Ep. 50 – Three Types of Creative Mortgages for Real Estate Investors

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Successful investing needs capital. For real estate investors, that often means mortgaging existing properties as a source of attaining capital. Traditional lending through banks and other financial institutions is often the method of acquiring hard-money loans. Sometimes though, the loan approval process may be too time-consuming or their lending practices may be too restrictive for investors.

Keyur Patel (top, left) and Naim Hamdar (top, right) of Synergistic Funding share three types of creative mortgages that are available to real estate investors as an alternative to traditional institutional lending.

  1. Commercial Mortgage-Backed Securities – CMBS Loans
    • Currently strong alternative loan product
    • Cyclical nature – this type of loan dissipates with market downturn
    • Undisclosed, non-restrictive cash-out feature
    • Assumable
    • Non-recourse
    • Quick execution – loan sold as packaged, traded security or bond
    • Competitive Interest Rates compared w/ institutional lending (< 8%)
  2. Bridge Financing
    • Often used as alternative loan for investors making balloon payments on existing mortgage and institution not offering re-financing options
    • Up to 65% loan-to-value
    • Typical terms – 1-3 yrs. w/ balloon
    • Interest rates between 8-12%
    • Quick-closing
    • Non-Recourse
    • Creative underwriting – “carve-outs” prevent loan being taken out with malicious intent
    • No minimum for financing, but $100 million ceiling
  3. Line of Credit
    • Designed for seasoned investors w/ multiple projects per year
    • Private lines of credit offered to investors
    • Available for entire term (1yr)
    • No annual fees if not used
    • Once used, 1% monthly fee applied + 9-month repayment term
    • Quick-closing
    • Relatively quick approval turnover (1-3 weeks)
      • Investors must have at least 2 successful closings per year
      • 1 yr. tax returns
      • 3 months bank statements

For more questions on these types of creative mortgages for real estate investing or to find out about other services Keyur and Naim offer:

Call Synergistic Funding – 813-333-5128

or email them at info@synergisticfunding.com

 

Ten Suggestions for Landlords and Managers of Residential Properties – Josh Diggs

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Headshot_JoshOkay. So you have made the leap and acquired a real estate investment asset to begin your portfolio. The next step, managing the property, is a recurring problem that arises for many investors. Real estate needs to be managed. A poorly managed property is a strain on any investor’s time and finances.

Josh Diggs, of Palm Capital Partners of Tampa, shares with us 10 tips for successful and effective property management. With years of experience in owning and managing investment real estate, Josh has crafted the essential shortlist to property management. His 10 tips cover all the points landlords and managers need to know about residential property management.

  1. Due diligence on tenants
    1. Background checks, credit checks
  2. Don’t make exceptions on tenant-screening policies
  3. Don’t buy used appliances
    1. Repair costs on used appliances total more than purchasing new
    2. It is better and more cost-effective to purchase new appliances w/ warranties
  4. Condition forms
    1. Have tenants complete and sign formal acknowledgments of unit conditions upon move-in
  5. Be cautious hiring sub-contractors
    1. Cheap ones may be appealing but service is unreliable/faulty
    2. Referrals and word-of-mouth are best vehicles for finding reliable sub-contractors
  6. Bed tenants mean bad communities
    1. If existing tenants are bad influence on community, remove them
  7. Complete regular property inspections
    1. A/C, smoke alarms, etc.
  8. Always deal with tenant directly
    1. Don’t allow friends or family of tenant to intervene in matters involving the property
  9. Maintain timely property maintenance
    1. Waiting on necessary replacements and repairs may have serious long-term consequences
  10. Always be professional
    1. Regardless of situation, never allow personal matters to affect business

Josh’s company Palm Capital Partners, LLC is always looking for new investment opportunities. They are mainly interested in B+C multi-family properties.

If you have any questions on investing in the Tampa area or have a property you wish to sell you can contact Palm Capital Partners at 888-805-9317

or you can contact Josh directly at 727-859-6510

Ep. 44 Carl Hudson – Did You Know the Federal Reserve Monitors Florida’s Real Estate Market?

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hudsoncarlpThe Federal Reserve is institution many are aware of. As the central bank of the United States, it serves as the standard for banking as well as regulates and moderates national interest rates. What many don’t know is that the Federal Reserve also has many other responsibilities.

Carl D. Hudson, Ph.D. is the Director of the Center for Real Estate Analytics at the Federal Reserve Bank Atlanta. The Atlanta division of the Fed (1 of 12) oversees much of the Southeast U.S., including Florida. Dr. Hudson is responsible for identifying and analyzing systemic impacts in real estate, economy, financial institutions and consumers. This week he shares his insights on the post-recession rates of Florida’s real estate market and its relation to the rest of the nation.

