Category Archives: Property Class

Ep. 109 Dennis Cisterna: A Tool for Rent Research

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rent researchRent research can be tough. Rent research can be a pain

Rent research may not be most’s idea of a good time, but it is necessary for single and small multifamily real estate investors. In order to determine investment value and potential for rental income, comprehensive rent research must be done on a property. Usually, this requires an extensive effort on an investor’s part in due diligence and market research.

Dennis Cisterna may have the answer to many investors’ prayers. In addition to his veteran experience in real estate investing and lending, Dennis serves as Chief Revenue Officer RentRange Data Services and Investability Real Estate, Inc. Each of these services serve as a helpful tool for investors conducting rent research on potential properties.

This episode, Dennis discusses these tools for rent research and lends his expert knowledge to Florida market overviews. Find out why there isn’t a better time to become a real estate investor in Florida!

Tools for Rent Research

  • RentRange
    • Analytical tool help investors understand SFR market points
    • Automated rent estimates on +10,000,000 properties
    • Premier SFR analytics tool
    • Business oriented – geared toward property managers, lenders, banks, etc.
  • Investability
    • Online search and acquisition platform (operates as brokerage firm)
    • Totally free to use
    • Offers 3rd party investment services
    • One-stop-shop for SFR and small multifamily investors

Florida Markets

  • Hot markets: Miami, Ft. Myers/Cape Coral, Tampa/St. Petersburg, Orlando, Jacksonville
  • Strong rental markets statewide
  • Miami: 15% rent increase and 5% vacancy
  • Tampa/St. Pete: 10% rent increase and 8% vacancy

Dennis has been kind enough to draw up a Florida-centric market analysis for our listeners. Check it out here! Invest Florida Show – Florida Market Analysis

Investors can visit RentRange and Investability to find out the full extent of services each platform offers. Each platform has an excellent sales and support staff to assist clients with any questions/concerns.

Ep. 108 Elysia Stobbe: Post Election Update & 3 Changes w/ SFR Investor Mortgages

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investor mortgagesElection years always have the potential to inject uncertainty into investment and securities markets… this year has been particularly interesting and it should be fair to say that the result of this election ties an enormous “?” to the end of 2016. Market uncertainty has been reflected in recent rate rises for investor mortgages.

Elysia Stobbe, NMLS# 146751 is not deterred by uncertainty. Elysia is not only a mortgage expert with NFM Lending, but with over 30 properties in her personal portfolio, she is also an experienced investor. She has shared her expert advice on numerous radio and television broadcasts and has authored a book on getting the best investor mortgages. She has been following changes to investor mortgages closely and is finding flexibility and continued promise for real estate investing.

3 Changes to Investor Mortgages

  • .5% hike in mortgage rates driven 10 year treasury bonds post-election
    • e.g. $300k loan sees monthly increase of $90
  • Fannie Mae (FNMA) loan-to-value down-payment requirement 25% up from 20%
  • Multi-property SFR (up to 4 units) investors can hold up to 10 mortgages if purpose is to purchase investment properties

Other News

  • Cash-out options have been increased for investment properties
    • Shows improved confidence in property equities
  • Return of bank statement programs to bank portfolio loans
  • Recent rise of investor rehab loans
    • Investors can save cash while making properties rent-ready

Finding Financing

  • Lot loans
  • Mortgage brokers/bankers
  • Community banks
    • While they may not be offer as much community banks generally offer better terms than national banks
  • Big banks
  • Alt. options: seller-financing; hard-money

Contacts & Resources

Ep. 104 Landlord Tales – Tax Credits on Green or Sustainable Property Endeavors

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cost segregation; tax creditsTax Credits

They sound nice, but real estate investors may think that they are not so easy to come by. Those investors who do happen upon them find usually find themselves bogged down by the IRS’ strict stipulations surrounding them.

Tax credits are, in fact, tools set in place to help investors grow their portfolios and while they may seem complex, they are accessible to any investor willing to do a little extra leg work.

While nobody should be expected to know the entire IRS tax code, real estate investors should be aware of some very helpful tax credits that can be applied to their assets.

Michele Pasquale, of Meridian Financial Solutions spoke with us previously about increasing your bottom line through cost segregation.

