How the Opening Back up of the Economy should affect Private Lending

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Image by Gerd Altmann from Pixabay

By Edward Brown

When the COVID-19 pandemic first hit the United States in March 2020, it was anybody’s guess as to how the private lending market would be affected. At first glance, one would presume that loan demand would have been negatively affected due to the expectation that borrowers were going to “hunker down” and not ask for, nor spend money, as we, as a nation, even the world, had not experienced a shutdown of this magnitude since the pandemic during WWI.

In the early stages of this effectual shutdown of most of the economy, this was the case. Borrowers were reluctant to take on debt, as the future was uncertain as to how they expected to pay back loans. However, as time went on, even though most businesses saw a large decrease in revenue, the lockdown/shelter in place, had another affect; many people were frustrated, feeling cramped where they lived, as a large part of the workforce had to work at home, and many households were not prepared to be at home 24/7. This put an undue hardship, emotionally, on people, as they tried to balance work with home life; especially if they had younger children who were not able to go to school.
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Image by Alexandra_Koch from Pixabay

Since many businesses were closed, people were able to save money, as they had no place to spend it, so to speak. This lent itself to the thinking that this was the new norm – working from home. This thinking made people start to ponder the future regarding the work/home life balance, and many chose to increase their living space. This, culminating with the fact of no commute for most workers, produced increased prices of homes in the suburbs where one could buy a larger house than in metropolitan cities. The frenzy that ensued for house purchases was a boon for private lending, as, not only were banks a bit gun shy due to the pandemic, but buyers were facing competition from other buyers and needed a competitive edge – quick closing offers. These two factors [banks slowing down on lending and the ability to provide capital very quickly], saw many private lenders having their best deal flow, by volume, in decades.
The question, for private lenders, is what happens after the economy eventually loosens up restrictions for most businesses, so they can get back to a somewhat normal cycle? There are those who believe that working from home will be the new norm for many workers.
The thought process is that companies that have been use to having workers work from home have proven that they can be productive over this past year. These same companies looking to cut costs will point to believing that they can shave off a lot of fat off of their income statement by lowering a large part of their expenses – rent. Since workers do not need to come into the office, and, with the technology of Zoom, rent expense can be significantly eliminated.
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Image by Joshua Miranda from Pixabay

Case in point; SF Gate reported that Sales Force cut back 325,000 square feet of space it was planning on occupying in San Francisco after adopting a permanent remote work policy. Many companies have followed such as Drobox, Twitter, and Facebook. Rents in the surrounding areas have decreased as much as 20%; however, prices for homes have not seen such a decrease, and, homes that have more square footage command a premium.
However, there is the possibility that, once a vaccine is widespread and we have moved on from the pandemic, many companies will start to require workers report back to the office. Some companies are already requiring employees go back to working in the office, as they believe productivity will increase compared to at home workers. This may start to force a shift of people moving back to the city from the suburbs.
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Image by hakan german from Pixabay

Interest rates are still relatively low, but they are starting to creep up. Many home buyers believe they should find something soon before the rates for mortgages go higher. The demand for capital is still strong and it does not appear that it will taper off anytime soon. Banks still have strict criteria regarding lending standards, and recent changes in the Dodd Frank rules did not dimmish these standards. In addition, borrowers who requested deferments from their lender may not have had their credit scores lowered due to these requests, but a memo recorded in the credit report has effectively prohibited conventional financing for them; at least, for a while. Other reasons many believe demand for housing will continue is due to a housing shortage. Too many restrictions by city or county officials hamper housing starts, and costs of both material and labor have dramatically increased. This put an undue burden on builders, as their profit margin gets squeezed; thus, the law of supply and demand as well as low interest rates [that appear to be relatively stable] should keep housing prices strong. During the Great Recession, many homeowners lost their houses to foreclosure. Many Millennials remember how their parents lost their home, and this lent itself to many people choosing to rent instead of purchase. Over time, however, these [now grownups] are starting their own families and have healed from the wounds of the Great Recession to where they are deciding it is better to buy rather than rent. This, too, is expected to fuel higher housing prices.

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Many housing sectors are still seeing multiple offers or houses that are being sold in less than a week. This phenomenon puts the would-be buyers in a predicament as to how to put in an offer that will be accepted to a seller. This is where private capital is a huge asset to potential buyers, as they can use private capital to make their offer much more attractive to the seller in that they can close the transaction very quickly without contingencies. Mark Hanf, president of Pacific Private Money has seen these buyers come to him in droves for capital and reports that his company had its best quarter in the last quarter of 2020.
One of the main advantages to private capital markets is that they do not have to rely on asking for new appraisals in every situation. Each case is different, and, many times, a recent appraisal that the borrower provides to the lender or a broker price opinion might suffice. Banks need to follow FIREA guidelines where the appraisal process is much longer, and this lends itself to a lengthy process to which the borrower may not have the luxury of waiting.
How long will the demand for private capital last? As long as banks continue to drag out the lending process, demand for housing stays consistent, and borrowers desire to purchase before interest rates and housing prices increase beyond where the borrowers feel comfortable, there should be a steady flow of requests for the foreseeable future.

