Fri, 27 February 2015
Cash Flow Friday Tip #7: How to effectively test the market demand for a rental property before ever purchasing it
In this week's Cash Flow Friday tip I'm going to go into detail on how you can use Craigslist as a tool to test a local rental market and the overall demand for that particular investment property before ever acquiring it. I mean, who would want to know how much demand there will be for a rental unit and how much you'll be able to get for it before ever buying it. Forget proforma's that the turnkey operators try to sell you on and why would you ever rely solely on the realtors opinion on what you'll be able to rent the unit for. Let the facts speak for themselves.
Now some of you might feel that this technique is a little misleading or unethical and you're completely entitles to your opinion. My goal when buying a mobile home park is to ensure we're buying in an area that has sufficient demand for the type of property I'm offering. Take the guess work out of the equation and let the market tell you whether or not the property you're considering buying is in high demand and will rent fast.
#1: Write a description for the property and be specific as possible without mentioning the address or neighborhood it's located in, since after all you don't own it yet. Be sure to include all the relevant facts: schools, beds/baths, sq. ft., age, upgrades, monthly rent $, etc
#2: Search google images and try and locate a similar looking exterior image (don't use an image of the exact property you're looking to buy) as well as a few interior images. Again, don't go and use the exact images of the property you're looking to buy. Using similar images which you grab from the web will do the job and won't get you in hot water.
# 3: Create a free google voice phone number which is where you'll be forwarding the calls to. Setup a voicemail message with a basic greeting so that the callers think they're calling an individual. If you're running more than 1 test ad at a time (maybe you have more than 1 property or are testing different markets) then you can use an app called burner which will allow you to create multiple temporary numbers with VM's for each for up to 30 days. We use this when we are looking at multiple parks and need to run numerous test ads to determine demand
#4: Post the CL ad and be sure to include the phone number to your google voice or burner app.
#5: Sit back and see how many calls come in. I personally like to see at least 5-6 calls per day for a specific property, but you'll need to figure out what the right demand for you is. If you're in a small market then maybe that number is 2-3 calls per day.
Mon, 23 February 2015
Our guest for this week’s show is Joe Stampone who is the Vice President of Investments for Atlas Real Estate partners, a privately held RE investment firm located in NYC who specializes in opportunistic and value add real estate in the multi-family, student housing, retail, and office sector
Unlike our typical guest here on the show who took the independent path of working their way to financial freedom through investing in real estate which usually consists of starting out with single family home investments and gradually working their way into larger and more profitable commercial deals, Joe decided on a different path, a path that landed him with a newly formed investment firm who specializes in institutional grade investments throughout a broad range of investment types.
Joe 's goal with this approach was to surround himself with the smartest in the industry and build a track record for himself in order to gain an edge that will directly benefit him when the day comes where he'll venture out on his own. I personally think this is a brilliant approach and one that should be seriously considered by those who are currently working their way through college and have a serious interest in a career in real estate.
In this show you’re going to learn:
· The reasons for choosing the institutional path versus going out on his own
· How he was able to land a key role with Atlas Real Estate Partners directly out of school
· What fundamentals his group looks for within a particular market
· How 3rd party strategic relationships has allowed Atlas to successfully diversify into multiple different asset classes
· How Atlas has been able to create more efficient management of investor relations by integrating an already proven crowdfunding platform
· What the day to day life within a private investment firm looks like
· Joe's inspiration for starting his real estate blog
· And much more...
· Download my free success guide, “7 habits of highly successful multi-family investors” by going to www.KevinBupp.com/guide
· Schedule a free "no obligation" call directly with Kevin by clicking this link https://www.timetrade.com/book/KV2D2
· Looking to invest in Mobile Home Parks? Want to partner with the industry experts? Check out http://www.SunriseCapitalInvestors.com
Fri, 20 February 2015
In this week's Cash Flow Friday tip I'm going to share with you the 4 free resources we use in our business to perform a quick and dirty evaluation of a market
#1: www.BestPlaces.net - this site provides info on cost of living, quality of schools, population, crime rates, unemployment rate, house prices and all of this can be search by zip code or by city and state.
#2: www.City-Data.com - this site is somewhat similar to best places, but goes into a little more detail and even includes things like recent sold comps, a sex offender search, more detailed demographics, a breakdown of neighborhood data by zip code, building permit data, etc. This site is best for a more detailed and specific research
#3: www.RentOMeter.com - Want to know what the market rents are for a given zip code or city/state? Then rent-o-meter is free and easy to use and will give you the quick and dirty data needed to see what properties are renting for in your market.
#4: www.Craigslist.org - We use craigslist for a multitude of things including; checking the local rental market competition - how many properties similar to mine are there available, how long have they been listed, are they offering move-in incentives.
Another thing we do is we run test ads to determine the demand within a given market for the type of property we're about to bring to market i.e., mobile home, apartment, SFR, etc. Some of you might find this misleading and unethical, but when looking to acquire a property within a new market I want to make sure there is plenty of demand before we commit to buy.
I'll talk in more detail about this particular system we use for running craigslist test ads in next week's Cash Flow Friday tip.
Fri, 13 February 2015
Cash Flow Friday Tip #5: The Top 3 critical market indicators to help you identify high demand areas to invest in
This week's Cash Flow Friday tip is the top 3 critical market indicators to help you identify high demand or "soon to be high demand" areas to invest
The question is, how do you find out whether the property you’re considering is located in a high demand area and whether the area will continue to be in high demand in the future because the last thing you want to do is buy a property in a declining market where incomes are deteriorating, unemployment is rising, and people are moving out.
