lower-cost city, Indianapolis. They took over a downtown tower there and are filling it up with great employees who are talented and willing to work for a reasonable cost be- cause they live in a relatively affordable area of the country.
to demand housing and, with an undersupply of homes for purchase, the rental market is likely to remain quite strong for the foreseeable future. •
anticipated. The institutional investor makes sure a property makes financial sense based on current figures on the day they buy it and small investors would do well to follow suit to minimize risk and build a stable portfolio. • > Continued from :: PG 47 A Primer on Due Diligence for Investment Houses Roof leaks and damage can be spotted by looking for discolored shingles and those that have “lipped up,” meaning the edges are curled upward. Of course, also look for signs that water is entering the house by way of the roof. INSPECTIONS Words to live by: “the more information, the better” A seasoned investor may be able to skip ordering inspections and simply inspect the property on their own. But I would rec- ommend any new investor get an inspection from a licensed property inspector. You should also get a pest inspection and may want to consider testing for radon and lead as well. Not only will an inspector often find things that you may have missed, but inspection reports can be very helpful for negotiating. You can simply ask the seller to either fix or offer a discount for whatever items the inspector noted as being in unsatisfactory condition. Having an inspection report to back such a request makes it stronger and more likely the seller will fix the problems or offer a price discount. Some issues may require a specialist. If you have con- cerns about the roof or the
foundation, consider consult- ing an expert in that area.
• Ask your property manag- er, a friend, or a neighbor to check the house daily during cold snaps to make sure it’s still warm. • At the very least, shut off the water in the house. Better still, shut the water off at the street and drain the plumb- ing system. If you don’t feel comfortable winterizing your property, call in a professional. • Install a remote or “smart” thermostat so you can mon- itor the temperature while away from the property. A NOTE ABOUT MOLD Mold can grow very quickly if you have a burst pipe – it only takes 24-48 hours (or less!) to grow after a water event. As such, it is imperative to dry out your property as quickly as possible. If the job is a large one, you may need help from a water mitigation com- pany. Mold is typically exclud- ed from most property policies, so swift action to remediate any mold issue is critical! WON’T INSURANCE COVER THESE LOSSES? The quick answer is… maybe. While insurance is an important part of your risk mitigation plan, it typically doesn’t cover every type of loss and each policy is different. Always check with your agent if you are unsure about your coverages. Even if your insurance does help, you can avoid a variety of expenses and hardships (think stress, loss of sleep, lost profits, lawsuits, guilt, and more) by taking the proactive steps above. •
appreciation rates while others loosen and level off. Single- and multifamily investors are already taking notice and taking action. “Peak Capital Partners re- cently purchased a nice 350- unit, class B, garden-style apartment complex in Jacksonville, Florida [that is] located in one of the best submarkets in Jackson- ville. We are excited about a value-add opportunity that should increase rents be- tween 7 and 10 percent over the next two years.”
> Continued from :: PG 27 Sector Breakdown: Multifamily Real Estate Trends in 2018 and Beyond go far, however. They will likely only go to the nearest lower-cost area that offers housing they can afford. The result, when this happens across the country in the international gateway cities (I include Miami in that catego- ry for the purposes of this dis- cussion), is that those primary markets end up “bleeding out” mid-level knowledge workers. They are skilled, but they are not necessarily wealthy. They have a family and responsibilities. They are looking for a good place to live (and they can afford it), but it is probably going to be a secondary city. For example, if one of these households is leaving New York City, they are probably heading for Raleigh, Charlotte, or Atlanta. If they live in Southern California, they are probably thinking of moving to Boise, Salt Lake, or even Denver. When the workers start to bleed outward from a gateway city, the corporations begin to take notice. Companies have to make decisions about where they want to locate future sites and also plant their headquar- ters. After consideration, they usually move elsewhere for expansion even if they do not uproot their original location. THE SALESFORCE.COM SCENARIO As an example, take the company Salesforce.com. They are located in San Francisco, and they capped their employment there at 10,000. Then, the rest of their employee population was hired and based in a much
> Continued from :: PG 92 Market Spotlight: Jacksonville, FL “Along with Raleigh, San Francisco, Omaha, Columbus, and Portland, Jacksonville has improved the accessibility of its rental housing stock by more than 20 percentage points since 2011."
