driver of overall returns, whether it be core, value-add or a development deal.

Let’s take a look at an example:
A core asset is purchased for $160,000,000. This is a luxury asset in a very good, high income area with strong population growth. The purchase price is about $400,000/door. The sponsor is projecting a 6% average annualized cash on cash return, 15% IRR and 2.5-3x equity multiple over a 10 year hold. This sponsor offers a straight 80/20 profit split from day 1 with no preferred return.

These numbers allow us to get a rough estimate of what the terminal sale value must be to achieve these numbers. Saving you the boredom of my simple excel model, the sales price in year 10 would have to be $261 million dollars, or 61% more than the purchase price, accounting for a year 2 refinance. This equates to $652,000/door.

Is this sale price achievable?
As investors, we are all speculating as to where values are going. Whether the hold is 1 year or 10 years, if I invest today it is because I believe values are going to rise over that period. The point is to ask the question and confirm the sponsor has thought this through.

Of course, there are a multitude of factors that can affect the terminal value of the asset. Some simple questions that I ask sponsors when assessing the projected sales price:

  • Are there comps today that support that price in total dollars?
  • Are there comps today that support your terminal cap rate?
  • Are there comps today that support that price per door?
  • Who is the likely buyer?

Notice I focus on CURRENT comparable properties, as my crystal ball is realistically no better or worse than anyone else’s. If a sponsor is projecting to sell a deal for $100,000,000 at a 5.0% cap rate and $250,000 per door, I will want to see comps showing that the sale of the asset I am invested in is not going to be a record breaker in two out of three of those areas, and ideally all three. As for the last question, while no sponsor can speak to who the specific buyer of an asset will be in 5-10 years, the purpose is to better understand that a) the sponsor has thought about the reality of an exit, and b) better understand if buyers exist in the market at that price.

At the end of the day, each investment is a balancing act of risk. Asset classes, property types, business plans, sponsors, leverage, time horizon are all pieces of the equation that need to be addressed, and many of these are commonly asked in my dealings with investors. But at the end of the day, the only thing that matters to most people is WILL I MAKE MONEY? Understanding where that money is coming from and assessing the feasibility of those results is imperative to answering that question.

Check out other red flags to look for when vetting sponsors here.

About the author:
Evan is the Investor Relations Consultant for Ashcroft Capital and Active and Passive Real Estate Investor. As such, he spends his days working with investors to better understand their investment goals and background. With over 13 years in real estate, he has seen all sides of real estate from acquisitions, to capital raising on the equity and debt side, to operations, and actively invests himself. Please feel free to connect with Evan here.

Follow Me:  

Share this:  

Apartment Amenities and Coronavirus: 6 New Trends

Due to the onset of the coronavirus, the types of amenities and services in demand by residents of apartment communities have shifted. 

Whether this shift is permanent or temporary remains an uncertainty. It depends on how long the pandemic lasts and, maybe even more importantly, how long resident’s memories will be.

Nonetheless, it is helpful to know what residents are demanding. Armed with this information, you can adjust your current investments, as well as intelligently analyze prospective investments.

Here six amenities and services currently in demand by apartment residents as a result of COVID.

1. Virtual Everything

Residents still want to socialize with other residents. Therefore, social-distanced and virtual events are desired. Simple examples are virtual happy hours, virtual craft events and contests, and food truck events.

Another service that has become popular during COVID are virtual fitness classes. This can be as simple as providing residents with fitness videos on YouTube. You can also partner with a local fitness instructor. They can record videos for residents or do live fitness events over video, as well as be available to answer resident questions. 

At Class A apartment communities, consider an interesting service called TF Living, which is a technology-enabled amenities company providing wellness and lifestyle services to apartment communities across the US. 

Depending on the local COVID restrictions, you can offer outdoor fitness classes.

Something else that is currently in demand and will likely remain so even after the pandemic has subsided are virtual tours. Residents should be able to obtain enough information on the available units to rent sight unseen. Examples include video recordings of units, 3D walk throughs, and live video tours.

2. Outdoor Spaces

Residents who are stuck at home still want to experience the great outdoors. Therefore, access to outdoor spaces, both common and private, are desired.

Residents want access to the outdoors in their own private units, which means patios and balconies are in demand.

The demand for public outdoor amenities isn’t new. Pools, BBQ grilling areas, and pet parks remain in demand. 

An outdoor space more recently in demand are walking and biking paths, ideally ones that connect to existing local parks and paths.

3. Working Spaces

Remote working may be temporary. However, many employers will likely continue to allow their employees to work from home for the foreseeable future. Therefore, onsite public and private workspaces are in demand.

The type of workspace you can offer your residents is limited by the existing footprint of the community. However, here are a few unique tips on maximizing the current space:

  • Add seating in outdoor areas
  • Add seating and dividers in indoor areas
  • Tweak the furnishings in the model unit to include a workspace (ideally near a window)
  • Add console/desk combination under the living room table (like what you find in hotels) to select units for a premium
  • Offer In-unit fold down desks for rent

Arguably the most important shift is the quality of internet. In unit and shared Wi-Fi must have the bandwidth to support video conferencing. 

4. Kitchen Space

With the closure of restaurants and limited seating, more people are forced to eat at home. Therefore, residents are demanding new kitchen features. The bar eating area dividing the living room and the kitchen is a great way to maximize space since residents won’t require a kitchen/dining room table. 

Since people are cooking at home more, larger pantries to store more food, especially nonperishable item, and more cabinets to store new cooking tools are desired.

5. Package delivery capabilities

More people are purchasing home goods over the internet. Therefore, your apartment must have the ability to securely deliver packages to residents. Ideally, the apartment community have package lockers or package rooms that can be accessed with a code 24/7.

6. No-Touch Technology

The demand for sanitation likely won’t go away anytime soon. Therefore, residents prefer no-touch technologies, both in unit and in common areas.

For example, no-touch entry. For units, this means door handles that can be unlocked/opened with a phone app, hand way, elbow-open, or voice activation. Also, touchless soap dispensers and faucets in unit and common bathrooms. Adding touchless hand sanitizer stations in common areas is also a smart move.

In conclusion

Whenever an unforeseen event, like coronavirus, occurs that impacts the economy, the winners are always those who know how to identify new opportunities and then pivot accordingly. 

In multifamily, offering the right amenities is always a must. Using the information in this blog post, you can pivot from your existing amenities offered to increase the demand for your units, maintain (or even increase) revenue, and become a winner during the pandemic.

Follow Me:  

Share this:  
Ash Patel and his agent Ragan Mckinney

Anatomy of a Sight Unseen Commercial Real Estate Acquisition


In the last year, I’ve done a couple of deals with a top residential agent in my area.  Her name is Ragan Mckinney and she is an absolute savage with Real Estate.  In our conversations, I have been giving her my opinions on the benefits of commercial RE vs residential.  Ragan shared with me that she has turned down some very large commercial listings because they were out of her comfort zone.  With the tenacity I have seen from her and her team, I know they would crush it in CRE.  Ragan would certainly do a better job than the commercial brokers I have worked with in the past.  I absolutely did not want her to turn away deals and leave money on the table, so I offered to give her my opinion on any commercial properties that come her way.  A short time later, she called me and asked if I had any interest in buying a strip center that she was listing.  I asked her to send me the address and any numbers she had.


Due Diligence:

It was a strip center about 30 minutes from my house located in a small town and the list price was $489k.  I immediately spent hours on my computer researching the building, tenants, traffic counts, previous sales, competition, building owner, township, previous tenants, schools, politics etc.  Two of the most costly landlord responsibilities in CRE are roofs and parking lots.  Most county auditor sites will have aerial photographs that will allow you to closely examine the roof and parking lot.  A short time later, Ragan was able to gather the following rent numbers from the seller:

Insurance broker: $1600
Hair Salon: $950
Restaurant: $4000
Bank: Vacant

My initial proforma looked like this:

At a 14 cap and 40% annualized return, I am in!  All I needed was to review the leases and make sure there were no surprises.  I signed a contract which included 45 days for due diligence to review the financials.  When I asked for a copy of the leases, I was told there were no leases but all of the businesses have been there for 10+ years.  This was not going to work.  If these businesses left, the dirt and building are not worth anywhere near $400k.  In reality if the restaurant left, I would be left with a 50% vacant strip center with no anchor and two fillers.  I began getting little bits of information that made me think this deal was not worth pursuing.  I found out that the owner of this building just passed and the son inherited it.  The son wants to move out of state and hence the reason for the sale.  After I explained the importance of leases, the son drew up simple boilerplate one year leases and had the tenants sign them.  The restaurant was actually paying $3000, not $4000.  I informed my realtor that the numbers don’t work at this price.  I wanted to back out of the deal but Ragan convinced me to stay in the game and offer a lower price.  I re-worked the numbers and $380k was where I was at.  They immediately accepted the deal but told me they needed to be at $383k.  Done!  The new numbers looked like this:

The Twists:

A few days later, Ragan called to inform me that the sellers are rescinding their offer and they were happy to pay for any expenses I incurred.  Apparently there was some infighting within their extended family which is not uncommon with inheritance.  With commercial RE, this is not how deals work and they cannot simply pay my expenses and send me on my way.  She asked me for an official response that she can go back to the sellers with.  My response was if they don’t show up to the closing table, I would file a multi-million dollar lawsuit.  A few days went buy and I researched my options and lined up attorneys.  In our purchase contract, we had written in $0 for earnest money which I thought was a win.  It turns out that in some states contracts can be invalidated if earnest money is not part of the transaction.  Luckily Ohio was not one of them.  I began reading case law and found that I would have to prove monetary damages incurred to be successful in a lawsuit.  Loss of potential or future income is difficult to prove in court.  I concluded that if they did not show up to the closing table, I would have little recourse other than expensive litigation which may or may not go in my favor.  After hearing my response, the sellers informed Ragan that they would move forward with the closing.

A Free Restaurant?

