Ep. 74 Jillian Bandes: 6 Hot Topics to Consider About Building Structure When Buying Multifamily

Posted on March 28, 2016 by admin

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Whether investing in a multifamily property with value-add intentions or simply as a stable addition to your portfolio, it is important to consider the building structure and the costs associated with structure maintenance.

Jillian Bandes, of Bandes Construction Company knows just what to look for in building structure when valuating a potential multifamily investment. This episode, Jillian shares six hot topics for investors to consider about building structure when buying multifamily properties.

Electric
1. Costly repair and improvement item
2. Determine property’s inside and outside amperage
3. Enlist licensed electrician for any repairs or improvements
Roofing
1. Unwise to cut costs on roofing materials and construction
  1. Find dependable roofing companies, use quality materials
2. Roofing Warranties: 1-2 yr Workmanship Warranty; 10-20 yr Manufacturer Warranty
HVAC
1. Air-conditioning represents a huge aspect to determine in Florida properties
2. Requires secure maintenance schedule
3. Replacement costs can be substantial
Doors & Windows
1. Many things to take into account with doors and windows
2. Observe building jurisdiction’s code requirements
3. Buying replacements in bulk may be more cost-effective than as-needed replacements
Interior
1. Interior trends fluctuate. Stay current with trends that tenants want
2. Value-add investors may want to put more into interior costs up front for greater tenant appeal and longevity: energy star appliances, natural stone counter-tops, removing partitions, adjusting ceiling heights
Frame vs. Masonry
1. Wood frame structures usually require much more extensive evaluations than masonry structures: water-proofing report, site level, landscaping, water table, drainage, etc.
2. Repairs and rehabs can be costly on frame structures
3. Masonry offers more stability and investment assurance

For more information from Jillian about important items to consider about building structure she can be contacted through Twitter @jillybee or by visiting Bandes Construction Company’s website.

Ep. 73 Colin Murphy – This Investor Manages a Large Florida SFR Portfolio from Madrid, Spain!

Posted on March 21, 2016 by admin

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Florida has long been known as a great real estate market for foreign investors. Commercial and residential markets both represent favorable investment markets for foreign capital. While investing in real estate outside of a county or state may seem a daunting task, this week we talk with an investor who grew and a successful SFR portfolio out of another country!

Colin Murphy is Director and Co-founder of Torcana, Ltd. an investment firm specializing in single-family properties in Florida. With over ten years’ experience behind him, Colin has grown Torcana into a leading name in Florida SFR markets and he was able to do it all based out of Madrid, Spain. This episode, Colin shares with us some tips for building a successful foreign real estate investment portfolio.

5 Must-Haves for Foreign Investors:

Standard Contracts
1. Avoid unnecessary and overly complex contracts
2. Standard Realtor’s Assn. contracts offer foreign investors easy-to-understand terms
Title Companies
1. Foreign investors new to U.S. and FL markets may be unfamiliar with title companies
2. Title companies ensure a clean title transfer in a real estate transaction. They run a property’s title against any outstanding liens and unpaid fees.
Closing Costs
1. Closing costs on U.S. and FL real estate is comparatively less than that of markets outside of the U.S.
2. Despite the relatively low closing costs, foreign investors still need to be aware of what they are paying for
Post-Closing
1. Follow-up is needed after purchasing a property
2. Find the right insurance coverage for your investment as well as establishing a property management plan
Taxes
1. All U.S. real estate is subject to taxes and returns must be filed on them
2. County tax collector searches can be an easy way for foreign investors to keep track of their portfolios’ taxes

For a more comprehensive approach for foreign investors, check out Colin’s list of 20 things to know for real estate investing:

20 Things to know

Colin also suggests Rich Dad Poor Dad, by Robert Kiyosaki and Millionaire Real Estate Investor, by Gary Keller, Dave Jenks and Jay Papasan for beginning investors

For more information from on Torcana‘s services or for investing opportunities, contact Colin: Torcana’s website, LinkedIn, or Bigger Pockets

Ep. 72 Santosh Govindaraju – Florida Developer Applies Wall Street Lessons to the Tampa Market

Posted on March 14, 2016 by admin

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For the average Florida real estate investor, Wall Street banking and investing practices may seem worlds away. However, one investor and developer in the state has managed to successfully fuse his expertise in Wall Street investing with the Florida real estate market.

