INVEST R R E V I E W A Think Real ty Publ icat ion SPONSORED CONTENT
DEMETRIOS BARNES SmartRent
JEFF PEPPERNEY President Real Property Management
Hot Market: Baltimore
TAMMY PHELPS Capital City REIA
LEE ROGERS realprotect
Jeff Levin with Specialty Lending Group talks due diligence in the D.C. area
MARCO SANTARELLI Norada Real Estate Investments
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Real Estate Investing: The State of Things in D.C., Baltimore
by Jeff Levin, Specialty Lending Group
R eal estate investors in the Washington, D.C., and Balti- more metro areas may be finding it more challenging to earn a positive return on their investments. But, opportunities still exist- particular- ly for investors willing and able to do their due diligence. D.C. is the nation’s sixth-largest metro area. Its unemployment rate throughout 2019 was below the national average, and average sala- ries in D.C. are some of the highest in the country. The economic picture isn’t as strong in Baltimore, although that metro area benefits from its prox- imity to D.C. Thousands of Balti- more residents commute to work in D.C.. As a result, Baltimore’s unemployment rate is on par with the country’s, yet importantly, workers in the Baltimore metro area tend to earn more than the national average. A strong post-recession econ- omy in both areas is making it more difficult for investors to find good deals. There is both a lack of available properties for sale and in-
creasing home prices.. The arrival of Amazon’s second headquarters, Amazon HQ2, in the D.C. suburb of Arlington, Va., is adding pressure to that area’s ’s real estate market. Redfin estimates that home prices in Arlington County have increased 33 percent because of HQ2. With that said, there are locations in both metros that offer opportu- nities for investors, especially in Baltimore. One way to find good deals is to track foreclosures. These properties can often be bought for less-than-market rates and sold after renovation for a profit. In Q4 2019, Baltimore County was second in the nation in zom- bie foreclosures. One in every 1,645 properties in the county is a foreclosure. The communities with the most foreclosures are Gwynn Oak, Randallstown, Kingsville, and Dundalk. Zeroing in on Baltimore City, one in every 601 properties is a foreclosure. Down the 1-95 corridor in D.C., the ratio of foreclosures is one in every 4,190 properties, but the District’s robust market offers
possibilities for real estate inves- tors, they are just harder to find. In Q4 2019, D.C. had the highest rate of zombie foreclosures in the country. Most foreclosures fall on the District’s eastern side, near Prince George’s County, Md. That county also presents investing opportunities. One in every 776 properties in Prince George’s County is a fore- closure. Demand has pushed home prices in the county higher, but homes are still selling for about $270,000 less than they are across the Potomac River in Arlington County, Va. Real estate investing in the Wash- ington, D.C., and Baltimore metro areas is a double-edged sword. A strong economy makes both markets attractive to investors while also making it more challenging to earn a profit. Foreclosures, though, pres- ent an opportunity for investors. By focusing on specific locations within both metros and staying attuned to their symbiotic relationship, inves- tors can find solid investments for their portfolios. •
INVESTOR REVIEW :: 3
Your Premier Source for Turnkey Cash-Flow Investment Property
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Norada Real Estate Investments
M arco Santarelli started invest- ing in real estate at the age of 18. He purchased, renovated, leased and managed a simple townhouse by himself. Over the years he continued building his real estate portfolio with over 84 out-of-state units including single-family homes, duplexes and small apartments. Founded in late 2003, Santarelli had a vision of helping other real estate investors invest in the best way possible. Norada achieves this by offering quality new construc- tion and refurbished investment properties in strategic markets throughout the United States with properties as far south as Florida to as far north as Chicago. refurbished and new-construction residential properties ranging from single-family homes on up to four- plex multi-units. Their rental prop- erties make sense the day you buy them. It is truly turnkey, as in there is nothing you need to do in order for you to have a solid wealth-build- ing cash-flowing investment. WHAT THEY OFFER Norada offers investors newly
MARCO SANTARELLI Norada Real Estate Investments
• new or newly renovated condition • cash-flow positive, even if fully leveraged • leased or in the process of being leased • under professional property management • carefully selected with renters in mind With their definition of a turnkey property in mind, they have a set criteria in place to make sure their turnkey properties are of the best quality, best location and cash-flow positive for their investors.
