and solutions. Small owners and managers of multifamily buildings can begin today implementing solutions just by implementing better tracking and data analysis. I know I am happy to find any tools that will assist me in this endeavor. • Multifamily Deals Using Government Programs “In total, that was about $4 million in public funding to acquire, renovate, and bring this property Carpenter noted that de- spite the sometimes-slow na- ture of working with govern- ment entities to fund deals, successful developers get to work as soon as they have the funding so that they can con- vert any short-term financing to more favorable terms as quickly as possible. “Right now, we’re in the bridge loan period on that project, and we hope to convert to a HUD loan in a few months,” he said. “Additional funding will then kick in when we start the inside of the units.” • > Continued from :: PG 53 4 UniqueWays to Source Off-Market Apartment Deals HELPFUL HINTS: To attract the owners to your meetup group, convey how they will benefit from attending. Explain that the > Continued from :: PG 49 Funding in sub-standard condition, up to speed.”

event will be attended by many active, experienced real estate professionals, or invite them to a specific meetup where you or another apartment owner will be pre- senting valuable information targeted at apartment owners; for example, “Seven Ways to Increase an Apartment’s Net Operating Income.” These are four creative and relatively inexpensive lead generation tactics that little to no one in your target market will be implementing. Additionally, all four tactics result in pre-qualified leads and are focused on alleviat- ing a pain point or adding value to another person’s business, which are the keys to maximizing your lead conversion rates. • > Continued from :: PG 57 5 Important Factors for Success in Residential Assisted Living Investments This method is certainly a nice thing, but it is intelligent business too. Food, activity, health and socialization are all part of the RAL experience, and the environment these factors create is key to the success of rental homes and RAL businesses. You want your residents to thrive, not just barely survive. Furthermore, cultivating a wonderful living environment enables you to justify premium rents, cultivate great reviews, and build a sterling industry reputation. A great environment may also help stave off aging and dementia and lead to longer-term tenancies, not to mention the personal rewards that

come from creating a healthy, happy, desirable community for your residents to enjoy. • > Continued from :: PG 85 Clearing Up the Insurance Exclusion Confusion, Part 3 6 Lighting: A well-lit exterior can discourage thieves from approach- ing your house at night. Motion-detector lights placed high out of reach should be a standard installation, as should lighting on timers. 7  Board up: If a property will be vacant for a long period of time, board- ing can keep thieves from entering through the windows and can vacant properties to be boarded, so check yours to see if you have that requirement. 8  Alarm systems: Alarm signs in the yard can be a good deterrent, but having a working alarm with monitoring may help scare someone off if they manage to make it past your other security layers. There are portable systems out there for those doing rehabs that help save on costs. add an extra layer of security to the entry doors. Some insur- ance policies require

com) and read the entire "Is It Covered?” series to help clarify common insurance misconceptions and help you be proactive at preventing avoidable losses. As always, if you don’t understand an as- pect of your coverage, check with your agent who should be happy to help you! •

is resident-ready. This particu- lar angle on the turnkey rental strategy, however, is ideal for an investor who specializes in creating good rental situations but does not necessarily want to manage a large rental port- folio long-term. For example, you might acquire, renovate, and rent out a house with a fair market value (FMV) of $65,000 for a total of $38,900, thereby leaving you with a nice spread to work with. Dan Zitofsky, president and CEO of Zitofsky Capital Management, did this deal (and many like it) last year. “I was able to get it rent- ed for $650 a month with a reliable tenant,” he recalled. “After six months, that rental had a good track record.” At that point, Zitofsky sold the house to another investor via seller financing. The buyer agreed to pay $55,000 for the property (thereby creating $10,000 in equity) and make a $20,000 down payment on the property (landing Zitofsky a nice cash infusion for his com- pany). He added two points to the loan, resulting in the creation of a note for $35,000 at 10 percent interest with a monthly payment of $307.16. “It is always important to make sure that the next inves- tor gets a decent yield as well as getting one for myself,” Zi- tofsky said. One way to make that happen is to increase or lengthen the term when selling to another investor. Zitofsky noted the 10-10-10 “perfect note” (see p. 87) may not work in this instance. In closing, there is no single path of success in real estate in- vesting. There can (and should) be many moving parts that are intertwined. Note investing can be used to acquire and sell rental home inventory as well

