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REIBLADE – A Partnering Necessity

Image by Gerd Altmann from Pixabay

By Bruce Kellogg

Scaling Partnerships

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We have all heard the old saying, “Necessity is the mother of invention”. This came upon the principals of Scottsdale Real Estate Investments earlier this year when they had acquired nearly 100 properties over the past three years. These were mostly single-family residences (SFR) purchased with joint venture (JV) partners, mostly from the Scottsdale/Phoenix, Arizona area. Many of the properties were out-of-state, and some were bought in bulk from sellers with large portfolios. A little thought will lead to the conclusion that this business model could become unwieldy and prevent scaling up to the next level. What to do?

Seti Gershberg is the Founder and President of Investments, whereas Jay Tenenbaum is President of Capital and Risk Mitigation. Together, they cast about looking to buy some software to process the “back end” of Scottsdale REI LLC. Alas, everything they reviewed was either prohibitively expensive, or lacked sorely-needed functions. Time to invent!

REIBLADE Software Features

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Asset Dashboard

Multi-property partnerships need a way to evaluate the performance of their assets, individually and in groups. REIBLADE has the “Asset Dashboard” that provides this vital benefit, as described below.

Investor Portal

How would you like to fully inform your investors without becoming extensively involved with their inquiries? REIBLADE provides an “Investor Portal” that gives investors instant access to their investments at any time with features that are easy to use. This is enhanced communication at its fullest!

Store and Manage Documents

REIBLADE will store all documents related to partnership properties in one place for easy, direct access by everyone involved. No stuffy files. No scrambling to locate a record, invoice, check, receipt, letter, deed, inspection report, walk-thru video, lease agreement, and so on. Click it, and get it!

Online Deal Marketplace

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REIBLADE offers its “Deal Days Marketplace” where partnership properties can be marketed on the internet to investors around the world. Alternatively, assets can be marketed using an investor URL that is distributed to selected investor prospects. This flexibility eliminates the need for complicated and restrictive MLS-type marketing avenues, thus reducing costs.

Raising Capital for Growth

In order to grow and “scale up”, a real estate partnership enterprise needs a means to raise capital from investors. REIBLADE features the ability to produce and issue a Prospectus that has its own URL. Offering opportunities takes one click. Fundraising doesn’t come any easier than this!

Asset Performance Tracking

REIBLADE offers an instant, downloadable, one-page “Track Record”, with charts, graphs, and financial measures including Capitalization Rate, (“Cap Rate”), Yield, Internal Rate-of-Return (“IRR”), Return-on-Investment (“ROI”), and Equity Multiple. With its flexibility, REIBLADE can evaluate any single asset, or even a group of assets such as a single-family residence (SFR) portfolio. This feature can be used to convince investors to invest. After all, performance sells!

Interested?

Interested readers are invited to: a) Go to www.reiblade.com, or b) reach out to Mr. Gershberg for a private demo at his email: seti@scottsdalerei.com, or c) watch a video at: https://reiblade.mykajabi.com/reicloud-webinar-replay-page-2-1.

For a limited time, REIBLADE is offering a total of 50 lifetime licenses at 70% off. So, what happens if you snooze?


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Bruce Kellogg

Bruce Kellogg has been a Realtor® and investor for 38 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches.

Mr. Kellogg is a contributor and copy editor for two national real estate wealth-building magazines: Realty411, and REI Wealth Monthly. He is a recipient of an Albert Nelson Marquis Lifetime Achievement Award, listed in Who’s Who in America – 2019.

He is available for consulting with syndication, turnkey, joint-venture, and other property purchasers and note investors nationally, and other consulting assignments. Reach him at brucekellogg10@gmail.com, or (408) 489-0131.

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REGIONAL SPOTLIGHT: NASHVILLE, TENN

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Looking for a new market to invest in real estate? Wondering what’s happening in the middle TN property market? Check out this round up of local property data and economic trends…

In real estate and investment circles the greater Nashville, TN area is known not just for its famous music scene, but also as an affordable and more stable property market for those seeking income.

 

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How has COVID-19 and the chaotic events of 2020 been changing that, if at all? What is the state of the market for investors? What is the outlook ahead?

Middle Tennessee

Middle TN is anchored by state capitol, Nashville. Music City is also the most populous in this state, with a population of almost 2M in 2019. The population here has grown at every census since 1810, with the exception of 1960. Around 100 people move here every day.

In 2017, it was recognized as having the fastest growing economy in the US. In addition to music, this region has moved beyond manufacturing to being supported by a diverse economy. One built on tourism, healthcare, insurance and financial services. Many Fortune 50 companies have offices here.

Economy & Business Growth

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Brandon Cobb of The House Buyin Guys says that while many local investors began prepping for the worst when COVID-19 hit, that never materialized.

Smart investors started focusing on more affordable properties and building in more cushion on their offers, expecting property prices to dive.

Instead, Cobb says the market not only kept running, but demand is up. Especially demand from retail home buyers. They are finding their listings going under contract in just 1-7 days.

He says that despite foreclosure and eviction moratoriums and COVID-19 measures, people just keep moving and buying here. Many are coming from expensive coastal cities. Others are drawn by the small city feel and no state income tax.

The city has new Amazon facilities and an MLS stadium. He describes it as a “young Atlanta.” A market not as affected in 2008 as other major cities, and one that doesn’t seem to be feeling the pinch this time around either.

Brandon, who is a member of the Forbes Real Estate Council, and specializes in wholesaling houses to fix and flip investors says this market is a great fit for those with idle funds, wanting passive income, better returns and stability for their IRAs and access to investment grade property. His company focuses on wholesale properties in the $100l-$190k price range, which can resell for $250k-$300k after repairs.

 

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For those local businesses which are struggling, the government has pledged tens of millions of dollars in support. Many won’t need it. They are still growing fast.

According to data from The University of Tennessee, Boyd Center for Business & Economic Research, TN employment actually kept growing year over year through the first half of 2020.

According to the Nashville Business Journal in August 2020, the city’s fastest growing businesses have been growing by as much as 100% to over 300% per year.