TITLE Words to live by: “Close with a title company” It should go without saying, but you should only close a property with a title company (or attorney, depending on the state). A title company will offer title insurance in case they don’t catch any old liens. There’s nothing worse than buying a property only to find it has a giant unpaid loan attached to it that is now your responsibility to pay! Thorough due diligence can not only prevent you from making critical mistakes, it can also give you the opportunity to get a better deal by providing leverage for negotiation. Make sure to never neglect it. • > Continued from :: PG 49 Meet Me at the Top The era of the video confer- ence has arrived in real estate. Use this advance to your advantage. Housekeeping tips for project management mile- stone meetings: 1. Start everyone on mute 2. Turn off social media alerts 3. Use reminder features to send out two alerts reminding all participants about the meeting • CONCLUSION
> Continued from :: PG 37 The Year in Review:
Institutional SFR Investing in 2018 While all the factors above are fairly standard metrics for sophisticated investors, chances are you are not utilizing infor- mation on this on a daily basis to execute your strategy. While using data is a valuable tool that can help guide your decision making process, the most important thing all investors should learn from institutional investors is the value of disci- pline. Institutional investors may not have the same return thresholds that individual inves- tors do, but they do have incred- ible discipline when it comes to sticking to those self-imposed thresholds. This makes them the perfect bellwether for a market, but you must remember that their goals are not the same as your goals. For example, most institu- tional investors were buying during 2018 (and in general) without assuming any future appreciation on their purchas- es. Most individual investors, even if they say they were not looking for appreciation, bought this past year with the basic expectation of it. As a result, now that the inventory is tighter and the appreciation rate is slowing and level- ing off in a lot of areas, the conversation is getting tense for individual investors who were hoping to flip properties that they are having to hold onto for longer than they
WHEREWE WANTTO BE
ADRIAN ROSENBERG a communications specialist at RentCafé
If I were a betting man, I would say place your bets on intellectual capital. Since I’m a real estate analyst, instead I will say this: When making real estate investments and evaluating markets, look for regions and even more localized sectors rife with innovation and change. These trends occur in concentrated pockets across different cities, and those locales are where people congregate to work, live, and play. Those areas are as powerful as any central business district downtown. •
What does this mean for Jacksonville’s housing market moving forward? Over the next 12 months, this market could tighten and increase in
JASON DANLEY COO of Peak Capital Partners •
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> Continued from :: PG 29 Expert
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Bronchick Law Firm DHLC Investments Finance of America
43
Commentary: George Ratiu, NAR’s Director of Housing and Commercial Research
40 & 83
IMN Supplement: 10
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Memphis Investment Properties National Real Estate Insurance Group Norada Real Estate Investments
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IMN Supplement: 12
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demographics [in an area]. What is the demand for your property? How, in light of supply, can you expect rents to grow? I would say demographics very much favor the rental market. The U.S. population added close to 30 million people in the last decade. Roughly 60 percent of the population is under the age of 50, which tells me there is a lot of potential for own- ing rentals. We have a lot of young people who are going
48
IMN Supplement: 16 IMN Supplement: 2
Private Money Lending Guide Radius Renovation Group
66
IMN Supplement: 4
Realeflow
11
Real Property Management
2
Renters Warehouse
100
> Continued from :: PG 51 Protect Your
RentFax
91 33
Standard Management
Investment from These Elements thisWinter
Think Realty
6 & 30
US Probate Leads
59
96 | think realty magazine :: december 2018
thinkrealty . com | 97
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