ABOUT EDWARD BROWN

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Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Additionally, Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns. Edward Brown, Host The Best of Investing on KTRB 860AM The Answer on Saturdays at 8pm and Sports Econ 101 on Saturdays at 1pm on SiriusXM channel 217 21 Pepper Way San Rafael, CA 94901 [email protected]

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

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Image by ar130405 from Pixabay

By Tim Houghten

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?

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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 sales gave him a unique edge in the real estate industry. He built his company based around that sales approach, something the real-estate industry lagged.

Since then, he and his business partner have done over 100 deals in this space, 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.

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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 seven-day flips simultaneously.

The two seven-day $32,000 flips were a failure because they took nine 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, Brandon says 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 hundreds of 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 magazine, 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 you’re willing and able to help the tenant find a place to live and cover moving expenses.

Review Your Past Deals

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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 twi to three 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 to $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. Occasionally, they followed up with a phone call to ask if they knew anyone that may want to sell their home.

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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 their own network and are 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: [email protected].

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

Successful Turnkey Real Estate Investing

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By Bruce Kellogg

Evaluating Turnkey Rentals

A major trend in real estate has developed where investors around the nation seek distressed properties in key markets regardless of distance. They purchase dilapidated assets to rehab, add value, and build wealth. Experienced investors tend to discover the hard way that it’s one thing to rehab locally, yet an entirely different experience to do so long distance.

For those who cannot afford to purchase nearby, the risks in rehabbing in a new area with few contacts increase tremendously.

Norada Real Estate Investments

The other approach an investor can take is to select a high-quality turnkey provider and invest with their help. Norada Real Estate Investments is one of the longest-running nationwide providers with a great industry reputation.

Meet Marco Santarelli

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Marco Santarelli made his first real estate investment at age 18, and he founded Norada Real Estate Investments in 2003. This means that he progressed through the Great Recession of 2008, unlike many turnkey property providers. He has become a nationwide provider of turnkey cash flow investment properties. He says his mission “is to help one million people create wealth and passive income and put them on the path to financial freedom with real estate.”

Mr. Santarelli is a licensed California real estate broker. For over five years he has been the host of the Passive Real Estate Investing Show with over 250 episodes to-date. The show airs weekly and can be found on every podcast platform including iTunes, Google Podcast, iHeart Radio, as well as www.PassiveRealEstateInvesting.com. This format allows the listener to learn, then jump off if they aren’t ready to invest at the time.

Other podcasters often persist with a blaring selling message, but Mr. Santarelli is more respectful of his listeners’ time.

Guide-to-Passive-Real-Estate-Investing-1Mr. Santarelli has also produced the 40-page e-book, The Ultimate Guide to Passive Real Estate Investing, which covers the subject very well and makes a great primer for new and seasoned real estate investors.

Norada Real Estate Investments

The Norada website features over 25 markets where Norada offers investment properties. Surely, readers would like to know which markets Norada favors for the second half of 2020, and why. They publish regular updates on their website on the best markets to invest in today.

Norada’s website has 13 frequently-asked-questions (FAQ’s) that are as comprehensive and clear as the author has seen. Additionally, the properties presented on the website contain all of the important items that an investor needs for successful decision-making. Many turnkey vendors leave out a vacancy factor, or maintenance expense, or post unrealistically low amounts to pump up the cash flow results, and this is done intentionally. (See my article in the second paragraph for details) Norada strives for accuracy in their property presentations.

Risk and Reward

In the end, when you buy a turnkey, you get a like-new property with a paying tenant, hundreds of miles from where you are. That’s why it is crucially important to deal with a long-term, successful turnkey provider who looks forward to earning your repeat business.

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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. 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 [email protected] or (408) 489-0131.

Why Should You Invest in Senior Living? Discover Why Now.

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Image by Gerd Altmann from Pixabay

By: Vinney (Smile) Chopra and Jon Roosen

Key facts on the Silver Tsunami:

  • This year, approximately 23 million Americans are over 75 years old while 8.9 million are over 83. As a general rule, most Americans transition to senior housing by the time they reach 83 years old.
  • The OLDEST baby boomers will not turn 83 until the year 2029, thus allowing the floodgates to open for the silver tsunami. The senior housing industry is only beginning and is expected to skyrocket over the coming years.
  • Predictions suggest that 2 million Americans will reside in senior housing by the year 2030, which is two times the number of Americans in senior housing in the year 2016.
  • Today, 15.6% of the American population is 65 years or older. By 2050, estimates predict over one fifth of the population will be 65 years or older.