Middle TN Real Estate Statistics

According to Redfin, average Nashville, Tenn, home prices stand at $328k, or $191 per square foot. They are selling for around listing prices, with an average marketing time of 43 days, and average down payment of 12.2%.
Home prices and closings appear to be up by around 12% year over year. According to Greater Nashville Realtors, single family homes recently hit a new record high of $344,420.

Word of Facebook’s recent investment in a $800M data center in Middle, Tenn, is likely to only fuel this growth further.


Brandon Cobb profile

Brandon Cobb

Co-Founder, “The House Buyin Guys”

If you are interested in learning more about how you can get added on Brandon’s list to receive off market wholesale properties in Middle Tenn, or learn more about how you can receive passive income secured by real estate through Brandon’s company, you can contact him at: Brandon@thehousebuyinguys.com.

For more tips, follow Brandon on his Facebook page at: https://www.facebook.com/brandon.cobb.3950

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REI Wealth Cover Feature: Meet Brandon Cobb from Nashville’s The House Buyin Guys!

Article by Tim Houghten


How To Scale Your Real Estate Investments In A Highly Competitive Market

Are you looking for more investments and ways to grow your real estate holdings? What are some of the ways that you can maintain and scale, despite the 2020 mayhem?

Brandon Cobb’s company The House Buyin Guys has been able to successfully sustain and even grow his real estate business by double digits through the pandemic and chaos of 2020.

How has he done it?

The House Buyin Guys

Brandon Cobb and his co-founder, Vagif Seidov, have been wholesaling houses to other investors, rehabbing properties, and creating win win solutions for his investors in the Middle Tennessee Real Estate market for years.

Prior to getting into real estate Brandon sold medical devices. After losing his job in Medical Device Sales, he transitioned over to real estate. Brandon found his unique sales skills sharpened by the world of medical device sales gave him a unique edge in the real estate industry. Brandon built his company based around that sales approach, something the real estate industry lagged.

Since then, he and his partner have done over 100 deals in this space, and during our exclusive interview Brandon shared how business has been picking up through the pandemic.

He says that the local Nashville market has kept blowing up, with growing demand despite the pandemic. As of October 2020 they were still seeing new deals going under contract in one week, if not within one day.

Brandon and his team challenged themselves to complete a $51,000 renovation in just 10 days while filming every day and posting the daily walkthroughs for all to see on his Facebook. After having huge success with that renovation, they challenged themselves to do two 7 day flips simultaneously.

The two 7 day $32,000 flips were a failure because they took 9 days to actually complete but to Brandon and his team they were a huge success because they learned a lot about how to better systemize their rehab processes and become more efficient. He and his team are always pushing the boundaries of what is possible in the Real Estate space.

So how can you compete and win deals in this highly competitive market?

Tips For Winning In This Competitive Market

This has been an interesting year in real estate for investors and business owners. During crisis, many fold and lose, and few know how to use the opportunity to create new levels of wealth.

Right now, It is an extremely competitive real estate market. Since the birth of the travel roadshow real estate guru’s coming to town and pumping out 200-300 new investors in a weekend it’s become much tougher to find deals.

So, how do you still get the deals?

Here are some of Brandon’s top tips.

Do What Others Won’t

As with any business or career, standing out and blazing a trail for yourself and becoming a valuable go-to resource for your clients is all about doing what other people won’t.

You can put in the extra hard work and hours, be more responsive, and go the extra mile to make customers happy but it starts with identifying what your customer’s want that competitors are not giving them.

Brandon says one of the big challenges his clients face are tenants. Many retiring landlords are willing to sell, but buyers want the property vacant. When there is a tenant, it can leave the property in limbo. Brandon’s competitors make offers based on the house being vacated most of the time so his company started offering tenant relocation services with their offers.

In his recent feature in Forbes, he says this alone can get you a $10,000 to $15,000 discount on the price of the property and win you the deal if your willing and able to help the tenant find a place to live and cover moving expenses.

Review Your Past Deals

When was the last time you went through your past deals and evaluated what went well, what didn’t, and what you could have done better? What about which deals really made the most money? Or what happened to those properties after you exited and sold them off?

You might be surprised at what you find. Brandon certainly was. They found they missed out on a deal that would have made $107,312.

Even more surprising, was the fact that they came across deals like this 2-3 times a year and were completely missing them! So, they adjusted their strategy when they came across these special opportunities, and after acquisition, and rehab costs are now able to sell them for almost double, with around $70,000 – 100,000 in gross profit.

Select Your Customers Carefully

How selective are you being with the customers you take on?

Brandon’s construction company, HBG Construction offers rehab services to others outside his house flipping business. Savvy business owners and independent professionals learn that they can work much more efficiently, profitably, enjoyably and with less risk and stress if they are more selective in who they do business with.

At first, it may seem like a good idea to take on various jobs within your space and Brandon did just this… his company would service builders, home owners, rehabbers, basically anyone who needed work done on their house.. until it became a big headache..

Just trying to work with anybody and everybody can be a big trap. You might feel busier chasing the money, but that doesn’t mean you’ll really net more money.

Brandon suggests figuring out who your ideal customers are, and to fire everyone else. Brandon discovered that his construction company loved working with other rehabbers. Because Brandon is an investor himself, he was able to understand and pinpoint all the pain points rehabbers have when it comes to dealing with contractors.

Brandon’s construction company now works exclusively with other rehabbers on their flips and that moment when he fired all his other customers changed everything. Now, his team deals with customers whose needs they understand and serve best.

Grow Your Referral Business

Referral business Is the best business. Referrals cost the least amount of money to generate, are the easiest to handle, and are the easiest to close! Brandon’s company started their own referral program using hand written thank you cards to all their customers and occasionally following up with a phone call to ask if they know anyone that may want to sell their home.

His company uses email drip campaigns to stay In touch and hands out handsome referral checks every time someone brings in a referral. They broadcast the experience of the person responsible for the referral receiving the check which prompts others to refer business!

This method alone has allowed Brandon’s company to grow by double digits with NO INCREASE IN SPENDING.

Leverage Other People’s Time and Money

In addition to leveraging other people’s money, smart real estate pros and CEOs learn to leverage other people’s time, expertise and exposure.