This week she discusses some more tax credits that real estate investors can apply to green or sustainable property endeavors.

179D

  • Instated in 2005 Energy Policy Act and renewed annually
  • Potentially set to expire end of 2016
  • Tax deduction for energy efficient additions to commercial buildings +30,000 s/f
  • 3 common components
    • Building envelope
    • HVAC
    • Lighting
  • $0.30-$1.80/SF in tax credits
  • Calculated on energy efficiency of entire building set to ASHRAE requirements

45(l)

  • Residential tax credit for developers of energy efficient buildings
  • Potentially set to expire end of 2016
  • dollar-per-dollar deduction
  • $2000/unit or dwelling
  • Qualifying factors
    • Apartments, Condos, Town homes
    • New construction or rehab up to 4yrs
    • 3 stories tall or less

Disposition

  • Tax credit for removal and retiring of building fixtures or components
  • Book value of components can be written off as business deduction
  • Components can not be purchased within same year as tax year filing with deduction and must be no longer in service

Have more questions on these or other possible tax credits? Call Meridian Financial Solutions for a free quote at 561-252-7282

 

 

Ep. 103 Reed Goossens: Talking Syndication of Multifamily Projects

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syndication of multifamily projectsLet’s face it, every real estate investor just starting out dreams of landing the huge deals. The question remains though: how to make it to the institutional level?

The answer comes with syndication. Syndication expands the opportunity to make larger deals by leveraging capital from a group of investors.

For singlefamily and small, residential multifamily, the first syndication deal can seem like a large step. There are a lot of moving pieces to keep track of in a syndicated deal that may seem complex to investors used to self-financing.

Reed Goossens knows the power in syndication.

A native Australian, Reed moved to the U.S. after educating himself in real estate investing. As a foreign investor, Reed saw the potential for earning cash-flow in U.S. real estate markets and set about acquiring properties.

Initially investing in small duplexes in tertiary markets outside of New York City, Reed had been using his own capital to finance deals.

He realized the need to scale his real estate investment goals and set about transitioning from residential multifamily to commercial multifamily through syndication.

Reed founded RSN Property Group and has been investing in commercial multifamily properties through syndication since 2011.

In addition to expanding his asset portfolio and investor base, Reed also hosts a podcast to educate foreign investors in the U.S. real estate market

Syndicating Investment Deals

  • SEC has strict rules for syndication under Regulation D
    • Rule 506 (b)  – allows for unlimited accredited investors (earn +$200k/yr. or personal worth of +$1 million); up to 35 unaccredited investors (earn under $200k/yr.)
  • Surround yourself with credible investors; find a mentor
  • Have pitch deck to educate potential investors on deal specifics
  • Private Placement Memorandum (PPM) – after sourcing investors, a PPM is needed
    • Drafted by syndication attorney
    • Outlines how deal is being syndicated under a regulation (e.g. Rule 506)
    • Tailored to individual investments
  • Syndication Contracts
    • Typically, 30 days for due diligence; 45 for larger properties
    • 15 days for financing and 15 days for closing
  • Preferred Returns
    • Limited investors get “x” percent of 1st earnings, decided in contract
    • Future returns split between limited partners and general partners (syndicators)

Resources

Reed and RSN Property Group are always on the lookout for value-add investment deals. If you think you have a potential deal, contact Reed at reed@rsnpropertygroup.com.

Reed also hosts a podcast that educates foreign investors on U.S. investment real estate markets- Investing in the U.S.: An Aussie’s Guide to U.S. Real Estate

Like many beginner investors, Reed learned about creating financial independence and the power of passive cash-flow through Robert Kiyosaki’s Rich Dad Poor Dad.

Ep. 101 Dan Pepper: Increasing the Value of Your Property by Paying Attention to Financial Details

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increase proprty values with financial detailsTime is money. Property managers spend a lot of money on their time and this is true whether they are managing residential, multifamily or commercial properties. Often times, property managers may get caught up in the timing of things, letting their financial records and organization fall by the wayside. Not only does this cause added stress on the property manager, but it can also hurt the value of a property. When it comes time to sell a property or to refinance, proper financial details mean everything in determining how much the property is valued at.

