Garage Sale Real Estate – Make Money in Real Estate and be Dead Broke Doing It!

By Jimmy V. Reed

Folks are always telling me I would love to make money in real estate but “I’m just too broke” And I would respond every time, so was I. Back in the late 80’s I started reading books on how to make money in real estate. Every time they kept telling me you find a good deal, then you go get a loan and buy it, fix it, sell it or hold it. That’s when I would say to myself well it sounded too good to be true.

Later I learned it is too good to be true. I learned how to Wholesale Properties. I learned what I would say was the greatest technique in real estate. How to buy a house without actually buying the house. Now let me tell you how that works. I compare it to when I would go garage selling with my wife on the weekends. We would drive around looking for SIGNS! You know Garage Sale Signs. We would find a sale and then look for a deal, and we always seem to find at least 1 deal. However once we started making offers and negotiating, By the way I have taught thousands of students whose number one fear is to make an offer. But the second you put them in a garage sell they start making offers so low it was like kicking the seller in the knee cap. Any way we would finally agree upon a price. And many times realize we didn’t have enough money on us to purchase the item. So we would ask the Seller to hold it until we came back with the money. And wahlah Garage Sale Real Estate!

I know you’re thinking what? Well let me tell you the secret to this. At the garage sale we would run to the ATM get the money come back and pay. Now take this principal a little deeper as we teach in our Wholesale Classes. Tell the seller to hold it, how? A simple Purchase Contract. That’s when you tie up the property until you have the money. I know I know you’re broke! That’s ok because while it is under contract we contact other investors who are looking for deals! That’s right we are deal finders finding deals for our customers. These investors have CASH! Now we just assign the contract to them for a fee. And now you just got Paid!

Sometimes we even use a double close to close on the property because the profit margin is so large. That one is a lot of fun. Well hopefully by now you at least can see a glimpse as to how so many investors can make money in real estate without having money. Did you know when you go to a car lot, or even Wal-Mart, the items you purchase from them has most likely not even been paid for by them yet. That’s right Wholesaling has been going on in most business forever. Now the question is are you up for some Garage Selling? Well it’s all up to you, but if you need a little help look us up, we’ve been teaching Wholesale to investors since 1991.


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

IS A REAL ESTATE FUND INVESTMENT RIGHT FOR YOU?

By Fuquan Bilal

Is investing in a real estate fund the right financial move for you? Who is it for? Who isn’t it for?

Real estate funds have been proving to be both attractive and profitable vehicles for many investors. For many sophisticated investors, family offices and even larger and broader funds and endowments, they are now one of the main staples in their portfolios. More recently they have become one of the most important and vital parts of a well diversified, sound and high performing financial plan.

Some people though, haven’t hit the gas pedal on these investments yet. Real estate funds may be a new concept. Or perhaps they just haven’t taken the time to dig in and really figure out the advantages and why others love them so much.

ALL ABOUT THE YIELD

I’ve met a lot of people over the years. Of those that do make alternative investments, the choice becomes really about the type of yield that gets them excited. The sophisticated, passive and strategic investors intelligently spread their risks. They may have some investments that ‘promise’ the chance of higher returns which are riskier. Others are more conservative and are happy with lower yields – and may choose a solid fund with a 7% to 9% return to help keep them in that target performance circle.

DIVERSIFICATION & STABILIZATION

Funds are frequently a stabilization and diversification play for strategic investors. They may have turnkey rentals, do some private lending and hold some notes. They know they can be very exposed with these investments. Funds give them much deeper and broader diversification, which in turn lower risk and keep cash flow consistent.

Let me explain. By investing in a fund, individuals may have 100, 500 or more assets collateralizing and protecting their investment. That’s versus the one or few assets that flippers, landlords or hard money lenders have. Would you rather put $150k or $500k into a single asset and cross your fingers as insurance that nothing goes wrong, or have a $5M or $25M or even larger pool of assets protecting that investment?

ARBITRAGE

The smartest investors know they aren’t going to be as successful as they could be by themselves. This not only applies to building a strong inhouse team, but looking at all options. Some are great at playing the arbitrage game. They may be great at raising capital at 6% returns. Then they just delegate that capital and invest in a fund for higher yields. The fund does all the hard work of sourcing and managing the assets. The arbitrage investor gets cash flow on a platter to pay out returns to their investors.