There are many in your market who have built up a their own network and doing their own marketing. Work with them instead of competing against them. He specifically points to real estate agents as an example of this. While many real estate investors feel they are at odds with Realtors, you can actually help each other and negotiate win-win deals If you understand their needs.

Summary

We are in an interesting period where the real estate business and country is evolving and changing. Many will fail. For some, this year will set them on a completely new trajectory for success and wealth.

These tips can help you protect and grow your real estate investments, regardless of the mayhem happening out there.


If you are interested in learning more about how you can get added on Brandon’s list to receive off market wholesale properties in Middle TN, learn more about how you can receive passive income secured by real estate through Brandon’s company, you can contact Brandon at: Brandon@thehousebuyinguys.com.

For more tips, follow Brandon on his Facebook page at: https://www.facebook.com/brandon.cobb.3950

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The Survivalist Project: Dutch Mendenhall’s Plan B for Middle Class America

Image by jburson from Pixabay

Like any American family, Dutch Mendenhall and his wife, Vanessa, are looking toward the future.

“My wife recently said to me, ‘We need a Plan B,’” Dutch said. “I said, ‘What does that mean?’” The couple began to hatch a get-out-of-dodge plan in case of any impending disasters in California, where they live, or the country.

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Image by Gerd Altmann from Pixabay

Brandon “Dutch” Mendenhall founded RAD Diversified, a non-traded, public REIT unaffected by the stock market, and is a highly successful real estate educator.

“My wife has not feared a day in her life. So, when she said something like that, I knew it was pretty serious,” Dutch said.

The real estate leader has been busy growing an empire through the years while educating students about increasing their investments. However, during a conversation with Vanessa, he realized that tumultuous events in the world could take away everything they had worked for in one swift move.

Dutch, who grew up in Iowa, maintains that while he grew up around guns, he never owned any until this year. While survivalist culture had never been on his radar before, he installed solar panels on his home this year. He also has a generator, 200 gallons of water, and a year’s food supply in case of an emergency.

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Image by Ulrike Leone from Pixabay

Dutch and his family believe that the world is changing and that everyone needs preparation. As a natural businessman, Dutch has begun merging this way of thinking with investments and deals.

The Survival Project allows investors to buy into sustainable farms. Everything from water, food, electricity, and shelter is self-contained in the project. “We create communities that can survive. If things do hit the fan, if stuff is worse, if every apocalyptic video or movie you’ve ever seen in your life, any of that comes anywhere close to real, you’re going to want a place to go,” Dutch said.

While other companies claim to offer protection from the end-of-days for exorbitant prices, Dutch’s project promises consumers an economical alternative that could also serve as a prosperous return-on-investment.

“I’m building a new Plan B for middle class families, for the average American, for the average person. What I think that Plan B is, happens to be a real, sustainable escape plan,” Dutch said. “We want people to live in the now, build their wealth in the present, and have an affordable alternative for the future.”

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While the wealthy in the United States have bunkers and bomb shelters scattered throughout the country in nuclear war or other impending disasters, Dutch and his company plan to charge low, monthly fees. Hence, individuals have access to autonomous communities in the case of some armageddon.

“The reality is that I think the scariest things are not going to come from a bomb,” Dutch said, continuing, “but I also think that you need to create communities that are not going to be within two miles of where the bombs are going to hit if they ever do.”

To Dutch, larger threats come from Communist countries like China and Russia who want to undermine the United States government and the economy. He believes that enough forces want to take away Americans’ rights, and as a proud citizen, he wants to take the actions he can to stay safe while keeping others out of harm’s way.

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Image by Pete Linforth from Pixabay

“No matter where you are in America, you want a place to go to be safe and thrive. You also can’t take away from your finances and your livelihoods to do that, so found an economical solution,” Dutch said. “No one has ever created an economically sensible way to do it and created something as sustainable as we have.”

Dutch maintains that the Survival Project is and will always be about family, God, and country. He’s proud of his opportunity to come from a poor upbringing and rise to the top of the country’s real estate market and education sector. “I remember days when we had electricity but no gas, and I remember heating water up in the microwave so we could bathe,” he said.

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Image by enriquelopezgarre from Pixabay

Now, as a thought leader having broken through the class system, he and his company have grown and invested carefully during these uncertain times. “Twelve months ago, nobody saw COVID coming. You can sit here and say, ‘Well, they plan for pandemics,’ but did you or me as an everyday, average American ever see wearing masks in public everywhere we go, pulling our kids out of school, and everything else that goes along with it?”

Now, Dutch and his team are thriving when other companies are tanking during the coronavirus pandemic. “We’re the first fund I know of that did a coronavirus amendment to the SEC in February,” he said. The team got the paperwork done quickly, which in turn guaranteed their investors money.

Dutch is also fiercely protective of every investor with this company and the select group of close members called the Inner Circle.

He recently had an investor come to him with an emergency whose natural withdrawal was not for another six months. “We sent him a wire this morning because that is what we needed to do for him in that case. He was in a bad situation, and all of a sudden, there was an emergency. That’s how we look at things,” he said.

Dutch and his team continue to prepare for a changing world and the challenges it presents. It’s always good to have a Plan B.


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A Behind-the-Scenes Look at How to Grow a 7-Figure Real Estate Business

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By Victoria Kennedy

When you’re a successful business owner, one question comes up in nearly every conversation: “How do you do it?” If you’re killing it and seeing revenues topping 7 figures, everyone wants to know your secret.

When Aaron Ace Harris launched Key Marketing Interventions, which offers end-to-end real estate marketing and lead generation solutions, he was starting from scratch. Three years ago, he had no online presence, very few connections, and not much more than a deep desire to serve others.

But, today, the tides have turned dramatically and Aaron is on a mission to share not only how he did it, but to pull the curtain back and give a behind-the-scenes look into what goes into running a 7-figure business daily.

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Image by Pete Linforth from Pixabay

5 Steps to Building a 7-Figure Business from Scratch

Of course, every entrepreneur’s journey looks a little different, but what follows are the 5 steps that Aaron swears by.

Step 1: Go all-in on ONE idea.

Every business starts in the same way—as an idea. Clearly then, the first thing you need to build a business from scratch is a big idea.

