Category Archives: Multi-Family

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. 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. 60 – Mark Fleming: What Does the Fed Rate Hike Mean to Real Estate Investors

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about-markWinter is coming… And so are national interest rate increases.

The Federal Reserve has recently announced a new national interest rate hike, the first since 2006. Real estate investors are very anxious about the announced rate hike. Many investors are wary that the rate hike may be instituted prematurely in an economy that is not capable of facilitating the effects on real estate markets.

Mark Fleming, Ph. D. serves as the Chief Economist for First American Financial Corporation. With over 20 years’ experience in mortgage and property information, Mark analyzes and forecasts national mortgage and real estate markets. This episode, Mark lends his expertise to our discussion on the new rate hike‘s effect on current real estate markets at a national level, and tells us why investors shouldn’t be so worried.

  • Federal Reserve Rate Hikes
    • First rate hike in 9 yrs
      • 2006 – +5% increase
      • 2007 -’08 to Present – 0%
      • End of Year (2015) – .25% increase
      • 2016 – +1% increase
    • Instituted to correlate with expected income/wage growth
    • Long-term, fixed-rate loans not affected
    • Good for housing markets
      • House-price appreciation seeing “asset inflation”, especially in Florida
      • 5-6% nationally, higher in FL markets (South Florida)
      • Out-pacing current wage growth, causing increase in housing rates
      • Rate hike should slow appreciation growth rate
  • 2016 and Beyond
    • Rate hike est. 5% increase
    • House-appreciation (Nationally) projected to slow to 3-4%
    • Income growth est. 3-4% increase
    • Commercial real estate to benefit from economic growth
    • Multi-family to benefit from strong millennial rental market

Interested in contacting First American Financial or want to learn more from Mark on the new rate hike and other economic info? Check out the company website and visit the Economic Center

Ep. 59 Jay Smith: 6 Hot Spots for Inspecting Properties

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thumb2_JayJay Smith, CEO of A Snoop Inspections, is a veteran in his field of property inspection. Jay possesses over 30 years in property inspection experience as well as hands-on knowledge of building construction. Jay has an invaluable insight into the key concepts of inspecting properties.

Property inspections can cause even the most seasoned real estate investor to shudder. Not only do inspections have the potential to turn up devastating issues for investors close to finalizing a deal, under-qualified inspectors may cost an investor thousands of dollars in corrective aggravation. Recent changes to insurance policies and coverage in Florida have led to increased concern over property inspections and their impact on real estate investment. Commercial investors need to be especially careful as there are many more aspects to commercial property inspection as opposed to residential. This episode will cover six hot spots or areas of focus for any investor to cover when inspecting properties.

  1. Electrical
    1. Out-dated wiring methods may preclude properties from meeting current insurance requirements
      1. Aluminum wiring dating mid 1960s-1970s a prevalent issue; Cloth wiring; Knob-and-tube wiring
      2. No safety outlets by water areas source of concern
  2. Roofs
    1. Major area of concern when inspecting properties. Damage can be detrimental to property and repairs costly.
      1. Look for flat roofs or areas where water pools
      2. Leaks cause major damage
      3. A/C units on roofs – water damage from condensation, impede accessible roof maintenance. New FL building codes require roof-units be on raised platforms
  3. Insurance Changes

    1. Changes to FL insurance coverage a important concern for new buyers
      1. Standards for coverage have changed over recent years
      2. Require more detailed inspections, won’t insure certain construction methods/materials
      3. Insurance coeerage under previous owner will not extend to new buyer
  4. Sinkholes
    1. Costly and potentially dangerous inspection issue
      1. Look for long, horizontal cracks in and around structure
      2. $2000 geo-technical survey
  5. Mold
    1. Serious issue in FL
      1. Difficult to asses severity or extent of infestation
      2. Especially an issue in vacant or untended properties
  6. Inspector Due Diligence
    1. In FL especially, determine certifications of inspectors prior to selecting
      1. FL requires Home Inspector license only
      2. International Association of Home Inspectors – largest H.I. association in U.S.
      3. For specific issues, contact specialists (i.e. mold inspector, master electrician, professional roofer)

To contact Jay for information on inspecting properties or to inquire about his own property inspection services, visit his website: www.a-snoop.com or call (813) 345-2600

 

 

 

 

Ep. 57 Albert Berriz – McKinley Bullish on I-4 Corridor for Multi-Family

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00f4451Florida real estate investors should be familiar with the name McKinley. With over 55 million square feet of commercial and residential real estate in 34 states, McKinley, Inc. is 37th largest real estate investment and management firm in the nation.

Albert Berriz, CEO, Co-owner & Co-Managing Member of McKinley talks with us this week about the firm’s special interest in Florida. The Interstate 4 Corridor, connecting Tampa, Lakeland, Orlando and Daytona Beach is favorite of McKinley for it’s unique position as a major economic engine for Florida. The firm owns and manages 55 multi-family communities along the I-4 corridor. Albert discusses the firm’s attraction to the corridor as a region of of immense population growth.