Santosh Govindaraju is a Florida developer with an interesting history. Prior to finding success in Florida real estate markets, Santosh was immersed in the world of high-strategy investment banking on Wall Street. After moving to Florida, Santosh applied his investment banking expertise to Florida real estate with a focus on the Tampa market. Santosh and his firm, Convergent Capital Partners, have been providing equity and debt investment options in a variety of Florida commercial real estate for over 17 years. This episode, he discusses his transition to real estate investing and what’s next for the Tampa market.

Wall Street Lessons
- “Reversion to the Mean” – markets and prices fluctuate, but they will always indicate a trend, or mean
- Relative-value trading – With two similar asset classes, sell asset class sitting above the mean and buy the asset class sitting below the mean
Convergent Capital Partners
- Santosh paired his understanding of financial side of investing with partner’s physical knowledge of real estate
- Saw relatively stable markets in FL during late 1990s
- Opportunistic commercial investing: all commercial asset classes except industrial; looking for properties with mixed-use potential
- Private Equity Platform Fund-Operation: base of 10 investors; deal offered first to fund as whole, then to individual memebers
Tampa Market
- Strong recent investment/development growth
- Institutional capital competing for projects
- New vision for Downtown Tampa
- Harbor Island Project: “The Point” – Convergent Capital developing 115k sqf. property in Tampa harbor

For more information about Convergent Capital’s current projects or to contact Santosh, visit their website

Ep. 71 Elise Batsel – 7 Things Landlords Should Know About Commercial Leases

Posted on March 7, 2016 by admin

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When transitioning from residential or simply starting your investment portfolio in commercial real estate, it is important to remember one thing: commercial leases are not the same as residential. Commercial leases are subjected to a much higher percentage of risk if not properly structured.

Elise Batsel has made it her business to ensure landlords are protected in any commercial lease issue from the ground up. As counsel with the Tampa firm Phelps Dunbar, LLP, Elise specializes in commercial real estate land-use and zoning. Elise represents developers and institutional lenders in acquisitions, dispositions, financing and transactions as well as all aspects of commercial leases. In this episode, Elise discusses seven hot-topics all landlords and owner/operators should know about commercial leases.

Commercial vs. Residential Leases
1. Commercial properties have different costs and expenses that can be transferred to tenants: common area maintenance expenses (CAMs)
2. CAMs may include: utilities, landscaping, management fees and other costs associated with owning and operating commercial properties
CAM and Triple Net Leases
1. Triple Net Lease – For landlords and tenants who want stability; does not account for unanticipated expenses or for properties without a familiar investment history
2. CAM lease – Serves as umbrella to protect landlord/owner from future costs and expenses incurred from property management; specifies expenses and tenant liabilities
Tax Implications
1. Though not frequently addressed in lease, tax implications are a major tenant-landlord discussion that could be beneficial for both parties
2. Leases can stipulate landlord ownership over tenant-improvements with proper recompense for tenant
Americans With Disabilities Act (ADA)
1. Commercial real estate considered public accommodations and subject to more ADA compliance regulations
2. Represents huge liability for landlords not in compliance
Sub-letting and Tenant-Assigned Leases
1. Landlords can address sub-leasing and assigning terms in commercial leases
2. Landlords entitled to portion of income from tenant leases
D-I-Y Leases
1. Do not attempt to draft generic commercial leases if self-managing property
2. There are many changing facets to follow when drafting commercial leases
3. If drafting your own lease, have attorney or specialist review
Protection Against Bad Tenants
1. Always ensure strong deposit from tenant
2. Small-Claims Court
3. Write effective demand letter to tenant

For any commercial lease, zoning or land-use issues and questions, Elise can be contacted by phone at 813-472-7564 or through email at elise.batsel@phelps.com

For even more information on commercial leases as well as landlord and tenant relationships, Elise suggests the following articles: Tenant’s Checklist of Silent Lease Issues and Model Landlord’s Checklist of Silent Lease Issues – S.H. Spencer Compton, Esq. & Joshua Stein, Esq.