survived the 2008 housing market crash. They extensively perform research on over 400 U.S. real estate markets and are what they call Market Agnostic. Meaning, they select markets based on local economic and housing factors, not fads or investor demand. And they include their own scoring system called DealGrader, which measures the investment quality of a real estate investment. No market or investment is perfect which is why you need a company like Norada on your side to help take the guesswork out of your real estate investing. They help you succeed by minimizing risk and maximizing profitability. For more information about their services and offerings visit www.NoradaRealEstate.com or call (800) 611-3060.
WHAT DOES “TURNKEY” MEAN?
Norada has seven factors proper- ties must meet in order to refer to them as “turnkey”. The properties must be: • in stable growth or cash-flow markets • in desirable neighborhoods
WHAT MAKES NORADAUNIQUE
First and foremost, they are one of a very small number of investment property providers that
INVESTOR REVIEW :: 5
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As the nation's premier real estate insurance broker, realprotect is the expert in insuring real estate investors. We understand the real estate business and what investors like you look for and need in a comprehensive insurance program. You've built a business out of owning and investing in real estate. Let us help you protect it. We start with an understanding of your properties and design an insurance program that helps you meet your coverage and pricing objectives. We promise that we will work diligently to find the best coverage at the best price for you. Give our process a try and find out why many leading SFR lenders and firms trust realprotect with their insurance and risk management needs.
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Real Protection for Your Properties
by Lee Rogers, realprotect
A s the real estate insurance program of Norton Insurance, realprotect is not only comprised of insurance professionals, but is also a real estate firm that has over 200 licensed agents and property managers. realprotect is the expert in insuring real estate investors and understanding the real estate business and what you look for and need in a comprehensive insurance program. You have built a business out of owning and investing in real estate, and realprotect wants to help you protect it. realprotect starts this process by gaining an understanding of your properties, business structure, and operations. Then, realprotect will de- sign an insurance program that helps you meet your coverage and pricing objectives. realprotect promises to work diligently to find the best cover- age at the best price for you – based on your actual needs. realprotect takes risk manage- ment and loss control seriously for every single client. realprotect has
risk management resources to offer you the tools you need to under- stand the risks that you face and has partnered with industry-leading companies to provide you risk con- trol products at discounted rates. At the helm of realprotect is Lee Rogers, President. As an insurance professional that has worked and consulted with different Sin- gle-Family Aggregators, Rogers brings unique value and perspec- tive for investors, fund managers and operations professionals. He and the Aggregation Risk Man- agement Team at realprotect have helped design and implement insurance and risk management strategy that is above and beyond what is being set as an industry standard for insurance structure in Aggregation Portfolios, while keeping costs contained and risk properly manage and transferred. Based in Atlanta, Rogers has unique insight and knowledge of many insurance markets, with direct access to many of the world’s lead-
ing insurance carriers. Rogers has helped develop analytical tools and insurance philosophies that are in line with the true risk exposures that Single-Family Aggregators are fac- ing. He understands that the Aggre- gation Market is unique, and that the insurance industry must be able to adapt to this emerging asset class. Rogers uses his vast experience and innovativeness to focus on building business relationships with prospective clients, marketing products and advising investors on coverage options for their real estate assets – while making sure that his entire team at realprotect provides the same quality experi- ence for each client. Lee Rogers and his team at realprotect work with industry leaders such as lenders, market- places, and property managers and wholesalers to provide them with the protection and service that their hard work deserves. To learn more about realprotect, please visit www.realprotect.com. •
