ments -- but shows all the signs of being well-supported by both public and private entities -- there is still a lot of potential in the area if an investor is willing to monitor the market and do a little research. • > Continued from :: PG 38 No Stone Unturned continues to spread into sec- ondary and tertiary markets, raising apartment performance and enhancing the appeal of assets in these markets to inves- tors seeking higher yield. For example, Austin, Texas, draws a highly educated, upwardly mobile workforce attracted by the city’s dynamic lifestyle and economic op- portunities. Austin ranks first in the United States for net in-migration and has the lowest unemployment rate among the 50 largest metropolitan areas. The city’s tech sector is thriving and demand for multifamily product is on the rise as new residents continue to move into this diversified growth market. Another example is Tusca- loosa, Alabama. While this “off the radar” market may seem less attractive to many large institutional investors, it is in fact a stable tertiary market with a strong and diverse local economy and a need for high-quality, afford- able housing. The recent multibillion- dollar expansion of the Mercedes-Benz plant further strengthens the intermediate and long-term outlook of the market, where multifamily properties offer an attractive entry point, higher yields at inception and value-add opportunities to restore and renovate units to a level similar to new construction properties.
foot home, you could expect to spend around $52,500 – as long as it doesn’t need a new roof or have founda- tion issues. • It is easy to underestimate the costs of a rehab. That is why I always add a 10 percent overage fee to all my calculations to make sure I have enough money to fix everything that needs fixing. Jumping over hundreds to pick up dimes will give you a reputation for selling low-qual- ity homes. Cutting corners will make your investments harder to sell. Looking for the cheap way out will make you lests like- ly to pass important inspections and more likely to be involved in lawsuits. Trying to save mon- ey where it shouldn’t be saved will cost you in the long run. • > Continued from :: PG 57 Training Agents to Serve Investors that an agent could do to help investors. Is there any advice you’d give real estate investors who are looking to find a great Real- me and I can direct them to the best agents within our network. Or they can inter- view agents and ask questions pertinent to their business model, such as: • Do they access to off- market properties? • How many investors are they currently working with? • Do they have supporting services in place, such as tor or real estate agent? Investors can always call
property management services and financing options?
> Continued from :: PG 16 Forcing the Economy
LEASE-PURCHASE OPTION Another idea is a combination of the strategies mentioned above in the form of a lease-purchase option. If you want to sell the property, you can inform the potential buyers that you will sell them the home at some point in the future. However, you want to make sure they qualify for your financing by making timely rental and option payments. In this case, you require a $10,000 option consideration as well as a premium rent. That is, a portion of the rental payment will be applied toward the down payment on the future purchase price. When the time to exercise the
option arrives, you can either sell the home a wrap note or substitute collateral. If the buyers don’t exercise their option, they will forfeit their $10,000 option consideration and however much of their premium rent was applied to the purchase price. The examples here are only a sampling of the structures that can be set up if you’re able to involve the sellers in the financing of a retail purchase. As you can see, it’s important to understand the goals and objectives of your sellers and what problems they’re trying solve by selling their property. With this information, you can create a handcrafted agreement that gets them to where they want go and provides you with another investment property. •
> Continued from :: PG 52 Jumping Over Hundreds
SOLID SELLER TRACK RECORD, RISK TOLERANCE ASSESSMENT ARE ‘MUSTS’ Due diligence on the seller is a must for any investment opportunity. The transacting partner’s track record should be fully investigated and vetted so that you can have confidence in their reputation for honesty and integrity in terms of negotiating a fair deal. If the seller is solid and reliable, most other issues are solvable. Ideally, every seller you have been involved with should be a candidate for repeat business. Another “must” is the basis of risk and reward. There is always an element of risk in commercial real estate transactions, but these risks must be quantified. There also must be a willingness to mitigate any risks during due diligence. Since every deal has an opportunity cost, any risk taken on must be compen- sated with a commensurate expected return. Based on a firm’s experi- ence, risk tolerance related to due diligence is always an issue. Some groups are afraid of exposure to certain risks, while others have the ability to be more flexible and opportunistic. The risk needs to be understood, thereby allowing the com- pany to find solutions that help mitigate it. The bottom line is to avoid rushing into a transaction without compre- hensive due diligence. Being as thorough and efficient as possible will allow you to quantify and limit risks, and proceed in a timely and decisive manner. •
