Finding a real estate market that fits your investment goals seems to be getting tougher and tougher. With markets tightening up across the state, investors are starting to feel it. Now, more than ever, investors need to be tracking investment market data – looking for trends and analyzing data to find viable markets.
Investors may be familiar with Yardi for property management services, but did you know they also offer comprehensive market research and data software? This system allows real estate investors to track investment market data on a national level, or zero-in on specific markets and sub-markets.
This episode, we welcome from Yardi Matrix: Senior analyst and editorial contributor, Chris Nebenzahl, and research and data analyst, Doug Ressler.They discuss what investors need to know about tracking investment market data. They also offer up an update on Florida’s commercial and multifamily markets.
Florida Multifamily Overview
Rent growth and development strong overall
Focus on A + Super A properties
Increasing demand for B + C properties, but limited supply
B + C properties seeing value-add opportunity
Florida Multifamily Market Highlights
Miami and Orlando: 9000 expected multifamily developments for completion, 2017
Tampa: 7200 expected multifamily developments for completion, 2017
Development expected to crest after 2017
Rapid rent growth may pose affordability issues in Miami/SFL
All investors have heard horror stories from single and multi-family investing: bad tenants, rehabs gone wrong. Often these stories result in investors paying much more in out-of-pocket capital than was accounted for. This remains a major contributing factor preventing would-be investors from making the leap. Though there are successful strategies one can adopt to deal with bad tenants or to facilitate successful rehabs, many investors are still wary of residential asset classes.
However, there are ways to earn cashflow without having traditional tenants or making unneeded rehabs to the property.
Larry Goins is one investor that does not rely on having traditional tenants or doing property rehabs.
Listeners may remember Larry from Episode 106 where he discussed finding creative ways to make money in rising markets. Larry is a 30 year investor and investment mentor. He is an author, speaker and educator sharing his wealth of investment experience with beginner investors. This episode, Larry discusses his strategy of offering lease options instead of traditional tenant leasing.
Earning Cashflow through Lease Options
Homeowners in Training
Prospective tenants are given lease with option to own
Tenants have stated intent to purchase property
Tenants put up non-refundable down-payment stating consideration to purcahse
For Dodd-Frank compliance, tenant’s down-payment only goes to closing costs; no rent credits can be given during lease agreement
Make sure tenant is responsible for minor repairs and maintenance for “x” amount per occurance
No matter the size or experience of the investor, this is a widely-held belief. However, it is not simply about risk, but rather smart risks.
Diversifying risk is a key strategy for real estate investors looking to expand their bottom line.
Increasing the Bottom Line
We are pleased to welcome back to the show, Elysia Stobbe, NMLS# 146751. Listeners will remember Elysia from Episode 108, in which she discussed updates to SFR investor mortgages.
In addition to being a branch manager with NFM Lending, Elysia is a successful investor with over 30 property deals under her belt, doing deals in and around Jacksonville, FL. She is also a published author. Her best selling book, How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye helps single family investors in obtaining secure, prime mortgages.
This episode of Landlord Tales, Elysia discusses her transition to multifamily investing and diversifying risk with geography and asset class. Through expanding focus into the multifamily asset class and remaining open-mined about market areas, Elysia learned that diversifying risk is a great way to increase returns.
Multifamily offers greater cashflow potential than single family while minimizing tenant turnover risk
Multifamily cap rates typically 2-4% higher than single family
Remain open-minded about potential market areas
Distressed properties can be made rentable
Networking with wholesalers is great way to find distressed multifamily properties