  • Florida is real estate market economy
  • Immigration major factor in FL real estate market
    • 2000-2007 – >300k/ year in population growth
    • 2008-2009 – <100k/ year
  • Economy is improving slowly
    • FL employment growth rates – 3.4% annually, highest in Southeast U.S.
    • Only .2% growth from pre-recession peak
  • Interest Rates may see increase over time
    • Short-term rate increases likely
    • Indicative of returning economy
    • No dramatic increases
  • Multi-Family markets in FL
    • 40% year-after-year construction growth rates
    • Major Markets: Tampa, Ft. Lauderdale, Miami, Jacksonville, Orlando seeing positive trends in construction
  • Miami
    • Largely driven by foreign market
    • July 2012: 4200 units under construction; June 2015 20,000 units under construction
    • Strengthening of U.S. dollar may inhibit foreign investment
  • Yield rates
    • Lower rates than pre-recession, but functioning at rates equivalent to early 2000s
  • Changes to investing
    • Prior to recession – financing investment involved a deposit
    • Post-recession – “pay as you go” financing on the rise
    • Greater commitment to investment, not easy to walk away
  • Growth trends for Florida?
    • Panama Canal reopening could mean major impacts on East Coast port cities
    • In FL – Jacksonville, Tampa, Miami, Ft. Lauderdale

To find out more from Dr. Hudson’s department, visit The Federal Reserve Bank of Atlanta’s website and click the Center for Real Estate Analytics link

Click here to read the President of the Atlanta Federal Reserve, Dennis Lockhart‘s speech on the national economy

Stay informed with Dr. Hudson’s blog, Real Estate Research

Ep. 43 Steve Berges: Tips on Selecting A Property Manager

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ServeAttachment.ashxSingle-family investors looking to transition to multi-family investing? It is important to remember that multi-family investing has different rules and procedures than single-family. It is crucial to have an understanding of the dynamics of multi-family markets. While a working knowledge of multi-family markets is vital, even seasoned investors cannot oversee all aspects of property management.

Steve Berges, author of Complete Guide to Buying and
Selling Apartment Buildings
has some tips on transitioning into multi-family markets and, most importantly, on selecting an effective and responsive property manager for your asset. With over $100,000,000 in multi-family transactions under his belt, Steve has the experience and know-how to achieve success in multi-family investing.

  • Value-Play/Value-Add System
    • Property undervalued for certain reasons relative to current market
    • Low-risk investment
    • In/out investment, not long term
  • Multi-Family is More Economical Than Single-Family
    • Multi-family flips still generate occupancy cash-flows
      • 70-80% occupancy compared with the usual 0% of single-family flips
      • Multi-family property should be breaking even, with proper research
    • Lower frequency of transactions per year than single-family
  • Multi-Family Markets are Competitive
    • Recognizing competitive market is important
    • Understanding the dynamics asset values and what drives the value is key
  • 3rd Party Property Managers
    • 50+ units should use property managers
    • more cost-effective to “manage managers” than to assume all responsibilities
    • On-site managers are especially important
  • Be a Strategic Manager/Owner
    • Use good judgment selecting property managers
      • Some may seem professional but may be ineffective
    • Develop close working relationship w/ property managers, but do not over-manage
    • Look for property management firms that specialize in multi-family assets
    • Be patient, do not rush investments

A devoted family man, Steve works with only a small group of partners a year, but he welcomes any investors to contact him with questions, to share interests or even propose investment opportunities!

You can visit his website at www.steveberges.com for even more information and updates!

Check out related content and past shows on our website!

 

 

Ep. 42 Courtney Barnard – 4 Things Apartment Investors Need to Know Regarding Current Florida Regulatory Issues

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Multi-family markets make many investors wary. Regulatory issues surrounding multi-family investments can change quickly and often. Florida regulatory issues occur especially quickly; changes occur every 6 months to a year. Multi-family units are also subject to many different federally protected-class ordinances that undergo frequent regulatory changes. Investors can be intimidated by the dynamic regulatory climate or move to invest in multi-family without a clear grasp of the market.

Courtney Barnard has made it her business to ensure multi-family investors with the proper resources and knowledge to stay atop the frequent Florida regulatory issues that arise. As Director of Government Affairs at the Florida Apartment Association, Courtney is tracking regulatory changes on federal, state and municipal level and advocating Multi-family owners’ rights and interests concerning these changes. This week we discuss 4 major regulatory issues in Florida that will have dramatic effects on multi-family markets.