As I started digging more, I found out that the restaurant operator is brand new.  Wait, I was told that restaurant had been there for over 10 years?  I later found out that the seller (the Son) was the restaurant operator for many years and had turned the business over to his CPA.  Even better, she wanted it to set up her 20 year old son.  Let me reiterate that; the seller abruptly gives a viable restaurant away to a lady who decides this would be great for her 20 year old son.  I asked if the Son sold the business to her or if he simply gave it to her.  It turns out that he literally gave her the business in return for signing a one year lease.  I would have felt better if she had purchased the restaurant so she would have skin in the game.  With a lease that has no personal guarantee, she could literally run the business down and walk away unscathed.  I had to get this lady on the phone and see what else I could find out.  My conversation with her was very positive.  She owns her own CPA business that she works at during the day and after 4pm she goes to the restaurant and works until close.  She is familiar with running restaurants, food costs etc.  Her plan is to grow the business for 10 years then hand it off to her son so she could retire.  She also shared her plans for growing the business.  I felt very comfortable moving forward after this conversation.

From a landlords perspective, this is actually a win.  I have a fully functioning restaurant in my building that I can sell to an operator if she ever leaves.  I also own all of the equipment inside of the building.  My goal with her, just like any tenant, is to do everything in my power to make her successful.  She has already grown the business by adding local delivery.


The Seller was an incredibly nice guy and was very gracious at the closing.  He explained that the tenants actually pay for their own gas, electric and water, and there were no house meters.  Another win!  When I inquired about him giving the restaurant away, he explained that he grew up in the food business and he and his wife were just done and ready to move down South.  A few days later I went to meet all of the business owners and inform them of the new mailing address for rent.  I also wanted to check out the vacant bank space.  I took my kids with me and got them excited about being able to go into a bank and checking out the vault.  When I walked into the bank, I heard what sounded like a running toilet.  As I walked towards the sound, my feet began splashing on the carpet and my heart stopped.  As I got closer to the source, the sound was louder and it became apparent that this was a full pressure pipe burst.  I opened the closet where the sound was coming from and saw a broken pipe gushing water all over the place.  I scrambled to find the main water shutoff and spent the remainder of the weekend remediating the damage.  The seller found out about this through Ragan and he and his wife graciously came to help.  During this time, I was able to speak with them and get leads on potential tenants for the bank.  They also gave me the scoop on city politics and potential developments near this building.

Game Plan:

My plan was to call every bank in a 50 mile radius and see if I can get them to move/expand to this location.  After the first few calls, I realized that Ragan’s team would probably be much better suited for this.  If I can get just $2000/month from that space, the value of the building will have more than doubled even at a 9% cap rate.


Follow Me:  

Share this:  

“It is Too Difficult to Invest Out-of-State” Real Estate Investing Myth Debunked

There are three phases to a real estate rental investment. 

  • Find the deal
  • Acquire the deal
  • Manage the deal

Most real estate investors find it is easier to handle the three phases in a local market. 

Finding deals requires implementing lead generation strategies. Lead generation strategies are either remote (i.e., direct mail, online advertising, cold-calling) or in-person (i.e., bandit signs, driving for dollars, door knocking). If you are investing in your local market, you can take advantage of both lead generation categories.

Once you find a deal, you can drive to the home or building yourself to perform due diligence to determine and offer price. 

After you have acquired the deal, you can either self-manage or oversee a third-party property management company.

When investing out-of-state, your options for finding, acquiring, and managing deals are limited…or are they?

Theo recently interviewed Andrea Weule on my podcast, Best Real Estate Investing Advice Ever. She lives in the highly competitive Denver, CO market, so she buys rentals out-of-state. In that interview, Andrea debunks the myth that you cannot invest out-of-state and provides interesting ways to generate leads and perform due diligence remotely.

The first phase is to find a deal. Andrea finds her out-of-state deals in three ways. First, she works with a real estate agent who sends her on-market deals off the MLS. She says that ignoring the MLS results in ignoring low hanging fruit. 

Secondly, she creates a list of motivated sellers. Andrea’s targets home that have been owned for more than 20 years and where the owner is 55 years old or older. She finds that these owners are often motivated to sell. They are approaching retirement and are thinking about the next phase in their life, which may require the selling of their home.

Andrea uses ListSource to create this list.

Then, she sends a sequence of three mailers for each address. Rather than using a generic “we buy houses” letter, she creates a message that speaks more directly to the 55+ years old demographic. The letters include questions like “are you looking for your next adventure?” or “do you want to eliminate the stress of owning a home?” 

These first two strategies (direct mail and MLS) are remote lead generation strategies. The third strategy Andrea implements is traditionally performed in-person – bandit signs. However, rather than flying to the market and placing the bandit signs herself, Andrea hires someone local to the area.

The process is simple. She creates a job posting in the “gigs” section on Craigslist with the purpose of hiring someone to place bandit signs in the local market. Andrea sends them the bandit signs, which have a GPS tracker. The GPS tracker allows her to confirm that the sign was places in the correct location. Once the bandit sign is place, she requests that they send her a picture. Lastly, Andrea will send them their payment via PayPal.

Andrea uses a similar strategy for the second phase of the real estate investing process – the acquisition. If someone is interested in selling her their property, she performs basic due diligence to determine an offer price. 

Back to Craigslist. She will create another job posting. But this time, she is hiring someone to take pictures of the prospective property, as well as to do a Zoom Tour. With the combination of the pictures and video from the Zoom tour, she has all the information she needs in order to submit an offer.


Overall, it is a myth that it is harder to or that you cannot invest out-of-state. All it takes is a little creativity and the use of technologies.

Follow Me:  

Share this:  
a set of apartment buildings

Using Technology to Scale Your Apartment Investment Business

You’re already two months deep into 2020, and you realize that, if you don’t take drastic measures now, you may not end up fulfilling your New Year’s resolution to grow your business like never before. The question is, how exactly can you take your business to another level both quickly and effectively?

This question can be answered with a single word: technology.

Unfortunately, many real estate investors overlook the power of technology when it comes to scaling a business. And, if you’re like them, it’s likely because you simply don’t know how to enhance your business with technology.

Fortunately, I’ve put together this guide on how to scale a real estate business with ease using the latest technologies in 2020.

Use Technology Platform to Stay Organized and Operate More Efficiently

Real estate technology platforms are currently available to help you to remain organized, which is paramount for scaling a business in apartment investing. For instance, you can use these business intelligence platforms to store your significant portfolio information in one system. This information may include critical deal information, marketing collateral, space budgets, tenant updates, and lease terms.

With this type of centralized platform, everybody on your investment team can automatically access the real-time materials or information they need, rather than having to constantly send emails requesting this information. This allows your entire organization to run far more efficiently, thus saving you time in the leasing process. The more time you save, the more time you can dedicate to making more real estate deals and, therefore, scaling a business into a real estate empire more quickly.

Introduce Smart Technologies

If you’re wondering how to scale a real estate business, you may want to consider incorporating smart technologies into your apartment buildings as well.

For instance, to leverage smart technology, consider adding smart locks to your apartments, which will allow your tenants to enter their units without scrambling for their keys every time. A smart lock enables them to unlock and lock their doors remotely using a smartphone app. This means that you don’t have to deal with having to replace lost keys, for example, which gives you more time to focus on growing your business.

Scaling a business in real estate is also possible if you use smart lights and smart thermostats in your apartment complex. These technologies are very energy efficient and, thus, save you money—money that you can use for future deals to help to grow your business even more. Tenants will also love these value-add amenities.

Digitally Market Your Apartment Investment Business

When it comes to scaling a business, it is critical that you master digital marketing for real estate investors.

For one, you need to have a strong web presence. This starts with actually having your own property investment website. A website plays a key role in helping you to build leads online. Also, you may want to use Google Analytics with your website, as it will help you to comprehend how effectively your website is attracting potential clients.

Also, when it comes to digital marketing for real estate investors, be sure to develop social media profiles, which are imperative for scaling a business. After all, some real estate firms drive every single lead they receive from Facebook, for example. To make Facebook work for you as you explore how to scale a real estate business, be sure to post content as frequently as you can.

In addition, get involved in conversations in relevant groups on Facebook. You might also want to purchase targeted ads aimed at reaching your chosen demographic and geographic area. These moves involving digital marketing for real estate investors can be extremely profitable and thus help with growing your business.

Automate the Process of Raising Capital

Another smart move for scaling a business is to tap into the power of syndication. That’s because today’s money-raising platforms are intended to automate the money-raising process for both funders and fundraisers.

For instance, if you’re seeking capital, a platform can handle a variety of important tasks for you, such as bookkeeping, providing investor updates, issuing legal disclaimers, and completing payment processing. In addition, investors can easily find your campaign among many other campaigns using their smartphones. Then, they can start investing in your venture with a few simple clicks. These platforms today make scaling a business easier by enabling business owners to reach a greater number of capital partners.

Automate Property Management

If you’re wondering how to scale your business in apartment investing, you may want to consider automating your property management functions as well.

Ideally, you want to embrace automation as much as possible, while still offering the personal touchpoint that customers are looking for. For instance, it can be helpful to offer online lease applications and payment collection. You may also want to offer three-dimensional virtual tours of your apartment units or even automated notifications for tenants.

Likewise, when it comes to maintenance, you could use an app to monitor your work orders’ progress. This type of technology can also streamline check-outs and check-ins to make the maintenance process more efficient.

Start Building Your Apartment Investment Business

If you’re serious about learning how to scale a real estate business, I can help you with the process of real estate business development.

I possess extensive experience in scaling my own business after raising more than a million dollars from investors for my first multi-family property deal. I now control more than $800 million in real estate assets, and I work regularly with investors to help them to launch and scale their own real estate businesses, too.

I can teach you how to purchase apartment complexes, bring in investors, and employ digital marketing for real estate investors. My goal? To help you to build an apartment syndication business that will allow you to reach your investment and financial goals.

Alternatively, I can introduce you to excellent opportunities to engage in passive real estate investment if you’re an accredited investor.

Get in touch with me to learn more about scaling a business and how I can help you to employ the right strategies to boost your bottom line in the months and years ahead.

Go to Geek Prank and try the online Windows XP simulator, play with the classic Minesweeper and Tetris games or listen to some music.

Follow Me:  

Share this:  
apartment building for passive income real estate investing

12-Month Goals for Passive Income Real Estate Investing

You look forward to creating more wealth for yourself in the months ahead. At the same time, you’re already busy, so you don’t have a lot of time to spare on your new endeavor. The faster and more easily you can make extra money, the better.

In your situation, generating passive income through real estate investing may be the wisest move you can make.

Unlike active investing, where you handle property acquisition and management yourself, passive income real estate investing involves putting your capital towards apartment syndication that a general partner is responsible for managing fully.

