Tag Archives: Florida

Ep. 106 Larry Goins: Finding Ways to Make Money in a Rapidly Rising Market

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ways to make money in a rising marketReal estate investors have heard the news, they’ve seen the figures: by all accounts, real estate markets are tightening up.

In all the major asset classes, investors are reporting rapidly rising markets, which translates to increased competition for deals. Some investors are starting to wonder how far until they hit the ceiling and would-be investors are wondering how to make money in real estate if opportunity isn’t knocking.

Larry Goins stopped waiting for opportunity to come knocking a long time ago.

As a 30-year veteran of real estate investing, Larry has tried his hand at just about every asset class. Over the years, he has learned that opportunity may not always present itself, but it is always there waiting.

Larry has become a master of finding ways to make money in real estate through his many years of investing experience and he is helping others find the same.

Based out of South Carolina, Larry currently wholesales, buy-and-holds properties and offers seller financing in 12 different states, including Florida. In addition to his active investing lifestyle, Larry provides a remarkable resource for investors to learn the ins-and-outs of real estate investing. Through numerous books, seminars and his radio show, Larry gives investors the tools they need so that they can make money in a rapidly rising market.

Ways to Make Money in Real Estate

  • Seller Financing under Dodd Frank
    • Dodd Frank affects seller financing for consumers only – read Larry’s report here (past Invest Florida Episode on Dodd-Frank Seller Financing)
    • Residential Mortgage Loan Officers specialized in seller financing should review loan applications – view Larry’s RMLO Directory
  • Marketing & Finding Deals
    • HUD houses - HUDHomestore.com
    • Secondary markets
    • Craigslist
    • Direct-mailing
    • Agent/Broker networking
  • Resources & Links

To find out more about working with Larry on future deals or for other investment questions, visit larrygoins.com or call his office at (877) LARRYGO (527-7946)

Ep. 105 Kurt Westfield: A Journey from Single Family to Multifamily Investing

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multifamily investingMost real estate investors starting out will try their hand at single family investing first. Single family properties are familiar, small-scale and generally easy to tackle for first-time investors.

However, many investors will find they have a limited ceiling for growth with single family properties. Juggling dozens of single family properties while actively marketing for new investments no longer becomes practical. Apart from wholesaling, flipping and other similar single family markets, the next logical step for many investors is to make the move to multifamily investing.

Multifamily investing may be intimidating to some, but while it is a different ball-game than single family, the two do share a few commonalities and the overall benefit of multifamily investing outweighs the risk.

Just ask Kurt Westfield.

Kurt moved to Florida from New York and, in 2008, co-founded an investment partnership, WC Equity Group. They then entered into Tampa’s single family investment market.

After doing 102 single family deals in his first two years, Kurt new it was time to make a change if he wanted to scale his investment growth.

Kurt turned to multifamily investing and has since expanded to also offer lending, management and syndication services under his umbrella firm, WC Companies. In addition to Tampa, WC Equity Group also has properties in Jacksonville, FL and Cleveland, OH.

Check out Kurt’s story going from single family to multifamily investing and what he learned along the way!

Tools for Multifamily Investing

  • Market Timing
    • Understand where market could go, not where it is.
  • Fringe Markets
    • Areas on edge of of hot market’s outward growth, i.e. markets around South Tampa
    • Similar tenant quality to class-a markets, better price points
    • Gentrification/community redevelopment occurring
    • Value-add opportunity
  • Network
    • Working relationships with brokers
    • Like-minded investor base
    • Reliable team of contractors/sub-contractors
  • Responsiveness
    • Be prompt and responsive for potential investment deals. Assure potential investors of trust-worthiness.
  • Mentors/Inspiration

Kurt is always interested in working with bright, like-minded investors and brokers to expand his network in multifamily investing.

To contact Kurt with potential deals or to find out about the services his companies offer, visit www.wccompanies.com, click on any company tab and find the contact section.

Check out their Facebook Page!

 

 

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. 100 Gavin Welch: Improve Your Quality of Life by Shortening the Time You Spend on Your Investment Properties

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Full-time real estate investors know more than anyone that there are only so many hours in the day. Finding time to actively land new investments can be hard when its necessary to manage other investment properties. Maximizing time is one of the most valuable tools a real estate investor can have. Shortening the time you spend on your investment properties can greatly improve your quality of life as a real estate investor.

investment propertiesGavin Welch, an entrepreneurial real estate investor, knows just how precious his time is. With seven properties in his portfolio and work commencing on an apartment development, Gavin has a lot on his plate. With a goal in place of acquiring 25 investment properties, Gavin simply cannot afford to spend time on everyday property management concerns for each of his properties. He has implemented a method that allows him to attend to his current investment properties while providing himself enough flexibility to focus on his investment goals.

Limiting Time Spent on Investment Properties

  • Landlording on Auto-Pilot – Mike Butler
  • Google Voice
    • provides automated information for tenants and clients to call in for property info and maintenance requests
  • Limited property showings
    • Schedule property showings and open houses for set days and times cuts down on time spent visiting investment properties
  • Auto pay system for tenants
    • Tenants pay automatically when monthly bill is due. Landlords and property owners don’t need to spend time tracking down payments
  • Passive Marketing
    • Bandit signs circulate property availability
    • Youtube videos provide property details and photos
  • Property Uniformity
    • Using the same materials and paints on all properties greatly reduces time on maintenance and up-keep

Gavin is currently in the market for viable single family investment properties in the Lakeland, FL area. Suitable fix-and-flips or rental property offers may contact Gavin through his website by going to the Contact Us page. Listeners should also check out Gavin’s own podcast, The Real Estate Loop for more investing advice.

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.

Ep. 88 Beshears & Associates: Update of the Multifamily and Self Storage Market in Florida

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e2bc79_37043315246c4693996f91e865cad488 e2bc79_e3001e806a764241a578a62d31aad77cReal estate investors in Florida know that the market has seen a steadily increasing return to normalcy since it bottomed out in 2010. Asset classes of all types have been undergoing a resurgence as the market continues to correct itself. With investing outpacing development though, investors are seeing access to viable properties tightening up. Investors need to become more creative when finding deals and stay ahead of new trends arising.

David Beshears, head appraiser and owner of Beshears & Associates, has been appraising properties in Florida for over 20 years and he is very knowledgeable about the self storage market. John Miller, senior appraiser and realtor for Beshears & Associates, specializes in multifamily asset classes, having completed over 200 multifamily appraisals since 2008. This episode, David and John discuss where Florida markets are at, particularly in the multifamily and self storage market.

Multifamily

  • 4% vacancy in Tampa area markets
  • Uptick in rental rates across sub-markets
  • High occupancy rates causing higher appreciation in Class B and C properties
  • Class A properties new builds at $2/sqf (Central Tampa Sub-market: Hyde Park, Westshore, Downtown Tampa, Davis Islands)
  • 3300 units entitled to construction; 2200 scheduled for 2016 completion
  • Class A super properties arising in suburban markets (Riverview)
    • Luxury trend in new developments (zero-entry pools, state-of-the-art amenities)
  • No new builds for Class B and C properties
  • Cap Rates (Tampa): Class A: 4.5-5.25%; Class B: 5.25-5.75%; Class C: 6.5-9%
  • Value-add opportunities still available with focus on interior of units

Self Storage

  • Traditionally lag behind multifamily cap rates by 150-200 basis points
  • Self storage market similar to multifamily market
  • Subject to overbuilding in 3rd tier markets
  • 12% of market owned by institutional investors
  • Value-add opportunity for private investors
    • Online/web presence
    • Upgrade security and lighting
  • Cap rates: Class A: 5-7%; Class B: 7-9%; Class C: 9% and up
  • Major markets in need of new development
    • Opportunity for developers if they can find land
    • 2-3 acres at $5-8/sqf is ideal

Beshears & Associates offers a newsletter providing an overview on a variety of asset classes in Florida, including the multifamily and self storage market. To check out their newsletter and to find out about the other services they offer, visit their website at www.beshears.net

Ep. 84 Daren Blomquist: Which Florida Markets are Hot? Which are not?

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headshot_daren_blomquistReal estate investors always keep an eye on Florida real estate markets. Not only does the state serve as a national indicator of market trends, but Florida also represents a major real estate market in itself. Despite ups and downs, Florida has remained an appealing market for investors. Investors must stay on top of changing market trends and know what the hot Florida markets are as well as the ones that aren’t.

Listeners may recognize Daren Blomquist from his previous appearance on the show. Daren is senior Vice President of RealtyTrac, a nationwide real estate data analysis firm, providing real estate professionals in-depth and up-to-date information and research on a variety of markets. This episode Daren discusses the changing face of Florida real estate as he covers some hot Florida markets emerging as well as ones that are winding down.

  • Florida market in strong recovery, but not at previous peak
    • 52 consecutive months of year-over-year increases in home appreciation
    • 12% in  appreciation since April
    • Successful transition from cash-buyers to FHA financing
      • 26% increase in FHA financing
      • 11% decrease in cash purchases
  • Foreclosures still lead, but in decline
    • 11 month decrease in foreclosures
    • 10% increase in flips statewide
      1. Deltona, Daytona Beach, Ormond – 49% y-o-y
      2. Tampa – 11%
    • Jacksonville – hot flipping market and highest gross returns on flips
  • Home appreciations on the rise
    • Cape Coral and Punta Gorda lead state, though seeing decrease in flips
  • Affordability remains market concern
    • Home appreciations are outpacing wage growth
    • Affordability index of 100 or above is normal; below 100 is less affordable
      • Cape Coral – 100
      • Punta Gorda – 100
      • Naples – 102
  • Institutional buyers in decline, but still active
    1. Jacksonville
    2. Pensacola
    3. Tampa
    4. Ocala
    5. Lakeland

Investors and listeners can find out more about current, local affordability index data by visiting www.realtytrac.com/news

For those who want to learn more about the hot Florida markets and the premium service packages offered by RealtyTrac, visit their website and subscribe! Listeners to the Invest Florida Show are eligible for a discount on subscription. To find out more about this offer, contact marketing@realtytrac.com or call 888-408-4396.