Category Archives: Marketing & Finding Deals

Ep. 65 Jerome Abecassis: Foreign Investor Makes Headway in the Florida Real Estate Market

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774cdb_ef326029dd18403e9c811822ec200c54Those who know the Florida real estate market know the influence of foreign investors. Foreign capital, especially in South Florida, has fueled real estate development in the state. Despite its slight recline with the growing strength of the US dollar, foreign investing remains a big part of the Florida real estate market.

Jerome Abecassis, a native of Paris, France now residing in Florida has made a name for himself and his company TIJ Group, LLC investing foreign capital in the Florida real estate market. Moving here in 2003, Jerome began investing in South Florida real estate and quickly established TIJ as a leader in foreign investing in the Florida real estate market. TIJ now owns and manages 200 units in South Florida and owns 160 units in the Detroit, MI area. This episode, Jerome shares his unique approach to investing and gives an outlook on the Florida real estate market.

  • Florida Real Estate Market
    • Foreign investing returning post-financial crisis
    • American markets seeing higher returns on investments than foreign markets
    • Market growing
    • South American investing strong in South Florida market
  • TIJ Properties and Investing Strategy
    • Distressed/Mismanaged properties
      • Code violations; in need of repairs
      • Handle repairs and assume property management responsibilities
      • “Detroit is Miami 10 years ago”
    • Cash-on-Cash Deals
      • Investor chooses stake
      • TIJ partners in investment
      • No traditional financing used
      • Network of brokers scout properties
      • Word-of-mouth investor base
  • Tips
    • Be wary of deals that seem too good to be true; no such thing as the perfect deal
    • Stay where you are comfortable; don’t over-diversify your investment portfolio
    • Always inspect property before buying; know the area and tenants

Want to know more from Jerome/TIJ Group?

Contact Jerome by

email: libertymiami@hotmail.com

or phone: 786-277-4163

Ep. 64 – Justin Ford: Florida Investor Knows How to Work the Vacation Market and Remain Flexible

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justin-ford-bio-picFlorida investors are familiar with the vacation real estate market; Florida is a strong, tourist-driven economy and seasonal and vacation real estate represents a large investment sector. Florida investors know that the vacation market has always offered prime investment opportunity. Despite it’s potential for success, the vacation market is a challenging and fast-paced market and many beginning investors often get caught in financial quagmires of bad investments.

Justin Ford, President of Pax Properties LLC, understands the “Florida market“. With over a decade worth of experience investing in Florida’s seasonal and vacation market, Justin has mastered real estate investing. Pax Properties currently owns and manages 30 properties (500 units) along Florida’s east coast, from Ft. Lauderdale to Jacksonville. Pax Properties has thrived due to Justin’s flexibility and ability to adapt to changes in the market. This episode, Justin shares with us his approach to marketing and investing in the Florida and shares tips and advice for beginning investors.

  • Florida is a strong vacation rental market
    • Hotels, condos, single-family/multi-family long-term and short-term seasonal rentals
  • Transient Apartment Licensing
    • Required license for operating vacation rental properties
    • Applies to hotels, apartments, single-family vacation rental, B’n’Bs, Airbnb, VRBO rentals
    • Dept. of Business and Professional Regulations
  • C.A.P.A. – Fundamentals of Real Estate
    • Cash-flow; Amortization; Positive-leverage; Appreciation
    • Investors can control all but Appreciation
    • Structuring deals around C.A.P. ensures more positive returns for investors than relying on Appreciation
  • Tips
    • Choose tenants carefully; good tenants can be difference between a good investment decision and a financial headache
    • Take advantage of Amortizing-loan finance options
    • Always be marketing and networking
      • Conventions, cold-calls, mailers

Justin also offers a course for investors that covers the fundamentals of investing. C.A.P. Strategy: Bubble-Proof Real Estate Investing for Lifelong Cashflow provides investors with in-depth insight into Justin’s investing philosophy. For more information, visit the website!