Here’s a look at the 12-month short-term goals for investing you should establish before embarking on your first syndication deal. Keep in mind, you might have additional goals that are personal to you, and this is not a comprehensive list. Consider writing down your real estate investment goals to better track your progress over time.

Vet Your Syndicator

One big goal during your first 12 months of passive income real estate investing should be to become a part of a high-potential property investing team. Then, you should aim to invest in your first real estate property (or even two or three properties) and finally start experiencing cash flow.

However, none of this is possible if you don’t partner with the right syndicator. For this reason, you need to look for an investor who has in-depth experience in the industry; specifically, this person must know how to turn failures into goals and wins. This is critical because someone who is experienced is more likely to avoid making extremely expensive, yet avoidable, mistakes with your investment capital.

Also, this sponsor is more likely to have a robust and proven personnel support network. The personnel they have relationships with should include contractors of various price points, brokers who are knowledgeable of various markets, property management companies who will manage the day-to-day operations, title companies, and even lenders who can provide funding.

Vet Your Deal

The benefit of passive income real estate investing is that you essentially serve as one of a deal’s limited partners. Because you’re relying on your sponsor to acquire and oversee the project, passive investing is generally lower risk than active investing is. After all, you’re already taking part in a real estate investing system that is already in existence and has experienced success in the past. Plus, if you picked the right sponsor, you’ll be partnering with someone with a track record of success, and you can rest assured that you’ll most likely receive positive results, potentially even exceeding projected returns.

Property Factors to Evaluate

In light of the above, one of the smartest moves you can make when it comes to passive income real estate investing is to carefully review the type of deal your potential partner is interested in pursuing. After all, even if a partner says that they are looking to invest in an apartment community, not all apartment buildings are the same. One apartment community could highly distressed, whereas another could be turnkey, and anywhere in-between.

For any apartment deal, factors that you should assess include the apartment community’s location, how many units it includes, and the available amenities. Also, what is the condition of the buildings? These factors will enable you to calculate what rent amount would be wise to charge, plus how much money would need to be spent on required improvements and repairs. Furthermore, the building’s overall condition can help to signal how frequent repairs may impact your cash flow each month. Of course, all of this information should be a part of the general partner’s write up for the deal.

Also, the property location will show you the socioeconomic factors in the local area that will impact your profitability long-term when it comes to resale value, occupancy rate, and rental yield, for example. Your syndicator should obtain important property documents, such as tax returns or lease copies, and hire a reputable inspector to pinpoint any covert problems before pursuing the property.

Start Receiving Cash Flow

Your goal in passive income real estate investing is clearly to make money. However, during your first one or two deals, in addition to making money, your chief focus should be to gain experience and first-hand education.

Also, make sure that the short-term goals for investing that you set for the first 12 months are timed, reasonable, attainable, measurable, and specific.

For instance, a specific goal is that you wish to complete two deals during the first 12 months and generate enough passive income from them to replace 50% of your income. In addition, to make your goal measurable, you can determine what you want the return on your investment to be 7% or higher. This gives you an excellent benchmark that you can measure your progress against and, thus, more easily determine if you’re on track to reaching your external goals as an investor.

An attainable goal when it comes to passive income real estate investing may be to invest your capital in a property that’s cash flow is positive. In addition, you want the property to have the potential to appreciate in the future. Also, a realistic goal is that you wish to maximize your profits by partnering with a strong syndicator who uses solid property managers.

Finally, if your short-term goals for investing are timed—for example, you want to invest in your first property within four months—this will give you the roadmap you need to accomplish your goal of being financially independent and stable long term.

Experience the Benefits of Passive Real Estate Investing Today

Are you bound and determined to increase your net worth through passive income real estate investing? It’s critical that you partner with a seasoned investing expert.

I currently control real estate valued at a total of more than $800 million, and I purchased the majority of this real estate with capital from passive investors. Therefore, I have firsthand knowledge of how to establish short-term goals for investing. And I know how to excel in the real estate investing business long-term.

Because of my extensive industry experience, many people have worked with me to find the types of property investment opportunities that will help them to succeed financially. Likewise, I can partner with you to help you to invest your capital wisely and enjoy an excellent return on your investment as a passive real estate investor.

Get in touch with me today to find out more about how I can make passive income real estate investing work for you over the next 12 months and beyond.

Follow Me:  

Share this:  
house decorated with Christmas lights

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

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

Prioritize What Really Matters

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

Expert Time Management

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

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

Set Actionable Goals

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

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

Follow Me:  

Share this:  
interior architecture of an apartment

What You’ll Gain from the Best Ever Apartment Syndication Book and School

Like many visionaries, you see yourself being successful financially one day. More than that, you see yourself being successful and feeling happy about the work you’re doing, as it doesn’t feel like work. However, chances are that you’re disillusioned about all of the opportunities that have already come your way but never panned out. When will you finally get that break you’ve been yearning for? And will it be everything you dreamed it could be?

I remember what it was like to feel like the walking dead in my corporate advertising job years ago. However, I was fortunate enough to get that one big break I needed–the purchase of an apartment community with the help of $1 million that I raised through private investors. That was around 2012. Since then, life has taken a major turn: I now control over $700 million in real estate, and I’m not slowing down.

These days, I’m all about helping other people to attain wealth through real estate, too. So, if you’d like to hop on the bandwagon of wealth generation through real estate syndication, now is the perfect time to check out my Best Ever Apartment Syndication Book and Best Ever Apartment Syndication School. Let’s take a look at what you’ll gain from both the book and the school.

A No-Fluff Book

My syndication book is designed to introduce you to investing in apartments if you’d like to buy an apartment community but lack experience in this fast-paced area.

It is also an excellent option if you’re having trouble locating a stellar deal or if you lack access to capital from private investors. In addition, you can take advantage of my apartment syndication book if you’re not sure how to go about executing business plans in the real estate industry.

The reality is, my book happens to be the only one designed to help you to solve all of these problems. What makes my book such a handy tool is that it offers a multi-step system for getting your first syndication deal under your belt. Then, it helps you to take the proper steps to create a real estate empire worth millions or even billions of dollars.

The Best Ever Apartment Syndication Book: Getting Started in Real Estate Syndication

Learn the critical terminology you should be familiar with if you’re trying to get into apartment syndication. I also go over how to establish a quantifiable goal as an investor and develop a long-ranging vision that will keep you motivated in the field. You’ll also receive some pointers for evaluating and picking the property market you’re interested in making the foundation of your investing business.

Another important area I discuss in my book is how to surround yourself with the cream of the crop of real estate experts who will become your team. For example, I provide advice about how to build a brand that will attract passive investors. These investors will essentially become your partners as you pursue deal after lucrative deal.

The Best Ever Apartment Syndication Book: Becoming Successful at Real Estate Syndication

When it comes to attracting investment capital, my syndication book will show you how to tap into your current network to pinpoint passive investors who can become part of your team. You’ll also learn how to create a strategy for generating leads so that you can always find out about apartment deals that aren’t always on the market.

Another essential part of owning a real estate investing business is developing a solid business plan—one that will maximize the returns that your passive investors will receive on their investments. We’ll go over this in-depth, and we’ll delve into how to implement your plan to impress your investors.

Of course, a major part of implementing your business plan successfully is mastering how to evaluate apartment deals. I’ll take you through the process of preparing offers to investors and getting financial commitments from them.

The Best Ever Real Estate Syndication School

In addition to accessing winning strategies through my syndication book, you can join real estate expert Theo Hicks in our Best Ever Apartment Syndication School—yet another tool designed to catapult aspiring investors to success.

In our school, you can listen to a free audio course that will not only provide you with valuable investing information but also give you access to documents and spreadsheets you’ll need to get started with your investing business. The purpose of these resources is to help you to build your own property syndication empire.

Some of the education you’ll receive through the Best Ever Apartment Syndication School includes how to close apartment syndication deals, how to sell apartment syndications successfully, and how to secure the financing you need for syndication deals.

Take Advantage of The Best Ever Apartment Syndication Book and School Today!

If you’re tired of spinning your wheels in your current career or even in real estate, my Best Ever Apartment Syndication Book and the Best Ever Apartment Syndication School can give you the boost of knowledge you need. The information you gain from these two helpful resources can quickly set you on the path to achieving sustainable revenue gains.

I’ve personally experienced what it feels like to taste success in the highly competitive real estate investing world, but my success didn’t come easy. Nonetheless, I learned how to become a better investor through a wide range of situations I encountered in various deals, and I am eager to share with you the lessons I’ve learned so that you can avoid many of the mistakes I made.

Work with me to learn more about how the combination of my apartment syndication book and school can change the course of your finances and, in turn, your life for the better.

Follow Me:  

Share this:  
the upper floor of an apartment building

Helping Your Real Estate Business Recover After a Bad Apartment Deal

The longer you work in the real estate business, the more likely you are to go through some stellar deals and experience some major wins. On the flip side, so to speak, you may also come across some bad deals that you’re fortunate enough to avoid. However, you may also find yourself encountering a seemingly good deal gone bad, and just like that, your real estate dreams may feel as though they have been dashed.

Not so fast, though. Yes, going through a bad deal can be both emotionally and financially painful. However, learning from mistakes made during the deal can also be an eye opener and a teaching moment that will help you for many years to come.

Here’s a rundown on a few errors commonly made with apartment investments, as well as what you can do to recover after a bad real estate business deal.

Common Reasons for Experiencing a Bad Deal

You may find your real estate deal going sour for a number of reasons. Perhaps you impulsively bought an apartment community and made plans for it on the fly, rather than creating a business plan and sticking to it. Another way you may end up in a tough spot with a deal is if you fail to hire investment team members who truly have a handle on your local real estate market.

Likewise, not obtaining the education you need to thrive in real estate can cause your deal to go south fast. For example, perhaps you fall into the trap of overpaying for a property. Miscalculating estimates, under budgeting, not calculating cash flow properly, or not coming up with multiple strategies for making money from a property can also doom your deal.

Let’s take a peek at what you can do to bounce back after making any of these mistakes and experiencing real estate industry setbacks as a result.

Let Go of Your Bad Real Estate Business Investment

This is one of the most important things you can do as you try to recover from a bad investment. Yes, you may think that you could perhaps turn your sour deal around. However, it is far wiser to plan your exit strategy and follow through with this strategy instead.