Now, if you’re like most entrepreneurs, you’re thinking, “great, I’ve got tons of ideas.” But the key is finding that ONE big idea that you can go all-in on.

“I always shake my head when I meet an entrepreneur who brags about running 6 businesses at once,” says Aaron. “What this tells me is that this person isn’t all-in on any one business. They’re spread too thin and trying to hedge their bets.”

To get to 7 figures, you need consistency, focus, and patience. This means choosing one idea and going all-in.

Step 2: Do your research.

Once you’ve found your big idea, the real work begins. It’s time to do your homework so you can figure out how to turn that idea into the revenue-generating machine of your dreams.

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But before we get ahead of ourselves, let’s break this step down. Here’s what to research:

  • Study your competition
  • Find the gap in the market
  • Figure out who your ideal client is
  • Identify the pain points of your ideal client

“When I started my real estate lead generation company, I had already learned a lot about what my ideal clients’ pain points were. I had been doing the agency thing for a few years. So I knew exactly what real estate agents needed most,” says Aaron.

Step 3: Create your way forward.

Now that you have your idea and you’re confident there are clients out there just waiting for your product or service to hit the market, it’s time to create.

This phase is full of experimentation, rejection, and even what might feel like failure. But remember, according to professor and motivational speaker, Steven Redhead, “the difference between success and failure is not giving up.”

If something you create doesn’t work out, take what you can learn from it and move on.

Step 4: Shout your idea to the world.

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You have created something you know has value and now it’s time to share your idea with the world. Sharing this big idea can come in many forms:

  • On social media (choose 1-2 channels where you know your ideal client hangs out)
  • In online communities
  • As a guest on podcasts
  • As a guest blogger
  • With joint ventures
  • By participating in virtual summits
  • By hosting webinars
  • Through paid advertising (Facebook, Google, YouTube, Instagram)

Not all of these platforms will work for you, so keep testing and tweaking your process until you figure out what pays off.

Step 5: Work your systems.

Finally, the key to really building up to that 7-figure goal is not taking your foot off the gas. One of the ways to stay on top of your business and make sure you’re doing the small things that will lead to serious growth, is to build systems everywhere.

When you have strong systems, you will work most efficiently. This will free you up to develop multiple revenue streams within your business, which is critical for taking your business to the next level.

There’s no secret to building a 7-figure business, but these 5 steps will take you from zero to 7 figures in less time than you might think. And as Aaron Ace Harris will tell you, it takes hard work and dedication, a lot of heart, and a little luck.


Aaron Ace Harris is the CEO of Key Marketing Real Estate and is a devoted husband and father. He was able to grow his real estate marketing business to 7-figures during the pandemic. Click here to find out about his 3 Closings Guaranteed System: https://www.keymarketingint.com/optin28970799


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Victoria Kennedy
victoria@victoriakennedyofficial.com
atmanrealestate.com

Nominated as a 2020 Brand Ambassador for Inman, Victoria Kennedy is a well-respected authority in Real Estate marketing and branding. She is the CEO of Atman Real Estate, a marketing & branding agency that is committed to helping top producing Real Estate professionals become the #1 Agents in their area.

She is a highly in demand speaker on all things digital marketing, and has helped many clients boost their visibility and revenue. Because of her expertise in real estate, she has been a trusted speaker and contributor to such organizations as the National Association of Real Estate Brokers, Inman News, and Yahoo Finance.

In addition to running a successful marketing agency, she also has given talks, workshops, and has worked as a trusted consultant for Realties, Title Companies, Investors, and top producing agents. She has been featured in over 175 publications and podcasts both nationally and internationally.

In addition to her marketing expertise, Victoria is a #1 selling classical-crossover singer and has sung with the likes of Andrea Bocelli, as well as toured all over Europe with her music.

She is excited to share with you the power of her Closing Maximization Method and how it can exponentially grow your business.

Find out more here: atmanrealestate.com

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High Cap Rates, Low Cap Rates, and Successful Real Estate Investing

Image by Alexander Stein from Pixabay

By Rusty Tweed

Using Cap Rates to Make Informed Real Estate Investing Decisions

Don’t be fooled by the simplicity of the cap rate, or capitalization rate — this simple calculation can reveal a trove of insight on potential real estate acquisitions. Some have even argued that this number is the single most important metric for any budding real estate investor to understand.

Our guide makes it easy to wrap your head around cap rates and use them to your advantage. So, without further ado, let’s jump in and learn.

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What Can a Cap Rate Tell Me?

In a nutshell cap rates provide a quick and simple way to help get a feel for a property’s overall investment potential and a balance with the property’s levels of risk and return on investment. To better understand how to achieve this, we’ll look at a few examples.

Cap Rate Formula: How to Calculate Cap Rate

The cap rate formula is simple: Divide net operating income (NOI) by the property value (or the purchase price).

Cap Rate = Property’s Net Operating Income/Property Value (or Purchase Price)

We can find net operating income by subtracting the property’s annual expenses from its annual gross revenue. Expenses will include things like operating expenses, management, taxes, and anything else you must pay to keep the property running.

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Careful though — debt payments, capital expenditures, and depreciation deductions are NOT included in the calculation. This is because we are trying to get a sense of the property’s performance irrespective of any mortgage arrangements, improvements we might make or depreciation schedule that may be selected.

For revenue or cash-flow, you’ll simply plug in what tenants currently pay in rent (total rental income), as well as any other sources of income (Ex: a laundromat or a parking garage).

Should I Use Market Value or Purchase Price as my Denominator?

For the bottom of our capitalization rate fraction, market value is generally preferred. A purchase price can be used if the property has sold recently, but using a purchase price from ten years ago won’t result in a meaningful cap rate. If we are considering purchasing the property, it would be very useful to plug in various possible purchase prices to see what rate we’ll achieve. This can be a helpful guide when determining an acceptable offering price.

Examples

Suppose you’re an investor considering buying Property A. The property is valued at $1,000,000 and generates an NOI of $50,000 annually. Plugging this into our equation we get:

Cap Rate = $50,000/$1,000,000 = 5%

Suppose you compare Property A to a similar property that is valued at $1,000,000 and has an NOI of $60,000. This gives us a Cap Rate of 6%. If all else between Properties A and B is equal, the higher cap property is the better buy.

