Listeners of the show will remember Jillian Bandes who, in episode 74, discussed what real estate investors should consider about building structure when looking at commercial multifamily investing. The project manager for Bandes Construction covered 6 hot topics on building structure and maintenance that investors should be aware of with commercial multifamily properties.
In this episode, we discuss Jillian’s first investment property….a single family home with an ajacent rental apartment. She discusses razing the property, dealing with the local code and building officials and her plans on whether to rent the units or live in one and rent the remainder. The property was purchased through a foreclosure and we cover the online methods now employed by Pinellas County. Not only is this project about a potential home and investment, but Jillian is passionate about blazing the trail for urban renewal and redevelopment in St Petersburg’s core and her unit is in the heart of a rapidly changing area.
Residential property permitting and zoning regulations differ from commercial properties
Choose property in an area you are familiar with
Walk surrounding neighborhood
If investment property, define target rental market
If foreclosure property, know state of title (liens)
What is the property zoned for? Is property up to code? Accessory buildings permitted?
Work with local and municipal officials
St. Petersburg, Florida
Undergoing immense urban growth period
Investors need accessibility to invest in properties with potential for redevelopment/renewal
South St. Pete offers development opportunity and reasonable prices w/ proximity to cultural amenities
Jillian extends a big thank you to Carlyn Neuman of Tampa’s 360 Realty for helping to navigate online foreclosure bidding as well as to Katrina Trump of Bank of Tampa, for assisting with securing financing.
This man is Bijan Gorji, a real estate investor based in Sarasota, FL. Bijan is a special kind of investor though. Bijan invests solely in one asset class–one often overlooked by other real estate investors–residential condos.
Bijan believes that residential condos as an investment asset class have been an unfairly neglected market for too long. Where others see problems, Bijan sees potential… and it is paying off well for him. Since moving to Sarasota from California in 2012, Bijan and his wife have acquired a portfolio of over 35 residential condos with plans to continue investing in more residential condos. This episode, Bijan will discuss why he settled on residential condos as his chosen asset class and why it should appeal to investors from a financial standpoint along with providing a brief overview of Sarasota’s real estate investment market.
Pros of Investing in Residential Condos
Easy property-management compared with single-family
Low upkeep costs
Ability to self manage properties
Tenant profile allows fluid leasing
1-2 bedroom units to working professionals or grad students; no families
Tenant turnaround quicker
Buy-and-hold investment w/ monthly cashflow
Hands-on investing allows oversight over all facets of investment
Check HOA regulations for condo before investing
Find properties within driving distance if self-managing
Finding tenants is biggest issue with residential condos: list on Craigslist, Zillow, Hotpads, etc.
Huge amounts of construction (Multi-family and Single-family)
Rents steadily increasing across all sub-markets
Residential condos offered stable investment asset class
Commercial real estate investing is not the same thing as residential real estate investing. Just because both property types have four walls and a roof does not mean they have the same investment strategy. Commercial deals and contracts are subject to different regulations than residential properties. Residential real estate investors looking to invest in commercial real estate should be aware of the different facets of commercial deals and contracts.
Shawn Yesner, of Yesner Law Firm of Tampa, specializes in real estate law. After getting his start in real estate law representing lenders, Shawn began his own law firm in 2004 representing homeowners. Shawn has since expanded his firm to encompass all aspects of real estate law, representing property owners in a variety of legal processes. Shawn discusses some important points for investors to consider when completing commercial deals and contracts.
Residential real estate uses one contract template – FARBAR (FL Assos. of Realtors + FL Bar Assos.)
Attorneys specialized in commercial real estate should draft commercial contracts
Only clauses that meet buyer/seller agreement should be introduced
Make sure tenants are current on lease payments
Track lease deposits
Keep leasing contracts in same format
Tax-Deferred Opportunities (1031 Exchange)
Strict timelines and regulations to be aware of
Seek assistance from CPA or certified agent
Be able to prove constructive receipt of funds; don’t get stuck with tax liability
“As Is” Contracts
Seller should always disclose state of property
in FL, Johnson v Davis sets “as is” precedence: Seller must disclose anything material to purchase of property and/or anything that might not be found after a reasonable inspection
Buyers may choose to assign ownership of property to LLC or other business name
Contracts should hold original buyers liable
FL recently changed LLC laws
Sellers should be aware of who holds legal authority to make buying or selling descisions
Title companies can do bulk of research on this
A detailed contract should outline purchase agreements
Sellers should not leave any gray areas to argue incomplete agreements
Make sure you know your property’s zoning authorizations
Zoning can be changed, but make sure your property can accommodate changes
May pose big concern for environmental properties
Owners may be responsible for environmental factors that occurred prior to purchase
Buyers should complete phase I assessments of properties for any red flags during due diligence process
To contact Shawn for any real estate law needs, visit his website!