Is a fund investment a good fit for your portfolio? If the yields are right, the diversification is a good match, and passive investing is a priority, then this could be the piece of the puzzle you’ve been missing…

INVESTMENT OPPORTUNITIES

Find out more about investing in secured debt and real estate, go to NNG Capital Fund.

10 Things to Look for When Comparing Real Estate Syndications

The increase in popularity of real estate investment syndications in the last few years has presented huge opportunities to investors looking to invest in commercial, multifamily, or industrial properties in a passive way.  As a review, syndications are a way to pool money from multiple investors to accomplish a common investment goal.  In real estate, this typically involves pooling equity to purchase a property with the intention of improving or holding it for appreciation and cash flow.

With opportunity, however, comes the need to know what to look for when comparing opportunities.  I have compiled 10 of the most important factors to look for in a syndication when evaluating them in order to make the most informed investments possible.

1)    Qualifications.  Check and see if the syndication deal requires you to be a sophisticated or accredited investor. Syndications structured under SEC Regulation D, exemption 506(c), require investors to be independently accredited via a CPA or 3rd party service.  This confirms an investor meets minimum net worth and/or income requirements in order to legally take part.  506(b) offerings, on the other hand, simply require an investor to be sophisticated which is simply a broad definition meaning an investor possesses sound financial education.

2)    Track Record. Syndications are passive, so it is extremely important that the sponsors have a proven track record and knowledge of the industries and areas they are choosing to invest in.  Good syndication sponsors will partner will experts when bringing new category deals to their investor pools.  Due diligence is key, and sponsors should be able to clearly articulate why they like a deal and what sort of risk mitigation exists.

3)    Preferred Returns.  Many stabilized properties are generating revenue via rents collected from tenants, and the sponsors of these syndications will structure a preferred return to investors.  This return represents an annual return on the principal amount invested by the investor (i.e. 8% returns on a $100,000 investment would represent $8000/year).  This return accrues at a predetermined rate, and must be paid before any sort of profit-sharing takes place upon the sale of the property.  Some deals will have a set preferred return pegged to an investor’s initial investment, while others will establish this return as a percentage of actual net cash flow received.

4)    Dividends.  Often confused with preferred returns, dividends differ in that they are the actual payments made during the hold period of a deal.  These are often paid out monthly or quarterly.  Certain value-add deals that require increasing occupancy or rehab work may delay paying dividends until cash flow of a property is sufficient to cover these payments.  Dividends are ultimately paid at the discretion of a sponsor, and can be interrupted due to unexpected expenses or vacancies that arise during the course of the holding period.

5)    Taxes.  Good sponsors will actively work to reduce the amount of taxable income received from real estate deals.  Dividends are tax reported on a K-1, which has the advantage of reducing the amount of taxable income due to the depreciation of the property.  Good sponsors will perform cost segmentation studies, where they bring on a 3rd party to accelerate depreciation, further mitigating taxable obligation on dividends paid out.

6)    Reporting Periods.  Many sponsors elect to provide progress reports on the status and management of the property during the course of the investment.  Some provide extremely detailed tenant by tenant accounting, and others simply provide a cash flow or overview of the property.  It is helpful to ask a sponsor for previous reports to see what kind of reports they typically provide.  Most of the time these are provided at the same interval as the dividends being paid (monthly or quarterly).

7)    Profit Split.  A common feature in syndication deals is for the net profits upon sale to be split with a portion going to the sponsors and the balance to the investors.  These profits are what is left over after closing costs and fees are paid, preferred returns are paid, and original investor principal is returned.  The percent of profits that get split among investors can vary significantly on a deal, based on risk, sponsor involvement, and overall return structure.