One option in this situation is to simply sell your now-undesirable apartment asset at a loss. Why? Because offloading a bad investment puts you on the path to starting over with a better deal. Simply put, cutting your losses may pave the way for more gains in the future.

Analyze Your Real Estate Business

After you have unloaded your apartment community, it is time to complete a comprehensive analysis of what resulted in your real estate crisis. This is where you ask yourself the five W’s of who may have caused it, what may have caused it, where the problem erupted, when the issue happened, and why your deal went south. During your analysis, you should jot down figures and facts—anything that can help you to fully reflect on your situation.

Next, write down your business’s strengths, weaknesses, opportunities, and threats; this is an important step in overcoming business obstacles. You’ll also want to take stock of your liabilities and assets following your bad deal, as this will further help you to diagnose your current situation. Armed with these details, you can now create a stronger plan for your next real estate business deal. You could even ask colleagues or friends for feedback on your new plan as well as on the bad deal.

Don’t Second-Guess Yourself

It’s natural for apartment syndicators to constantly wonder what they could have done to avoid bad deals. However, constantly singing the “shoulda, woulda, coulda” blues won’t do much to help you. Rather than being so hard on yourself for your oversights and mistakes, concentrate on goals and success habits that can help you to avoid making the same mistakes twice.

To achieve this, consider creating a list filled with goals you would like to achieve during your future real estate business deals. But make sure that your goals are timely, realistic, measurable, specific, and attainable. For instance, rather than saying that you want your next deal to be a successful one, say that you would like your next deal to net you a certain dollar amount. Also, be sure that your new plan provides you with a solid fallback option, too.

Move Forward, Full Speed Ahead

Now that you have a good idea of what you’d like your next deal to look like, it’s time to take action and make it happen. In other words, start looking for your next apartment deal. The more investment properties you buy, the more experienced you’ll be in spotting potentially lucrative deals and bad deals. Also, you’ll be in a better position to recover after one failed deal if you own many assets that are generating revenue for you.

Take Steps to Recover After a Bad Real Estate Business Deal Today

Once you realize that a deal has gone belly up, you may immediately feel discouraged. And understandably so. But the good news is that every cloud has a silver lining. You can recover after a bad deal (yes, really) and turn mistakes into cash.

I have had my fair share of mistakes in real estate. I’d be glad to help you to find your way back to the path to success after you’ve experienced a less-than-stellar real estate business deal. And, as your mentor, I’ll show you what you can do to stay on track and avoid bad deals in the future.

Get in touch with me today to learn more about how you can live your best life in real estate investing no matter what the industry throws your way.

Follow Me:  

Share this:  
team member’s hands

What to Include in Real Estate Business Team Interviews

As a real estate investor with an eye on owning apartment communities, you need two things in your arsenal to maximize the returns on your investments. One, you need a solid understanding of how to identify potentially lucrative deals and how to execute them. And two, you need to surround yourself with a winning team of professionals who will support you each step of the way.

So, who exactly do you need to hire to be on your real estate investment team? And how do you know which candidates are truly the best ones to work with as you strive to succeed in apartment syndication?

Here’s a rundown on what to include in real estate business team member interviews as you try to establish an all-star investment team.

How to Choose a Mentor for Your Real Estate Investment Team

A mentor is a core investment team member, meaning that he or she is one of the most critical experts to have on your side before you embark on any deal. An important question to ask a potential mentor is if he or she owns properties, and what the mentor’s net worth is. This can demonstrate his or her success in the biz and prove their experience and expertise. Also, will the mentor want to take part in your real estate deals, or will he or she simply advise you? Establishing the nuances of the relationship right away will make things easier in the future. Finally, make sure that your potential mentor shares your business values and understands your goals.

How to Choose a Property Management Company for Your Real Estate Investment Team

A property manager is yet another core investment team member you’ll need to hire to effectively manage and scale your business. When interviewing real estate managers, be sure to ask them how many rental units they currently manage. Ideally, you want a manager with anywhere from 200 to 600 rentals, as too few units indicates that the company may not have much experience, whereas too many rentals mean you may become a number. Be sure to also ask about the company’s management fees, and choose one whose fees are based only on collected rents, as this will motivate it to constantly fill vacancies.

How to Choose a Real Estate Broker for Your Real Estate Investment Team

Your real estate broker will also play an important role in your investment team, as he or she will help you to buy or sell properties when the time is right. Make sure that you ask potential brokers how much they charge and why they stand out from their competitors. For instance, if you’re big on communication, you may want to go with a broker who prides himself or herself on constantly being available by email or phone. In addition, consider asking brokers if they offer any guarantees, which means they’ll stand behind the service they give you.

How to Choose a Real Estate Attorney for Your Real Estate Investment Team

A real estate attorney may not necessarily be on your core investment team, but he or she is a secondary team member who still plays a valuable role in your real estate investing efforts. A wise question to ask an attorney is what he or she recently did during a transaction that did not occur as planned. In addition, you may want to find out if he or she can recall a time when his or her efforts had a positive impact on the outcome.

How to Choose a Mortgage Broker for Your Real Estate Investment Team

You may also choose to include a mortgage broker as a secondary investment team member. Before you hire a given broker, consider whether other fees exist beyond points and interest. Also, what is the funding timeline? In other words, how quickly can your loan be turned around? Make sure that the mortgage broker you hire also has experience with funding the kinds of real estate projects you are pursuing.

How to Choose an Accountant for Your Real Estate Investment Team

As you seek to build the ultimate team, note that you’ll additionally need to work with an accountant. This individual will make sure that, in all of your revenue generation activities, you don’t end up getting into trouble with Uncle Sam by not paying your taxes or not paying enough taxes based on your earnings.

Ask potential accountants what types of companies they’ve worked with, and check to see how many years of experience they possess. It may also behoove you to ask them if they are Certified Public Accountants (CPAs) or if they have other qualifications. Note that no CPA designation is necessary to fulfill the responsibilities of a real estate accountant.

Another thing to consider when interviewing accountants is if they own any real estate properties of their own. Or, how many of their clients own rental properties that produce income? If they are also real estate investors or at least work regularly with real estate investing clients, they’ll have a better idea of how to help you manage the financial aspect of your own real estate business.

Start Interviewing Experts and Hiring Winning Professionals

No real estate deal is successfully executed in a vacuum. In other words, if you expect to make lucrative deals happen, you’ll have to rely on other people—like a mentor—to pursue, execute, and generate money from these deals.

I could be the mentor you need to get your real estate business off the ground and start experiencing serious gains as an investor. I’ll show you how to successfully fill all of the other openings you have on your investment team as well. In fact, you can check out my three-step approach to hiring brand-new real estate team members with ease.

Contact me today to further discover how to add competent experts to your real estate investment team time and time again.

Follow Me:  

Share this:  
tiny wooden

Balancing Your Day Job and Your Real Estate Side Hustle

Who says you can’t work your 9-to-5 and still dabble with real estate on the side? In fact, research shows that a whopping 44 million people have side hustles in an effort to boost their household incomes and, thus, more easily make ends meet. So, you can do the same by working on your real estate business part-time.

The question is, how exactly do you balance your day job and your real estate side hustle? Here’s a look at how to start investing in real estate on the side.

Create a Routine That Works for You

If you’re wondering how to start investing in real estate while still working a full-time job, note that the secret to your success will be in your routine. It’s human nature for people to look for patterns in their days and then stick with them. So, capitalize on this as you seek to develop your real estate side hustle.

To enjoy a nice balance between your day job and your real estate gig, develop a schedule that will work best for you. For instance, after you finish your 9-to-5 each day, build in some moments to scout for properties to invest in before the sun goes down. Also, be sure to carve out dedicated time for addressing any real estate–related emergencies that may crop up each day. When you learn how to expect the unexpected and plan accordingly, you’ll start saving yourself a whole lot of stress.

Starting Practicing the Pomodoro Technique

The Pomodoro technique is a well-known tool used to enhance a person’s time management skills. It is based on the idea that you can fully devote no more than 25 minutes of your time to a certain task.

In light of this, you should spend 25 minutes on real estate investing research, for example, then take a five-minute break. If this process goes on for a couple of hours, you should then take a 15- to 30-minute break before resuming your work. Using this technique will help you to stay focused on your real estate side hustle during the time of day you’ve allotted for your part-time gig.

Do Plenty of Research Before You Invest

When it comes to investing in any asset, conducting in-depth research early on is the key to financial success. So, if you’re curious about how to start investing in real estate, be sure to investigate the various factors that might impact your real estate investment before you dive in. The more informed you are, the more likely you are to make smart decisions regarding where to put your money.

For instance, when you’re working on your real estate side hustle, be sure to pull up-to-date property comps. These comps will tell you what homes are selling for in a certain neighborhood. This will give you a good idea about how much you should offer for an investment property that is for sale in that area, or how much you can expect to sell an investment property for there.

Delegate Your Responsibilities When Handling Your Side Hustle

As you work on your real estate side hustle, you may come across situations where you could use some extra help. And that’s okay. In fact, in certain situations, it’s best to simply hire a professional or start building a team of professionals, rather than attempting to solve the problem yourself. Or, you can glean invaluable advice from a reliable mentor in the real estate industry.

Reaching out to experienced individuals, such as underwriters, property managers, and for help with your real estate side hustle has a twofold benefit: One, you give yourself some room to breathe while running your side business, and two, you get to build your professional investing network.

Motivate Yourself to Keep Going in the Real Estate Field

Once you’ve established a routine for doing your real estate side hustle, try to set some mini-milestones and goals for yourself. Then, when you reach these milestones, give yourself an enticing reward.

For instance, once you finally make it to a local real estate networking event you’ve been putting off, be sure to reward yourself with a pack or two of nice business cards to handout there. Or, treat yourself to some new investment books once you’ve secured adequate funding from passive investors to purchase your first apartment property. Rewards are great incentives for you to keep working hard on your side hustle until you see it generate the results you’re dreaming of. And if you don’t reward yourself, who will?

Start Taking Your Real Estate Side Hustle to the Next Level!

Balancing your day job and your real estate side hustle can feel like a major chore in and of itself. However, many investors who have mastered the art and science of this eventually leaped into real estate investing full time. The same can happen for you as long as you remain persistent, diligent, and disciplined.