You can also check out Pax Properties’ asset portfolios here:www.paxproperties.com and www.beachpads.net

Justin can also be reached directly by email at justin@pax-properties.com

 

 

 

Ep. 63 Amir Korangy: NY & South Florida Real Estate Investors Will Want to Know the Real Deal!

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3a2b8b6One of the hardest things for new investors is finding a current and accurate source of real estate information; a place to find up-to-date and informative data on market trends and conditions. Even for seasoned real estate investors, it is difficult to stay on top of market research.Thankfully for real estate investors in New York and South Florida, Amir Korangy has solved this problem.

A real estate investor himself, Amir Korangy began The Real Deal magazine in 2003. At first focusing only on New York real estate markets, The Real Deal has long since established itself as an authority on South Florida’s real estate markets as well. By providing current, informative and actionable real estate data on a variety of asset classes in both New York and South Florida real estate climates, The Real Deal has become a go-to source for real estate investors. This episode, Amir shares The Real Deal’s mission as well as his personal investing process and he gives tips to new real estate investors.

  • The Real Deal
    • New York and South Florida real estate news publication
    • Est. 2003 – Amir Korangy, Founder
    • Up-to-date market reports on variety of asset classes
    • Updates monthly with some specific day-to-day developments
  • Investing tips
    • Know your neighborhood or the area where you are looking to invest in
    • Familiarize yourself with the market; movements and trends
    • Due diligence is imperative
    • For beginning investors, buy within means
    • Don’t overthink a good investment – no such thing as the “perfect deal”

To find out about all of the The Real Deal’s services, visit their website www.therealdeal.com/miami (South Florida); www.therealdeal.com (New York)

Questions for Amir? He can be contacted through social media on LinkedIn and Twitter (@mrkorangy)

Ep. 62 – 1031 Exchange – This Provision in the Tax Code Might Help You Acquire More Investment Property…..Faster

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home bundles of dollarsMany potential home buyers enter the housing market looking for something they can call “home”. Many look for a property based on personal aesthetics. However, these may not be the best indicators of a good investment property. Buying the ‘dream home’ may require a stringent, long-term financial requirement of the homeowner; one that may limit those who aspire to build an investment property portfolio. By purchasing a property for a primary residence not as long-term commitment but as a strategic investment decision, homeowners can take advantage of a provision in the IRS Tax Code that may enable them to acquire more investment property.

  • 26 U.S. Code § 121 – Exclusion of gain from sale of principal residence
    • Sale of property exempt from gains tax if property was held as principal residence for a minimum of 2 out of 5 years of ownership
    • Single taxpayers entitled up to $250k exemption
    • Joint filing taxpayers entitled up to $500k exemption
    • Mandatory, 2-year residency need not be contiguous
    • Applicable to one sale every two years, no limit on how often this may be done by homeowner
  • Things to Know
    • Look for properties that are good investment decisions
      • Sect. 121 only applies to exemption from Capital Gains Tax, meaning only a property that is being sold for higher than original purchasing price
    • Sect. 121 may not be good for those looking to have children.
    • Money saved in exclusion from gains tax may be used to acquire new properties
  • Exceptions
    • Check with tax adviser or C.P.A. for eligibility; you may still be eligible for partial exemption
    • Sect. 1031 Exchange – enables investors to sell a property with capital gains and receive a deferral on gains tax if purchasing a new one
      • If property was acquired as a replacement property and converted to a primary residence, investor must live in property for 5 yrs before qualifying under Sect. 121
    • Sect. 121 cannot exclude Depreciation Recapture Tax (25%)

 

 

 

Ep. 61 Jean Francois Roy: Staying Flexible is the Key for Residential Developers

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Jean-Francois-Roy-687x1030Real estate markets are entering a new phase. Nationally, investment markets are evolving to suit new demands from consumers. Here in Florida, theses changes are causing ripples of concern for investors and residential developers. What does the generational shift mean for the future of residential real estate and what can investors and and residential developers due to anticipate and adapt to these changes?