8)    Sponsor Fees.  Syndication sponsors get paid through three main ways, and investors should be aware of these when evaluating deals.  Sponsors may derive compensation from one or more of these categories.

a.     Upfront Fees.  These fees are built into the amount of money raised and help compensate sponsors for time and money invested to get the deal secured and put together.  There is no formal terminology, but this money is commonly called sponsor fees, acquisition fees, or due diligence fees.  These are separate from 3rd party fees from entities such as lenders, attorneys, title companies, and inspectors.

b.     Asset Management Fees.  During the hold, some sponsors will take compensation for management time and costs incurred to keep the property running successfully.  These are typically a percentage of rents collected or net cash flow that the syndication receives and are paid at the same time as dividends to investors.

c.     Profit Splits.   Typically, most of the value of a property is derived at the time of sale.  A successful syndicator is incentivized by a percentage of net profits to help close a deal out and maximize profits.  These will vary by deal, but should be high enough such that a sponsor is motivated to invest time and effort throughout the entire hold period to maximize returns.

9)    Exit Plan.  Syndications are illiquid and passive investments, meaning sponsors retain the final decision of when to sell the property.  A good sponsor will have an exit plan that has a projected hold period or range of years, contingent on market forces and occupancy being favorable for a property sale.  Most value-add deals will be shorter in length due to most of the value being created in early years.  Many stabilized property deals will be longer in order to take advantage of increasing rents, equity build up through debt payoff, and stabilized cash flow.

10) Voting Rights.  Most syndications are structured through an LLC.  The LLC buys and sells the property with the sponsors being Class B managers.  The Class A investors will be formally included in the company/operating agreement of the LLC that outlines their portion.  Some LLCs will give members voting rights as well, which can be used for large decisions such as changing management, restructuring returns, or dealing with death or transfer of existing members. It is important to understand the type of rights you have as an investor and what types of transferability, if any, your shares have.

These are just a sampling of the many differing components of a real estate syndication savvy investors should be educated on when evaluating opportunities.  Knowing how syndications are set up will allow you to make smart investment choices in the future.

Best regards to you and your investing,
Tom Wilson
CEO and Founder of
Wilson Investment Properties

ARBITRAGE: THE INTELLIGENT STRATEGY FOR MAKING MORE, WHILE DOING LESS

By Fuquan Bilal

Arbitrage is both a very basic concept and a high level strategy deployed by sophisticated investors and entrepreneurs. It’s used for efficiently creating great profits, with a lot less hassle and stress. So, how does it work? Who is using it? How can you apply it?

Who Uses Arbitrage to Supersize their Potential & Paychecks?

  • Google with its ad services
  • Governments at all levels, with taxes and funding
  • The biggest financial institutions and brokers
  • Banks and funds
  • Amazon and Walmart
  • The Concept

According to the dictionary definition, arbitrage is:

“The simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.”

The Cracks in the Market

Those leveraging arbitrage are those that see the gaps in the market. Gaps in the supply and demand chain.

Today so many have fallen into the temptation to try and do it all. Most just don’t do it very well. At least not nearly as efficiently or profitably as they could. They stunt their potential and under serve by trying to do too much, without being experts or having the time or hiring pros in all the different areas and roles involved.

What’s Better…

Know what you’re best at. What you love. Outsource the rest to someone you can trust.

Maybe you are great at finding assets, rehabbing, or selling houses. That’s great. Let someone else pick up the other parts. You’ll enjoy what you are doing more. You’ll do a lot better at what you are focusing on. You can go a lot bigger.

Financial Arbitrage

In this space it means, you raise the money, and you put it to work with someone like us. For example; you may be great at raising money at 4%, we might pay out double that. You get the difference. All with NONE of the work. Network, meet investors, collect checks, put it to work, get checks back. Done.

Find out about our latest fund and how you can participate and use arbitrage to make more while doing less, and enjoying it a whole lot more.

INVESTMENT OPPORTUNITIES

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Another Reader Retires Five Years After Buying 1st Rental

Hello, Realty411 readers! I hope everyone is doing fantastic and ready to step into Spring. It’s my hope that you’re expanding your education and forging ahead with your investment goals.

I, for one, am moving right along with my mission of providing complimentary and quality resources to investors around the world, which can help them realize their financial goals.

Recently, Bobby S., one of our long-term followers in the Bay Area, reached out to share with me that he was turning in his resignation at the technology company where he worked. He is only 55 years young so he’s definitely retiring early, which is what most people dream of doing.

The reason he specifically called was to thank me for organizing an out-of-state investing bus tour five years ago, which helped him buy his first long-distance rental. That experience also sparked an interest in him to want to help others learn to invest as well.