  • 7 Protected Classes under Federal Government (Race, Color Nat’l Origin, Religion, Sex, Disability)
    • Additional protected classes may be added at state/local level
  • 4 Major Regulatory Issues in FL
  1. Additional Protected Classes in Miami-Dade County
    • Source of Income – cannot discriminate against renter based on source of income (non-traditional incomes…this includes Section 8 and Housing Choice vouchers
    • Domestic Violence Ordinance – victims or perceived victims of domestic violence may apply under Source of Income protection for housing. In FL, no documentation needed for renter to apply under new ordinance
  2. Pets in Multi-family Units
    • Pets often claimed as service animals to preclude fees/pet deposits
    • In FL, service animals may only be defined as a dog or miniature horse
    • Florida House Bill 71, passed 2015, proclaims: Service animal must be house-broken, under control of owner, and pose no threat to community
    • Now a misdemeanor in FL, to falsely identify pets as svc. animals
  3. Fire Assessment Fees/Inspections
    • Past 2 months have seen rise in local ordinances involving fire-safety assessments
    • Recent regulatory changes have cut many municipal budgets
    • Frequency and costs of assessments has risen
    • Property owners charged per unit fee of up to $49, in some cases
  4. Supreme Court ‘Disparate Impact’-Ruling
    • Texas Housing Authority v. Inclusive Communities Project
    • Court ruled that business owners may be unintentionally creating environments of discrimination with regard to fair-housing without violating fair housing laws
    • Already seeing rise in litigation regarding Supreme Court ruling
    • Could pose negative economic impact on multi-family markets
    • See the National Apartment Association‘s website for more info surrounding ruling

Visit the Florida Apartment Association’s website for information and resources on the state level.

Members of the Florida Housing Association may visit the Government Affairs section for more information on regulatory changes or contact Courtney directly through her contact info listed on the site.

 

E34 Wesley Burdette – How He Progressed from Single-Family Flipper in to Multi-Family Development

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318084_536836776336108_1099953190_nWesley Burdette has always had a hand in real estate investing, however he began on the lending side in the Washington D.C./metro area. From lending he moved towards single-family residential flipping with his sights set on the Florida real estate markets. After finding success in the single-family markets, Wesley endeavored into real estate development and now has several projects in progress in the Seminole Heights neighborhood of Tampa, notably a 46 unit loft-living complex, The Warehouse as well as four new townhouses.

Wesley joins us to discuss his transition from flipper to developer and covers key tips for investing in the Florida real estate markets along with advice on how to diversify your investments and foray into larger investment markets.

  • Know Your Market
    • Research the areas you are considering investing in
    • Understand consumer psyche – what do people want in a home?
    • Know your contractors, work closely with them
    • Millennial Markets on the rise: Seminole Heights
  • Budget
    • Know what you can afford
    • House-flipping is all about initial buy
    • Cost structure
      • Adaptive reuse (commercial, multi-family)
      • Infrastructure (basic repairs)

Wesley’s Tips:

  • Perseverance is key.
  • Entering into investment real estate can be intimidating, but with determination and the proper know-how you can find success.
  • Be careful with your investments. Don’t get locked into something uncertain

If you are interested in investing in the Seminole Heights area or just looking for some local urban flavor, check out: The Rooster and the Till or The Refinery

To view pictures of Wesley’s multi-family development project, The Warehouse, click here.

Visit the Page on Facebook

Wesley can also be contacted directly at: wburdett1@yahoo.com

 

 

 

 

EP17 – How One Investor Segued from Single Family Homes to Multi-Family Investing

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Multifamily InvestorChris Urso is a multifamily real estate investor and coach.  His real estate company, URS Capital Partners, now controls over 50 million dollars of real estate throughout the Midwest and Southwest of America.  Chris began investing in real estate at the young age of 21 years old when he bought a 2-family in 2001 with the money his parents were intending on using for his college loans.  In this podcast, Chris covers a range of topics from how to get started, what has worked for him and hasn’t worked and how he structures his deals.

One of his proudest moments in his investing career was purchasing a 280 unit building in Charleston, SC for 7.2 million dollars.  Urso then invested 2 million dollars into renovations for the property.  All in all Urso plans on selling the property in the next two years for a 3 million dollar profit.