Investors can also think of cap rate as a measure of their rate of return on their investment. For example, with the 5% rate, an investor earns 5% of their purchase price annually and will recoup the purchase price in the 20 years.

What Does a High Cap Rate Mean? What About a Low Cap Rate?

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There’s a lot more to cap rates than “higher cap = better investment.” No two properties are created equal, and in practice, properties with a very high cap rate often turn out to be higher risk as well.

Let’s think about our capitalization rate equation again, and what factors might contribute to driving it higher. We’ll look at Property A again, which had an NOI of $50,000, a property value of $1,000,000, and a 5% cap rate.

If we want to raise our rate by changing NOI, then NOI will have to increase. This could be accomplished by increasing revenue, or lowering expenses. In either case, increased NOI is typically a good thing.

Now, let’s say we want to raise our cap rate by modifying property value. In this case, property value will have to decrease. A decrease in property value could be driven by several things, including the worsening reputation of a location or the revelation of some costly deferred maintenance.

To summarize: high cap rates are great, but they can also point towards factors that increase the risk of an investment. A property with an 18% cap rate might need work, and might not be in a highly desirable area. Ask yourself, “Is this amazingly high cap rate stemming from high NOI, or low property value?”

What Drives Cap Rate Lower?

Let’s consider what factors might contribute to driving a cap rate lower. If NOI decreases, our cap rate will decrease as well. We also see lower cap rates in the case of property appreciation — and appreciation is a very good thing.

If a property appreciates significantly, but revenue trails this appreciation, the property’s cap rate will go down. Lower cap rates can indicate high-value properties, suitable for investors seeking lower risk. Generally, better neighborhoods trade at lower cap rates.

High vs Low Capitalization Rates

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High cap rates are driven by two things — higher NOI, and lower property value. If a building needs renovation, this could result in a lower property value and, therefore, a high cap rate. With large amounts of maintenance needed to bring a building up to date, that high cap rate might mislead the investor and leave him with far more work and expense than he bargained for. But, if an investor is interested in updating a property, these high cap properties can potentially provide large rewards.

These property types are best left to investors who have experience, or who have a trusted guide that can help them find the right properties that balance their investment goals with their risk tolerance.

Figure Out What You Need to Know

If you know any two of the three variables of the capitalization rate formula, you can figure out the whichever variable you’re missing. This can be useful in a range of situations. For example, suppose you are trying to determine what you should offer on a property. If you know the property’s NOI and have a cap rate goal you want to target, then you can calculate what purchase price will give you the result you’re looking for.

For example, suppose your target is 8%, and you’re looking at a property that generates $100,000 in NOI:

8% = $100,000/Purchase Price

Purchase Price = $100,000/.08

Purchase Price = $1,250,000

Or, if you have $500,000 to spend on an investment property, and are targeting a 7% cap rate, you can figure out what level of NOI is required for you to meet your goals:

7% = NOI/$500,000

NOI = 7% * $500,000

NOI = $35,000

Re-Cap

There’s no set range for which are “good cap rates” — they’re most useful as a comparative tool between a few potential purchase opportunities that are similar in terms of location and kind.

High cap rate properties can be lucrative, but also come with an increased level of risk. If you’re new to high-cap real estate investing, it’s best to partner with someone who has the experience and know-how to get a deal done right. At TFS Properties, we specialize in pairing investors with properties that match their investment profile and risk comfort-level while guiding them through the journey of building a secure investment portfolio.

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Wondering What to do NOW In Real Estate? (Part 2)

Image by Gerd Altmann from Pixabay

By Jimmy Reed

So, what do you do when the market is flooded with so much Competition? How do you really get Wealthy in Real Estate? Getting fed up!?? How about Real Wealth Deals???

Hope you enjoyed the last article! Part 1 of “What to do NOW in Real estate?” As we ended last time, we started to mention VRBO’s vs a Standard Rental. We also talked about Hot Markets and that the Dallas/Fort Worth (DFW Area) is one of the Hottest in the country. Since the last article we have also had the Covid-19 Virus which at this time has literally shut our economy down.

The timing however is really interesting since we are now about to go into a market that is only 3 hours away from the DFW market and growing at the same pace. Now last time I talked a lot about the Granbury market which was only 30 minutes South of Fort Worth where we are building brand new Constructions all Brick for Rentals.

But let’s now switch the mind set to VRBO where we can Double & Triple our Cash Flow! You heard me right! So now we move North of DFW to Broken Bow Oklahoma. And to help me out I want to introduce you to a friend, former student, and a Rock Star on VRBO’s in Broken Bow, Miss Kelli Haus. I asked Kelli to help contribute to part 2 of this piece since she has literally taken the VRBO in Broken Bow to a new level. So first keep in mind we are looking at cabins now verses a standard house. We are looking at Nightly rent vs Monthly rent. And this is where you will see how you could nearly triple your Monthly Cash Flow with a VRBO in Broken Bow.

Now I meet Kelli a few years ago when she signed up for our Platinum Program here in the DFW area. She soon informed me she was wanting to move into Vacation Rentals, I told her it was not my specialty at all. A few years later and Kelli has become a Rockstar of VRBOS!

So here is a little about Kelli, and some info on Broken Bow, OK.

The How Toos of Finding Deals

Kelli has 6 years’ experience in the real estate field, she is known as the Beavers Bend Realtor. However, Kelli does more than just help her clients buy and sell cabins, her secret sauce is her step-by-step plan for her clients so they can not only enjoy a vacation at their cabin but also turn it into a big money maker.

Kelli uses this same plan on her own Beavers Bend investment properties so she practices what she preaches, and she can not only show you how the plan has worked for her, but so many of her clients. Her ideal client is someone who is looking to make memories and extra money.

Hello all, I’m Kelli Haus and I am a cabin investor in Broken Bow, OK and a full time Realtor in the Broken Bow area, specializing in helping families’ and investors purchase an income/second home/vacation luxury cabin that pays for itself.

Did you know that according to a recent VRBO report “71% of millennial travelers say they consider staying at a non-traditional vacation rental”? VRBO rentals are up 30% from last year!

