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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: August, 2018
Aug 30, 2018

Value Add Technology in Parking can increase revenue and customer experience.    

Jake Bezzant, CEO of Parking Sense, takes us through the new technology and benefits of available to parking lot owners.  Installing hardware in conjunction with the downloadable user application provides data that makes the lot work better for all parties.

You know the drill.  You have an appointment but first you need to park the car.  If you did not plan ahead, you could end up parking miles away from your appointment.  Or worse, have to cancel your appointment because you could not find parking.

It is not uncommon for a parking lot without technology to underperform.  If you cannot tell a driver where to park, the driver may travel through the entire lot before finding one parking spot.  No more. Now, there is new technology in parking available to help you and visitors to your property forget about any parking hassle.

Technology in Parking System

Parking Sense is a manufacturer, installer and operator of technology in parking.  The system consists of hardware installed at the lot, a downloadable application for users and lots of data to help with your value add strategy.  

You can chose to only use the hardware which provides a visual queue, green or red light to drivers looking for a space.  If you elect to integrate with the free downloadable app, you can eliminate the need for gates and payment machines. Parking Sense has found that users tend to migrate to the application if they do not chose to do so up front.  Use of the application allows the system to communicate with users reminders such as, parking validation, where they parked, and how much time remains for their space.

Parking lot owners can purchase or lease the system.  

Benefit to Using Technology in Parking

The benefit to a parking lot owner using technology in parking is the ability to fully understand their supply and the demand for parking.  This allows you to communicate in real time with drivers exactly where an available spot is located. If you can keep your lot full you increase your income.  When drivers can easily find a space to park, they are happy.

When Parking Sense technology system is installed, property owners are able to over sell parking as much as 300%!  This compares with only 75% sold prior to installation. It is clear that if you own a parking there is a value add opportunity by using technology.  

Future proof your parking lot

The migration to the urban core has created a premium on parking.  Cities want cars off the streets, and the future includes driverless cars.  It is clear that cities will not allow driverless cars to roam aimlessly through the streets.  If you have the technology, you can communicate with cars in real time where they can park in your lot and keep your lot full.

For more go to

www.parkingsense.com

Aug 23, 2018

Qualified Opportunity Zones can produce tax free gains for investors with capital gains.  This new vehicle was added added to the December 2017 Tax Cut and Jobs Act.

Jonathan McGuire takes us through the Qualified Opportunity Zones and how they can benefit investors.

Government sponsored investment incentives are nothing new.  Tax credits or special treatment for a desired behavior are a tool used to stimulate growth and encourage investors to deploy needed capital.  The vehicle identifies the area of need and rewards investors for taking a risk through tax abatement. The most recent example on the Federal level is found in the Qualified Opportunity Zones.

What is a Qualified Opportunity Zone

The 2017 Tax Law provided the opportunity for each state to nominate distressed areas in need of investment to the US Treasury.  If certified by the Treasury, the area is recognized as a qualified opportunity zone. Investors can find a current list for each state Qualified Opportunity Zones to find local opportunities near them.  

The opportunity for investors is pretty broad.  Projects must abide by local zoning rules and be new investment into a project.  There are certain types of investments which are prohibited including: investment must be new money into a business or property.  Real estate can be new construction or a rehab project. If the property is in the zone, it must follow local use guidelines. Sin type businesses are not eligible, bars, country clubs, liquor stores, casinos, etc.

Benefits of investing in a Qualified Opportunity Zone

There are multiple tax benefits available to qualified investors.  

  1. Deferred payment of capital gains.
    1. 5 years earns a 10% step up in basis
    2. 7 years earns a 15% step up in basis
  2. Stepped up basis for investments held for:
  3. Tax free gain on the appreciation of your investment if held for more than 10 years!

Who can invest in a Qualified Opportunity Zone

The investor must have a recognized capital gain within the last 180  days, which must be deposited in the Qualified Opportunity Fund. At this time, there is no recognized requirement to use a qualified intermediary, similar to a 1031 exchange.  

The capital gains can come from any investment, sale of a business, property, stock, etc.  

How to invest in a Qualified Opportunity Zone

In order to invest in a property located in a Qualified Opportunity Zone, you must use a Qualified Opportunity Fund.   A fund is an investment vehicle set up as a separate corporation or partnership, designated to invest in a qualified opportunity zone.  The initial investment must include capital gains.

For more go to:

www.aldrichadvisors.com

https://aldrichadvisors.com/tax/qualified-opportunity-zones/

Aug 16, 2018

To accelerate the growth of your multifamily portfolio, you need to know how to attract capital and communicate with real estate investors.

Vinney Chopra has raised millions of dollars and syndicated over 26 multifamily properties.  Today, he shares the key to scaling up quickly; attract capital and communicate with real estate investors.  

Your Potential Real Estate Investors

To attract captial is not easy.  To be successful, you need to always be looking for capital.  If you are syndicating, you are looking for passive investors to invest as Limited partners in your LLC.

The easiest money usually comes from those you are closest to, your family.  These people know you and are most likely to support you if they believe in the opportunity you present.

The next closest group of eligible investors will be your acquaintances.  Again, these people know you and are likely to support you if they are able.

Now that you have introduced your investment opportunity to your closest circles of influence, it’s time to check with your business associates.  These are the professionals you know that have a retirement account. They are likely looking for ways to make a better return than what they are currently receiving.

The Opportunity for Real Estate Investors

The key to attract capital is communicating the opportunity to your potential investors.  You can easily do this with a “credibility kit”. This is where you share with potential investors the knowledge you have gained. Introduce your investment team, and the criteria you will use for selecting a property.    The goal is to convey to the investors that they will not lose their investment.