Dan Pepper knows the importance of organizing and recording all the financial details of a property. Through his company, Palm Companies, a combined investment and property management firm, Dan oversees 190 multifamily units with nearly 50 units managed by Palm. With so many factors to keep track of, paying attention to financial details has become imperative in streamlining property management efficiency. This episode, Dan shares what he has learned about managing properties effectively and increasing property value by organizing and tracking financial details.

  • Automated Property Management Systems

    • streamline record keeping, bill pay and rent collection
    • Appfolio – good mid-market, fully-integrated automated system; 80+ units
    • Import photos or scans of bills for services and expenses into an easily accessible database

  • Capitalizing Expenses vs. Annual Expenses

    • Clearly define and categorize expenses that are capital improvements and what are annual expenses
    • Buyers can reconcile their investment concerns with detailed records
    • Lenders can asses precise values on properties
    • If unfamiliar, google search “capitalizing expenses”

Dan and Palm Companies are focused on multifamily properties ranging between 30-150 units in Southwest Florida. They focused primarily on property management ventures currently, but are open to viable multifamily deals. Palm Companies also has an interest in retail investments. Check out their website for more information.

Ep. 99 Phillip Smith and Jason Schaller: What You Need to Know About Multifamily Design and Amenities

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Apartment investing is undergoing a profound transformation in regards to multifamily design and amenities. The age of the shoe-box apartment is over. Changing climates in construction, social trends, economic growth and consumer demand have forced apartment investors and developers to re-examine what apartments could and should provide tenants. Apartment investors, whether they are refurbishing existing buildings or developing new complexes, are taking a drastically different approach to multifamily design and amenity provisions. This episode, we are fortunate to have two guests lending their insight and experience to the changing perceptions of what tenants want out of an apartment space.

multifamily design and amenitiesPhillip Smith is CEO of Framework Group, LLC, a multifamily development and construction group based out of Tampa, FL. Phillip oversees acquisition, design and development of multifamily communities. Currently, Framework Group has projects under construction in Tampa, Orlando and Sarasota, with projects under contract in Jacksonville. Framework Group’s goal is to provide multifamily communities with location and amenities that highlight and promote the urban lifestyle. By pushing the envelope of what makes a sensible investment to what meets with consumer demands, Framework Group has become a major figure in and development, offering full-service, high end apartments in Tampa and along the I-4 Corridor.

multifamily design and amenitiesJason Schaller is Managing Director of Property Management for McKinley. McKinley owns and operates a $4.6 billion real estate portfolio, 35,398 apt. units and 21 million SF of shopping centers and office centers around the country. The Michigan-based firm has a special interest in Florida’s I-4 Corridor with much of their Florida portfolio focused on it. Jason currently oversees Mckinley’s line of boutique apartment projects in Tampa, Mckinley | Hyde Park. Jason brings over 20 years of design and construction experience to multifamily design, refurbishing older and historic buildings and adapting them to suit the growing urban lifestyle.

Amenities

  • Reinforce and promote urban lifestyle
    • bike-share programs
    • Canoe, kayak, bike storage
    • Outdoor kitchens
    • Functioning communal spaces
    • Technological integration
  • Health and Wellness Focus
    • Hot/cold plunge pools and resistance pools vs. traditional pools
    • High-end exercise equipment
    • Classes, training courses: yoga, exercise, massages
  • Pet amenities
    • Green spaces
    • Grooming

Multifamily Design and Development

  • High-end finishing/fixtures
    • Quartz counter-tops
    • Rain-style shower-heads
    • Upgraded moldings
    • Wine glass racks
    • Kitchen storage
    • Stainless steel appliances
  • Individual feel
    • Corridor entrances
    • Lighted unit numbers
  • Space
    • High ceilings
    • Larger rooms
  • Décor
    • Natural finishes
    • Authentic colors and textures

If you are a building owner in the Tampa area and you think it might make a great addition to the McKinley | Hyde Park portfolio, visit the Principal to Principal contact page on their website. To find out more about becoming a resident at a McKinley | Hyde Park project, visit the Apartments page on their website for more information.

Framework Group, LLC provides general contracting services and selective development consulting in addition to project development and construction. To find out more about current and upcoming projects along with services offered, visit their website.