The great news is that you don’t have to figure out real estate investing all by yourself. I can guide you through the investing process from the beginning. For instance, you can take advantage of my book Best Real Estate Investing Advice Ever Volume II to kick start your real estate investing career. I’ve also written about 22 tactics for going from your corporate job to multifamily real estate investing, based on my personal experience.

With my help, you can experience excellent returns relatively quickly and avoid making the mistakes that so many novice real estate investors make.

Get in touch with me today to learn more about how to start investing in real estate while still holding down your 9-to-5.

Follow Me:  

Share this:  
apartmecomplex investment property

The Ultimate Guide to Real Estate Asset Management

You’ve sealed the deal, and now, an attractive apartment property is a major part of your real estate portfolio. You’re happy, and so are the passive investors who helped to make your apartment syndication deal possible.

Now what?

Now, it’s time to get serious, as your work has only begun. After all, acquiring an asset is helpful only if you take the right steps to manage it once it’s yours. The question is, where exactly do you start?

Fortunately, I’ve compiled the ultimate guide to effective real estate asset management, filled with the best real estate investment strategies. Here’s a look at the most critical things to add to your real estate investment management to-do list right away.

Real Estate Asset Management Step 1: Follow the Money

After you’ve purchased your apartment property, it’s time to take a good look at the budget. You need to make sure that the numbers are accurate; otherwise, your revenue-generation opportunity may end up costing you more than you bargained for.

So, to ensure that you remain financially afloat, examine your anticipated rental income each month, and compare this with your monthly expenses. These expenses may range from taxes to utilities or insurance fees. Also, be sure to calculate potential costs related to property upkeep and maintenance. You should also have money set aside for emergency expenses or vacant unit coverage. Be sure to budget in the cost of using a property manager to oversee your apartment community as well—which brings us to the next point.

Real Estate Asset Management Step 2: Secure a Property Manager

The great thing about hiring a property manager when you’re investing in apartments is that you don’t bear the burden of keeping up with finding and signing on new tenants, maintaining the units and grounds, executing leases, managing the budget for the property, and other similar duties. For a percentage of the rent you collect each month, this third-party service will complete these duties for you. You can also rely on the service to manage a range of tenant issues on your behalf.

Real Estate Asset Management Step 3: Complete Inspections

Just because you’ve relinquished control to your property manager doesn’t mean it’s time for you to coast. Quite the contrary. While your management company focuses on completing the tasks you’ve delegated to it, you should double-check the work it is doing to make sure that your business is being handled to the values and standards of your company.

Also, when tenants move out or in, be sure to walk through their units to ascertain that your property is in tip-top condition. If you notice any damage or appliances not working, for example, address them right away. Feel free to also complete regular inspections while your tenants are living at your property. Just be sure to give them 48 hours’ notice in writing prior to performing your property inspections.

Real Estate Asset Management Step 4: Maintain a Desirable Property

This is one of the most critical steps you can take when it comes to real estate investment management. After all, nobody looks forward to going to or staying at a property that appears run-down. Investing in landscape maintenance and appropriate outdoor lighting can go a long way in making your apartment property look cared for.

Real Estate Asset Management Step 5: Market Your Asset

If your apartment happens to be in an area with a lot of demand for housing, then advertising your available units is a smart move. This will enable prospective tenants to learn more about what your property has to offer, as well as how to contact you for a rental opportunity.

Your property management service can handle your advertising for you. However, whether you’re doing the advertising or you’re outsourcing it to a property manager, make sure that your ads end up on social media—an increasingly popular tool for marketing real estate rentals.

Real Estate Asset Management Step 6: Choose the Best Tenants

According to federal law, you cannot discriminate against a tenant on the basis of protected factors, like sex or race. Still, it’s paramount that you do screen them based on whether they can afford to cover their rent obligations each month. Check their references, including personal references and former landlords, to see how good (or bad) they are about taking care of the units they rent out. And verify their incomes to make sure that they can meet your established rent levels.

Real Estate Asset Management Step 7: Think Outside of the Box

Remember that your apartment property is more than just a piece of real estate sitting along a busy corridor: It’s an asset. That means your goal should be to improve your property’s value long term. Let’s take a look at a couple of ways you can do this.

First, look for any hidden costs that you may have previously overlooked. For example, when it comes to your property’s electricity, you could use one meter for the entire property, or you could allow every unit to have its own meter. Do some investigation to find out which option would save you the most money, then go with it.

Also, have you ever considered providing rental insurance to your tenants? Not many landlords have. But if you can become the anomaly by doing this, you could easily generate more revenue on a monthly basis without adding a whole lot of work to your plate.

Master the Real Estate Investment Management Process!

Embarking on the real estate asset management process can no doubt be an intimidating experience. However, it can also be an exciting and fruitful one if you know which steps to take from the start.

I have extensive experience with business development in real estate, particularly when it comes to apartment syndications. In fact, expert investor Theo Hicks and I offer free education through a top-notch Apartment Syndication School. So, we can help you through this process.

Get in touch with me today to learn more about how to successfully manage your property and thus watch your bottom line grow like never before.

Follow Me:  

Share this:  
man working at a desk

Steps to Quitting Your 9-5 for Real Estate Investing

You feel a piece of your soul shatter each time you punch the clock at work.

Sure, you have a job. And sure, it’s paying the bills. But it’s not the fulfilling career you’ve always dreamed of having. And it’s not helping you to get ahead financially.

If you’re feeling stuck in your 9-to-5, you’re not the only one. Research shows that over 70% of employees don’t feel happy about their career choices. The good news? You can quickly change your career path by breaking into the dynamic and potentially lucrative real estate investing field.

Here are five steps to investing in real estate that can get you started today!

Find a Mentor

If you’re wondering how to get started in real estate, the first critical step to your success is finding a mentor, asking them questions, and reading everything you can get your hands on.

Here’s why having a mentor is especially critical starting out.

When you begin your career in real estate investing, you’ll no doubt find it difficult to set up your real estate business, find deals, make offers, and develop an appropriate exit strategy. However, having someone else to give you valuable advice with each step can quickly help you to have several deals per month, rather than just a few deals in a year’s time.

For starters, your mentor can guide you through the process of restructuring your time and income. This will put you in the best position to leave your 9-to-5 and start building the type of business you’ve always dreamed of owning.

Also, when you speak to a real estate mentor, your mentor can share lessons with you about his or her successes and failures—lessons that may help you to avoid making critical mistakes in the beginning. In addition, your mentor can help you to confidently analyze potential deals as well as provide helpful recommendations and connections.

Choose Your Niche and Market

Picking your real estate investing niche and market is one of the most crucial steps to investing in real estate as well. After all, not all markets are lucrative. And, once you find a promising market, a niche is what will pay you the big bucks.

For example, take a look at fields outside of real estate. The specialized professionals—like contractors, engineers, technicians, dentists, and medical surgeons—are the ones who bring in the most bacon. In the same way, you need to narrow down your area of focus and work on mastering it.

Some popular investment niches today include single-family homes, small or large apartment buildings, office properties, and industrial properties, for example.

Going back to the first step, read about the niche that interests you the most, and try to find a mentor who has extensive experience. Your mentor can also point you to the local market that may give you the best return on your investment. The better you become in your chosen niche, the more credibility you develop.

The Steps to Investing in Real Estate Include Securing Capital

If you’re wondering how to get started in real estate, it’s critical that you learn to bring in investors to secure capital.

The truth is, you can’t build and scale your business efficiently on your own. You need partners who are willing to contribute their capital to help you to complete deals that will make both of you money. In the real estate investing world, these are passive investors.

To draw passive investors, you absolutely have to network. For example, you’ll need to attend industry conferences, clubs, or meetings, where you can meet these potential business partners in person. Then, once you make connections, put together a plan detailing a particular real estate deal you’re interested in. You can share this investment plan with your connections to see who is willing to work with you.

With the right investors on your side, you can quickly take advantage of hot deals and start generating revenue at a much higher level than you could have done without outside help.

Build Your Team

Creating a robust real estate investing team is also one of the most critical steps to investing in real estate. Your team should consist of several core individuals who will provide you with guidance and advice on various aspects of your business.

For instance, you might want to hire a real estate broker to help you to find and close deals. You might also want a real estate attorney, who can help you with structuring your company, in addition to advising you on your due diligence. You will additionally need to find a reputable insurance agent to help you to protect the assets you accumulate over time.

An accountant can help you to watch your bottom line and keep it strong. Contractors are critical to have on your team as well, as they will give you an idea of what repairs need to be made to your assets whether you’re renting them out or flipping and selling them.

The Steps to Investing in Real Estate Include Finding and Making Great Deals

Finally, you need to know where the good deals are if you’re going to succeed as a real estate investor. For example, industry professionals at meetings may tell you about deals you may be interested in. Or if you’re trying to sell a property, you might find a buyer at your local real estate conference. You may also find gems among bank-owned properties or even get lucky with properties being sold at auctions.

Take the First Step Today!

Creating any business can be a challenge, and a real estate investing business is no exception. However, surrounding yourself with the right industry knowledge and the right people can help you to master how to get started in real estate.

Learn how to apply the above steps to investing in real estate. Contact me today to learn how to quit your 9-to-5 and start doing something you’ll enjoy for years to come.

Follow Me:  

Share this:  
residential real estate community

What to Look for in Residential Real Estate Investments

Looking for the right residential real estate investments is not a black-and-white process, as many factors are involved in selecting the perfect property. It’s especially critical that you understand these factors if you’re interested in drawing in capital from other investors. After all, these partners will ask you about these factors before contributing capital to your potential deal.

Here’s a glimpse at what you should look for in a property when embarking on a deal.

Consider the Neighborhood

Note that your chosen neighborhood will ultimately determine the type of tenant or buyer you will attract, as well as your rate of vacancy. For example, let’s say that you buy a property near a college. In this situation, you can expect to draw students to your property, which means you may have a hard time filling your vacancies during the summer months.

Look at the School System When Searching for a Residential Property Investment

If you are targeting families as part of your residential real estate investing strategy, it’s imperative that you consider the quality of the schools near your target property. If you can’t find highly-rated schools close by, you may want to avoid purchasing it, as this will negatively affect the investment’s value, and you might have trouble selling it to your target buyers.