Senior living investors should understand that the senior industries profit from a huge demographic groundswell. The Baby Boomer generation will hit the 75+ age mark by the year 2021, as they begin their retirement years. As this happens, baby boomers will seek housing in an industry that is undersupplied and heavily out of step with shifting market demands and caregiving structures. For example, according to CBRE, 40,325 units must be constructed each year in order to satisfy peak demand in the years 2020-2025. When compared to the actual pace of construction in 2014 of 16,440 units per year, construction rates fall short by far. A clear trend has formed showing that despite the overwhelming growth in senior population, growth in senior housing has remained far below the threshold to keep pace.

As such, we conclude that one of the most risk-adjusted prospects in both commercial real estate and general domestic investment is the acquisition, renovation, and growth of senior living facilities. When comparing senior housing to more traditional types of real estate such as multifamily, senior housing is much more operationally complex and demanding from a regulatory perspective. Because of this, efficient execution of a senior housing deal requires an experienced and committed investment team.

Over the past 55 years, global life expectancies have risen from 49 to 72 years of age. The world population of those age 65 and older will double todays numbers and reach 1.3 billion by 2040.

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Aging demographics have created five unique investment opportunities for Americans, one of which is senior housing. With the increased demand for housing created by aging demographics, the U.S. senior housing industry is prepped for a future of unprecedented growth.

According to Senior Housing Analytics figures cited by PGIM, the demand for new senior housing in the United States is expected to rise by around 850,000 units between 2010 and 2030. PGIM’s study “A Silver Lining: The Investment Implications of an Aging World” notes that lucrative investment prospects exist for independent living, RCFE, assisted living, and memory care classes.

Industry centered on senior care and housing is complex. This industry provides a broad array of services to seniors over the age of 75, and can be divided into four care segments. These segments include Independent Living, Assisted Living, Memory Care, and Skilled Nursing Care. Historically, nursing care has been provided in a hospital-like setting; however, a shift is underway to transition into a more homelike environment for nursing care. The remaining three care segments are traditionally delivered in a multifamily residential setting. These housing facilities, known as continuing care retirement facilities (CRCCs) generally provide all three remaining care segments: independent living, assisted living, and skilled nursing, in one community.

While the senior housing industry is complex and difficult to maneuver at times, there is a simple solution for investors who want a piece of the pie without the knowledge to be involved at the level of a general partner. Investors can become passive investors by buying shares in senior housing investments. Through passive investing, investors can take advantage of this exploding market without the headache of management and general partnership. We can help direct you to these high-quality passive investing opportunities.

Senior Housing Is a Recession Resistant Asset Class

A huge advantage senior housing investors have over traditional investors is the durability of the senior housing segment of the commercial market. Senior housing lacks dependence on economic and real estate climates, and this is a key component to the sector’s success. For the last ten years, senior housing has been the number one performing commercial real estate industry. This outperformance of other industries includes the era encompassing the 2007 stock market crash, in which returns dropped as much as 20 percent for other commercial sectors.

Why Is Senior Housing Recession Resistant?

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Econ 101: Supply and Demand

  1. Huge Demand: As discussed above, the growth of the senior communities in America is unbelievable. As our baby boomers age, the number of Americans 65 and older will grow from 47.8 million in 2015 to 79.2 million by 2035. This huge rise continues to produce higher demand for senior housing facilities.
  2. Minimal Supply: While our elderly populations increase in size, you would imagine construction in senior housing would increase concurrently. Unfortunately, that has not been the case. Senior housing construction began a dramatic decline in 2008 that continued through to 2011 followed by only moderate growth through 2018. From the years 2014 through 2019, units constructed increased sharply; however, in 2020, occupancy rates are expected to continue rising while development slows once more.

Where Are Senior Housing Investments Moving?

While still a relatively new phenomenon, the senior housing sector is generating talk among real estate investors. The 2021 report by PwC on “Emerging Trends in Real Estate” named senior housing investing as one of the best for years to come. The survey results showed a growing interest from investors in independent living, assisted living, nursing homes, and long-term care facilities. These opportunities will only continue to increase as we move into the year 2021.

A survey from 2019 by the CBRE titled “U.S. Seniors Housing & Care Investor Survey and Trends Report” further supports rising interest in senior housing investing. The survey indicated that 19% of respondents were already invested in the senior housing sector, and 20% were interested in pursuing such investments in the future. This data overall shows a remarkable trend that almost two-thirds of property investors surveyed were interested in the senior housing sector. This interest is backed by several key factors and benefits of senior housing investments. Further, several forecasters have predicted that the senior housing sector will continue to skyrocket in the near future.

Below, we will detail some top reasons to start investing in senior housing.