Broken Bow, Oklahoma. I am going to assume you’ve never heard of it. It is an outdoorsman’s paradise! It is only three hours away from the DFW metroplex. A perfect family getaway that makes most feel like they arrived in Colorado.

The area is also known as Hochatown, Oklahoma which is a few miles north of Broken Bow. Through good economies and bad economies, this place is always a hot market with vacationers packing the area every chance they can. As long people in the DFW want a quick getaway from the metroplex, this market is going to continue to be on the rise until there are enough cabins to accommodate the mass influx of vacationers.

Hochatown is approximately 95% luxury investment cabins that are occupied by residents from Texas, Oklahoma, Arkansas and Louisiana that flock here YEAR-ROUND. That’s right, there is not a down season! VRBO’s travel trend report projects that the Broken Bow/Beavers Bend State Park lake area tourism will grow 50% in 2020.

If you have never heard of Broken Bow, Oklahoma your first question is going to be why the heck would anybody want to invest in this remote area? The answer is Broken Bow Lake is one of the most gorgeous lakes in the country. Its pristine natural shorelines are not riddled with boat docks and lake houses. Ten years ago, this lake was a hidden gem of a secret for the locals to enjoy. This lake is crystal clear and provides some of the best fishing in the country. The lower Mountain Fork River feeds off the lake has some of the best fly-fishing in the world.

Believe it or not most people never even see the lake when they rent a cabin. They’re too busy hiking some of the most gorgeous trails in the state park, hitting up the local breweries and wineries, roasting s’more‘s on the campfire, renting ATVs, horseback riding, kayaking or canoeing on the river, grilling out on the back porch and hitting the cabin hot tub!

The Choctaw Nation has recently purchased 700 acres here in Hochatown and they will be building a family friendly casino right here amongst these luxury cabins. This casino is going to draw so many more visitors to the area that have not heard about Broken Bow.

It’s rumored to believe that only 50% of the DFW metroplex is aware of Broken Bow. There are more than 7 million people in DFW and Broken Bow is growing in correlation with the growth of DFW. There is certainly a buzz in Texas about Broken Bow and in my opinion, there are not near enough cabins in the area to support the demand of people that want to vacation here.

The How Toos of Finding Deals

Even during this Covid crisis, all the cabins here are full of people “sheltering” at a cabin. And there has been no slowdown of investors inquiring about investing in Broken Bow either.

The question I get asked the most often is which is the best size, price, and type of cabin for an investment? There is not a good answer to that question. One-bedroom cabins are booked more nights per year but at a lesser nightly rate. The big cabins that sleep 25 to 30 people are booked less nights per year but at a much higher rate, up to $2,000 a night!

If managed properly every cabin in Broken Bow can be paid off in 8 to 10 years. So, would you rather have a $300,000 one bedroom or a $1.5 million cabin paid off in 8-10 years?

Every single cabin here pays for itself every…single…month. Some months, like February and April, can be a little slow but this year they have not been at all! Each year this area is growing more and that means more net profits, even in what used to be known as the slow months. Cabins are booked every single weekend, every holiday, and every time school is out of session, I encourage all cabin owners to raise their nightly rates 10-30%.

Both of my two-bedroom two bath cabins that have a loft, both sleep eight or nine people are booked 18 days a month on average year-round. June and July are the busiest months of the year. Both of my cabins were booked solid in the summer months except for the rare times of a one-night opening between bookings.

The How Toos of Finding Deals

Generally speaking, a cabin will make 45% net profit. If you hire a management company, they are going to expect 25% to 40% of your gross income. 95% of my client’s self-manage their cabins with my proven method of doing so. But that is a whole other and I am certainly happy to answer questions like them, such as:

  1. How do I manage my cabin from 2000 miles away?
  2. How do I minimize phone calls from my guests to the point where I do not get any?
  3. How do I maintain five-star reviews on Airbnb and VRBO?
  4. What do I do if I have a maintenance emergency in the middle of the night?
  5. Do you share your team of people on the ground in Broken Bow to help Cabin Owner’s?

So, let us talk about real numbers. I purchased my “Kiss and Angel Good Morning Cabin” in April 2018. It came fully furnished from a new construction builder with a sales price of $310,000. It appraised for $329,000 and today it would appraise for $360,000 or more. I put 10% down. Mortgage, taxes, insurance as well as PMI totals$2,050 a month. Property taxes are low at about 1%. My monthly average expenses to run my cabin business is $500 a month.

The How Toos of Finding Deals

In my first year I paid down the mortgage with 100% of my profits. I did not pay my mortgage down in 2019. Instead, I used my profits in 2019 to purchase my second cabin. Right now, I have $100,000 equity in this cabin. Nightly rates are between $199 and $350 a night. My first year I grossed $50,000 with $20,000 net profit. My second year I netted $27,000 profit.

I encourage my clients to purchase new construction or a cabin that is less than three years old. That is another discussion for a different day. About70% of cabins for sale can be found on Realtor.com. Not all real estate agents list their cabins on any MLS. New construction cabins cannot be found online anywhere. You must have a connection to a builder to find those hidden gems! 80% of my clients purchase a new construction cabin that has not yet been completed.

The How Toos of Finding Deals

I know I have just scratched the surface with this article and there are many more questions to be asked. I am extremely grateful I discovered the Broken Bow area. I have two young children and with the two cabins that I do own now, I will be able to use the $2,000 monthly net profit to pay for my children’s college education.

I do not see this market slowing down anytime soon as I do not see the DFW market slowing down. It has been rumored that Broken Bow will be the next Branson, Missouri, or Lake Tahoe.

I do not have enough cabins to show my clients even during this possible recession. Construction has not slowed down either. Can you think of a hotter market? I hope to hear from you soon, and Thanks Jimmy for allowing me to contribute to your article!

Well I hope you just realized the opportunity you have been presented with. How regardless of where you live you can own a Vacation/Investment Cabin that can produce up to nearly Triple the Cash Flow vs that from an ordinary rental. Yes, I know if you are Old School you understand Monthly Rentals. Trust me I’ve had rental for over 30 plus Years!