as improving the everyday busi- ness activities of a landlord. The wise landlord/investor will learn and execute different strategies to improve both their processes and their bottom line. • > Continued from :: PG 89 4 Categories of Debt and Associated Remedies Common equity holders are investing alongside the person/ entity with the most at stake, the project sponsor. Sponsors put real money into their projects (generally at least 10 percent of the total equity), and so believe in those projects and expect to make money from them. Also, there is no upside limitation with common equity investments: If a property is sold ahead of schedule for a better-than-expected price,

common equity investors are the ones who would realize on those unexpected gains. Since a common equity position involves no security or collateral, the corollary is that that investment position generally involves the highest potential returns, since there is no limit (cap) on the property’s appreciation – or “upside” – that the investor can realize. Of course, high potential returns involve high potential risks, including loss of principal – so investors need to think careful- ly about this trade-off. SUMMARY Each investment position in the capital stack has different rights and involves different remedies. Reflect at length on these differences when consid- ering investment opportuni- ties and associated debt. •

> Continued from :: PG 13 Letting GoWithout Losing Control business will soon start cost- ing you money if it has not done so already. How much does it cost you to lose a lead, continue costly rehabs that are over timelines, or pay more money to your lender because your projects are taking too long? Starting this process will help you resolve that problem and take your life back from your business without you having to go out of business. • Use Artificial Intelligence to Ramp Up Your Multifamily Game employee, buyer, and seller. Furthermore, we did not even begin to address the benefits of smart-home technology that enable you to identify and prevent main- tenance issues before you ever encounter a leak, a clog, or many other problems. From move-in to move-out to housing inspections, the ability to store more data and document the images with date time stamps allows for multiple scenarios to track and tackle data patterns and resolution. In another year or two, you might even take your personal robot with you on housing inspections to timestamp images and record your exchanges with the tenant! As you observe AI-related changes in other industries, watch with your creative side. Share best practices > Continued from :: PG 47 3Ways to

> Continued from :: PG 87 Maximize Your Rental Portfolio with Note Investing Strategies

“You have to record the note to create a first-position lien that is legally enforceable, or it doesn’t work.” When structured correctly, the tenant is highly motivated to pay their rent on time; the family member is highly moti- vated to ensure that they do so, and the landlord has another individual on their “side,” so to speak, in the collection of rent. Furthermore, in a worst- case scenario, the investor can foreclose on the collateral and recoup their losses. Breakdown: One investor gets a mortgage note. One investor gets a turnkey rental property with a sea- soned tenant. Note knowledge may also play a role if you want to sell a house that is already being rented, a strategy also known as creating a turnkey rental. Note: This is not the only definition for turnkey rental. Many investors use the term to refer to any purchase of a rental property wherein the tenant is already in place or the property OPTION 4 TURNKEY RENTAL STRATEGY


5 Arch Funding Brad Sumrok


Investor Review: 14-15 Investor Review: 12-13; 85

Affinity Loss Prevention Services

American Association of Private Lenders


Goodwin Commercial

Investor Review: 10-11

Memphis Investment Properties National Real Estate Insurance Group Norada Real Estate Investments


59; Investor Review: 6-7


Private Money Lending Guide Real Property Management





Renters Warehouse

Investor Review: 4-5 Investor Review: 6-7

Residential Assisted Living Academy

Secure Pay One SGF Contracting Streamline Funding

Investor Review: 2-3; 115


Investor Review: 16

Think Realty


FURTHER READING Read more about poten- tial exclusions on the ALPS website (www.affinitylps.

112 | think realty magazine :: march 2018

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