Jean Francois Roy, Founder and President of Ocean Land Investments shares with us his story and discusses the importance of flexibility as a residential developer and investor to find success in the market. Beginning his foray into residential real estate in his native Quebec, Canada, Jean Francois focused on developing high-end retirement living spaces. Following the American economic recession in the early 1990s, Jean Francois moved his venture to Florida, focusing on Ft. Lauderdale markets. Jean Francois quickly realized that flexibility and understanding the demands of the market was imperative for the success of any residential developer or investor. Ocean Land Investments continues to be a leading residential real estate firm due to Jean Francois’ drive and flexibility.

  • Staying Flexible
    • Residential Developers: Purchase land during market/economic slumps
    • Markets with high populations reduce vacancy risks
    • Adapt to market demands
      • In Ft. Lauderdale, high retirement-age demographic good for multi-family residential (apartments, condos)
    • Recognize consumer trends
      • “Going green” – buyers and tenants willing to pay premiums for environmentally-geared projects/renovations
      • Shift towards “conservative” structures from “extravagance” of 2000s
    • Be amenable to joint ventures and refurbishment projects as opposed to new developments
    • Be wary of overambitious or amateur developers straining the market

To contact Jean Francois Roy or to find out more about investment, leasing, or purchasing options with Ocean Land Investments, call the office at (954) 558-3187 or visit their website

Ep. 58 Jefferson Lilly – Things You Should Know About Syndicating Real Estate

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361ee06A big concern for new real estate investors is the question of how to raise financing and build capital. Many investors are intimidated by traditional methods; using institutional debt-equity options and financing. Many who are hesitant about financing are unaware of alternative financing options. We have discussed alternative financing previously on the show, but this episode focuses on a specific method: syndicating real estate.

Jefferson Lilly also has a special focus when it comes to real estate investing. Jefferson specializes exclusively in mobile-home park property markets. Through his own company, Lilly & Company as well as through his co-partnership with Park Street Partners, Jefferson owns and manages 10 mobile-home parks from Wyoming to Ohio. Park Street Partners specializes in syndicating real estate deals, operating through a registered blind fund as opposed to raising financing through singular deals.

Things to Know About Syndicating Real Estate:

  • “Fundraising takes a life of its own”
    • Reputation and word-of-mouth marketing produces a snowball effect in syndicating real estate
    • More successfully executed deals translates to a greater willingness from investors to devote capital
  • Costs
    • Roughly $7500 to establish offering memorandum template in syndicating
    • Roughly equivalent in legal costs per deal for one-off financing
  • Syndicating
    • Blind funds- investors pool capital and allow broker/agent to make executive investment decisions
    • Largely adaptive to outsourcing options for financing and fundraising
    • Investors may conduct due diligence on broker/agents existing transaction records
  • Stipulations to Syndicating Real Estate
    • SEC requires strict operating stipulations for funds
    • Accredited investors permitted only
      • Private net-worth of $1,000,000 excluding home
      • Annual income of $200,000 (Individual)
      • Annual income of $300,000 (Married)
  • Advice
    • Due diligence is key
    • Generate customized contracts, tailored to specific investment goals
    • Provide enough time for both parties to process deal requirements
    • Seek guidance from a mentor

Jefferson Lilly got his start just like any other investor. He sought tools and resources to become informed in his market type. Some of Jefferson’s key mentors and resources are:

www.mobilehomeuniversity.com

and

George Allen – Mobile-home park industry specialist, author of How to Find, Buy, Manage and Sell a Manufactured Home Community

To contact Jefferson with any questions regarding mobile-home park investing or syndicating real estate, contact him by email at jefferson@parkstreetpartners.net

For any other Investment opportunities with Jefferson’s company, join the mailing list on the company’s website: www.parkstreetpartners.com or join the LinkedIn group: Mobile Home Park Investors

 

Ep. 54 Rob Gidel – Tips on How to Help Prevent an Attorney from Killing Your Real Estate Deal

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651Enlisting the counsel of an attorney is a necessary part of any real estate deal. Whether for general investment oversight or to oversee specific terms of the deal, an understanding of the integral legal stipulations is essential to any real estate deal. An attorney’s involvement has a tremendous influence on the outcome of any real estate deal. Often, the counsel provided by attorneys has the power to sway a deal towards a negative or positive outcome for all parties involved. An overly aggressive attorney or one not specialized in real estate law has the potential to ruin good deals. For novice and beginner investors especially, it can be intimidating to negotiate with attorneys in a real estate deal. Investors and attorneys need to enter into a real estate deal with an open, cooperative attitude to ensure a successful transaction for all parties.