  • I-4 Corridor
    • Tampa/St. Petersburg, Lakeland, Orlando, Daytona Beach
    • 3/5 of Florida Residents centralized around I-4
    • 6.5 million residents (6th largest population concentration by geographic area in U.S.)
  • Economic Growth
    • 1.3 times over growth rate of South Florida
    • Panama Canal to introduce Port of Tampa to new markets
    • All Aboard Florida rail project to provide high-speed transit between Orlando and South Florida
      • Tourism/Entertainment
        • Theme Parks in Orlando and Tampa
        • Coastal attractions

For any investor seeking to improve their success in the real estate market, Albert believes that a mentor is an invaluable resource for investors. The expertise and understanding of a seasoned investor can provide knowledge and guidance to make actionable investment decisions.

Albert cites Colin Powell as a distinct influence on his development as a leader. Despite his focus in military and politics as opposed to business, Gen. Powell established himself as a true leader in his field and exhibits the qualities of leadership that can be applied to any individual.

Check out Colin Powell’s literature on leadership on Amazon

To find out more about Mckinley’s properties in Florida visit their website

 

 

Ep. 56 – Karma Senge: Trials & Tribulations of a MultiFamily Investor

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1f396c8When it comes to multifamily investing, the size of the deals is often the most intimidating, but as we know, with bigger risks come bigger rewards.There is always a reason not to do something. The transition to becoming a multifamily investor may seem overwhelming but many investors make the move into multifamily markets and overcome the obstacles to become successful multifamily investors.

Karma Senge is a multifamily investor with quite an interesting story. Like most real estate investors, Karma cut his teeth in investing in the single-family markets. After entering the market in the early 2000s, Karma had soon acquired over 350 properties in his portfolio and was single-handedly managing them all. After a brief departure from real estate investing to recover from the stress of single-family investing, Karma reentered the market with a focus on multifamily investing. Despite his renewed vigor, Karma had to work his way back from the ground up in the multifamily market, eventually acquiring his first investment on a 6-property portfolio. Karma’s story is one of hard work and perseverance. Karma managed to overcome the obstacles ahead of him and establish himself as a successful multifamily investor in Florida and the Southeast U.S.

  • Alternative Financing
    • Seller-financing and creative debt options provide an appealing alternative to institutional debt options
  • Due Diligence
    • Researching markets and properties is imperative before committting to any deal
  • Find a Mentor

    • Someone who is an experienced multifamily investor can serve as an invaluable source of information and guidance
  • Have a Team
    • A team of experienced staff or even a partner can help to manage responsibilities and stress
  • Community Investing
    • It is important to consider tenants when investing in multifamily. Invest in community-oriented projects and developments.

Karma recommends:

Rich Dad, Poor Dad by Robert Kiyosaki and The Big Leap by Gay Hendricks, PhD for those thinking of entering into multifamily investing.

If you would like to find out more about Karma’s investment firm, please visit his website

you can contact Karma via email at karmalodrowsenge@gmail.com

 

Ep. 55 – Brian Bandell: Update on the South Florida Real Estate Market

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3657aafSouth Florida has always been in a class apart from the rest of the state in terms of real estate development. The South Florida real estate market has lead the state in real estate investment and growth. Despite it’s ups and downs the South Florida real estate market has historically been a market indicator in terms of development and investment activity. South Florida’s unique positioning and heavy influence of foreign investment makes this market an interesting and dynamic one.

Brian Bandell is a senior journalist with the South Florida Business Journal covering real estate, transportation and logistics. For over a decade, Brian has served the South Florida business community. With an expert ear for news, Brian gives us a brief, but detailed overview of the South Florida real estate market and what is in store for future developments in the area.

  •  $7.5 billion in construction starts in Miami and South Florida
    • Condominium/Multi-family
    • Retail
  • Developers/Developments
  • South Florida economy driven by tourism and foreign investment
    • Heavily dependent on international markets
    • Strengthening of USD may adversely affect South Florida investments
  • Miami moving towards transit city
    • Metrorail connects major points in Miami
    • Metromover connects Downtown Miami
    • Trirail connects Miami to West Palm Beac
    • All Aboard Florida rail project will connect Miami to Orlando
  • Issues
    • Commuting is still difficult in South Florida for those who don’t live near transit stations or commute by car
    • Development in South Florida does not represent demographics
      1. Developments are for high-end/luxury spaces
      2. Middle-income bracket job growth not suited to high-end developments
    • Rapid rent increases
      1. Multi-family rent increases: 8.8% in Miami-Dade, 7.1% in Broward and 5.8% in Palm Beach
      2. Weekly wage increase: 2%

To find out more about Brian’s work with the South Florida Business Journal visit their website

In addition to his journalistic successes, Brian is also a published author of fiction! Look for his books on Amazon

 

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