Take a Peek at the Job Market Around the Property

If you want to attract the most tenants or buyers possible, it’s wise to choose a property in an area where employment opportunities are on an upswing. So, take a look at the local media to see if major companies are relocating to that area, for example. When companies move to cities, workers who are looking for places may very well flock to these areas, which is good for local landlords and sellers.

Keep an Eye Out for Future Development In the Area of Your Target Property

When you’re getting into residential real estate investing, before purchasing a property, try to check with the area’s planning department for information about a new development coming to the area. If you see construction in progress, or if construction will be taking place soon, this indicated a high-growth area. This is great when it comes to drawing more buyers and tenants to your home. Of course, keep in mind that new housing may end up competing with your property, and some new developments might hurt their surrounding properties’ prices.

Look out for Property Taxes in Your Target Area When Delving into Residential Real Estate Investing

Property taxes will probably vary across the area you are targeting for your residential property investment. For this reason, it’s important that you know how much your target property’s taxes are. High taxes aren’t necessarily bad if your property is in an area that draws long-term renters, for example. However, some not-so-attractive properties also come with high property taxes—a situation you don’t want.

The city’s auditor or assessor office is a good place to find out tax information for the properties you’re interested in purchasing. Alternatively, you could speak with property owners in the area. Also, try to find out if taxes will increase in the future. Towns that are facing financial crises might boost taxes to a level that is beyond what you’ll be able to charge a tenant or buyer.

Find out What the Local Crime Situation Is Before Engaging in Residential Real Estate Investing

As a general rule of thumb, tenants don’t want to live in or even near crime hot-spots. So, do your due diligence in this area before purchasing an investment property. For instance, check with the public library or local police for up-to-date crime statistics regarding your target neighborhood. Specifically, check how much petty criminal activity, serious criminal activity, and vandalism is taking place there. You could also ask how frequently police show up in the neighborhood.

Consider Local Amenities Before Embarking on Residential Real Estate Investing in an Area

Before you settle on an investment property, tour the property’s neighborhood to check out its public transportation, movie theaters, gyms, restaurants, and parks. All of these are amenities that attract tenants. Also, check with the area’s city hall, as it might offer promotional literature on the various public amenities in the vicinity.

Take a Peek at Vacancies in Your Target Investment Area

If you’re serious about residential real estate investing, it’s wise to also look at the quantity of vacancies and listings in your target investment area. If the neighborhood has a high listing number, this could indicate a normal seasonal cycle, or it could be a sign that the neighborhood is declining. Either way, you as a landlord will likely have to lower your rent to draw tenants. On the flip side, a low vacancy rate in an area means you can raise your rental rates.

Start Your Search for Residential Real Estate Investments Today!

Real estate is one of the best investments you can make, but your choice of property will either make you or break you in the business. The good news is that you don’t need to navigate residential real estate investing on your own.

I can guide you through the process of buying real estate assets to add to your portfolio. In addition, if you’re looking for a passive real estate investment opportunity, I’ve got you covered. Contact me to get started with property investing today!

Follow Me:  

Share this:  
colorful homes at dusk

Ten Questions to Ask Your Real Estate Mentor Early On

You feel a surge of excitement as you imagine building your own modern real estate empire. You’re already brainstorming how you’ll secure financing for your future deals and what types of deals you’ll pursue. You’ve even found contractors who can help you with any renovation work you’ll need to do.

But there’s still something missing.

If you plan to set sail on the open sea of real estate without a rudder—also known as a mentor—to guide you, you’re selling yourself short.

The reality is, if you want to thrive in the competitive and constantly evolving real estate investing world, it’s critical that you enlist the help of a real estate mentor. Here’s a rundown on 10 questions to ask your real estate mentor early on so as to put yourself in the best position to succeed in real estate investing.

1. Which Investment Approach Has Worked Best for You?

This is an essential question to ask mentors for real estate investors because it’s a good idea to choose a real estate mentor whose investing strategy mirrors yours.

The main strategies you can use include buying and selling, also known as flipping; wholesaling; and buying and holding, also known as owning rental properties. In addition, you’ll need to decide whether you plan to zero in on commercial properties or focus on residential ones. The best mentor is one who has extensive experience in using the strategies you’re aiming to use.

2. What Should You Look for During a Property Tour?

As you embark on the path to investing in real estate, you may immediately assume that all fixer-upper properties are excellent deals. Wrong.

The truth is, both experience and attention to detail are needed to decide if the cost of renovating a property would surpass your possible profit from that property.

So, see if your mentor will allow you to accompany him or her on a property tour. This will give you a firsthand look at how he or she determines whether a property is worth investing in. In addition, ask your real estate mentor what his or her target return on investment typically is. Such insight from mentors for real estate investors can help you to consistently choose lucrative investments in the future.

3. What Drew You to Real Estate Investing, and How Experienced Are You?

Just as a hiring manager may want to know how seasoned a job candidate is, you should find out how experienced your real estate mentor is right away.

Ask your mentor how long he or she has been investing in real estate, as well as what caused him or her to become a property investor. Also, ask how many real estate properties he or she owns in total.

It’s also a wise idea to ask the mentor how many real estate assets he or she purchased last year, as well as what his or her plans are for the current year. Why? Because you want a mentor who understands not only past markets but also the present market climate.

4. How Are You Financing Properties?

The answer to this question from mentors for real estate investors will help you to choose the right property financing avenue for your needs. For instance, you could seek a loan from a bank, or you may want to tap into the resources of accredited investors instead. Your mentor can tell you the pros and cons of each approach and share with you what has worked best in his or her situation.

5. What Industry Technology Are You Using?

Ask your real estate mentor what technology he or she is leveraging for automating tasks. These technologies may range from property management software to lockboxes, for example. The right technology will save you on time and ultimately improve your investing experience.

6. What Mistakes Did You Make as a New Investor?

Your first year as a real estate investor will probably be your hardest one. However, you can save yourself a lot of confusion and heartache by finding out what costly mistakes your mentor made starting out and how to avoid these mistakes.

7. Do You Utilize a Property Management Company?

As a general rule of thumb, wise mentors use property management companies to help them to manage their rental properties. So, if your real estate mentor doesn’t use such a company, you may want to think about finding another mentor.

Using property management companies will prevent you from having to go hunting for late rent payments or spending a lot of time on property repairs. In other words, it’ll give you the freedom you need to thrive as an investor.

8. Who Are Your References?

Be sure to ask your real estate mentor for his or her references—and I’m not just talking about other real estate investors who are gleaning wisdom from him or her.

Feel free to also talk with your mentor’s past joint venture partners or even people who’ve purchased his or her flip properties. All of these parties can give you insight into what they liked (or did not like) about the mentor’s work, and this can impact how you approach your future projects.

9. How Have You Failed?

All experienced real estate investors have experienced setbacks in their careers. Learning about these setbacks from your real estate mentor early on can help you to make wise decisions both now and in the future.

10. What Exit Strategy Have You Developed?

This is yet another critical question to ask your real estate mentor, as the whole point of getting into property investing is to build wealth. Your mentor should be able to tell you how he or she will sell his or her investments to turn his or her equity into cold, hard cash.

For instance, maybe your mentor plans to sell a property to a tenant using a lease option. Alternatively, you could sell a property using a real estate broker, or you can wholesale the property to another investor. Understanding your real estate investing exit strategy is paramount because you may end up needing to leave the game at any point, and you need to be prepared for this.

Start Taking Advantage of Mentors for Real Estate Investors!

Building a property investing career can no doubt be exciting, but it can also be intimidating. The good news is that I, Joe Fairless, can walk you through it from the start, serving as your hands-on real estate mentor. Contact me today to find out how I can help you to start off on the right foot and keep moving in the right direction as a real estate investor.


Are you a newbie or a seasoned investor who wants to take their real estate investing to the next level? The 10-Week Apartment Syndication Mastery Program is for you. Joe Fairless and Trevor McGregor are ready to pull back the curtain to show you how to get into the game of apartment syndication. Click here to learn how to get started today.

Follow Me:  

Share this:  
skyscraper commercial investment real estate

Lucrative Commercial Property Investment: Office vs. Industrial vs. Apartment Real Estate

So, you’re reflecting on the past few months to see how far your bottom line has come. If you haven’t made significant gains financially, now may be a good time to get serious about expanding your real estate investing footprint. Or maybe it’s time to buckle down and develop a footprint in the first place.

The commercial real estate industry continues to show great promise for those interested in attaining their individual American Dreams. For instance, perhaps you want to retire early and retire well, or maybe you’d like to build an empire that you can pass down to future generations. Achieving your dream is certainly possible, but if you’re using real estate to do it, you need to know where to put your money.

So, which type of commercial investment real estate property should you pursue for your next investment?

Here’s a rundown on the differences among office, industrial, and apartment real estate investments and how to choose commercial investments based on your particular situation.

How to Choose Commercial Investments

A Glimpse at Office Real Estate

Office real estate is usually categorized into a couple of types: suburban and urban. Suburban office facilities are typically smaller than their urban counterparts and can be found in office park environments (for instance, a medical office park). Meanwhile, urban facilities, which include high-rise buildings and skyscrapers, are present in cities.

An office commercial investment real estate building can feature a single tenant or multiple tenants. In addition, it can be classified as Class A, B, or C. A Class A building usually features cutting-edge systems and are designed for your premier office user—one willing to pay above-average rent. A Class B building usually features average rent prices and fair finishes. Meanwhile, a Class C building offers below-average rents and functional space for tenants.

Why Choose Office Commercial Investment Real Estate?

As you explore how to choose commercial investments, note that one of the main benefits of investing in office buildings is that these spaces have a tendency to provide a hedge against inflation. That’s because an office building has triple net leases, where regular rent increases are built into the leases. In addition, with triple net leases, your tenant will pay you not only rent but also repairs/maintenance, property taxes, and property insurance.

Another reason that investors embrace office properties is that they are among the types of properties with the greatest amount of bank financing available.

The main downside of this type of property is that when a tenant churns, you may need to heavily renovate the empty space to make it suitable for the next renter.

A Glimpse at Industrial Commercial Investment Real Estate

Industrial buildings are useful for housing tenants’ industrial operations and are typically found on the outskirts of cities, usually along core transportation routes.

Tenants may use industrial buildings to do heavy manufacturing or light product assembly. These types of buildings can also become distribution centers. Some tenants may additionally look for flex industrial properties, where they can take advantage of office space along with industrial space.