#1. Baby Boomers Are Driving the Demand

If there is one fact becoming excruciatingly clear throughout our research on the senior housing sector, it is that more and more Baby Boomers enter retirement each day, thus driving up the demand for senior housing. This trend will continue over the next many years, as Baby Boomers will continue to need housing for decades. By 2035, 79.2 million Americans will be age 65 or older. With these numbers, the demand for senior housing is massive and is just beginning.

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The average senior housing resident is typically 83 years of age or older. With the oldest Baby Boomers today averaging 73 years old, the U.S. Census Bureau estimates approximately 8.5 million Americans are age 83 or older. Further, the U.S. population is growing. By 2025, the U.S. Census Bureau estimates that our population will exceed 10.2 million people. The key point from these facts is that in the coming decade, demand will rise for senior housing. This makes senior housing investing a reliable, savvy opportunity for long-term investments.

Another key benefit of senior housing is that not only is there a huge population demand, but there is a need-based demand as well. This demand is non-discretionary and merely a consequence of the chronic care issues that come with an aging demographic. This demand is unique to senior housing and does not correlate with other commercial real estate sectors such as office, retail, or industrial properties.

A further benefit of senior housing over other commercial real estate sector is that senior housing is far less affected by technological risk than other industries. This creates a more certain investment analysis for senior housing, while such an analysis of other sectors could be limited by technological changes.

While senior housing has its own business cycle similar to other sectors, the business cycle of senior housing is far less fluctuant. This is because senior housing does not depend on changes in employment rates and expansion and contraction of GNP. In today’s times, seniors are primed to live out their senior years using the alternate forms of income compared to a traditional job. These alternate income sources include retirement plans, stock portfolios, insurance benefits, and 401K programs, among others.

No industry is perfect, and like others, senior housing is impacted by severe inflation and an inability to sell. However, these impacts tend to be moderate. The benefits of social security payments to seniors and the need-driven demand of senior housing provide substantial backing to senior housing. With these benefits in mind, the senior housing industry is protected from traditional economic setbacks that take down other commercial real estate investments.

Finally, national operators have successfully maintained occupancy rates of 88% or higher in senior housing, even in markets that have reached temporary saturation.

#2. New Senior Housing Development and Supply

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The current inventory for senior housing is relatively outdated with 58% of the current housing units over 17 years old and 32% over 25 years old. As with any property, aging of these units only worsens with time. The existing units will become progressively more and more outdated as care amenities continue to improve, tastes evolve, and new regulations come to light. Additionally, as we’ve discussed previously, construction of senior housing units is not keeping pace with the aging senior demographic. These trends present both a challenge and an opportunity for real estate investors looking into the senior housing sector.

While it is still not keeping pace with the aging demographic, reports do indicate that senior housing development is increasing. The 2020 Emerging Trends Report concluded that senior housing is the top commodity for the development of residential properties and the 3rd prospect for development in commercial and multifamily properties.

#3. A Recession-Resilient Investment

When compared to other traditional real estate sectors, senior housing is exceptionally resilient. While it has its own business cycle, the cycle in senior housing is far more steady than other sectors and less affected by traditional economic changes. This is largely due to the key benefits of senior housing already discussed.

Additionally, the need-based demand for senior housing is an undeniable benefit. There will always be a need for long-term, quality medical and health care facilities for our seniors, regardless of economical circumstances. These characteristics allow senior housing investments to thrive while other industries suffer during recession times among other economic pitfalls.

Traditionally, the senior housing sector has proved itself to be resilient to difficult economic times. This should reassure you as an investor that you can rest easy with a senior housing investment. It is a low-risk and reliable investment with the potential for phenomenal returns.

#4. Historic Investment Performance

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Historically, senior housing investing has a track record of success. When compared to other major real estate investments, senior housing generally has increased income stream, appreciation, and total return on investment.

To be more specific, the National Council of Real Estate Investment Fiduciaries (NCREIF) 2018 property index results revealed that over a ten-year period, returns for senior housing averaged 10.2%. This average is well above the returns from overall property index (6.09%) and apartments (6.10%).

Regarding appreciation, senior housing investments produced 3.73% of total returns compared to 0.54% for overall property index and 1.03% for apartments.

Another way senior housing outpaces other sectors is total income returns. Senior housing investing produced total income returns of 6.61% while property index and apartments produced 5.53% and 5.20%, respectively.

Senior Housing as an Alternate Investment

According to the CBRE, over the past 13 years, the market share of alternative investments has more than doubled. More recently, in the past five years, annual investments in specialty properties have made up 12% of all CRE investments. This accounts for approximately $59 billion in yearly transactions.

Below, we have listed the eight major alternative investment sectors along with the percent share of all alternative investments and average annual investment volume from the years 2014-2019.

