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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: June, 2018
Jun 28, 2018

Joint ventures are an option every real estate investor should know.  

Growing your real estate portfolio is capital intensive.  Eventually you will run out of your own money. When real estate investors reach this point, you have to look for other people’s money, OPM in order to keep growing.

Jeff Lerman, the Real Estate Investors Lawyer, works with real estate investors.  He takes us through the benefits of joint ventures compared to syndication.

What is a Joint Venture

A joint venture is the coming together of two or more parties to achieve a goal.   It is the cheapest, easiest, fastest and safest way to do real estate deals with other people’s money.  

The members of the joint venture must take an active role in the work to meet the goal.  Investors cannot be passive. Roles must be defined, and records must be kept in order to satisfy any legal challenge of the legitimacy of the joint venture.    

Main advantages of a Joint Venture:

  • Risk diversification, is the primary benefit of a joint venture.  You are able to spread your risk from an all or nothing position. Your potential loss can be lessened when you invest across multiple deals.
  • Risk mitigation,  You gain the input from an experienced investor to test and confirm your conclusions on the opportunity, will it work, or should you pass.   
  • Not a security.  A joint venture does not require the extensive legal paperwork which is required in a syndication.   
  • Potential for future deal flow.  When you join forces with an experienced investor, you are likely to be invited to participate in future opportunities provided the original deal goes well.
  • Simple to set up.  Unlike a syndication, a Joint Venture is not a security and does not require the extensive legal expense associated with a syndication.  There is no private placement memorandum, etc when establishing a security.

In all cases, joint venture or syndication, pick your partners wisely.  Set it up right. The last thing you want is to get tied up in some lengthy, costly litigation that tears apart the wealth you have worked so hard to build.  

For more go to:

http://www.realestateinvestorlaw.com

Jun 21, 2018

Multifamily Syndication is a great option if you are looking to scale your real estate investment strategy.

Real estate investing takes tremendous amounts of capital.  When you run out of your own money, do you stop, or try to keep going?

Vinney Chopra is an experienced deal sponsor who has purchased over 38 properties through multifamily syndication.  Today, he takes us through the why, what, who, how it works.

What is a Syndication?

When you run out of your own money, your ability to grow your real estate portfolio will stop.  Unless, you learn how to attract other people’s money, OPM. Syndication is an investment vehicle that allows unrelated investors to pool their capital together.  The combined funds allow you to purchase larger, more expensive multifamily properties than you are likely to qualify for on your own.

The syndication forms an entity that has two general groups; general partners and limited partners.  

The general partners are the sponsors, or the syndicator, of the deal and are responsible for finding and actively operating the multifamily property.  Additionally, the general partners attract investors. The investors are passive and join property purchasing entity as limited partners.

Because you have investors trusting you to take care of their money, the SEC requires multiple documents that make clear to all parties the risk.  The documents also make clear how the entity is to operate, responsibilities of the parties, and how the money will flow.

You will need a securities attorney to prepare the Private Placement Memorandum, Operating Agreement and the Subscription Agreement for each syndication.

Rule 506 B or C

There are multiple vehicles for raising capital.  The two most common for multifamily investing are 506b or 506c.  Both allow for you to raise capital from accredited investors. The distinct difference between the two is based on whether or not you have a pre existing relationship with the investor.

Regulation 506b requires that all investors have a pre existing relationship you the deal sponsor.  You can also have up to 35 “sophisticated investors” participate in this structure.

Regulation 506c requires no pre existing relationship.  Additionally, you can advertise far and wide and attract any accredited investor to participate in your deal.

Click the link for a FREE EBook about multifamily syndication.

www.vinneychopra.com

Call / text (925)766-3518

Jun 14, 2018

How will Blockchain Technology disrupt your real estate investing business?

You’ve heard the word blockchain, and maybe associated it with a cryptocurrency like bitcoin.  It is true that bitcoin uses shared ledger technology, but it would be wrong to assume that cryptocurrency is a blockchain.

Joe Snyder, the CEO of Lannistor Holdings, takes us through what a blockchain is and how it will be used in real estate investing in near future.

What is blockchain?

The simplest description of a blockchain is:

  • a digital, secure, decentralized ledger which guards against a single point of failure.

All users with access to the ledger can see the in real time, exactly what is the current status.  Because there is not one central point, the opportunity for a hack or corruption are reduced.

Every major industry, government and education institution is looking into how they can employ blockchain technology.  They are looking at how using a shared ledger can result in cost savings and loss mitigation.

It is estimated the next 36 months shared ledgers will be introduced and become the standard for many current paper systems.  

How Technology Applies to Real Estate Investing?

You are a real estate investor asking how will Blockchain affect your real estate investing.  A couple of easy applications are chain of title and lender investor records, ie mortgage backed securities.  

For your real estate investment, a clean title is a must.  If your title has a hidden lien, no lender will lend, and you will not be able to transfer ownership to a willing buyer.  Shared ledger technology would allow for the local government, seller, buyer and lender to determine with certainty if there are any claims against the property instantly.  

Do you remember the mortgage meltdown and the mess created by mortgages that were packaged, securitized and resold?  There were multiple stories of homeowners losing their homes because the bank or loan servicing company was selling the home because they could not identify performing mortgages from non performing .

A blockchain would have provided instant identity for the homeowner to stop the sale, and or the lender to recognize the loan was performing.  

These are just a sample of how shared ledger technology will affect real estate investing.

For more go to:

https://www.lannisterholdings.com/

https://www.lannisterdevelopment.com/

https://twitter.com/lannisterceo

Jun 7, 2018

Learn how you can reduce your Multifamily Operating Expenses by using micro water meters.   

The ability to increase your net operating income and property value can be affected by either increasing your rents, lowering your expenses or both.

When you use micro water meters to measure your building water usage, you have instant actionable performance data that you can immediately respond to and correct the leak.  Your ability to timely stop your leak can reduce your operating expense, save money and water.

Jack Howell with ION Energy Solutions, monitors over 800,000 micro water meters daily.  Because ION measures so many units, they have the experience and data benchmarks to recognize instantly when one of your units has a leak.

Operating Expenses

The average cost of a gallon of water is $.01.  The average usage of a two bedroom apartment is 100 gallons per day.  If one toilet flapper chain gets hung up and the flapper does not close, and the toilet fills for six to seven hours, that toilet can waste as much as 3,000 gallons in one day.  That’s more water in one day than should be used in one month. If that one toilet leaks for 30 days, it’s easy for the cost of wasted water to add up.

Water leaks have little to do with gallons and everything to do with time.  An average medium leak will waste 1,000 gallons per day. How long would it take for you to determine you have  medium leak? How much will your medium leak cost you over 3 months?

There are multiple reasons to consider installing micro meters.  The primary reason are financial. Less water used, results in a lower water bill.  Additional reasons include that the micro meters qualify for Green Loan Incentives. Use of micro water meters can also fulfill some of your reporting requirements for Low Income Housing Tax Credits.   

If you own multifamily property and are looking for ways to reduce operating expenses, you need to know about the savings available through the use of micro water meters.

For more go to: www.IONENERGYSOLUTIONS.com

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