Soon, he began to tell his colleagues about his positive investing experience, and he began to seek more properties out for himself, and later also for his friends and associates.

After a number of years, our loyal investor/reader evolved into an educated authority on investing in out-of-state rentals. He now also hosts his own events and has a loyal following of investors. What an amazing experience to know that Realty411 was the instrument which shaped Bobby’s early retirement. Not only did we teach him about passive cash flow, but now he is multiplying that message by sharing it.

What a joy to know that Realty411 is changing LIVES! I changed the course of my life with real estate, and now it’s your turn too. Please call us anytime if we can assist you, or if you have any questions: (805) 693-1497. I hope to see you soon at our next live event!

HOW TO USE FUND INVESTING TO OVER-COLLATERALIZE YOUR CAPITAL

Is it time to rethink the way you think about funds and invest in them?

There are all types of funds. Some are far better and safer than others. Some see all the gains eaten up in fees and admin costs. Others generously pass on great gains to participating investors, even though their upfront estimates may have been modest. There’s a good chance that there is a place in your portfolio for some type of fund. Yet, most just don’t get the real advantages. They only see passive income and some stability in yields in the case of real estate funds. There are other advantages though, which more sophisticated investors are aware of.

THE OTHER ROI

“What’s my return?”

That’s the most common question novice investors ask when shopping and comparing investment options. “How much are you promising me?” That’s like shopping mortgage interest rates on your home loan. If you’ve financed a few homes, you know that the rate and terms you can get at the closing table may be WAY different.

What experienced and intelligent investors prioritize is another kind of ROI. The Return OF Investment.

It doesn’t matter if you’re promised the chance of 100x returns, if the chances you’ll lose everything are pretty close to 100% too. That’s the case with a lot of investments. Especially in the tech and startup world.

If you lose your capital you have nothing to reinvest. It is far better to make nothing in terms of returns on your investment, and just walk away with your capital back to try something else. A little icing on the cake, in yield, to cover inflation and lost opportunity costs on top of that would be nice too though.

So, what the most sophisticated investors look at is how likely they are to get their capital back in the worst case scenario. Think bank loans, mortgage lenders and even VC funds and Warren Buffett. What is this asset worth? If it completely fails to perform and the borrower or tenant goes broke, how can I get all my money back, and then have the chance to potentially sell it for a whole lot more? You think banks really did bad in the 2008 crisis? Probably not near as poorly as you think.

HOW TO OVER-COLLATERALIZE YOUR INVESTMENTS

So, how do you make sure that the risk-reward balance is so skewed in your favor when investing that you can’t lose?

Well, you can invest in mortgage notes and demand great spreads. You can buy properties for pennies on the dollar. Or you can choose great fund investments.

Over the past decade we’ve only seen problems ramping up. Virtually a whole industry of novices have popped up, overpaying for assets, without any plan for sustainability. Many are already seeing their assets dive into negative equity territory. It’s a catastrophe waiting to happen. Though a massive opportunity for others.

Here’s what’s cool about funds. Not only do the best have the ability to still buy assets in bulk, off market for pennies on the dollar, they can over-collateralize your investment with all of the assets in a fund. Let’s say you put $100,000 into a $1M fund. Well your capital technically has 10x the protection of your investment. Inside that fund there can be hundreds of assets too. So, you are never counting on a single asset to perform. In fact, even if 30% of them totally flop, you’ll still be fine.

In our diversified hybrid fund we’ve also built in multiple strategies and plays that are working for you at the same time. Redevelopments, buy and hold income properties, mortgages notes, etc. if one niche slows down, the others are speeding up. It’s a great way to not only ensure your return OF capital, but a return on your investment too.

Is your capital safe? Is your portfolio future proofed?

INVESTMENT OPPORTUNITIES

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Real Estate Investors, If You Could Buy Single Family Homes With No Mortgage For 20 Cents On The Dollar, How Many Would You Buy?

By Ted Thomas

Here’s the secrets of a little known but highly lucrative business of purchasing tax defaulted properties at auction for 10-20 cents on the dollar.