  1. Seniors housing and care- 31.3%/$17.2B
  2. Medical office- 22.1%/$12.2B
  3. Student housing- 13.3%/$7.3B
  4. Life sciences- 11.8%/$6.5B
  5. Self-storage- 9.0%/$5.0B
  6. Manufactured housing communities- 6.3%/$3.5B
  7. Active adult and 55+ communities- 3.2%/$1.7B
  8. Data centers- 3.1%/$1.7B

Benefits of Alternative Investments

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The key positives of investing in alternative investment sectors can be narrowed into five main benefits:

  1. The effects of cap rate compression from traditional assets can be offset by yield premium and higher cap rates of specialty investments.
  2. Market demand for alternative investments is rising due to fundamental structural changes in business, technology, demographics, tenant experience, and ESG criteria.
  3. Product availability is rising as developers rise to meet the demands of investors on national and international levels.
  4. Alternative investments offer a great opportunity for portfolio diversification for investors currently holding traditional assets.
  5. Alternative investments are improving in transparency of pricing, operations, and market performance, making such investments more appealing to investors.

Bottom Line

Whether you are a seasoned investor looking to diversify or just getting started investing, senior housing should be at the top of your list. The demand is undeniable as our Baby Boomers continue to age, providing a great opportunity for growth and development. Senior housing is a low risk investment with potential to provide exceptionally high returns.

If you’ve ever been interested in learning more about investing into senior housing, please visit SeniorLivingInvesting.Co or email us directly at [email protected].

Women in Real Estate — Build the Lifestyle of Your Dreams with Real Estate Investing

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By Laura Alamery

In 1987, at the young age of 23, I had my first glimpse of a future as a real estate investor. It all started with my love of visiting open houses, which led me to obtain my real estate license to learn the industry. At the time, I lived in Hawaii where I found inspiration from the successful women real estate agents around me. After a move to the Midwest in the early 1990s, I quickly learned that the commissions and energy around real estate weren’t as inspiring. For me, this led to the transition from real estate agent to real estate investor. Over the next few years, I launched into real estate investing while managing a young family and career. After a divorce, I realized I needed to leave my corporate job and fully dedicate myself to establishing a reliable income and building long-term wealth through real estate investment.

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Along the way, I made mistakes, learned many valuable lessons and ultimately built a lasting and successful real estate investing business. Today, I use that knowledge and experience to help other women launch and grow their real estate investment businesses at Real Estate Investing Women, a resource for training, live events and networking in a community of likeminded women.

Lessons for New Real Estate Investors

Looking back at how I built my real estate investing business, I now have the wisdom to see the ways I would change my strategies to avoid mistakes and build wealth with fewer risks. One of the big lessons I like to share with new female investors is to trust your instincts. The ability to tap into our gut feelings to make decisions is a benefit that makes women a natural fit for real estate investing.
Another piece of advice is to use money from your real estate investments to buy more real estate, instead of putting all your personal money into investments. The challenge is finding the money to start out. The mistake I made was purchasing too many buy and hold properties too quickly. This led to unnecessary risk and eventual burnout. I now tell new investors to start with one buy and hold property and grow slowly.
However, unlike my path into real estate investing where I dabbled in fix and flip, moved on to buy and hold and then finally figured out how to work wholesale deals, I suggest new investors start with wholesale deals. Wholesale isn’t easy and requires work. Yet, wholesale real estate investing has lower risks than other investment strategies. real estate womenWith wholesale investing, you learn while making money. In fact, wholesale investment is a great way to delve into the details of real estate investing without taking possession of properties. Set aside the money you make money through wholesaling to build the financial foundation of your real estate investment business. Not only does wholesaling produce quick profits, it also establishes a portfolio that you can use to attract private money. Creative financing with private money gives more control over your real estate investing business. Private money safeguards against the volatility of the market.
As your business grows, you then have the money, knowledge and reputation to tackle larger-scale investments with bigger risks. Ultimately, this is how you build a viable business and path to long-term wealth and the lifestyle of your dreams.

Three Keys to Success in Real Estate Investment

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While real estate investment offers many different strategies and paths to wealth, the keys to success come from your determination to make it. When I finally became serious about real estate investment as my career, I was newly divorced with three small children. I gave myself six months to build a business that allowed me to walk away from my corporate job.
Looking back, the three keys to my success were focus, consistency and time management. These areas were critical to get me out of my comfort zone and take real estate investing from a hobby to a true business.
women in real estateOften when I talk to women interested in real estate investing, the barrier they struggle with most is the confidence to take the first steps. Men historical dominate the real estate investing industry, which makes trusting your abilities as a female investor even more intimidating. However, with these keys to success and the support of other successful female investors you too can create a prosperous business. Focus – A serious approach to real estate investment requires focus. This means you create actual goals for your business. For me, my goal was to quit my corporate job within six months. This meant I needed to close at least one deal per month, which required willpower fueled by my excitement and inspiration. My eyes stayed on the prize. Consistency – You cannot build anything without consist dedication. To exceed my goal of closing one deal per month, I had to work daily toward that goal. Remember, I was a working, single mom, yet I put in time daily to find, connect and close deals. It was this consistent effort that led to achieving and surpassing my goal. Time Management – Life is busy. This is true of almost everyone I meet. The difference in the people who grow a sustainable business that produces wealth and those that don’t is good time management. During my six-month transition, I realized that a little sacrifice could change my life. Good time management means you don’t waste your time. Instead, you find those pockets of time to dedicate to your goal. For me, this meant working on weekends and evenings until I had the money to quit my corporate job.

