Ep. 45 What Real Estate Investors Need to Know About the Family Office Market

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Brian_Prax_WebThe elusive family office market. Investors may have heard that it offers a deep pool for raising capital for deals, but for many it remains an enigma: a veritable El Dorado of investment capital, discussed in hushed tones in investment seminars and conferences throughout the country. What IS the family office market? How do you get involved in it?

This week, we have Brian Burke stop by. Brian is the co-founder and managing director of Praxis Capital, an investment firm that manages investments in a variety of markets. In addition to his extensive knowledge and experience in single and multi-family markets, Brian also has invaluable experience working in the family office market. He discusses what the family office market is exactly along with providing tips for working your way into the market.

  • Family Office Market
    • High net-worth families that need to invest
    • Usually managed by family member or RIA
    • Offers high investment opportunities, but difficult to get into
  • How to Get Into Family Office
    • Get Noticed – use word-of-mouth and alternative press (podcasts, radio shows) to get word out
    • Do not solicit to family office markets…You will be approached if there is an intereset
    • Attend family office conferences
    • Networking is key

For more information on Brian’s firm Praxis Capital or to contact his team, visit their website!

 

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.

 

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

Ep 40 – Don’t Forget About Small Business Loans for Investment Real Estate

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Hoyt PrindleHoyt Prindle of the Florida Business Development Corporation talks about Small Business Administration (SBA) loans for investment real estate. Most real estate investors overlook this type of financing, because, frankly, it has limited use for investment property…BUT, the financing source can be excellent for mini-warehouses, hotels, golf courses, etc…OR, the professional or retail user who decides to have some attached rental space on the current space in which they own and run their business/practice. The terms of an SBA loan can make a deal VERY attractive for investors. Listen to Hoyt tells us what programs work best.  

Check out this episode!

Ep 38 Barney Killinger – Working the Central Florida Auction Market

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Potential investors looking to get into the Florida real estate market are often held back by the fear that they don’t have the capability, time or resources to make the right investment decisions. There are a million reasons to say, “I can’t do it because…”

Our guest this week is Barney Killinger of Pro Auctions Services. Barney is a foreclosure auction expert, purchasing properties at foreclosure auctions for investors. His company, servicing mainly Central Florida, provides investors with a consolidated portfolio of foreclosure auction markets available for bid in several counties.

Barney is a great guest not only for his enormous well-spring of knowledge and experience SSPX0099in the Central Florida auction market but for his inspirational story. In 2010, Barney was involved in a head-on collision and suffered a severely fractured neck. While bed-ridden and amidst surgeries Barney continued to pursue his dream of achieving success in foreclosure auction markets and managed to organize and execute successful bids on 40 properties in a 45 day period from his hospital bed. Barney is living proof that you absolutely can succeed as an investor with perseverance and dedication.

  • Florida foreclosure market still going strong
    • Courts still holding and processing foreclosure cases
    • Large amounts of “reserve stock” properties
    • Most likely to reach its peak mid-2018
  • High Risk/High Reward
    • Title issues
    • Structural damage
    • Risks can be minimized with right knowledge and resources
  • Returns on foreclosure auction investments
    • 65-75% average for investors
    • 12-15% average per month on remodel/rehab properties
    • 3-6% average per month on wholesale flips
  • FL Open Bid system
    • Investors have access to bank/lender’s selling prices prior to sale
  • FL 10-day Title Redemption Law
    • 10 days allotted post-sale for owner/borrower to pay liens or for bank/lender to vacate foreclosure sale
    • If sale vacated by bank, make direct offer to bank on vacated property
  • Pro Auctions Services
    • Servicing mainly Central Florida auction market: Polk, Orange, Osceola, Seminole and Volusia County
    • Proxy Drivers – view and photograph property for buyer at auction
    • Proxy Bidders – buyers who represent investor at auction
  • Tips for SuccessVideo Pic
    • Always SEE the property before placing bid
    • Run title search
    • Who you work with and how you educate yourself is very important in real estate investments

 