Educate the investors on why investing in an emerging market is a sound decision.  Explain what you know about the growing demand for multifamily, job growth and the opportunity to increase rents.

When to Attract Capital

You can never start too soon.  Raising money if full of rejection.  Investors pull out at the last minute all the time.  So, you need to have a long list of potential investors that can fill a capital needs at any time.  A deal is not a deal if you don’t have the funds to close.

Vinney has overcome the issue of investors backing out or not having enough money to close.  He does this by offering investors 2% on their funds from the day the deposit until the asset is acquired.  This guarantees closing, and the provides the lenders assurance the down payment is available.

Keep records.  Vinney recommends a spreadsheet where you identify the goals and dreams of the investor and keep records of the dates and what you discussed.  This allows you to easily reach out when you have a deal.

Your ability to close deals will raise your stature with the real estate brokers in the market.  The more deals you close, the more deals you will be presented.

Communicating with Investors

Vinney recommends regular, constant communication with investors.  He leverages technology with voip calls, webinars, videos, emails, etc.  He does such a good job that in 12 years only 5 investors have actually visited a property.  

When you communicate regularly with investors, they will feel comfortable and tell their friends about the good job you are doing and will want to invest with you.

 

For more go to:

Text “Syndication” to 474747

FREE Deal Analyzer: http://deal.multifamilyacademy.com/

Call / text (925)766-3518

Aug 9, 2018

A good multifamily property manager is invaluable to real estate investors.

Andrew Kroger is the owner of Peak Property Management and shared with me the characteristics of a good relationship between a property manager and the investor.

Relationship

Your relationship with the property manager is key to your success.  The more common ground between you and your manager, the better your results will be.  

The goal when interviewing prospective managers, is to learn who they are and how they communicate.  How much communication do you want and how do you want to communicate.

Are you looking for a manager to do it all, or do you want to be more hands on?  

Think about your preference, and look someone that fits your communication needs.

It’s important that the manager is on the same page with you.  If they understand your goals and objectives they can help you reach them.   

Get referrals from other owners.  Find out what other property have to say about their experience working with the manager.   

If your goal is to sell in the near future, does the manager recognize this?  What does that mean to them?

Find out what property management software they use?  What level of reporting should you expect and how often?  Does it include rent increases, rent roles, balance sheet, profit & loss statement?  This is your scoresheet for how well you property is performing.

Acquisition

Once you find a property manager to work with, invite them for a tour of your next acquisition.  The manager can develop both operating and rehab budgets if necessary. An experienced manager can give you a clear understanding of the property’s potential to ensure your success.

Operation

Operating the property efficiently is key to cash flow.  Questions you want to get answered from your prospective property manager include:

  • Leasing; What are the requirements for residents; application, income, rent history, criminal background, etc.  Understanding the managers resident selection criteria up front will provide you with realistic performance goals.   
  • Maintenance; What is the process for a resident to make a repair request.  Does the property manager have its own maintenance staff or do they use subcontractors?
  • On site or off site management?  What is the need for your property?  How often do they physically inspect the property?  You need boots on the ground to keep an eye on your property for any maintenance needed.  A small problem can be fixed for a few dollars, but when neglected, the small problem can grow into a big problem and become more expensive.
  • Vendor relations; Does the manager have relations with multiple vendors?  Good vendor relations will provide the manager the ability to get your property fixed and or turned quickly.  You can’t make money from an empty unit.
  • Turn process; ask the manager what is their process for turning a unit?  When do they start and how long will it to take to get the unit re-rented?  Ask for both a light turn and a complete remodel.

For the best outcome of your multifamily property, find a property manager that meets your communication needs.  Take the time to make certain you are on the same page. This relationship is paramount to your multifamily real estate investing success.


For more go to: www.peakpropertymgt.com

Aug 2, 2018

Commercial Real Estate Investment lessons can be costly.  

An expensive lesson can ruin you.  If you are lucky, you learn something and you still have enough time to recover and make your fortune back.  

Paul Moore, co-host of the podcast, How to Lose Money, talked with me about some of the lessons he has learned from real estate investing and how they have helped to form the real estate investment strategy he employs today.

Are You a Real Estate Investor or a Speculator?

When the market is going up, it’s hard to tell the difference between investors and speculators.  But, when the market corrects, speculators are more susceptible to losing. Paul summed up the difference between an investor and a speculator:

  • An investors capital is safe from risk with the chance to get a return.
  • The speculators capital is not safe with a chance to get a return.

If you are investing for cashflow, you are an investor.  If you are investing for appreciation, you are a speculator.  

Real Estate Investment Strategy Lessons

Paul has tried multiple investment strategies; single family residential flipping, ground up commercial development, multifamily and self storage.  He has gone from riches to rags and back to riches. Through each asset class, he has learned from his losses, and has changed.

He no longer invest on a haunch, ie: speculates.  

Today he is looking to create generational wealth in commercial real estate.  Unlike some investors who commit to a single asset class, Paul has become a student of the market.  Now he looks for a safe place to invest his capital with the possibility of a return.

He has studied the market and found justifiable reasons to invest.  He knows the client profile, what the projections are for this demographic and what type of owner/ seller qualifies a good prospect to purchase.  This market knowledge helps confirm any haunch he may have.

Using the lessons he has learned, Paul is now syndicating self storage facilities.  

For more go to: https://www.wellingscapital.com/

http://howtolosemoney.com/

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