Identify Your Dreams and Go After Them

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Over the course of my life, my dreams have changed. Yet, the basic dream has remained. I desired to have financial freedom and independence. I achieved that dream through focus, consistency and time management. I continue to use these tools today in my new ventures.
For me, my dreams included taking care of my family, a flexible schedule, world travel and helping others. One of my passions is helping other women identify and go after their dreams by building successful real estate investing businesses. You don’t have to let a lack of confidence stifle your dreams. Instead, tap into your natural instincts to create a path to your dreams.
women powerWomen benefit by helping other women. In real estate, I’ve never feared scarcity. There are more than enough deals for everyone. My dream now is to leave a legacy by empowering other women. My work at Real Estate Investing for Women is one way I work toward this goal. Through mentoring, community building, live events and online resources, like podcast, articles, eBooks and more, women have access to unprecedented knowledge and encouragement. As I look back over my more than 30-year career in real estate investing, I see a story of hard work and determination. I also see the gift of my dream lifestyle that real estate investment empowered. You too can find the lifestyle of your dreams through a focused, consistent and well-managed real estate investment business.

Laura and Elizabeth

To Learn More about Real Estate Investing for Women:

Laura Alamery and Liz Klingseisen are a mother and daughter team, who are real estate investors and mentors to other women. Their goal is to empower and help women, who want to learn about real estate investing through a supportive and experienced community of women investors. We offer training and live events nationwide. You can learn more at www.realestateinvestingwomen.com

Trust Deeds: The Investment You May Be Missing

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Image by Willi Heidelbach from Pixabay

As an investor, having many different investment opportunities at your fingertips is both a blessing and a curse. It means more opportunities to make money but can make choosing which one to pursue tedious and difficult. With the stock market so often erratic and unpredictable, now more than ever people are looking for other ways to intelligently invest their money and diversify their investment portfolio. Real estate is one of those investment vehicles that investors are turning to for those high returns. You may be thinking to yourself that real estate is not a realistic investment for you. Rental properties and fix-and-flips are time intensive and require a hefty amount of available cash, and many real estate “crowdfunders” have high minimums and financial requirements you have to meet to invest with them. If this is you, then you may want to consider investing in Trust Deeds. Investing in Trust Deeds with a company like Ignite Funding can help you break down those barriers to real estate investing, and help you earn the returns you deserve.

What is Trust Deed Investing?

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Image by Precondo from Pixabay

Investing in Trust Deeds essentially means you are loaning your money against real collateral. The collateral is real estate, in this case, which serves to protect the lender’s investment. This leads us to one of the most important considerations in Trust Deed investing: the true value of the collateral. It’s very important that Trust Deed investors consider the size of the loan they are making in relationship to the real estate collateralizing the loan. This is one reason why Ignite Funding uses a detailed underwriting process to help justify the value of the property, evaluate each piece of collateral at hand and ensure the borrower is accountable for what they are borrowing.

Who is Ignite Funding?

Founded in 1995, Ignite Funding has evolved with the changing real estate landscape. Our original business model began as a traditional home mortgage lender providing lending to home buyers. The demand for lending from homebuilders and developers reshaped our business in 2011. Since that time, Ignite Funding has funded over half a billion dollars in loans with investor capital. Ignite Funding is well respected throughout the western United States as a reliable resource for lending. When banks are not lending, Ignite Funding is. We pride ourselves in working with a handful of borrowers with a proven track record. We follow a strict underwriting process when evaluating our loans before they are presented to our investors on a matrix that includes, but is not limited to; location, market conditions, various valuation methodologies, borrower track record and financial condition, and exit strategy. These projects can include the acquisition of land, development, construction of residential and commercial properties, and the refinancing of the aforementioned.
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Image by mohamed Hassan from Pixabay

At Ignite Funding, we work as a team to ensure you experience the same level of professionalism throughout the entire process. We do not believe in outsourcing. The loan underwriting and origination, capital fundraising, loan servicing, investor relations, tax reporting and statements, foreclosure process (if required), property management and sale of property are all conducted by us. You will never be passed on to someone else.

Do I Qualify to Be an Investor?