Shawn also hosts a podcast covering many legal topics in real estate investing and ownership. Check out Yesner Law Podcast on iTunes, Stitcher or your favorite major podcast platform!
A sense of home can be a hard thing to find in an apartment. Real estate investors holding apartment complexes or other multifamily dwellings may find marketing their properties as desirable living spaces to prove difficult in media over-saturated with ineffective advertising and marketing strategies. The rise of social media has changed the face of marketing, with web-based marketing now offering a variety of platforms to deliver your property to potential residents. Some apartment complex investors and property managers are embracing these new platforms and initiating innovative and effective marketing campaigns directed at tenants looking for something more than just another apartment.
Melissa Meredith and Ana Maria Palermo have both grasped this shift and are using social media and other creative methods of marketing to produce appealing, effective marketing solutions for their clients. Melissa Meredith, of Marketing with Mel, works and lives in Tampa’s Channelside District. Melissa applies her innovative “360 approach” to create niche marketing strategies to grow her clients’ business. Ana Maria Palermo, property manager of Channelside’s SkyHouse luxury apartment complex, has built a strong community foundation for the residents by using social media and other creative methods to market to new tenants. This episode, find out how using social media and other creative methods of marketing your apartment complex or other investment property can improve your sales or lease rates.
Engage residents and tenants in interactive community-driven events
Pool party, art classes, residents’ night, yoga, cooking classes, etc.
Provide events free-of-charge to attendees as future investment for new business
Push through social media
Post original, independent content through various platforms
Facebook; Twitter; LinkedIn; Instagram, Pinterest, etc.
Relatable content should stand out, should appeal to yourself as a consumer, capture essence of product/business
Take advantage of ‘viral media’
Post original, engaging content
Find common ground with readers, appeal to readers’ sensibilities
Comfort and Convenience
“Live, Work, Play” concept
Provide services/amenities to tenants that makes your property a comfortable, convenient home
car/bike-sharing programs (Zipcar); onsite retail spaces; cafés/bars; proximity to local attractions
Florida has its fair share of mobile homes. Whether providing seasonal residences or year-round affordable housing, mobile homes have become an ever-present property class in the Florida real estate market. Though they have been a historically neglected asset class, investing in mobile homes can provide strong, consistent returns. As markets in other asset classes become more competitive, mobile homes may be a rising hot market for investors.
John Fedro is one investor who discovered the opportunity in mobile home investing early on. After entering full-time real estate investing in 2002, John purchased his first mobile home in a park in Florida. He quickly saw the potential investing in mobile homes and after his first year had acquired 14 properties. In a virtually untapped market, John was able to develop an investment strategy exclusively for mobile homes that ensured strong returns. He has since expanded his portfolio to Texas and is actively sourcing deals in other states.
Mobile Home Investment Types
Private land mobile homes – longer to close, traditional sale of real estate;
Mobile homes in parks – categorized as personal property in most states, not subject to title issues/other typical
Mobile Home Parks
Little to no conventional lending; mainly cash deals
Dodd-Frank regulations do apply to mobile homes w/ financing
Mortgage loan originators can assist with compliance
Costs + Fees
Purchase for >$10k
Sell for <$25k on payments
Buyer repays minimum $300/month on property
Mobile homes in parks, buyer pays lot fees, utilities, possibly insurance
Buyers will usually do refurbs/improvements
Mobile homes in parks: Craigslist, driving through parks, talking w/ park managers
Mobile homes on private land: networking, direct-mailings, bandit signs, seller lists
Hot Florida Markets
Miami, Jacksonville, Tampa, Gainesville
Rural areas, small towns
Do multiple deals
Effective marketing strategies
At least 60 mile radius for investment market
Seek knowledgeable investor
Check out John’s website for even more information on successful investment strategies for mobile homes. John has free videos and a podcast where he covers tips for investing in mobile homes. Contact John directly by email at firstname.lastname@example.org