Robert Gidel, Jr. is a real estate attorney with just this mindset. He believes that an attorney should serve as an adviser to their client and not commandeer the transaction. Robert knows that communication is the key to a successful real estate transaction. This episode, Robert shares tips to help investors, sellers, brokers and attorneys get the best out of a real estate deal.

  • Effective Communication
    • Prevents extraneous fees, missed deadlines, cancelled deals
    • All parties should remain open and up-front
  • Possible Risk vs. Plausible Risk
    • Attorneys often draft generic risk-assessments on properties. Investors should know how to identify plausible problems apart from possible problems
    • Have real estate brokers involved in risk-assessment discussions
    • Allow attorney to understand specific intentions for investment
  • Attorneys in Negotiations
    • Several approaches: collaborative, adversarial and competitive
    • Collaborative is most effective in terms of cost and time
    • Attorneys should approach negotiations from a holistic perspective; they should represent their client but understand other party’s perspective
  • Extent of Attorney Engagement
    • Always outline attorney’s involvement with deal explicitly with Engagement Letters
  • Tips
    • Always retain attorneys specialized in certain aspects of real estate transactions. Ill-prepared or under-certified attorneys may delay or prevent deals
    • Clients should have attorneys provide up-front estimates for fees based off past experiences

To find out more about Robert and the services his firm, Gardner Brewer Martinez-Monfort offers, visit the company website

 

Ep. 53 – Ken McElroy: Tips on Investing in Multi-Family Property

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ken-mcelroy-1Investing in multi-family property has its definite upsides. Investors who have considered multi-family investing know that it is an intimidating process: the stakes are much higher. Our guest this week has made calculated investments in multi-family properties…and it’s paid off big.

Ken McElroy may be the expert on investing in multi-family property. As founding partner of MC Companies, Ken oversees day-to-day operations of a nearly 10,000-unit portfolio of multi-family properties. With over 20 years experience in the field, Ken covers the key tips on investing in multi-family property.

  1. What to Know About Multi-Family
    1. Bigger is better
      1. Higher return rate than single-family
      2. Easier to finance
      3. Enables support staffing
      4. Does not require as many deals as single-family
    2. Requires long-term investing
      1. Unlike “flipping” single-family properties
    3. Familiar market landscape
      1. Single-family investors will recognize the similar processes in terms of due-diligence, lending and raising capital
    4. Multi-family debt market options
      1. Ken advises agency debt options for financing such as FANNIE MAE
        1. Tedious underwriting, but offers favorable rates and pricing
        2. Non-recourse
        3. Supplemental pieces available (not forced to sell existing properties before purchasing new ones)
        4. Not taxable
  2. Advice to Investors
    1. Due-diligence is key
      1. Track upcoming cities and neighborhoods
      2. Follow market trends and economic trends
      3. Tailor search for specific markets (e.g. retirees, single-family homeowners, renters)
    2. Real estate is cyclical
      1. Look to where the market is heading not where it is at present
    3. Good property management is a must for multi-family
      1. Use local, knowledgeable, responsive PM firms
    4. Finding deals
      1. Look for properties that are mismanaged
        1. Mismanaged properties may be holding unrealized “value-add potential”
      2. Stay focused on specific areas
        1. Do not expand to quickly or invest in remote locations
      3. National and local brokerage firms, in-house acquisition teams good resources for finding deals

More about Ken:

Ken is the author of The ABCs of Real Estate Investing as well as several other books covering all aspects of investing in multi-family property and property management.