Why Choose Industrial Real Estate?

If you’re exploring how to choose commercial investments, a major reason to pursue industrial properties is that the capital requirements for these spaces tend to be relatively low.

On the flip side, the lower cost of entry for industrial real estate investing compared with other kinds of commercial real estate investing is making this market very competitive at the moment.

Still, like office buildings, an industrial property comes with triple net leases, so your tenants will assume responsibility for all expenses related to renting your property.

A Glimpse at Apartment Commercial Investment Real Estate

You can invest in various types of apartment buildings, such as high-rise or mid-rise buildings. High-rise buildings feature at least nine floors and one or more elevators, whereas their mid-rise counterparts feature fewer floors and only one elevator.

You can also invest in a garden-style apartment building erected in an urban, suburban, or rural location. Walk-up apartment buildings are also an option if you’re okay with owning buildings featuring 4-6 stories but no elevators.

Why Choose Apartment Deals?

A major perk of investing in an apartment is that these types of properties can be effortless to find. In addition, if you’re planning to seek funding through a bank, banks generally like lending on these types of properties. Plus, they’re wonderful generators of cash flow.

Many investors also like apartments because they offer the best portfolio diversity due to the high number of tenants you can have in one building. The industrial and office niches are riskier in this sense because they come with fewer tenants.

Additional Benefits of Apartment Commercial Investment Real Estate

A major appeal of apartment investment properties is that they usually come with limited risk. Why? For starters, high vacancy in apartment buildings is relatively rare. In fact, apartments offer the greatest growth prospects compared with industrial and office buildings because today’s dislocated homeowner is becoming a renter.

In addition, when tenants move out, you usually just need to add some fresh carpet and paint before you re-rent their units. Of course, in some situations, much more needs to be done, which can add up financially.

Start Mastering How to Choose Commercial Investments Today!

Now couldn’t be a better time to delve into the dynamic commercial investment real estate market and look for new revenue-generation opportunities. Understandably, though, you may be overwhelmed by the idea of having to choose among office, industrial, and apartment buildings for your next investment.

I can guide you through the process of selecting your future commercial real estate investments so that you avoid making costly mistakes. Get in touch with me today to learn how you can buttress your bottom line and enjoy new levels of wealth via commercial real estate in the years ahead.

Follow Me:  

Share this:  
Two Common Real Estate Scenarios: Communication and Protection

Two Common Real Estate Scenarios: Communication and Protection

In this blog post, we’re going to be looking at two niche real estate scenarios that can happen to just about any investors.

The first scenario involves dealing with older potential clients and original buildings. If you’ve been in this situation before, you know that it can be quite a delicate process getting older owners to sell.

Communication Issues

Imagine this: You just found a potentially amazing off-market apartment building deal. It has 150 units and a $4 billion portfolio. It was purchased back in 1978, just over the 39-year expiration of the depreciation tax benefits law. The owner is in his late 80’s and purchased these buildings when they were first built at the time. You give him a call and ask him if he has any interest in selling, but he has trouble hearing you. He hands the phone to his caregiver, who abruptly says no and hangs up. What solution is there?

What one should do in this situation is to get curious. Start asking yourself some questions, then draft a letter to them. This is how you can learn more about their situation while introducing yourself to them. This is your chance to say, “I’m not sure where you’re at in this stage of owning these properties, but I can tell you that you might be worried about tax liability when you sell them. I have experience purchasing these types of buildings and I’d be happy to talk about some solutions any challenges you might be having.”

Penning a handwritten letter shows care and integrity. Keep in mind that many people of a certain age are struggling to keep up with the constant innovations and growth in the tech and digital world. A handwritten letter could be a breath of fresh air and a means to communicate that potential sellers may appreciate.

Protection From Embezzlement

Now, think of this scenario: You’re embarking on a general partnership in the real estate industry. It is your first time committing to such a project, and you’ve heard horror stories from colleagues involving embezzlement, fraud, and massive loss of funds. The general partner controls the business plan as well as the financial account connected to the project. You’re wondering how you can protect yourself from them embezzling funds from the operational account, and what auditing protocol you can use to protect yourself as a passive investor from theft.

There are several ways to approach this, but we can look at the most tried and true method.

You can have some checks and balances before the deal is done, which won’t be very much. After the deal is closed, though, you can do a lot more. For this scenario, we’ll look mostly at what a beginner real estate investor can do preemptively to stay safe in a general partnership.

There is no money for a potentially untrustworthy or shady general partner to take before the deal, but you can do some due diligence prior to a deal. If a shady partner is going to steal money from the entity itself, then they would have to do it afterward. This is because that is when the money is physically in the bank account.

Before the deal closes, there are a few things you should do. First off, you should absolutely take the time to look at the overall structure of the deal to make sure that there is at least an 8% preferred return. Make sure that the general partner is getting paid an asset management fee if and only if they are actually performing. If they’re proving themselves and they’re returning the preferred return, they can get that asset management fee. Otherwise, they get nothing.

Obviously, these are things that aren’t going to outright prevent someone from stealing money in a general partnership. When it comes down to it, they’re just small things you can do to ensure that the deal itself is set up in the mutual favor of you and your general partner, so that you have an alignment of interest.

Those are some things you can do before the deal. Another thing you should absolutely be doing before signing on anything with a general partner is to check those references. You can absolutely not go into a general partnership blind with no knowledge of who you’re working with. Even if the hearsay is overwhelmingly positive, you absolutely need to still check in with the partner’s references. By doing so, you’re going to get a really good picture of what the partner is all about.

Call their references and listen to what they have to say. We’re talking about past partners, firms, project managers, any business colleagues or people who have worked with this particular partner. Even if you get glowing reviews, you should then Google your partner. Those are things you’re probably already doing, but it really can’t be optional if you’re a baby real estate investor. You can be seen as an easy target because you don’t necessarily know the signs and symptoms of a parasite real estate partner. When you Google them, look for the partner’s name or firm title. And don’t be afraid to dig deep.

This doesn’t directly answer the question of how to make sure they’re not embezzling money, and we’re aware of that. However, there is some prep work that needs to be done on the front end to mitigate the risk of getting in with a group that is known for criminal activity. Sometimes that front end research is really all you need to check out.

What do you think about these two scenarios in real estate? Have you experienced either situation in your career? Tell us your real estate story in the comments below!

Image courtesy of Pixabay

Follow Me:  

Share this:  
Navigating the Mechanics of an Apartment Deal

Navigating the Mechanics of an Apartment Deal

From the types of roof, electrical wiring, heating and cooling to the parking lot condition, windows and hot water heaters there are alot of checklist items to consider when negotiating your apartment deal.

Nathan Tabor shares his insight into some of the the nitty gritty so you won’t be left in the lurch after closing. Read on to find out what you may not have been thinking about for your ideal setup.


Check for city complaints

How do you know if the plumbing is alright? Or the electrical connections are okay?

“So the number one thing on top of my list that I do first when I start due diligence is to go to the housing authority or whoever is writing city complaints and get the last two years’ worth of city complaints. The reason why – I got burned on this.” says Nathan Tabor.

This will give you a general idea as to what issues you’ll be facing. From the housing complaints, you can determine what else is probably wrong with property revealing any expenses you will incur so you can factor them into your deal.


Thinking about the roof

The type of roof you have not only impacts your installation and maintenance costs, but plays a part in insurance costs as well.

Let’s look at pitched vs flat roofs. A flat roof is cheaper to install but that’s about as far as the benefits go. A pitched roof has a longer life span and has a more appealing appearance while flat roofs have an institutional vibe. You see a flat roof and the first thing you’re thinking about is a medical facility as opposed to something that feels like home.

Usually, flat roofs cost more to insure because they’re not going to last for very long and also have a greater chance of developing leaks. Not to mention the host of other problems a leaky roof would present in your apartment building.

Nathan on flat roofs: “…[With flat roofs] you’ve gotta climb up there often, make sure that the drains are unstopped… Depending on where you are in the South, flat roofs just make your electrical bills more, because in the summer it’s hotter, and in the winter you don’t get the sun.”


Look out for fire hydrants and mailboxes

Nathan sheds light on some other hidden costs:

“Do you know who owns the fire hydrants on the complex you’re getting ready to buy?”

Most folks would never think of this until there’s a gigantic puddle next to the fire hydrant. Sure, you can call the fire department to come over and fix it, but since it’s on private property you could be on the hook for a surprise $6,000 expense.

Nathan on multi-unit aluminum mailboxes: “I just thought hey, it’s stamped on the side of it “Property of the USPS”, they maintain it. Guess what they don’t do? They don’t maintain them.”

When Nathan looked into the replacement cost of a 4’x4’ mailbox seven years ago it was…wait for it…$1,800.


Water metering

Having one meter on a multi-unit complex means you’re footing the bill for your tenants no matter who is taking 20-minute showers, outside washing their cars or letting their faucets run. Having individually metered units means you can bill your tenants individually holding them responsible for their own water needs. If you’re looking at buying a complex with a single meter find out the the average cost of the total water bill. Then weigh the cost of conversion and savings over time to help you decide which route you want to take.

What does your due diligence look like? Let us know in the comments.


Image courtesy of Pixabay

Follow Me:  

Share this:  
How To: Creative Financing for Real Estate

How To: Creative Financing for Real Estate

On a recent Situation Saturday segment on the Best Real Estate Investing Advice Ever podcast, Joe Fairless spoke with CEO Todd Dexheimer, CEO of Venture D Properties, LLC about creatively financing in the real estate business. How do you do that? Luckily, we got someone who not only knows how to do that, but he actually did it as well. And the story behind how his latest deal came to be is an all too familiar one to real estate investors.

The latest deal I did, which I think we can spend the most time on, was about 120-unit apartment complex,” Dexheimer said, “and I put it on a contract with the intention to just get regular financing on it. Well, I shouldn’t say regular financing. The property was 78% occupied. So, it was low occupancy, and it needed some work. So, sixty of the units had been renovated to a pretty good standard, but basically, the rest of the units needed a pretty substantial renovation. So, I needed to get either a bridge loan, a local bank loan, or seller financing, and as I went through this deal, I just didn’t want to use a bridge loan because they’re expensive. So, anybody who has done a bridge loan understands the expenses.”