But go back and read the last article “Part 1”Remember the Make Money vs Wealth? Wealth is what you are looking for in real estate. But I understand if you want a rental, we have them for you as I said back in the first article down in Granbury. By the way you could VRBO the Granbury properties. See these articles were written to open your eyes to see the opportunity of not so much what you invest in but where! Hot, Emerging Markets will always out pace Appreciation and Cash Flow due to demand, and the location with in what I call the Hot Zones.

Texas is a Hot Zone always has been and even more so today.

Make sure you go back in read the first article from last month in Realty 411. Refresh yourself to what our Goals were. Buying and Selling vs Buying and Holding, real Wealth! Look back at some of those trainings we offer on my site at www.JimmyReed.net. Create some Cash but parlay that into Creating Wealth through Rentals are maybe even VRBO’s so you can Double & Triple that Cash Flow.

Well I hope this opens your mind up to investing in Hot Zones. To understand so many people come from all over the World to invest in America because of all the opportunities. My question to you are you willing to travel a few states and end up in the middle of the country and the most lucrative Hot Zone, TEXAS!

So if you’re still riding the fence here’s a thought make sure to keep an eye out in the magazine and Realty 411Marketing emails so you can make it to Texas for the Lone Star Expo! Yes in October the Lone Star Expo is right here in my backyard, Arlington, TX. And if you remember from the first article we plan on doing a bus tour down to Granbury to look at those New Construction Rentals. Who knows Kelli may be at the Expo to answer questions about Broken Bow. Fact stay a few extra days and rent a cabin in Broken Bow!

In Closing, the main thing is position yourself so you can maneuver positively so no matter where the market turns. If you keep your eyes on the market and not so much on the quick buck, you can become very successful even Wealthy at this real estate game!

Be Blessed with Success!

Jimmy Reed


jimmy

Jimmy V. Reed

Jimmy V. Reed of Fort Worth, Texas has been investing in real estate since 1987.  In 1991, he started conducting full-day training sessions on Wholesaling.  He then began teaching and mentoring others throughout the country. He is currently the founder of the Fort Worth Real Estate Club www.1REclub.com and has his own real estate training company that includes Wholesale, Probate, Mentoring & a Biblically based Debt Free training course and more!

More info available at www.JimmyReed.net

Guarino Family 2

Pro-Tips For Working Together in a Business as a Family

By Gene Guarino

Here’s some lessons I’ve learned to help you to grow closer as a family when you’re working together in business.

Each family member is unique…embrace it.

Utilizing a “personality profile” can be a great objective tool to help identify each person’s unique skills and talents. We use the Predictive Index tool for hiring and to make sure everyone is in the right seat on the bus.

Communication is critical to your family’s health

We use the EOS system to help us with business organization and communication. It’s been an invaluable system us as we’ve grown by over 400% over the past 7 years.

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Image by Anita Oosting from Pixabay

The Family that Plays Together Stays Together

I’ve been asked “what’s the best investment you’ve ever made?” My answer is always the same, Family Vacations. Investing the time and money was one of the best investments I’ve ever made. Those “18 summers” go fast when you’re an entrepreneur. You can make an impact far beyond that if you invest the time and attention along the way.

FFF – Forced Family Fun

Do you remember when you responded “because I said so” when the kids were impatiently asking you that? Or those times when you were providing a great experience for your kids but they weren’t appreciating it as much as you thought they would or should? Well, I Do!

We created a term for that, FFF. Forced Family Fun.

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Image by michellerey17 from Pixabay

Today, we enjoy our FFF even more because everyone gets to pick an activity. Between Christmas and News Years, we make a list of “fun” activities that we can do together as a family. Each member gets to “pick” an activity and we do them as a family.

In the past we’ve done a lot of fun things like, group massages, yoga, game night, bowling, wine and art, movies, kickball, pickleball, driving range, reflexology, salt baths, cryotherapy, frisbee golf, snowmobiling, skiing, sledding, ice skating, scooter races and contests of every kind.

Passing on the traditions from one generation to the next.
Try it this year and see what kind of fun things you come up with for your own FFF.


gene

Gene Guarino
Founder/CEO
Residential Assisted Living Academy™

Gene is the President, CEO & Founder of RALAcademy.com. Gene has over 30 years experience in real estate investing and business. Today, Gene is focused on just one thing… investing in the mega-trend of senior assisted housing. He has trained thousands of investors/entrepreneurs throughout the United States how to invest in and operate residential assisted living homes. For over 25 years he has been educating people on the strategies of successful investing, business and self-employment. He now specializes in helping others take advantage of this mega-trend opportunity.

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10 Habits of Successful Real Estate Investors

By Russell Barneson

If you’re an aspiring real estate investor, building good habits will be the core foundation to your success.

From the moment you rise to the time you go to bed, outlining your day will make you more efficient and more effective at your job.

Here is a game plan to implementing habits to develop to put you on your path to achieve your real estate investment goals.

Having a Schedule

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Image by Tumisu from Pixabay

Having a daily routine of planned activities will help you get into a rhythm.

Waking up at the same time, going to the gym daily and even planning your meals are great for building structure.

Setting a schedule will help you clear your mind, giving you laser focus.

The side benefit of such a structure is you will not be worrying about whether you forgot to do something.

There are many scheduling, CRM and organization tools you can install on your phone and computer, making it easier than ever to stay organized.

These tools will send you reminder messages so you don’t miss an important meeting or appointment.

Find a Niche

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Image by Clker-Free-Vector-Images from Pixabay

There is an ocean of property types and investment strategies out there.

The world is a complicated place, finding a niche helps simplify life.

Pick one type of property or strategy to invest in; this will give you an identity and make you an expert in the niche you choose.

For example, if you work in rehabbing single family homes in a certain area, over time you will become an expert in this industry and will know what to look for in regards to the local market.

Developing strong relationships with property brokers, contractors and lenders will be beneficial to your success.

For example, a great relationship with a property broker may result in access to insider pocket listings unavailable on the MLS.

Go with what you know! Try to stay away from projects outside your niche as this can become time consuming and bring on unnecessary risk.

Settings Goals

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Image by Megan Rexazin from Pixabay

Great real estate investors set short and long term goals.

