Ep. 125 Todd Hutcheson: Landlord Tales – Keep Control of Your Closing When Assigning Contracts

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getting into real estate with limited cash; assigning contractsReal estate investing is a big draw for many due to its strong ROI potential as well as its flexibility in investment strategy. There are a lot of ways to make money in real estate without keeping your finger on the main pulse of the deal. This is most evident when it comes to wholesaling and assigning contracts. Buying and reselling interest in a property allows for increased earning potential. It also allows for expedited turnarounds on deals.

Assigning contracts allows investors to sell interest in the property title without being responsible for following the deal all the way through. Essentially, investors can buy and sell properties without ever having to lay hands on the property itself. While this definitely has it’s perks, it is not without risks.

President-elect of the Central Florida Real Estate Investors Association, Todd Hutcheson, joins us today to discuss his experience starting out in wholesaling and assigning contracts. Listeners will remember Todd from episode 111, in which he discussed how investors can get into real estate with limited cash. Todd is an investing mentor. He is the founder of IBuyHomes and an active wholesaler in Central Florida. As he shares in this episode of Landlord Tales, assigning contacts can quickly become a snowball effect and your control over a closing can disappear before you know it.

What to Know About Assigning Contracts

  • Understand contract assignment process before selling interest
  • Write your control over closing into the contract
  • Contract assignments do not show up under public records
    • A final sale price listed in public records will not record contract assignments
  • Make sure to notify title companies of contract assignments when recording a title claim, otherwise it will not be insured

Contact Todd

Ep. 41 Ryan Severino: Things You Should Know About CAP Rates, Interest Rates & Asset Classes in Florida for 2015

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images The recovery from the 2008 economic recession has been a slow one with real estate being perhaps one of the hardest hit industries during the recession. In Florida, investors in all asset classes are feeling uncertain about rising costs of rental rates and projected interest rates adversely affecting cap (capitalization) rates.

Ryan Severino joins us this week to discuss the recovery from the recession and its effect on real estate investment. As a senior economist and Director of Research at REIS, one of the nation’s leading real estate data providors, Ryan can provide expert insight on national recovery and how it translates to a state level. He also clears up the uncertainty over cap rates, interest rates & asset classes in Florida real estate.

  • In 2008, U.S. experienced deep balance sheet recession
    • Excess debt built up in national economy
    • Flow of credit ceased
    • Slow recovery period
  • 2-2.5% GDP growth rate annually (next several years)
  • Class A inventories on rise, B & C inventories diminishing
    • Results in top-of-market rental rates in all asset classes
  • Southeast FL markets experienced above average recovery
    • Supported by foreign investment
    • Rents rising quicker than income recovery
    • Miami, Ft. Lauderdale becoming unaffordable markets
  • Central, Northeast FL markets still generally affordable
  • Multi-Family properties becoming much more competitive
    • Cap rate compression beginning to plateau
  • Commercial properties experiencing early-stage recovery
    • Room for cap rate compression
  • Cap Rates not effected solely by interest rates
    • Tied more closely to economic recovery
    • NOI (net operating income) effects cap rates

Ryan’s Tips:

  • Real Estate is a cyclical investment market
  • Follow proven market trends

For more information and research data on a variety of asset classes, visit the REIS website here

EP19 Larry Feldman: Office Investor Moves BIG in to the Florida Market

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Wells Fargo BuildingIn 2010, Larry Feldman and his investment partners had decided it was time to strike when the iron was hot. Tampa Office vacancies had plummeted, which took office prices with it. Feldman was gun shy of the Tampa region, as he really did not see it is a market worth pursuing.

Finding deals in other markets, however, proved to be challenging, so he decided to take another look at Tampa and MAN, is he glad that he did! The rock bottom prices presented a handful of opportunities that were too good for Feldman to turn away. Since then, he has been one of the biggest deal makers in the area and stands to make millions on bets that the office markets had bottomed out purchasing the Wells Fargo building in Downtown Tampa and Morgan Stanley building in St Petersburg, among others.

Feldman’s strategy has been to focus on the core business sub-markets (densely populated downtown office space cores), buy under-leased real estate at rock bottom prices, invest in building renovations, build relationships with brokers and try to flip. He stands to make millions from his timing of this market.

Feldman and his partners bought the Wells Fargo building, one of the signature office buildings in downtown Tampa for $115 per square foot and invested $15 per square foot in improvements. Replacement costs for the asset could approach as much as three times what they paid for the property.

He credits his strategy for working closely with brokers as a reason for quick turn-arounds on assets with stubbornly high vacancy rates.

Feldman is not your typical hands off institutional asset manager. He is very involved in the property management of his real estate. He subscribes to the old fashioned way of “Management by Walking Around.” On any given day, you can find Feldman in his Downtown Tampa office in the Wells Fargo building, working the phones, walking the property, checking on his tenants and trying to work on creative ways to make sure the brokerage community keeps him on the top of their list when they have a hot prospect.

We think you will enjoy Larry’s approach to deal making.

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