 

Ep. 98 Adrian Smude: Landlord Tales – One Method of Creating Distance between You and Your Tenants

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landlord talesThe sob-stories; the hard-luck-tales; the down-and-out pleas. There are many reasons tenants might ply a landlord for a special leniency or exemption. Whether these are legitimate reasons or or not, landlords and property managers can end up assuming a lot of extra stress on a property by allowing tenants to take advantage of a situation through emotion. Sometimes, the hardest thing for investors who manage their own properties to do is tell their tenant “no”. It is easy to put yourself in someone else’s shoes, but at what point can empathy hurt your investment? Real estate investors need to know how to keep tenant turmoil at arm’s length when it comes to the viability of an investment.

Adrian Smude may know better than any the importance of managing interaction with tenants. As an investor in single family residential properties in and around Plant City, FL, Adrian has experienced the short-comings of allowing tenants unchecked leniency. Adrian’s start in single family residential investing stems from an unpleasant tenant/landlord experience: eviction. After being evicted from a rental house in college, Adrian ended up purchasing his own single family property and converted into a multi-tenant rental. Wary of the poor experience he had as a tenant, Adrian opted towards a more empathetic approach to landlording. Eventually, he found his tenants abusing their privilege. Adrian had to find a way to separate himself from thinking like a tenant and more as a landlord. Adrian adopted a system that put distance between himself and his tenants while avoiding the hard-line approach. Join us for the first episode of “Landlord Tales” as we discuss holding rental properties in a land trust.

  • Land Trust
    • Property placed in name of land trust. Property owners can designate themselves as trustee, separate from beneficiary
    • Managing property and tenants becomes easier by separating function as landlord from property owner
    • Adrian learned this method from veteran local investors Jack Shea, Larry Harbolt and Mike Warda

Adrian is actively in the market for single family residential properties and mobile homes of up to $120k in areas around Hillsborough County and Polk County, including Brandon, Plant City, Lakeland and Winter Haven. If you believe you may have a potential investment opportunity, contact Adrian at (813) 720-7874.

Sandra Adomatis: Energy and Sustainability Initiatives to Increase Your Bottom Line

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sustainabilityCommercial real estate investors and developers know the term: “Green”. In Florida, it seems that “green” is the phantom criteria for real estate: many have heard of it, few have seen it. The term brings to mind vague notions of sustainability and energy efficiency, but what exactly is it? What is the merit in “going green”? As an effort to shift toward sustainability becomes a rising trend in the nation, Florida continues to lag behind as commercial developers and investors grapple with the nebulous nature of sustainability and green construction.

Sandra Adomatis, SRA, and LEED green associate is an appraiser with a focus on green initiatives and sustainability in real estate. Based out of Punta Gorda, Florida, Sandra has over 25 years of experience in real estate appraisal in the state of Florida. Sandra is a green valuation expert for the Appraisal Institute. Through course development, seminars and literature, Sandra has been helping commercial real estate investors integrate sustainability and energy efficiency into their investments.

  • 6 Elements of a True Green Building
    • Site orientation
    • Water efficiency
      • Low-flow plumbing, greywater recycling, rain barrels/cisterns, energy star rated washing appliances
    • Energy efficiency
    • Environmentally-friendly materials
    • Clean air circulation
    • Operations & maintenance
  • Adapting Existing Structures
    • Lighting
    • Heating/cooling
    • Insulation
  • Energy Modeler/building scientist
    • Assess what existing structures can handle for energy and sustainability adaptations
    • Calcs-Plus (Florida)
  • Green building investment appeal
    • Low-interest, flexible financing exclusive to green buildings
    • Cost-saving on appliances and utilities
    • 2-10% sale premiums vs. traditional structures
  • Resources and Info

To find out more about sustainability options or for appraisal services, visit Susan’s website or email her at adomatis@hotmail.com

Ep. 93: Using Social Media and Other Creative Methods to Market Your Apartment Complex

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using social media and creative methods of marketing your apartment complex marketing your apartment complex creativelyA sense of home can be a hard thing to find in an apartment. Real estate investors holding apartment complexes or other multifamily dwellings may find marketing their properties as desirable living spaces to prove difficult in media over-saturated with ineffective advertising and marketing strategies. The rise of social media has changed the face of marketing, with web-based marketing now offering a variety of platforms to deliver your property to potential residents. Some apartment complex investors and property managers are embracing these new platforms and initiating innovative and effective marketing campaigns directed at tenants looking for something more than just another apartment.