For many, the question is, what’s the difference between a tax lien certificate and a tax defaulted property (tax deed)? Before you begin investing, it is vital that you understand how a tax deed works, once you know you can purchase tax-defaulted real estate for pennies on the dollar but it’s only profitable if you know what you are getting when you bid.

What is Tax Defaulted Property (Tax Deeds)?

In a very basic sense, every piece of land in the United States is owned by the federal government. The government allows you the right to own the property as long as you pay taxes on it.

Many years ago, the U.S. Congress enacted laws that allowed individual states to handle governmental duties and obligations at the local level. The states further designated counties to handle the property taxation part of those duties and obligations. When you pay property taxes to the treasurer or assessor’s office, those funds are used to pay for public schools, police and fire departments, and any number of other civic services. The local government that manages and operates these services is primarily funded by property taxes.

Every year hundreds of thousands of property owners neglect to pay property taxes for various reasons. So what happens then??

The remedy for local government is to confiscate that property and resell it at a tax defaulted property auction for only the back taxes with no mortgage. The majority of these auctions use a public oral bid system. To quality as a bidder is simple; you just need to register before bidding. The starting bid is the amount due to the local government for back taxes plus penalties and interest. If you win, in most instances, you must immediately pay for your purchase.

It doesn’t matter where you live; county governments in all 50 states are authorized to hold auctions to recover delinquent back taxes. Some states offer tax lien certificates, other states offer tax defaulted property auctions (tax deeds) which are used to collect the past due property taxes owed. The difference? A tax lien certificate entitles you to collect the amount of tax you paid plus the interest penalties; a tax deed purchased at auction allows you to become the owner of the property for the price you bid at auction the mortgage is extinguished, that is deleted by law.

The secret to becoming a successful investor in tax defaulted property (tax deed) real estate is to know the who, what, when, where, why, and how these tax auctions take place.

Golden Rule #1

Know what you’re buying. This includes the size of the parcel, how many buildings are on it, zoning, restrictions, easements, the annual amount of property taxes, the appraisal value, previous sale prices, and current condition.

Taxes are usually assessed at 1 to 1.5 percent of the property’s value. So a piece of real estate valued at $100,000 will be assessed somewhere around $1,000 in taxes each year. Three years of back taxes would equal $3,000 and the local county will probably ask for a minimum bid at the tax defaulted property auction of $3,500 -the county will add late payment penalties to the back taxes.

The next question that must be answered is where and when are the auctions taking place? Normally auctions are conducted at county offices, but not always. Regardless of the location, it will be announced in advance of the auction. Some counties hold one big annual event while others schedule tax defaulted property auctions monthly, annually in the United State of America there’s over 5,000 tax defaulted auctions.

Secondly, you must know how the bidding process works. Rules vary from state to state, taxing district to taxing district. Some counties use an online bidding process which is becoming more and more popular, but the majority still hold live auctions you may attend in person.

At the auction, each parcel number is announced in turn; then the auctioneer asks for opening bids. It works much like any other auction; the bidding goes up until there are no more bids. The person who wins with the highest bid is awarded a Treasurers Tax Deed from the county treasurer. Make note there’s dozens of unique bidding processes, this is only one.

Real Estate For 20 Cents On The Dollar

There’s big money to be made buying tax defaulted property at auction Tax defaulted property (tax deed) auctions allow you to buy low and resell for a quick profit. Do your research, and you’re bound to find success!

Ted Thomas is famous for showing newcomers and investors how to earn 6 figure incomes within 1 year of completing his training program. Conservative investors love tax lien certificates because they are predictable, certain and secure and sold by local government. Tax defaulted properties are sold at oral big auctions and online. Starting bid, only the back taxes…. More information at TedThomas.com

Why Sponsorship Marketing is a Win-Win

By LAURA ALAMERY

Many of you will immediately associate sponsorship with sports; your name on the team jersey, a display ad printed in the game programs, your logo emblazoned on a prominent banner waving in the wind. You may be pleasantly surprised to learn that sponsorship marketing is far from being exclusive to the sporting world and humanitarian causes. And, it may just be the answer to integrating your brand into the local community; creating a loyal following of believers in your product or services.

Sponsorship vs. Advertising: What’s the difference?