INVESTOR REVIEW :: 7
Multifamily Smart Home Automation Solutions from SmartRent
by Demetrios Barnes, SmartRent
I n 2017, SmartRent set out to cre- ate software targeted specifically to the multifamily industry to allow users to manage an array of smart home devices and other third-party software using just one platform. Today we are proud to offer an en- terprise solution that allows owners, operators and staff enhanced visi- bility, better control and increased efficiency in day-to-day property operations while providing residents the ability to manage multiple smart devices and enjoy the benefits of smart home automation using one app. With 70,000+ smart homes (and growing) installed across the United States, SmartRent continues to expand its reach and develop robust product offerings and integrations for our clients. We’ve secured partnerships with industry leading investment funds, such as the Amazon Alexa Fund, which have provided additional de- velopment and technology resourc- es, enabling us to continue creating and offering new features. We con- tinue to introduce industry-leading innovations, such as self-guided property tours and access control systems to enhance your return on investment and reduce common operational inefficiencies that pain property owners and managers. In addition to our mobile-friendly web
platform, we also offer a native mobile application that allows property owners and staff to audit work orders, manage access, move residents in or out, and more, all from their mobile device. The SmartRent platform allows for efficient management of a suite of IoT devices that can be easily transferred to end users, which reduces the need for go-backs and warranty claims, adds value to your properties and provides an attractive upgrade for residents. SmartRent offers a wide range of solutions, including complete community-wide access control through a seamless keyless ex- perience and management dash- board; asset protection using smart sensors, alerts and notifications; property optimization utilizing au- tomations and scheduling features; the ability to offer self-guided tours for vacant units and more. RESIDENT BENEFITS The smart home automation industry has received an over- whelmingly positive response from consumers who experience efficiencies, such as energy and cost savings, through IoT devices. Many consumers already enjoy the benefits of automation in their daily
lives through connected devices like speakers, locks, doorbells, cameras, and thermostats, and this is just the beginning. Industry research estimates that by the end of 2023 there will be more than 6.4 billion smart home devices in use, accounting for approximately $157 billion in spending. However, there is an inefficiency in these platforms: they require users to switch be- tween multiple apps to complete IoT device-related tasks. In addition, renters are precluded from enjoy- ing the benefits of many of these devices because they are not able to install in homes or apartments they do not own. SmartRent tackles these issues head on by offering IoT devices and services for rent- al properties, enabling renters to experience smart home benefits they are willing to pay a premium for. In a recent study, 86% of renters indicated that they would be willing to pay more for a unit outfitted with automated or remote-controlled devices. With SmartRent, residents have access to the automations and connectivity they desire and the ability to control their home through just one app. • Find out how you can turn your property into a connected commu- nity by contacting SmartRent today!
INVESTOR REVIEW :: 9
Using the right property management firm puts more money in your pocket—not less. Real Difference
REAL Property Management has more than 30 years of experience, in 48 states and Canada, doing just that for our clients. Our highly skilled professionals—the most thoroughly trained in the property management industry—have one goal in mind—to help you make the most of your real estate investment. That’s why REAL Property Management manages your property like you would—like a business. Successful investors across the nation have trusted us to professionally manage every aspect of their rental real estate, providing them REAL peace of mind. Put another way, REAL Property Management helps you make the most of your investment in rental real estate while you make the most of your life. Visit www.realpropertymgt.com/optimize to learn how we can put our experience to work for you, giving you real commitment, real ROI, and real peace of mind.
© 2019 Real Property Management.Each office is independently owned and operated.