For instance, a long term goal might be turning over 1 fix and flip every month or earning $200K profit per year.

A short term goal might be going to the gym every 2 days for a month.

Humans thrive with goals, having a target to aim for will help you orientate yourself towards a brighter future and help you avoid complacency.

Persevere Through Down Markets

Real estate markets, like all markets, are cyclical.

Like a surfer, learn to ride the highs as well as the lows.

Position yourself to withstand an unexpected downturn in the real estate market as it is inevitable.

And don’t be discouraged if you have a few bad years, stay positive and find ways to persevere.

Go to School

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Photo by Pixabay from Pexels

Getting higher education is a valuable tool. Becoming more knowledgeable could open up various job opportunities throughout the real estate industry.

People with degrees often get promoted and have higher incomes than those without.

According to APLU.org, high school grads earn 62% of what a college graduate earns.

Diversify

Rule No. 1: Never lose money.
Rule No. 2: Never forget rule No. 1.

- Warren Buffet

The number one rule of investing is preservation of capital. The easiest way to achieve this is through diversification.

Don’t put all your eggs in one basket and consider partnerships if necessary to diversify into multiple projects.

This will balance out your portfolio in the case one of your assets is underperforming.

Patience

Patience is a virtue. Real estate markets have been around for eons and will always be cyclical.

What is valuable today is worthless tomorrow. Avoid buying at the top of the market, and try getting into up-and-coming neighborhoods, or buying when you think a recession is at the bottom.

Therefore, don’t chase deals. Have cash reserves ready for a drop in the market, in order to capitalize on bargain deals.

Work Smarter not Harder

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Image by Fathromi Ramdlon from Pixabay

Know your priorities and limitations. Be efficient and do one thing well, outsource the tasks you struggle with.

Don’t scoff at the idea of getting some outside help. When blocked on something ask for feedback.

Not a web developer? Don’t try to build everything yourself. Trim the fat and focus on your money makers.

Create Passive Income

Creating passive income helps you leverage your time and is one of the most powerful income generating strategies in the world.

If you have a solid rental business setup and organized, you will have a lot more time to focus on developing other businesses or living a more fulfilling life.

Hire the Right Team

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Photo by fauxels from Pexels

An expert is a person who has made all the mistakes that can be made in a very narrow field.
- Niels Bohr

Paying employees a little more than competitors can be beneficial in the long run.

Hiring competent people to make difficult decisions on your behalf will not only benefit your business but also give you more time to do the things you love.

Additionally, turnover in any business can be costly due to the training time for new employees, so it’s best to find great employees and stick with them.


About the Author

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Russell Barneson runs Sales & Marketing at Crescent Lenders and is a real estate investor and operator of his own vacation rental business.

He is passionate about the topic of real estate investing and helps real estate investors from across the USA obtain private money financing.

Having the experience of running and operating a real estate business himself, as well as helping other investors get capital for their projects, gives him unique insights.

Russell is a sports fanatic and in his spare time he loves to travel, surf, play sports, and have the occasional beer. For more information, visit: https://www.cresentlenders.com

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Premiums: How Much and For How Long

By Gabby Darroch

Let’s talk about premiums, because, let’s face it, no one likes to pay them. But what if you began to look at them like deposits instead of payments? With The Money Multiplier Method, that’s really what they are.

How much does my premium (or deposit) have to be?

question-3838906_1280You are incomplete control of what you want your deposit to be. Now, in order for your policy to do what we want it to, which is to make you the bank and generate wealth over time, we do have suggestions on what it should be. That looks something like this:

(Your Age) x 10 = (Minimum Monthly Deposit Amount)

For example, Sally is 35 years old. So her minimum monthly deposit would be $350 (35 x 10). Again, we have it structured this way so you benefit the most from your policy.

Of course, you aren’t limited to monthly deposits. How often you want to pay is up to you as well. In fact, you can change your deposit frequency at any time. Most people opt for the monthly deposits, which is why we use that in this example. And who has ever really made “too many” deposits?

How long do I have to make deposits for?

In a typical policy, we will settle on what your premium deposit should be for the first five years. This premium deposit will include a paid up additions rider that accelerates the growth of the policy. In year six, you will then pay roughly forty percent less in premiums as the rider will have dropped off and no longer be necessary. For example, if you are paying a premium of $10,000 for five years, this includes a $6,000 paid up additions rider so in year six, you’ll only make a deposit of $4,000 for the remaining life of your policy.

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Of course, that paid up additions rider can still be of value. That $6,000 (or whatever your paid up additions amount is) can then be used, along with any other funds you have, to start another policy. Consider it similar to a “branch office” because you are the bank now. And don’t banks have multiple locations? Why shouldn’t you?

As we always say, there are specific situations with all of our clients and our Money Multiplier Mentors are trained to help you make the best decisions in growing your family’s wealth. When you meet with one of them, ask them about your options and what will work best for your lifestyle.

Can I make a lower or higher deposit if I want to?

Absolutely. What you pay towards your premium is entirely up to you. We have never and will never tell you how much money to put towards your premium. We do like to note that the higher the premium, the better the return in your cash account.

money-3219298_1280And if you have the means to deposit an additional lump sum of money (called “overfunding”) with your premium deposit this would accelerate the growth of your policy even more.

Keep in mind, if you take out a policy, you can always reduce your premium on that policy. You cannot increase your premium amount on the particular policy, but you can take out a new policy in addition to your initial policy. In fact, many of our members end up taking out multiple policies once they see the benefits of their initial policy.

Deciding on your premium deposit amount and frequency doesn’t have to be scary. On the contrary, we are with you every step of the way to make sure your policy fits your lifestyle in every way. As your life changes, so does your policy, as it should.

Your policy, your premiums, your way. This is what it feels like to be in control of your money.

To learn more about this method and what it can do for you, please visit www.TheMoneyMultiplier.com , scroll to the very bottom and click on “Member Area.” Enter the password “bankwithbrent” and watch the presentation that appears on the next page.

When you’re ready to get started on creating your financial legacy or if you have more questions, please email us at info@themoneymultiplier.com, or give us a call at 386-456-9335, and one of our mentors will be in touch with you.