He has also partnered with Robert Kiyosaki, author of Rich Dad Poor Dad and serves as an adviser for Rich Dad

To find out more about Ken or MC Companies, visit their website – www.mccompanies.com

To find out more about Ken’s books or other informational resources he offers check out his website – www.kenmcelroy.com

 

 

 

Ep. 51 Joe Fairless: Transitioning From Single-Family to Multi-Family with Creative Equity

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jf-homepage2Joe Fairless bought his first single-family investment properties in his home state of Texas after leaving a successful, but unrewarding career in advertising. After finding that multi-family investing offered greater returns and less inventory, he began making the transition to multi-family investing.

His first deal was managed through unconventional measures. Lacking the standing as a seasoned multi-family investor, Joe incorporated non-traditional, creative equity solutions for obtaining capital for his first 168-unit apartment complex in Cincinnati, Ohio. Now founder of Fairless Investments, Joe controls millions of dollars in multi-family investment properties. Joe shares his experience in multi-family investing and provides tips for securing capital through creative equity methods.

  • Challenges for Single-Family Investors
    • Lack of credibility in multi-family markets
    • Traditional lending and private financing may be difficult to attain
  • Network Personal Contacts
    • This is a good practice for single-family investors to find financing by networking personal relationships for interest in multi-family investing
  • Strategic Networking
    • Network and affiliate with organizations that may not be lenders but have cash flow or may have eye towards investing
      • i.e. philanthropic organizations, community foundations, business groups
  • Establish Investment Base First
    • This does not mean a blind-fund or requirement of prior monetary investment
    • Form verbal contract with investors based on shared financial goals
    • Pursue investment opportunities that suit shared criteria
  • Structuring Deal With Investors
    • Preferred returns – investors get cash from deal before yourself
    • Acquisition fees
    • Performance hurdles
    • Post-sale incentives
  • Tips
    • Make yourself attractive to lenders and investors
    • Know the market, know the deal
    • Investing is starting a small business; structure so that you may sell that business. Don’t get tied down to an investment

Joe has his own daily podcast in which he interviews guests on a variety of real estate investment strategies

For more information on Joe, visit his website

You can also contact him by email at info@joefairless.com with questions or investment opportunities!

Joe also shares some helpful literature for single-family investors looking to make the transition:

Investing for Dummies – Eric Tyson

Commercial Real Estate Investing for Dummies – Peter Conti & Peter Harris

The Complete Guide to Buying and Selling Apartment Buildings - Steve Berges

 

Ep. 46 Steven McCraney – Talks Industrial Property and Why He is Bullish on the Central Florida Market

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26eb9b4

Steven McCraney, President and CEO of McCraney Property Company, lives his life by the Helen Keller quote: “Life is either a daring adventure or nothing.”    The West Palm Beach developer is an avid outdoors-man and mountain climber, scaling notable peaks such as, Mt Elbrus in Russia, Mt Rainier in Washington and Mt Aconcagua in Argentina.  He has now turned his attention to the I-4 corridor and intends to build that area between Orlando and Tampa in to the next great industrial powerhouse.  He has multiple projects in various areas of the corridor, but most recently, he is teaming with Northwest Mutual on a $30 million development of 603,000 square feet of warehouse space in Davenport, near US 27 and I-4.

Steven  has developed, owned and managed over 3,000,000 industrial properties all over Florida. This episode, Steven discusses the merits of the industrial property market as well as his philosophy to approaching the market. This show is a must listen for stakeholders in Central Florida!

  • Industrial Property Market is New Retail
    • Rise of online-shopping leading to emphasis on warehouse/storage space
    • Companies expanding warehouse/distribution centers
  • Central Florida new ‘Hot Market’
    • I-4 undergoing expansion project
    • I-4 corridor (Tampa-Orlando-Space Coast) anticipating boom
    • Amazon, Walmart developing large-scale distribution centers along corridor
  • Other FL Markets
    • Daytona, Space Coast growing
    • South Florida good sellers’ market
    • Lakeland
  • Tips for Success
    • Treat clients as customers, not tenants
    • Strive for class “A” properties and class “A” clients
    • Anticipate change
    • Keep close working relationship with financiers (banks, lenders, investors)
    • Never be afraid to take the next step!

For more information on Steven’s company or to check out current projects visit his website.