Sponsorship marketing is one of the most effective and affordable ways for a growing business to gain plenty of exposure. By showing your support for (or alliance with) small and local businesses, sponsorship allows you to get your message out in front of a highly desirable audience; your community, your industry niche. Sponsorship marketing also provides the opportunity of an ongoing relationship, giving you more time to really nurture potential customers and gain their loyalty (and referrals).

Advertising, on the other hand, is a huge expense (especially for a startup business). One simple placement in a popular industry magazine – or several 30 second radio spots a month on your local station – can run into the hundreds of dollars. Your return on investment (ROI) is minimal, because the few seconds you’ve got anyone’s attention is not likely to convert to sales. And, the trial and error you’ll experience while finding what works for your company – and doesn’t – can be painful and time consuming.

Advertising is about quantity. Sponsorship is about quality.

Putting Sponsorship Marketing to Work

Whether online or onsite, this method for getting out your message and building brand recognition is superior to many others. Don’t miss the many types of marketing available to sponsors:

  1. Reaching a Target Audience: Remember, with sponsorship marketing your ideal prospect is essentially already in place, and you have their attention. Make good use of it! Sponsoring the right company means you skip about 20 different task levels in narrowing down the right consumers for your products and services!
  1. Standing above competition: Customers take many things into consideration when choosing to spend their money. While the cost and quality of your services (or products) are key factors, your commitment to the economic development of their local community will definitely influence their decision.

  1. Extensive brand exposure: In most cases, sponsorship marketing involves more than just writing a check. You will be given varied ways to introduce yourself to an attentive audience – in person or online, or both. From speaking at group meetings, to brand placement on coveted group web pages; from vendor table opportunities to guest posting. It’s a class act.
  1. Business collateral is a must: Here’s a chance to display your logo and message (banners, table runners) at events and distribute your cards, brochures, giveaways like cups or pens, etc. This goes so much further than wasting hundreds of dollars a year with a neighborhood newspaper ad; thrown into driveways, only to be rained on, run over and tossed in the trash.
  1. Be generous and tasteful: Go the extra mile and have your gift or donation for drawings branded with your logo. Use subtle yet creative ways to make sure the recipient knows (as well as the audience) that it’s your company providing the gift. Thoughtful, useful items may be kept for many years.

Sponsorship marketing is an excellent means of making the most of your valuable time and hard earned dollars. It is a mutually beneficial strategy to achieving meaningful business goals. Hence, the win-win.

Laura’s Story…

I was born and raised in beautiful Vicenza, Italy – only 40 miles from lovely Venice on the Adriatic Sea. I used to hang out at the top of this hill as a teenager, where I could see the whole city stretched out before me.

Laura Alamery investor

In 1985 I relocated to United States, moving to Honolulu in 1987 where I became a college student at Hawaii Pacific University; just 4 miles from the beaches of Waikiki. I began developing a keen interest in real estate, so I started reading everything I could find – watching late night infomercials and buying courses by Dave Del Dotto, Robert Allen and Carlton Sheets.

My Real Estate Career Begins

That same year I became a real estate agent, to help pay for my college studies. I joined Dolman and Associates in Honolulu, and right away I was inspired by some of the top agents on the island. I began following their lead and in my first year in the industry, I became a multi-million dollar producer!

In 1991, I graduated with a Bachelor of Science in Business Administration and moved to Missouri that same year. Once on ‘the mainland,’ my real estate career really took off. I started to purchase properties with no money down, using creative financing.

I continued my education by earning an MBA in Finance, still working part-time in real estate. Then I began a new career as an assistant controller in metal commodities, planning to climb the corporate ladder and keep real estate as a side business.

From Part-Time to Full-Time

By the mid-1990s I had already acquired a sizable portfolio (over 20 properties) consisting mostly of multi-families for rental income – and I was barely 30 years old! I was making more money in part-time real estate (less than 10 hours a week) than my full-time corporate job, so in 1996 I decided to flip the switch and devote myself entirely to real estate. Once I was able to immerse myself full-time into real estate investing, my career skyrocketed.

In 1997, I began sharing my knowledge of real estate investing, proven strategies and creative financing techniques by hosting real estate seminars. And, given the widespread use of the Internet, I decided to also share my practical knowledge and experience as well via online mentoring and coaching. In 2010, I opened The REI Lab, Inc. – the culmination of various companies I had started and closed in the past.

