Think-Realty-Year-End-2017

TechnologyWar are created equal. Be sure to ask a few questions, including: • How many offices are in your network? • How do you ensure consistency across the board? • What steps have you taken to guarantee the integrity of your data? • What makes your bench- mark data applicable to me? Once you have accounting data, the best practitioners combine it with other operat- ing metrics. This is the process of standardizing data that holds the details of website traffic, paid search results, detailed Google analytics, lead counts, sales closing rates, online reputation ratings, market statistics, and even consumer profile information. A good data firm will standardize every piece of data for every office in its system and even connect the results of paid search advertis- ing all the way to new business won. This is a very complicated and constantly evolving process (see sidebar on p. 61). Small and independent property management com- panies simply do not have the resources, skills or scale to create this level of business intelligence. However, other large property management companies might. I predict that smaller property manage- • How recently has your process been reviewed and updated? THE HIGH-TECH “SECRET SAUCE”

ly weak local demand: You may easily find renters, or not. Both strong and weak markets are less attractive as a slowing economy threatens to diminish demand for housing. At this time, it may be best to consider investing in markets which are neither in boom nor recovery mode, where home prices are rising but still low. Places where the ratio of prices to rents means you don’t need to split a property, and where the local economy is still solid. Local Market Monitor has sifted 320 markets to come up with the 20 listed here. They won’t be immune if the national economy slows further, but they offer a lower-risk opportunity in single-family rentals. •

their fix-and-flip business do not meet the criteria for that short-term investing option. The Adkins use the strategy of buying properties subject-to the existing mortgages, called “subject-to investing” for short, in order to gain control of real estate and associated financing without having to bring large amounts of money to the table. “When a property does not necessarily fit our requirements for a fix-and-flip, we always investigate to see if someone might sell it to us subject-to,” said Jay, explaining that many burned-out land- lords will jump at the oppor- tunity to escape a troublesome rental property that they may own nearly outright. “We simply ask them if they would be interested in us taking over the property and being responsible for the mortgage, the repairs, everything,” said Jay, noting that in this strategy, “Our goal is to get the mortgage out of their name in less than five years.” He added that they would never guarantee this. “It’s all about having a differ- ent mindset, an atypical mind- set compared to how most of society and even the majority of investors think about real estate,” Annie added. “It’s about offering a different kind of solution that works for inves- tors at a lot of different levels and is also, at times, a perfect for homeowners as well.” When that match is made, the Adkins can access all three types of equity in one fell swoop either immediately or often within that five-year period. They find buying sub- ject-to rental properties to be an ideal way to access some of that “instant” appreciation to which Olsen refers, to leverage the forced appreciation that

Bowers described, and to often own properties outright on a much shorter time frame than otherwise might be an option for an investor in the typical buy-and-hold mindset. FIVEYEARS CANMEAN ALOTOFTHINGS When considering imple- menting a five-year plan into your buy-and-hold real estate investing strategy, remember that these plans may and should be flexible and creative. Much of your five-year investing strategy should hinge on contingencies: •  What is the market doing right now? How about now? •  What are your tenants doing right now? How about now? •  What are your home values doing right now? How about now? While much of real estate is highly predictable, when your market revolves around the changing preferences of people, it pays to spend some time carefully evalu- ating your game plan from time to time. This is true no matter how long you plan to remain in an investment. To this end, a five-year investing plan, even a tentative one, may enable you to maximize an opportunity that you didn’t plan for but that can change your investing power and potential for the better in the long, long term. •

ment firms will begin to real- ize they need to join a larger organization to thrive. Many have already either joined franchise systems or sold their portfolios to independently owned and operated offices in those franchise systems. This consolidation is likely to continue and even speed up as larger organizations make additional strides in data man- agement strategy. • > Continued from :: PG 103 Creating a Firm Foundation for Your Real Estate Business When you are working on these signs and graphics, be willing to accept some help and even pay for it. If you are not creative, find someone who is and give them lots of examples of things you like. Finally, be patient and deliberate. Lots of real estate investors get extremely excited about getting started investing and they fail to build a firm foundation under their business. Take a moment to identify and communicate your why, and you will find that it is very easy to build your investing business. • > Continued from :: PG 107 3 Variables that Will Make or Break Your Deals sells a lot of properties in the area, they should have a set of quality checks they can use to show you how accurate their predictions about other recent deals have been. If you are working with an individual seller, you may have to work a little harder to compile this type of data about an area on your own.

> Continued from :: PG 18 Never “Advertise” Again playing field. Many times, I have heard the words, “We don’t need to adver- tise,” often from very successful companies. I find when I dig deeper into these companies, the marketing is so evolved that it no longer feels like advertising to them. However, they are still dedicating time, brain-space, and resources to building up their brands and staying visible to their target market. Use these four questions to help fine-tune your market- ing strategy so you no longer need to advertise in the conventional sense and can, instead, devote your mes- saging to building up your reputation, your client base, and your returns. • one property and put those proceeds into maybe two new properties in the next area that is ripe for growth,” Bowers explained. CREATIVITYCLEARS THEWAY Clearly, a lot can happen in five years, and a five-year plan is certainly something to consider even if you plan and even hope to own your long-term real estate investments much longer than that time period. Some five-year plans can translate to extremely safe, long-term in- vestments in a different way, us- ing a method that Jay and Annie Adkins, co-founders at Extreme Equity Partners in Newark, Ohio, leverage when leads for > Continued from :: PG 38 Investing in a Five-Year Plan

LESSON LEARNED The market sets the price and determines your profits, so be very, very familiar with your market. When you invest in real estate, there will always be deals that go better than planned and, unfortunately, there will always be some that do not go as well as you hoped. Starting out with these three variables, however, will help put you in the best position possible to make your deals a success. • > Continued from :: PG 109 Behind the Scenes with The Local Market Monitor IW Well, it probably won’t surprise you to learn that there are some statistics we lean on more heavily than others, but you might be surprised to learn some of the really important variables, like population growth, for example, are not as current as we would like. You must always consider the dates on your data! Population growth is an enormously important determinant of demand for housing, but by the time we get population data it can be as much as two years old. Job growth, on the other hand, is another extremely important factor and you can get very recent numbers, but it tends to be more volatile, especially given that those numbers are often revised multiple times after they are initially released. TRM What is the biggest myth you encounter about real estate data and analysis?

IW The biggest myth is probably that there is some way to identify a single absolute best market. There is no system that will tell you which market is the best because there is no one way that all people invest and there is no one way that people evaluate markets. I think we have a pretty good overall ratings system, but we are ultimately just looking for different ways in which our data makes sense for different investors. •

> Continued from :: PG 111 Top 20 Markets for Defensive Investing

rentals very attractive. The low home prices, however, at this stage of the recovery, signal fair-

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> Continued from :: PG 61 The True StoryAbout Real Estate’s

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