For more information on Barney’s company and the services they offer, visit his site here

Contact the Pro Auctions team by email at auctions@proauctionsservices.com

or by calling the office at 863-687-4101

 

 

Ep. 37 June Fletcher Talks Naples Real Estate

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June_Fletcher_1433953767891_19585335_ver1.0_640_480 As a real estate investor, especially in Florida, it is important to remember one thing: there is no single real estate market. The Florida real estate markets are diverse and dynamic and are comprised of many different asset classes; from single and multi-family to commercial investment markets. Naples, on microcosmic scale, is a good representation of a diverse market. Although, with low supply of available property and a near-exclusive cash-buyer’s market leading to high real estate values, it can be difficult to find a footing in investing in Naples real estate.

June Fletcher can be considered an expert on real estate markets. She has been involved in business and real estate reporting for nearly 30 years and currently works as a Business and Real Estate reporter for the Naples Daily News. As local resident of Naples, she has the inside scoop on the current state of the Naples real estate markets.

  • Naples is one of highest Cash Markets in US
    • Represent 7/10 buyers
  • Collier County very diverse demographically
    • Marco Island + City of Naples, largely wealthy
    • Immokalee + other outlying areas, lower-income
  • Higher-price market averages compared with FL
    • Naples – $432k for single-family, $285k for townhomes/condos
    • FL – $200k for single-family, $159k for townhomes/condos
  • Higher net-worth value than state and national markets
    • City of Naples – $752k
    • State of FL – $395k
    • US – $496k
  • Decrease in Institutional Investor transactions (buys 10 or more units in calendar year)
  • Not affordable for local residents
    • Average income – $55k per year
    • Not many multi-family developments or affordable living projects
    • Ave Maria – planned community 20 mi. from City of Naples
    • Long commutes

If you are looking to visit Naples for investment opportunities or just to enjoy its natural splendor, June recommends stopping by The Bayhouse Restaurant for some great local flavor and grub or to catch a live Celtic band!

If you wish to contact June for more information on Naples real estate, email her at: fletcher.june@gmail.com

Look for June’s book, House Poor available now!

 

E36 – Jason Hartman – Building and Diversifying Your Real Estate Portfolio

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jason-hartman-speaking A common difficulty for real estate investors is making the jump into diversification: diversifying one’s investments can lead to larger returns and can provide supplemental support or income if one market fails, but it may prove intimidating to manage investments in several different market types. Investors are usually more comfortable investing in a single market rather than risk a loss in unknown markets.

For Jason Hartman, its all about diversification. Jason has been involved in the brokerage of several thousand real estate transactions and owned investment properties in 11 states and 17 cities. In his long career, Jason has championed diversification of investment markets and his company, Platinum Properties Investor Network assists investors with acquiring income properties in diverse markets. Jason joins us on the podcast to discuss his strategies for building and diversifying your real estate portfolio.

  • Diversify – Investors should be involved in about 3-5 different real estate markets
  • Be a Direct Investor – Starting investors should experience full control and ownership of property
  • Educate Yourself
    • Learn Your Markets
    • Podcasts, blogs, info products, and home study provide inexpensive and valuable Information
  • 3 Market Types
    1. Linear
    2. Cyclical
    3. Hybrid
  • FL is Good Hybrid Market
    • Good appreciation potential
    • Decent cashflow
    • Good diversification opportunity
  • All Real Estate is Local
    • No single “housing market”
    • About 400 local markets in U.S.
  • Top U.S. Markets
    • Memphis, TN – stable rental market
    • Little Rock, AR – landlord-friendly state
    • Indianapolis – strong industry, commercial growth
    • Atlanta, Birmingham, Kansas City also good markets
  • “Don’t Wait to Buy Real Estate…Buy Real Estate and Wait”

To find out more about Jason’s company or for more resources on building and diversifying your real estate portfolio, visit: jasonhartman.com

Contact Jason on Twitter at: @JasonHartmanROI

Also, tune in to Jason’s podcast for great advice and information on diversify your investments as well as increasing your financial literacy.

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