Purchasing a Turnkey Property? Evaluate the Property Management First
by Jeff Pepperney, Real Property Management
uying turnkey properties can be a great way to build your rental
property manager will help you get the highest possible returns for your investment, year after year. The trouble with some turnkey properties is that they may not always come with reputable management. If the property has been neglected or left in disrepair, that could result in added expense for you as the new owner. There may be hidden damage or other problems that the current manager either doesn’t know about or is hiding. Also, poor management may have resulted in irresponsible or unqualified tenants who may not appreciate changes to the status quo. An inexperienced property manager is much more likely to violate lease terms or even local or federal laws in their dealings with tenants, creating an expensive legal mess for you. They may also allow problem tenants or necessary repairs to go unaddressed, leading to much larger and more expensive headaches down the road. These and other problems are all far too common to assume that it won’t happen to you. To avoid unwanted costs and lawsuits, it is important to first evaluate the current property management on any turnkey property you want to buy. A reputable property manager will be able to provide you with references, including past or current satisfied clients. You should
also ask others in your network if they have heard anything about the current property manager, and talk to their employees, if any. Do a thorough check on any licenses and certifications, taking note of any disciplinary action taken by state licensing boards. You can also visit one or more of their other properties, to get a sense of whether maintenance is being done and whether or not they lease only to conscientious tenants. If all of these check out, you may just have a turnkey property with a professional, experienced property manager on board. Once you find a turnkey property that meets all of your investment criteria, you can then let the experts at Real Property Management take over. We will work with the existing property manager for as smooth a transition as possible, ensuring that all necessary documents and information are collected in a timely manner. We will also work carefully with your tenants, providing them with the information and answers they need to feel comfortable about the coming changes. Each Real Property Management office is an expert in the local market and can help make your new turnkey rental property one of the best investment experiences you’ll ever have. Contact us today to learn more. •
property portfolio. Rental homes that are already leased upon purchase can help investors eliminate the process of getting the property ready for the rental market. But as you crunch the numbers on the purchase price, rental rates, and so on, don’t forget to carefully evaluate the property management situation first. If that turnkey property comes with an inexperienced property manager or has otherwise not been managed very well, that could spell trouble for you no matter how great the numbers look on paper. When considering whether or not to buy a turnkey rental property, it’s important to research the current property management. Quality property management is critical to long-term real estate investing success. A professional and experienced property manager, like those affiliated with Real Property Management, manages properties efficiently and with a high level of care. Good property managers will not only collect rent and find tenants for your property, but also ensure that regular maintenance and repairs are completed on time and correctly, that your rental rates are accurate, and provide recommendations on property improvements, just to name a few. In these and other ways, a professional
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Failure, Not an Option
recently had the pleasure of sitting down with a real modern real estate “SHERO” Her story had me sitting on the edge of my seat the entire time she shared details of her journey. What she taught me during this conversation is that I along with each of us have no excuses because if she can endure, create, achieve and overcome what I am about to share with you in her own words is, “FAILURE IS JUST NOT AN OPTION!” She left high school in 10th grade and never looked back realizing school needed her but she didn’t need school. She knows now but didn’t know just then that what she felt was the burning ‘Entrepreneurial Spirit’. She worked relentless hours in pursuit of making team leader. No longer than she became team leader she learned she was pregnant. By the age of 18 she was a single Mom with two babies. She enrolled herself into a by Tammy Phelps, Capital City REIA I
the US to be named ‘Certified Master Haircolourist’ She traveled, taught and educated on platform for National Hair & Colour Manufacturers. This is where she realized anyone could be as she says, “Un-Mess-Able-With” if we just believe that we can. She purchased her first home at 22 with no knowledge of the process - she “Just Did It!” She didn’t go into analysis paralysis or all the ‘what ifs’. She located the perfect home and simply went for it knowing she would learn the process along the way. Five years later she experienced a life shattering event forever altering her life. She woke up in Shock Trauma to learn she had been hit by a drunk driver and the trauma to her back, hip and leg was severe. She shared with me how over four years she endured 21 surgeries, extensive rehab to learn to walk and if that wasn’t enough she lost her home during this time. She told me that through it all
there were two things she didn’t lose: Her FAITH and Her Kids. With nowhere to go but up she enrolls to learn real estate and becomes a Realtor. A client invited her to join a top producing brokerage. As ‘Rookie of the Year’ she was nicknamed F.S.B.O. Queen. One such listing she met an investor who had acquired a SFH, was flipping it for a profit and right there the earth's axel shifted while the stars aligned. With no clue, no knowledge she sought out seminars, workshops, anything she could to learn about being a real estate investor. She had no idea where the next 20 years would take her. All she knew is that she was called to build “Community!” She was Commercial Investor of the Year in 2018. She founded the most sought after Baltimore, DC & MD REIA - Capital City REIA. She continues to touch, motivate & inspire. This invincible “SHERO” is me - This is my story! •
cosmetology technical college and ended up becoming 3rd in
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