This is very true. While a bridge loan can be helpful in the scope of buying a new property, there are many downsides to this type of financing. You’ll likely have to pay very high-interest rates and APR. Some lenders utilize a variable prime rate that can increase over time as well.

“So I was trying to get local bank financing, but I had kind of three strikes against me. The first strike was the fact that I was out of state. The second one is [that] I’m syndicating the deal, and the third one was the deal wasn’t stabilized. It was 78% occupied. So, three strikes against me. The local banks were very hesitant. I did have one local bank that was semi-interested, but we were running out of time. My earnest money was going to become hard. So, I said, ‘Look. Let’s do seller finance,’ and I approached it at that level, and we ended up working out a deal.”

Seller finance is essentially a real estate agreement in which financing is provided by the seller and included in the purchase price.

There are many benefits for both sellers and buyers when it comes to seller financing. From the buyer’s perspective, selling financing is one of the best alternatives to a standard bank or bridge loan. For real estate newbies who may not be able to pay that standard 20% down payment, it may not be the best option. But for those who are ready to invest, it’s very doable. Sellers can also benefit from seller financing by essentially using the loans as a form of additional income. Seller financing is essentially just real estate investment, just with a personal edge.

What do you think about creative financing strategies? Tell us about it in the comments below.


Photo source: Pixabay

Follow Me:  

Share this:  
office real estate investment properties in Huston

Real Estate Investment Properties: Retail vs Office Spaces

Every real estate investment opportunity comes with risk, but it also comes with the opportunity to boost your bottom line like never before. You just need to know what a good opportunity looks like, especially if you’re contemplating pouring your money into office or retail real estate investment properties.

To help, I’ve compiled some property investment advice focused on the differences between a retail real estate investment property and an office property, so you can decide for yourself which one may produce the greatest return on your investment, or ROI, in your particular situation.

The Potential ROI of Each Property Type

A major advantage of investing in retail spaces is that these properties are generally landlord-friendly. That’s because tenants typically pay all expenses in net net net leases, or NNN leases. In addition, retail properties often have high rental yields of between 5% and 12% because they have well-known companies as tenants or have several different tenants.

With the “anchor effect,” a large store, like Walgreens, is used to anchor an outdoor shopping mall. The benefit of this setup for investors like you is that the rents of the other shops in the area can go up as a result of the additional shopping traffic generated from the mall’s anchored properties.

Also, you can take advantage of what’s called the percentage rent with retail real estate investment properties. This rent is dependent on the mall retail properties’ sales volumes. That means if a shop is doing extremely well with its business, you can collect more rent. In this situation, you’re gaining profit via the tenant’s base rent and can also get a portion of the tenant’s sales to boot.

Office Properties

Investing in office space often means less risk for you. Additionally, these properties are a bit more cost-friendly compared with retail spaces, as long as you account for all the expenses carefully. At the same time, you may not receive as great of an ROI. However, if cost is a factor, investing in office space over retail space makes financial sense.

Retail and Office Real Estate Investment Properties’ Lease Terms

An especially good reason to invest in retail is that the lease terms can run as long as 10 to 15 years. Retail tenants have a tendency to stick around longer since they have invested in substantial amount of money in their leased spaces. For instance, they invest their capital in decorating, customizations, and improvements. If they stay in one place for a while, they can amortize these costs over a long period.

Also, retail giants are relatively established, which means that, compared with smaller businesses, big retail companies can more easily assume the monetary risk that comes with longer-term leases.

Meanwhile, office lease terms typically run from around three years to as many as 15 years. Newer or smaller companies usually can’t guarantee that they’ll be financially strong long-term, so they usually choose shorter leases. So, if you prefer longer leases, retail may be the way to go. On the other hand, office tenants often renew their leases, so office real estate investment properties are still an attractive option.

Managing Your Office or Retail Real Estate Investment

A major benefit of both retail and office properties is that the landlords and management companies that support them are usually free from responsibilities related to the property. This makes these properties different from apartment buildings, where tenants may contact their landlords when something malfunctions or is damaged.

For example, an apartment building tenant may need a floor refinished. In this situation, the tenant has to inform the landlord of this and then wait for the landlord to handle it. However, tenants in office and retail properties are usually more on top of problems with their spaces because they don’t want to lose business due to property-related issues. As a result, they typically have a greater amount of freedom to address repairs before they affect their businesses.

All in all, both retail and office properties are excellent sources of passive income if you want to be more hands-off after the deal is done.

Long-Term Outlook for Office and Retail Real Estate Investment


If you’re interested in diversifying your portfolio, your best bet is to go with retail property investment. This is especially true if you plan to invest in a shopping center or mall. Why? Because this type of deal features several income sources from many tenants. That means, if a single tenant ends up going bankrupt or moving locations, you won’t be affected as much financially.

The above is good news considering that retail has had a hard couple of past years, with the increasing popularity of online shopping. However, experts say that retail sales in the third quarter of last year actually rose by more than 6% year-over-year. This was the largest gain since back in 2012. Retail sales are expected to continue to be healthy in 2019 due to increasing consumer confidence, a robust job market, more wage growth, and lower taxes.

Office Properties

For office properties, the outlook also remains positive. During the first three quarters in 2018, activity began to slow down, but it remained positive. However, during the final quarter, the industry had a very optimistic outlook due to a leasing market that was active, coupled with rent growth. In 2019, this same momentum is continuing. The demand for flexible space is continuing to boom, especially space used for technology and coworking purposes.

Start Purchasing Real Estate Investment Properties Today!

If you’re ready to take your bottom line to a whole new level, both office and retail real estate investment opportunities may be a smart choice depending on your end game. The great news is that you don’t have to dive into the property investment world on your own.

Learn how to raise money to invest in real estate from me, Joe Fairless, to start your journey towards financial independence.

Follow Me:  

Share this:  
Palm trees surrounding a large apartment building at dusk

How to Make Your Passive Investors Aware of Potential Real Estate Investment Risks Without Ruining Your Chances

The greater the risk, the greater the reward, right? This old adage applies in many aspects of life, and real estate investing is one of them. The question, though, is what amount of risk is appropriate?


The reality is, the chance to purchase physical assets provides many investors with a sense of comfort. Plus, the fact that the real estate market has rebounded from the Great Recession of 2008 and has reached all-time highs lately makes this industry even more appealing to investors. Still, these investments may come with several risks that your passive investors should consider, rather than simply paying attention to the anticipated return.


Here’s a rundown on how to make your passive investors aware of potential real estate investment risks without ruining your chances.

The Risk of Commercial Renters Going Bankrupt

How stable and long-lasting is a commercial real estate property’s stream of income? That’s what ultimately drives its value. For instance, if Apple signs a 20-year lease with you, the price tag of this lease is much higher than the total amount of money you’d generate in an office building featuring many smaller tenants.


However, to make your passive investors aware of credit risk, show them recent news reports about Sears’ financial struggles. Sears used to anchor malls back in the 1990s, but these days, it is going through the bankruptcy process. The truth is, even tenants who are the most creditworthy can end up going bankrupt, so this is a risk that’s important for passive investors in commercial real estate to consider.


Demonstrate to investors how you’ll deal with renter turn around in a lucrative way so that, if this ever happens, they know you can recover easily.

Real Estate Investment Risks Include Leverage Risk

The greater the amount of debt you have tied up in a real estate investment, the greater the risk associated. In this situation, investors would be wise to demand more in return.


The thing about leverage is that can certainly help to propel a project forward quickly, in addition to increasing returns if everything is going well. However, if the loans associated with a project happen to be under stress—for instance, the return on the asset is not sufficient for covering the interest payments—an investor tends to lose large sums of money quickly.


The Leverage Rule


In light of the above, a good rule of thumb is not to let leverage exceed 80%. A return on an asset should primarily be generated from the real estate property’s performance—not through excessive reliance on leverage. So, be sure to instruct your passive investors to exercise caution when it comes to the amount of leverage used for capitalizing an asset. Also, remind them to ascertain that they receive returns that are commensurate with that asset’s risk.

Discuss with Them Any Structural Risk

Structural real estate investment risks aren’t related to a real estate property’s structure; rather, they have to do with the financial structure of an investment, as well as the rights provided to participants.


You need to tell your passive investors what their rights are based on their positions in a joint venture, like a limited liability company—for instance, whether they have a minority or majority holding. This will determine how much they’ll have to pay the person managing the company when the real estate asset is sold, as well as how much profit they’ll receive from the deal.


Also, how much equity is the manager investing compared with the limited partners? If limited partners are involved in deals with advantageous profit splits with the managers, and if the managers have a lot less cash invested in these deals, the managers are incentivized to take more risk. Make sure that your passive investors understand this structural risk concept before moving forward with a deal.

Liquidity Risk as it Relates to Various Markets

To make your passive investors aware of liquidity risk, ask them how they’ll exit an investment if they need to. Use two completely different cities to make your point about this type of risk.


For instance, dozens of investors might show up to place bids in a large real estate market like Houston, no matter what the market conditions may be like. Meanwhile, a real estate asset located in the city of Evansville in Indiana won’t draw as many market participants. This is an important consideration because it may be easier to get into the Indiana investment, but it will also be harder to get out of it.

Idiosyncratic Risk – Location, Location, Location

Idiosyncratic real estate investment risks are related to a certain property. Point your private investors to the current example of Wrigley Field to help them to understand a particularly important type of idiosyncratic risk: location risk.


Buildings behind this famous Cubs baseball field in Chicago have been used to host privately held rooftop parties. However, these assets are becoming bust investments because a brand-new video board will totally block their views into the field. Meanwhile, property values around The 606—Chicago’s high line— are rising.


Additional Idiosyncratic Risks


Other types to consider include construction risk. Construction makes a project riskier by limiting the ability to collect rent or profit during the construction period. In addition to construction risk, there are environmental risks, which may include workforce and political risks, budget overruns, and soil contamination.


Yet another type of idiosyncratic risk to factor in is entitlement risk. Entitlement risk is where a government agency that has jurisdiction over your project will not issue the necessary approvals for your project to move forward.

Start Making Smart Investments Amid Today’s Potential Real Estate Investment Risks!

Real estate investing does come with multiple risks, but if you and your private investors weigh the risks and the rewards wisely, you can enjoy great returns from one deal to the next. Learn more about finding and making great apartment deals from my and Theo Hick’s book, Best Ever Apartment Syndication Book.

Follow Me: