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Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
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Now displaying: 2018
Apr 19, 2018

Attract investors & raise capital, and grow your real estate portfolio.

It’s been said that you are not a true real estate investor until you run out of money.  Because it is only then that you are forced to find willing partners with money if you want to continue growing.  The alternative is to go get a W-2 job.

Have you run out of money yet?

When you run out of your own money, you have to change your real estate investment strategy.  Most investors turn to their intimate circle of influence, family and friends, for their initial capital raise.  Unless your uncle is Sam Zell, you are going to need to reach beyond family and friends to find more investors to keep growing.

Help for Real Estate Investors

For experienced investors, there is help.  InvesTechs.com is a marketing firm focused on helping real estate investors / sponsors attract, find, market to and raise the capital you need to grow.  They know your business and how to help you attract capital.

How it works:

First, build the platform.  Investechs meet with sponsors to learn about you and your offering.  Then they help you tell your story to attract investors with the capital you need.

InvesTechs will create your professionally branded webpage and all the content pieces you need; written, video, webinars, etc., to clearly communicate your offer and attract potential investors.

Finding Investors & Promoting your Deal

Once the material has been created, InveTechs use target marketing to put your information it in front of your ideal investors in your area.  These are people with money looking for investment opportunities like yours. By automating this initial communication, you are able to focus your limited time on those investors who are truly interested and more likely to invest.

For these interested investors, you can schedule some calls and face to face meetings to gain further understanding of each other to confirm your offer is a good fit for the investor.

Invest Now

For accredited investors who are ready to commit, Investechs has partners that will qualify and collect the money online.  This proven system will make you stand out to potential investors and allow you to continue to grow your real estate portfolio.

For more go to: www.investechs.com

Apr 12, 2018

Real Estate Investors must know how to create a successful 1031 Exchange strategy in order to keep their profits.

Karen Templeton with Emerson Equity, is a 1031 strategist.  She specializes in Securitized Real Estate Investments (DSTs, TIC, NNN) and the 1031 Exchange to build Real Estate wealth.

What is a 1031

The Internal Revenue Service code section 1031 allows investors to sell one property and replace it.  Provided the requirements are met, the seller can defer the taxes due, capital gains and recaptured depreciation, on the sale of the property.  tax and due upon sale if they reinvest into a “like kind” property.

Who can benefit

The 1031 Exchange provides real estate investors one of the most powerful benefits available to real estate investors.  Investors can defer the tax due upon sale if they reinvest into a “like kind” property. Regardless of the real estate property type; single family home, duplex, triplex, apartment building, self storage, retail, office, warehouse, etc.

How does it work?

The easiest way is to contact a 1031 exchange qualified intermediary prior to the sale of your property closing.  The qualified intermediary will hold the sale proceeds in escrow. When the sale is completed, you have 45 days to identify a replacement property and a total of 180 from the sale to close on your new property.

In order to defer all tax from the sale,  you must replace the equity from your sale and the debt you had in place on the prior property.

Like most things in life, exit strategies are rarely considered until they are upon us.  Failing to understand the steps of a complicated process can leave you without enough time and cost you dearly.  One of the most compelling reasons to invest in real estate is the ability to defer capital gains when you sell.

Plan your sale, and consult with your trusted real estate professionals to create a successful 1031 Exchange.

For more go to:

www.kt1031.com

 

Apr 5, 2018

Solar Energy is now a legitimate alternative to fossil fuels providing the opportunity for users to reduce their energy cost.  

The financing of small to medium solar energy projects has been challenged, until now.

Bryan Birsic combined his finance background and technology to co-create the solar energy financing platform Wunder Capital.

Solar Energy Today

Solar Energy has come so far since the 1970’s.  More than just a nice idea to save the planet, today’s solar energy can produce enough power to more than replace a commercial buildings energy needs.

An additional benefit is that the product is warranted for 25 years to produce at least 80% of what it did when initially installed.  While this may be enough for the greenest property owner to convert, for most buyers, it’s about the money.  

For most projects, the opportunity to save 15% on their energy bill is what drives property owners to make the move to solar.  

Unfortunately, traditional financing is not as receptive to small and medium size projects.  

Financing for Solar Energy Projects

Banks fundamentally want to know they will get paid back.  Decisions to lend are based on the understanding of the borrower and what the money will be used for.  That’s underwriting.  

For large projects with credit rated borrowers, there are plenty of lenders willing to lend on the project.  The loan is large enough to support the layers of fees for traditional underwriting.

For small projects, there are two hurdles for financing.  

  • Borrowers rarely have a credit rating for banks to use.
  • Small project do not generate enough revenue for the bank.

Investment Opportunity for Solar Energy Projects

The demand for solar energy is strong in areas where energy cost are high.  Wunder Capital has partnered with 150 installers in 30 states to provide financing for projects.

The Wunder platform leverages technology to underwrite the project and borrower.  This provides quick approval wich Installers like.  The platform because it is easy to use and provides fast approval for the project owner.using its understanding of the market and the key indicators they have identified for qualifying borrowers.   

Installers like the platform because it is easy to use and provides fast approval for the project owner.

Projects under $2million is Wunder’s target borrower.  The average project values is $500,000 and will be installed on a school, municipal or commercial building.  

Investors

For accredited investors, Wunder Capital provides the opportunity is to invest as little as $1,000.  You receive a payment dependent note with a projected yield.  Projects average between 6-8% interest for 5 to 10 years depending on the project.

The product can generate enough energy to more than pay for itself.  This plus building owners and investors want to promote green energy have made this a viable investment opportunity for investors looking for something different.

Borrowers

Opportunity to save on electricity and own their primary electrical generation guaranteed for 25 years.  

Wunder focuses on Solar Energy exclusively.  

For more go to:

Wundercapital.com

Mar 29, 2018

Real Estate Investors buy insurance to protect their property from loss, but if you stop there, you could still lose if you don’t protect your assets.

Attorney Scott Smith is the principal at Royal Legal Solutions, a law firm specializing in working with real estate investors.

Insurance is a good first step to protect you from loss when you are first starting out.  Once your portfolio grows and you have multiple properties, and significant equity, there are additional asset protection steps you need to take to protect yourself from loss.

Insurance vs Asset Protection

Insurance protects you from negligence.  If you are sued for more than the insurance you have, the balance owed can be taken from your assets.  If you lose it all, how long will it take you to recover?

Rule #1, don’t lose capital.  Getting a poor return is far better than losing capital.  If you lose capital, it can ruin you.

Insurance is inexpensive.  Don’t skimp on insurance.

Protect Your Assets

Asset protection is not a singular event.  It’s a plan that provides protection that creates separation between your investments and from your personal wealth.  This structure isolates properties and the operation from you.  It’s a way of creating moats with alligators and drawbridges to protect your castle.

Work with a legal professional to create a structure that will provide you the appropriate protection for your investment strategy.  Your plan will likely include creating an LLC.  When creating an LLC, consider the state you file it in.  Certain states provide significantly more protection based on the charging order, compare CA vs TX.

If you do it right, you can compartmentalize your properties and protect them from actions at other properties, and hide your personal information from the ability to be found.

“If you have more than $50k in assets and equity, spend the money to protect your assets.”

For more go to:

www.royallegalsolutions.com

scott@royallegalsolutions.com

Mar 22, 2018

Multifamily investors rely on brokers to find deals.  Beyond the broker relationship, investors look online; LoopNet, Costar, etc.  

Scott Furman is an experienced multifamily commercial real estate broker that created ApartmentBuildings.com to compete with LoopNet and Costar.

The name says it all.  Unlike LoopNet or Costar, ApartmentBuildings.com is exclusive to Multifamily, any size, from land for sale to fully occupied apartment complex.

Brokers Convert

The pain of change is the price of progress.  The number one challenge for Scott and his team has been to gain brokers attention and confidence.  Scott & his team’s persistence has paid off.  Today, ApartmentBuildings.com is actively marketing properties in 5 states: CA, AZ, TX, FL & NY.  The brokers listing their properties are getting results.  

Brokers that commit to list on ApartmentBuildings.com  are provided a marketing boost not available on other sites.  If they will list their property on the site first, before listing on other sites, Scott and his team will present the property immediately to the users whose investment profile matches!  This instant list of interested buyers has created numerous sales for brokers.  

While the current footprint is not nationwide, the focus on multifamily is valuable to both brokers and users due to the focused nature of the platform.  

Gain Access

You can create a free ApartmentBuildings.com account in just 30 seconds by going to apartmentbuildings.com/login.  Once you establish a login, you are able  to create an investment profile for the type of property you are looking for.  

After you set your parameters, you will be receive first notice for all newly listed properties that meet your investment profile.  

Users can specify:

  • Number of units
  • Where you are looking to invest
  • Deal size

Additional support built into the sites.  Get professional advice and input regarding numerous matters involving multifamily investments.  Including:

  • Valuation: get a professional opinion on the value of a property.
  • Lending: Make contact with lenders that specialize in Multifamily nationwide.

For more go to:

https://apartmentbuildings.com/

Mar 15, 2018

The new Tax Plan will affect Real Estate Investment Strategies mostly for the better.

President Trump signed the revised Tax Plan into law effective for tax year 2018.  There has been a lot of speculation up till now about how it will affect real estate investors.  I spoke with Jonathan McGuire, CPA from the Real Estate team at Aldrich Advisors to sort out the changes, good & bad.

Tax Plan Summary Highlights

1031 Exchange:

1031 Exchange remains unchanged for real estate investors.  The deferral of gain on like-kind exchanges is only allowed with respect to real property that is not held primarily for sale.  

Tax Pass Through:

Owners of certain pass-through businesses, S Corps, partnerships, & sole proprietorships,  will be allowed to deduct up to 20 percent of qualified business income for tax years beginning after December 31, 2017.

Carried Interest:

The new tax law requires that in order to qualify for Capital Gains, the investment must be held for more than 3 years, compared to the prior 1 year standard.  This could affect your plans if you originally planned to get out after one year.  

Section 179

Equipment purchased to operate & maintain a property can be expensed at 100% of the purchase price up to $1,000,000.  This does not include real property; land & buildings.

Changes to Individual Itemized Deductions

Previously, individuals could write off all mortgage interest and local property taxes against income to lower the federal tax obligation.  This is no longer the case. 

Mortgage Interest:

Now, the portion of mortgage interest attributable to the first $750,000 is all that will be allowed.  These buyers already are treated differently with jumbo loan rates and terms.  

Additionally, deduction for home equity loans has been repealed.  This could reduce the pool of investors looking to deploy equity held in their residence.

State & Local taxes

The new tax caps the state and local tax write off to a maximum of $10,000.  Unless you live in one of the six states without a state income tax, you will pay between 2.9% (ND) to 13.3 (CA) of your income in state tax.  When you add property tax to this, it is not difficult to breach the $10,000 cap.  

IE: If you live in Portland, OR where the state tax rate is 9.9% and the Median household income is $58,423, your State Income Tax will be: $5,784.  If in addition, you own a median priced home in Portland, $319,400 you can expect to pay roughly 1% of the retail value or $3,194 in property tax.  

This may not affect a first time buyer if they are able to purchase a home.  However, it may cause potential buyers of larger properties to rethink their purchase.  

Any additional reduction in demand for single family homes to be built, will likely push the demand for more lifestyle rental options.

Pass Through Deduction:

Owners of certain passive income businesses will be allowed to deduct 20 percent of passive income.  Limitations apply.

For more go to:

https://aldrichadvisors.com/2017-tax-reform/

jmcguire@aldrichadvisors.com

 

Mar 8, 2018

Real Estate Investors buying government backed tax liens take little risk and can make great returns.

Every property in the United States has a property tax owed against it to support local government and services provided.  An estimated 2% of all property tax bills are in default and go unpaid every year.  Meaning, every year, there are more opportunities  for real estate investors to buy tax liens.   

Ted Thomas is a former commercial  airline pilot and apartment investor.  After he lost big in the crash in 1986, Ted got into tax liens, deeds and certificates and has never looked back.

What are Tax Liens

Every property, residential, bare land, and commercial has a property tax assessed against it.  

The taxes go to support the local government and services provided by the local government; schools, roads, police, fire, etc.  In some jurisdictions, they are liens and others they are certificates.  In both cases, they represent tax that is owed.

The tax rate and percentage of value varies by municipality.  At a minimum, for residential property, the property tax represents 1% of the value of the property.  

When a property is sold, or a change is made on title, the tax lien is the first lien that must be satisfied.  Tax liens have priority over any first mortgage, second mortgage, or lien.  

When the property tax does not get paid, the government sells the tax bill to willing investors.  If after a determined amount of time the property owner does not pay the taxes due, you, the investor, become the owner of the property.  

How do Tax Liens Work?

The local municipality has the authority to tax and sell the unpaid tax liens to a willing buyer.  If the property owner does not pay the tax owed, the tax liens are sold at an auction.  In many cases, the opening bid is for just the tax owed.  

The annual interest rate charged against a tax lien can be as much as 18%.  When the property owner elects to pay the tax, refinance, or sell the property, you get paid the tax plus accrued interest direct from the local municipality you purchased the tax lien from.  

For more go to:

www.tedthomas.com

Mar 1, 2018

Problem properties are the answer when looking for true opportunities in commercial real estate.

The marketplace is full of buyers chasing large properties with compressed cap rates and thin margins.  To compete and win, you need to become an expert in identifying problems.

Sellers with problems want to be rid of their problems.  These property owners are the focus of Tyler Sheff’s commercial real estate investment strategy.  He has found there are multiple opportunities in every market, if you recognize the problem and can offer a solution.

What Problems

Tyler’s team has identified multiple problems that are clues that the property owner wants out of the property.   The following are some treasures of opportunities:

  • Properties owned by an LLC: Most buyers assume that because a property is held in an LLC, that the owner is a professional firm that knows what they are doing.  Tyler has found this is not the case, especially with smaller properties.  Look for LLC’s that missed their renewal registration.  It is a clue that someone is not paying attention.
  • Properties owned by a Trust: If the property is held in a trust that includes the name of the individual, this is a clue the ownership is not a professional group.  The first rule of a trust is to hide the owners name.  Look for trust in the name of an individual.
  • Properties with larger than average water bills:  This screams problem!  Contact the local water utility and ask for a list of properties with a higher than average water bill.  This is your list of prospects with problems waiting for you.
  • Properties with tenant complaints in the property forum:  The internet is the place where unhappy tenants go to scream to the world how unhappy they are.  Fortunately for you, small owners are not looking online for the problems under their nose.  If the tenants are unhappy, there are likely other issues like deferred maintenance problems waiting for you.
  • Tired owners: If the owners are self managing, and have been for a long time, there is a good chance they are tired and looking for a solution.  You are it.

The Answer is Right in Front of You

Find out what the tenants want and need.  Remember, if they are upset and telling the internet about it,  they probably have not been asked by the owner or management what they want.  

Spend a little time getting to know what the tenants want can go a long way to making the property more enjoyable for them.  This is an excellent opportunity to establish good will with the tenants and make certain your efforts get the reception you want.

For more to to:

http://www.cashflowguys.com/

Feb 22, 2018

Multifamily success is the dream for many real estate investors.  

Jake Stenziano & Gino Barbaro, the drug rep & restaurateur,  better known as Jake & Gino are proof that hard work and the right mindset can propel you to amazing success in multifamily real estate.

Multifamily Mastery with Jake & Gino 2018

In 2013, the investor team had almost given up the dream of owning a multifamily property.  Then their persistence paid off.  They landed their first 25 unit multifamily property.  It was rough, but they were finally in the game.  

In just a little over 4 years, Jake & Gino’s real estate investment strategy of mom & pop multifamily has led to an impressive 850 units in Knoxville, TN.  The following are some of the keys to their success.

Mindset: It all starts in your mind.  If you want your circumstances to change, the easiest thing to change is your mindset.  Once you change your mind, you need to find like minded people, because the herd will try and bring you back to the pack.

Education: Take some time and invest in yourself.  Learn the lingo, talk to people, and get to know how others are doing it.

Motivation: If you are comfortable, it is tough to find the motivation to change.  If you really want to change, you have to be uncomfortable

Market: You don’t have to be in a primary market to grow in real estate.  Real estate is everywhere.  What is important is to know the basics in the market.  Is there job growth?  Are there people moving to the area?  Is there more demand than supply in the housing market?  These are keys in any marketplace.

Hard work: If you are willing to work hard and go through some pain for a few years, you will reap the rewards that others only dream of.

From there it’s Buy Right, Finance Right, Manage Right and repeat!

For more go to: https://jakeandgino.com/

Feb 15, 2018

Know the Seller’s story and you have the keys win with any real estate investing strategy.  

Whitney Nicely is a real estate investor from East Tennessee.  Her real estate investing strategy focuses on connecting with sellers hearts and minds.  This takes time, but once connected, the sellers want to sell to Whitney because they know her and she knows them.

Instead of grinding through thousands of calls, this southern gal has fun getting to know the sellers and what they are about.  She also tells her story.  She leverages Facebook to let all her contacts know what she is doing and what she is about.  She is a real estate investors!  

Story is full of secrets

The story is where you will find the seller’s secrets.  The answers that don’t show up on a spreadsheet, what they want and what they need from the sale.  When you start with the answers to their problem, it’s a whole lot easier to reach a creative a solution that meets yours and the sellers goals.

Secrets like they:

  • Don’t need the cash and would consider owner financing.  secrets to all of the sellers wants and concerns.  
  • Need to get out of the debt load
  • Are health is poor, and they can no longer care for the property.
  • Inherited the property and want nothing to do with it.
  • Are sick and tired of toilets and tenants and they just want out NOW!
  • Get other offers, but they want to sell to you.
  • Are ready to retire and do something different

So remember, as you race around to find the property, don’t forget to take the time to get to know the story of the seller and share your story.  The more you connect, the more memorable you are to the seller.  And, you might just get a deal.

For more go to:

Whitneynicely.com

Getyourfirstdeal.com

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