Melissa Meredith and Ana Maria Palermo have both grasped this shift and are using social media and other creative methods of marketing to produce appealing, effective marketing solutions for their clients. Melissa Meredith, of Marketing with Mel, works and lives in Tampa’s Channelside District. Melissa applies her innovative “360 approach” to create niche marketing strategies to grow her clients’ business. Ana Maria Palermo, property manager of Channelside’s SkyHouse luxury apartment complex, has built a strong community foundation for the residents by using social media and other creative methods to market to new tenants. This episode, find out how using social media and other creative methods of marketing your apartment complex or other investment property can improve your sales or lease rates.

  • Building Community
    • Engage residents and tenants in interactive community-driven events
      • Pool party, art classes, residents’ night, yoga, cooking classes, etc.
      • Provide events free-of-charge to attendees as future investment for new business
      • Push through social media
  • Social Media
    • Post original, independent content through various platforms
      • Facebook; Twitter; LinkedIn; Instagram, Pinterest, etc.
      • Relatable content should stand out, should appeal to yourself as a consumer, capture essence of product/business
      • Take advantage of ‘viral media’
  • Blogging
    • Post original, engaging content
    • Find common ground with readers, appeal to readers’ sensibilities
  • Comfort and Convenience
    • “Live, Work, Play” concept
      • Provide services/amenities to tenants that makes your property a comfortable, convenient home
      • car/bike-sharing programs (Zipcar); onsite retail spaces; cafés/bars; proximity to local attractions

To find out more about SkyHouse luxury apartments: @skyhousechannelside or #skyhousemyhouse

To find out more about the services offered by Marketing with Mel: https://marketingwmel.com/ or @marketingwmel

Ep. 92 John Fedro: Using Mobile Homes to Get Started Investing in Florida Real Estate

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mobile home investingFlorida has its fair share of mobile homes. Whether providing seasonal residences or  year-round affordable housing, mobile homes have become an ever-present property class in the Florida real estate market. Though they have been a historically neglected asset class, investing in mobile homes can provide strong, consistent returns. As markets in other asset classes become more competitive, mobile homes may be a rising hot market for investors.

John Fedro is one investor who discovered the opportunity in mobile home investing early on. After entering full-time real estate investing in 2002, John purchased his first mobile home in a park in Florida. He quickly saw the potential investing in mobile homes and after his first year had acquired 14 properties. In a virtually untapped market, John was able to develop an investment strategy exclusively for mobile homes that ensured strong returns. He has since expanded his portfolio to Texas and is actively sourcing deals in other states.

  • Mobile Home Investment Types
    • Private land mobile homes – longer to close, traditional sale of real estate;
    • Mobile homes in parks – categorized as personal property in most states, not subject to title issues/other typical
    • Mobile Home Parks
  • Financing
    • Little to no conventional lending; mainly cash deals
    • Seller financing
    • Dodd-Frank regulations do apply to mobile homes w/ financing
      • Mortgage loan originators can assist with compliance
  •  Costs + Fees
    • Purchase for >$10k
    • Sell for <$25k on payments
    • Buyer repays minimum $300/month on property
    • Mobile homes in parks, buyer pays lot fees, utilities, possibly insurance
  • Move-in ready
    • Buyers will usually do refurbs/improvements
  • Marketing
    • Mobile homes in parks: Craigslist, driving through parks, talking w/ park managers
    • Mobile homes on private land: networking, direct-mailings, bandit signs, seller lists
  • Hot Florida Markets
    • Miami, Jacksonville, Tampa, Gainesville
    • Rural areas, small towns
    • Panhandle
  • Investment Tips
    • Do multiple deals
    • Effective marketing strategies
    • At least 60 mile radius for investment market
    • Seek knowledgeable investor

Check out John’s website for even more information on successful investment strategies for mobile homes. John has free videos and a podcast where he covers tips for investing in mobile homes. Contact John directly by email at support@mobilehomeinvesting.net