Points Discussed on the Show

Advice

Chris Urso gave some great advice throughout the show.  One piece of advice he gave is that it is important to focus your energy on one specific type of investing.  Urso also stresses the need for every young investor to have a mentor or a coach in their life to help guide them.

Quote’s from the show

“Anyone who says they’ve never lost money in real estate is full of you know what. “- Chris Urso

“You can’t dance at every wedding.”- Steven

“Stay focused on the end game.”- Chris Urso

“Don’t do a deal just for the sake of doing a deal.”- Chris Urso

Favorite Places in Florida

Urso’s favorite spots to hang out in Florida are Del Ray Beach as well as the beaches on the West Coast.

Favorite Book

Rich Dad Poor Dad by  Robert T. Kiyosaki

 Contact Info

http://www.eliteapartmentcoaching.com/

 

EP15 – How One Investor Acquired 9 Apartment Complexes with Great Mortgages in Only 18 MONTHS!

Today our guest on the show is a multi-family real estate expert by the name of Michael Becker.  Becker  is the Senior Director of Lending for Old Capital Lending and Principal in

Michael Becker - Apartment InvestorSPI Advisory, a real estate investment firm specializing in the Multifamily Apartment investments in the Dallas-Fort Worth area.  What is surprising about Becker’s story is the breathtakingly short period of time he was grown his portfolio.  In two years, he has acquired 9 complexes with more coming this fiscal year.   Becker started out as a lender, when the light bulb came on one day and he made the decision to move from collecting a check to taking control.  He originally started in the single family market and quickly came to the conclusion that he could not grow the single family business with the speed necessary to meet his goals.

Steven and Eric cover much more than just Becker’s investment history.  Michael possesses the knowledge to talk frankly about how to acquire debt to purchase multifamily properties.  He touches on many types of lending from small, community bank borrowing to Commercial Mortgage Backed Securities (CMBS), and his personal favorite, agency debt (Fannie Mae and Freddie Mac).  Find out the pros and cons of each one of the debt options and learn why Michael likes the agency lenders so much!

Other Important Points Discussed:

  • Syndication Strategies
  • Off Market Deals
  • Property Management Strategies
  • Importance of Education
  • Inspection – Due diligence
  • RUBS – Ratio Utility Billing System
  • Water Conservation System
  • Mistakes made in the 2008 downturn
  • His firm lends in Florida and has done a deal recently in Jacksonville

Quotable – “Running toilets is the sound of making money to me.”

Books:
ABC’s of Real Estate Investing
&
The Advanced Guide to Real Estate Investing by Ken McEleroy.

Tips:
Get involved – Educate yourself
Find a Good Property Management
Get a good physical inspection
You are never going to know everything you need to know. Avoid paralysis by analysis.

Favorite part of Florida – Panhandle .

Mbecker@oldcapitallending.com

Old Capital Lending

 

EP10 – What is Happening in Miami Real Estate Development? Where Is the Market Headed?

The Miami real estate market is one of the most resilient markets in the world and certainly the strongest market in the State of Florida.  It was left for dead after the 2008 market downturn and even optimistic projects estimated it would take at least a decade to rebound.  Fast forward to 2015 and the Miami market is seeing eye-popping growth, not only in construction starts, but also a rebound in prices.

193x257_TimBecker_9988Tim Becker, CCIM & Director, Kelley A. Bergstrom Center for Real Estate Studies, is our special guest for this first of a four part series of the State of Florida’s major real estate markets, in preparation for the Center’s Trends and Strategies Conference February 26-27 in Orlando, Fl.

In this part of the series Tim gives a brief overview of what is moving and shaking in the Miami real estate development scene and some areas of potential concern.  If you are an active or aspiring real estate investor in the Florida markets, you will definitely want to catch all four parts of the series.

 

Check out this episode!

Contact info:

Twitter
Linkedin
Stutzin Hall
PO Box 117168
Gainesville, FL  32611-7169

EP5 Dan Pepper – 5 Pitfalls of Conducting Due Diligence on Real Estate

Dan Pepper is a young guy with a lot of experience.  He is a value added real estate investor. While he has invested in many different asset classes, his focus is on multifamily Dan Pepper - Tampa, Floridadwellings.  He is going to share with us his 5 biggest pitfalls of conducting reviews of investment properties.  Due Diligence …the nuts and bolts of real estate decisions.

Check out this episode!

 

 

Show notes:

Linkedin Profile

Tip for Investors – Asking questions

Advantages of being being a landlord in Florida

Favorite Restaurant – Sally O’Neal’s 

Meaningful Educational Text – 

Dan’s Company – Palm Communities Apartments