You do not have to be an accredited investor to invest with Ignite Funding. Ignite Funding is licensed with the Mortgage Lending Division of Nevada, which requires investors to meet the following suitability requirements; the investor’s household net worth is more than $250,000, excluding their primary residence; and/or their household net annual income was more than $70,000 for the previous two years with the expectation they will continue to earn that income.

How Are the Projects Funded?

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Image by Pete Linforth from Pixabay

Companies like ours (Ignite Funding) use a type of “crowdfunding” method to aggregate capital from multiple smaller investors and pool the investor’s capital to directly fund real estate projects. This allows Ignite Funding to implement a minimum of $10,000 to invest on a single loan. The loans are also short term, ranging from 6 to 18 months in duration. During that time, you are earning a monthly fixed income of 10% to 12% annualized interest.

What’s the Risk?

Depending on which company you invest with and the structure of the investment, the risk you take on as an investor can be crucial to your capital investment. For example, if the borrower defaults on the loan, the servicer could pass the loss directly to you as an investor. At Ignite Funding, that is NOT the case. Ignite Funding will work on the behalf of the investor with the borrower to resolve any default issues that may occur. In some cases, a foreclosure may be the best option in order to help mitigate the loss of capital to investors. To learn more about how Ignite Funding handles default situations, click here.

I’m Ready to Invest, How Do I Become an Investor?

The first step to make real estate investing a reality is by contacting one of our Investment Representatives. Our expert staff will fill you in on our investment options, the type of projects our borrowers need financing for, on our rigorous underwriting standards, and how we mitigate risk. Our Investment Representatives can be contacted via phone, email or in person at our office.
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Image by Gerd Altmann from Pixabay

The next step is to fill out an application online to create your free account. Without an account to facilitate transactions and paperwork, you cannot make any investments. After your account application is submitted, our Loan Processing Department will ensure all required paperwork is completed. Lastly, you will be provided with the information necessary to make a confident decision about which one of our many available investment projects best suits you. Now that you have decided which project to invest in, you’re probably thinking, “When will I start to see a return on my investment and how often will I receive payments?” You start accruing interest on your investment the day the loan is funded. Interest payments are paid in the arrears and disbursed directly to you on the 15th of each month. Once the loan is paid off, your capital is returned to you. It’s common to see an annual double digit return on your investment. For investors who want control over their own real estate portfolio, Trust Deeds are a great option. Investors can browse and pick individual opportunities based on location (including across state lines), project type, risk and return profiles. They can manage and track investments through an online client portal on the Ignite Funding website, automate incoming or monthly income and access investment financial records. For more information about Trust Deed investments or if you wish to schedule a FREE consultation with an Investment Representative, please click here.

Ignite Funding, LLC | 2140 E. Pebble Road, Suite 160, Las Vegas, NV 89123 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | AZ CMB-0932150 | Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.

Buying Vacant Land . . . NO WAY! YES . . . WAY!

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Image by Gerd Altmann from Pixabay

By Kathy Kennebrook (The Marketing Magic Lady)

Do you realize that you can build your fortune through buying vacant land?

You are saying: “No way!!” I am saying: “Yes…WAY!”
There are lots of great ways to make a lot of money in real estate, not the least of which is buying and selling vacant land. This is an effective way to do real estate deals with no hassle, no rehab, no insurance and no worries of vandalism and theft. Plus, there is virtually no competition for these properties since many investors are simply not going after this incredibly lucrative portion of the market place. I was actually in the real estate business for several years before I discovered this very profitable part of the market. In addition, in this current market buying and selling vacant land is another good strategy to continue making money in the real estate business.
If you live in an area that is particularly rural, then buying and selling vacant land is a more lucrative means of doing real estate deals. Since it can be more difficult to find homes to purchase in more rural areas, vacant land is definitely the way to go. There are several different ways to find vacant land deals.
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Image by Free-Photos from Pixabay

One is to simply drive around and look for them. However, since it can be kind of difficult to find addresses for properties this way, it is probably a much better idea to create a direct mail campaign to the owners of vacant land. Some of the parameters I use for this list are out of state owners of vacant land, especially those with past due tax bills or people who have inherited vacant land. These are some of the most lucrative deals out there. Be especially aware of those properties that front main highways since these will create even more valuable deals for you. In many cases, these owners have inherited these properties and they are not interested in doing anything with them. They are usually tired of paying tax bills, so they stop paying them altogether. They are usually highly motivated sellers and fairly easy to deal with. In fact, in many cases, they may have never even seen the property and are unable to give you directions to it. This is when it becomes really important for you to be able to work with your tax assessor’s office and get a mapping program so you can locate these properties with just the parcel identification number. There are also some national companies that can provide information such as mapping programs for you for a monthly fee. This tool alone has saved us hundreds of man hours and hassles in locating properties. In the case of vacant land, unless you know exactly where it is, one piece pretty much looks like another.
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Image by herbinisaac from Pixabay