#1 - Demographics: Commercial property investing is really all about space investing. What that means is that you are buying, selling, or leasing space that you think the general population not only want, but need. Take a look at the number of households, people, and businesses residing within 3-5 miles of your property. The more the better. A simple free tool I use to do a quick and dirty analysis for this is www.BestPlaces.net and www.City-Data.com
#2 - Income: To market, sell, and lease your space, you need paying customers. That means the more paying customers you have within 3-5 miles of your property that earn enough money to pay for your property, the better. For example, when I’m evaluating a market for Mobile Home Parks, I will look for median household incomes of $28,000 or better. That’s because residential tenants will spend about 1/3 of their income on housing. I’m looking for tenants that can afford at least $7,000-9,000/year. (583-750 mo)
#3 - Infrastructure: Airports, highways, railways, ports, area amenities are all critical indicators for high demand areas. People want to live, work, and sleep where access is easy and amenities are available. If you’re looking at an apartment community 1 hour from any Walmart location, you might want to reconsider how “in demand” that are might really be. In fact, when I'm looking at a mobile home park within a new market I always look to see if there's a walmart and how close by it is. If there is no walmart in town then I usually pass immediately.
Mon, 9 February 2015
In this weeks show we’re going to cover a topic that has seem to become a popular over the past few weeks throughout the numerous conversations I've personally had with real estate investors who own multi-unit and single family rental properties
This week’s show is a quick one in comparison to our normal Monday session and I’m going to get straight to the point as this is a topic that we don’t need to tip toe around. It’s really a no brainer and if you’re not implementing this strategy then you’re doing yourself and your business a disservice and you should really second guess your choice as being a professional landlord or real estate investor who owns rental properties since you'd be leaving a ton of money on the table without this technique in place
And the topic or technique is about enforcing monthly late fees and why as a landlord I love when my tenants pay late and you should too if you want to increase you NOI.
In this show you’re going to learn:
§ Why it is soooo important to enforce late fees
§ How you increase your NOI by as much as 10% by implementing this simple practice
§ How this simple strategy will make your job as a landlord much less stressful
§ How enforcing such a policy will make for better residents
§ And much more…
Fri, 6 February 2015
This week's Cash Flow Friday tip is based on a profound statement I like to use when speaking to both new and experienced RE investors about their investment strategy and the saying is “Real Estate is easy to get into, but hard to get out of.
Let them tell you what this statement means to me by breaking it down into two separate parts with the first part being– the getting into real estate and the second part getting out of real estate a.k.a. your exit strategy.
Getting into real estate is easy
• Many different strategies to make money in RE, some of which you can do with almost a zero budget (wholesaling)
• Multiple different educational options to learn the business (books, bootcamps, coaches, podcasts, etc)
• Great financing options even for people with bad credit (hard or private money and even creative financing)
Bottom line, if you put your mind to it you can buy an investment property, BUT just because you buy something doesn’t mean it’s a worthwhile property that will meet your goals – both short and long term. In addition, it’s imperative that you fully understand your exit strategy and have both a plan A, B, and C before ever getting into it because as the saying goes, getting into RE is easy but getting out can be a much greater challenge, one that if you don’t do your homework and have a plan in place can leave you in financial ruins.
Possible exit plans
• Adding value and selling for short term capital gains
• Holding for long term cash flow
• Adding value and refinancing to pull your capital back out
• Fire sale – worst case scenario
• Selling on creative terms
Thanks for listening in to the Cash Flow Friday Tip and until we meet again next week, Get out there and make some cash flow happen.
Mon, 2 February 2015
In today's show, we're going to flip the tables and take a completely different angle as we interview Passive Real Estate Investor, Jeremy Roll. You see, we usually have owners on the show who are active operators and which a good portion of them get their funding from silent or passive investors to fund their acquisitions. Well, Jeremy is one of those passive investors and has built quite the empire in strictly a passive role and he's here to tell you all about it
A little bit about Jeremy: Jeremy has been an active real estate and business investor for over 13 years who left the corporate world in 2007 to become a full-time passive cash flow investor. He is currently an investor in more than 50 opportunities across almost $400 Million worth of real estate and business assets. As President of Roll Investment Group, Jeremy manages a group of over 850 investors in the US and Canada who seek passive/managed investments in real estate and businesses.
Jeremy co-Founded public investor meetings under the name FIBI (For Investors By Investors) in 2007 with the goal of networking with, learning from, and helping other investors. FIBI is now the largest group of public investor meetings in Southern California, with over 15 monthly chapters and over 13,000 members. Jeremy is originally from Montreal, is a licensed California Real Estate Broker (for investing purposes only), has an MBA from The Wharton School, and is an Advisor for Realty Mogul, the largest online crowdfunding marketplace for real estate investors to invest in managed real estate opportunities. Jeremy has a diverse investor and fundraising network for real estate and business opportunities and has a large network of real estate and business contacts.
In this interview with Jeremy you’re going to learn:
§ What it means to be a passive investor
§ The types of returns Jeremy expects through his passive investments
§ The process of performing due diligence on a passive opportunity
§ The steps he takes to qualify the sponsor of investment opportunity
§ Why he likes to diversify into multiple different asset classes
§ The typical timeframe you can expect to have your capital tied up
§ The responsibilities of a passive investor
§ Jeremy's outlook for the next 5 years and why he's seeking out longer term investments
§ And much more…