Also, agents should never stop learning. The Investor Agent Certification is one I would recommend. It’s offered at the Think Realty Conference and Expos. What do you enjoy about working in real estate? Real estate is everywhere! And it allows me to be flexible inmy business. There’s simply no other investment that is more acces- sible, easier to understand and even easier to get involved in. What kinds of goals are you working on right now? Currently, I’m focused on identifying the best agents for Think Realty Real Estate Services. We are open in three states (Missouri, Kansas and Georgia) and have two other states in process (Texas and Florida). So my days are full with training, education and onboarding new agents. What’s the best advice you ever got about real estate? The best advice I ever re- ceived about real estate was to take risks. Without risk, there’s no reward. I must say that purchasing my first property, sight unseen, was risky and crazy. However, it was one of the best purchases I’ve ever made … and it was one of the first. Want to learn more? Visit www.thinkrealtyservices. com or call 816-398-7983. •
and home to myriad tech com- panies bolstering both cities’ economies. Furthermore, local developers and community organizations are seriously ex- ploring the viability of intercity rail connecting Phoenix and Tucson, likely a further indica- tion that growth in the area will continue to experience support in coming years. Also of note for real estate investors is Florida’s High Tech Corridor (FHTC), which is at a much earlier stage of develop- ment. FHTC spans 23 counties across the state of Florida and is intended to encourage develop- ment along the major highways and interstates that connect them. The corridor’s council has worked hard to negotiate myriad matched-funding grants, entrepreneurial support and research-and-development funding for universities that work with the council (and in many cases spend education and research funding to develop new facilities physically on or near the corridor) and for other STEM (science, technology, engineering, math) corpora- tions as well. With large areas of the interior of the state still relatively undeveloped com- pared to areas like Miami-Dade, Orange and Pinellas counties, investors should watch sparsely populated areas around the highways of the FHTC for signs that the state is planning transit expansion, that local banks are getting ready to sell off REO properties, or that corporations or research institutions are preparing to build facilities in a given area. Because FHTC is in an earlier stage than many other established high-tech develop-
• Light fixtures • Bathroom fixtures • Kitchen fixtures • Countertops
Once again, you may feel like you are saving money when you install these products, but when it comes time to sell your investment property, you will quickly regret your decision. I know I did. FINISHWORK AND CURB APPEAL Many times, when refur- bishing a home, an investor will go over budget. This hap- pens for one of two reasons: the budget was not reasonable, or something unforeseen happened. When either of these occurs, the gut reaction is to stop the bleeding and quit spending money. When this happens, the home suffers. If the home is not yet done, you can’t stop spending money. How will it look if there is no landscaping? How will the home look if the finish work is not done? You would be amazed at the number of times I’ve seen a beautiful home with a dirt lot or a houseful of unpainted doors or just bad or unfinished finish work. If you haven’t done a rehab before, you should work with someone reputable who can help you determine a budget. I have found these numbers give me a good estimate: • A good rule of thumb for a traditional fix-and-flip is around $35 per square foot. If you have a 1,500-square-
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Affinity Loss Prevention Services
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American Association of Private Lenders
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DAWGs
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DHLC
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Equistream
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Finance of America Greystone Residential
3
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LoanMLS
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Patch of Land
Private Money Lending Guide
RCN Capital
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Real Wealth Network
REIGuard
Renters Warehouse
2
RentFax
61 29
SGF Contacting
Streamline Think Realty
103
> Continued from :: PG 87 Big Returns by Paying Retail
6, 15 & 48
US Probate Leads
108
110 | think realty magazine may :: june 2017
thinkrealty . com | 111
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