Make sure you take the time to develop a relationship with a title agent or real estate attorney in your area and make sure you have title work done before purchasing these properties. Sometimes there are probate issues or liens to handle before you close which may also include past due tax bills. Some of these sellers will try to work directly with you without having a title search done on the property. Don’t do it!
I find that vacant land deals are very profitable for me personally. I live in Florida and here in Florida we have hurricanes. It is so much easier to work with vacant land because you still have the same big profits without the worries of damage, insurance, vandalism and rehab. In fact, some of the properties we have purchased were so inexpensive that we paid cash for them and put them into our portfolio to hold on to for retirement income when we sell them later on. They are already worth a lot more than we paid for them, so we figure the pay check will be huge later on as property values go up even more. And some, we will simply wholesale for a good profit. You can also purchase land into your Roth IRA.
In addition, with the current market being what it is today, purchasing land at huge discounts gives you the advantage to be able to sell it at “bargain basement prices” and still make excellent profits. Since you are selling the property at a lower price, it usually sells very quickly.
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Image by Gerd Altmann from Pixabay

Once you purchase these properties there are several ways to resell them at huge profits. One way you can sell these lots is to list them with a local Realtor who is familiar with selling vacant land without touching them. Whether or not you are able to sell your properties this way will depend a lot on how motivated the Realtor is. You also need to make sure that these local Realtors are part of the MLS system. Surprisingly we have found that in many rural areas they are not. You want to have as much exposure as you can for the properties you are looking to sell right away. Some of the best buyers for these lots are folks from out of town looking for a vacation get away. So they will purchase vacant land and build a home on it. Another thing that some of my students have done is to buy some acreage, split it into pieces, sell off some of the pieces and keep part of the land for themselves. They will make enough money off the sale of the split that the pieces they keep for themselves end up being free.
The other thing you can do is to list these properties on your property for sale web site where people, just like you and me, who may want to build vacation homes in the area where your vacant land is will see them. You will be able to get attention from many parts of the country. You may also want to put a “For Sale by Owner” sign on your land or run an ad in the local newspaper and the newspaper in the next largest city near you. I have done this and it has produced many buyers for me.
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Image by Steve Buissinne from Pixabay

If you want to take the time and you have your team in place to take care of these matters, you can also partially clear the land and add water or electric and then raise your asking price. The more ready the land is for development or home placement, the more quickly it will sell and the more money you can make! Depending on where the vacant land is located and how much there is, there are also opportunities to develop these pieces of land and resell them at really huge profits. One way to develop your land would be to get involved with a builder and have homes built on these pieces of land and then resell them with the land and the home already on it. Personally, this is not my favorite way to deal with vacant land because it’s time consuming and the more hands on and the profits are made later as opposed to sooner. A better technique would be to hire an engineer to take a look at the property, determine its best use, possibly change the zoning, and then do the other things necessary to get the property ready for development, such as splitting the land into smaller parcels and then reselling it. This is one of the best ways I know to build in huge profit margins without ever touching the property yourself. I find this to be a really lucrative way to handle properties especially when you are buying in an area that is an hour or more from where you live. In my case, my vacant land business is about three and a half hours from where I live most of the time.
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Image by RAEng_Publications from Pixabay

Another technique you can employ to make vacant land work for you is to explore the possibility of leasing land you own. This way you make cash flow on the property on a monthly basis and you still own the land. For example, you could lease a piece of land for RV storage. We have leased land to someone who needed extra room to expand a worm farm business. On another occasion we leased property we had with many pine trees to a company that harvests pine straw. A billboard company leases a property for a billboard that we own on a main highway. The possibilities are endless with a little ingenuity.
Another real advantage to working with out of state owners of vacant land is that you will run across investors who purchased groups of properties a long time ago so they have several properties with a lot of equity in them to sell. This creates wonderful scenarios where you can purchase multiple lots at well below current retail. The seller still makes money on the deal, creating a win-win solution for both parties. That’s what the real estate business is all about, creating win-win solutions for all of the parties involved. If you live in an area where there is a lot of vacant land, these techniques are definitely worthy of looking into because many of your competitors are simply not thinking about purchasing vacant properties. They are missing a huge opportunity since these properties are usually easy to purchase and reasonably easy to resell at huge profits.
Vacant properties can be a big “bonanza” for you! For more information on marketing to the owners of vacant properties as well as all kinds of sellers and lenders, visit my website at www.vacantlandgold.com.

REIBLADE – A Partnering Necessity

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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: [email protected], 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 [email protected], or (408) 489-0131.

REGIONAL SPOTLIGHT: NASHVILLE, TENN

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Image by sr00chfort from Pixabay

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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Image by Paul Brennan from Pixabay

  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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Image by 41330 from Pixabay

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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Image by Gerd Altmann from Pixabay

  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: [email protected].

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

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

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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: [email protected].

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

Nashville skyline in the morning