The Next Chapter Unfolds

With a love for laid back lifestyle and great weather (I really missed being near the water), I decided to relocate once more in May of 2015. This time the move was to Broward County, Florida; midpoint between Miami and Fort Lauderdale. Laura Alamery Miami investor

The Miami-Dade area is full of opportunities, and 59% of the real estate transactions here in 2016 were cash – more than twice the national average according to the National Association of Realtors!

Three Misconceptions about Japan’s Properties

Japan’s attractive property market draws real estate investors worldwide for its high yield, affordability, rental income cash flow and safe haven economic environment. While the real estate investment arena is undoubtedly attractive, and the second largest real estate investment market in the world, Japan is also one of the countries most affected by natural disasters. Therefore, before jumping in to buy up properties, foreign investors, new to the market, often test the waters by asking about the quality of Japan’s structures and their ability to weather the storm. Investors ask, “What is the risk associated with the age of Japan’s real estate?” To answer this question, we explore the common misconceptions of Japanese properties.

Misconception #1 – Properties are Made of Wooden Structures

Some investors have concerns about the materials used to build real estate in Japan and whether or not they can withstand the force of earthquakes and tsunamis. This misconception stems from traditional wooden houses which used to line the streets of Japan in the former imperial capital. Most investors focus on buildings for the cash-flow play, rather than houses. Therefore, the concern is an out-dated concept and no longer a consideration. Furthermore, wooden houses are being steadily replaced by earthquake-resistant, reinforced concrete apartment blocks.

Misconception #2 – Properties Built after 1981 Pose Less Risk

In 1981, the Building Standards Law was revised to protect residential and commercial structures against earthquakes. In 2006, building certificates and inspections became even more regulated subjecting builders to inspections during the construction process for buildings above three stories. Because of the revisions to the Building Standards Law in 1981, some investors consider 1981 the turning point for sounder structure. Herein lies another misconception.

A building’s condition is affected by more than just its age. A properly managed accumulated funds pool can also affect its condition. With adequate funds, buildings built prior to 1981 can be retrofitted to bring them up to code by regularly renovating, repairing and re-strengthening exterior walls and taking care of unforeseen renovations. Alternatively, a newer building could be poorly managed with insufficient funds for renovations and maintenance. As you can see, investing in an older building under these circumstances could be the wiser choice to minimize risk.

As facilitators to foreign investors, we try not to source anything older than 1973. But, those that we did source were well-maintained buildings housing 50 to 200 units, showing no signs of deterioration, beyond normally acceptable and repairable wear and tear. Generally, since the cost for renovations and repairs are taken out of the building repair fund, if funds are insufficient, then apartment owners bear the extra costs. To ensure the risk to investors is minimal, when conducting due diligence on a potential purchase, we look into the status of the accumulated funds pool, renovation/repairs/maintenance history and the building management company’s handling of the collected renovation/repair funds and provide a report to the investor for an educated investment.

Misconception #3 – Properties have Just a 20 Year Life-Span

Life-span of a house is sometimes referred to as approximately 20 years, while that of a building approximately forty years. From a value perspective, this is a misconception. This life-span refers to tax depreciation not the quality of the property.

There are other benefits to an apartment investment over a house. Houses require more maintenance and can present unexpected costs, whereas, in a building, structural expenses are known in advance and covered by pre-set building fees. And, the building management company’s monthly fees normally cover all or most maintenance expenses, so there are far less surprises.

Overall, risk is greater with speculative play for capital gain such as units in Tokyo or Osaka. Investing in Japan for its monthly cash flow environment in cities such as Sapporo, Fukuoka, Nagoya and other cities with stable or growing population can result in stable returns. For highest yielding properties, investors should focus their criteria on condo units under 200 sq. ft., one to two room units, for inexpensive interior maintenance. Alternatively, some of our clients aim for smaller and older buildings on large plots of land in key locations. The strategy in this case is to sell to a developer when the building becomes too expensive to maintain, in exchange for either compensation at a profit, or a new unit in a new residential project built on that land. The downside is that these units only have a small fraction of land attached to them, so appreciation potential is lower.

Priti Donnelly, Sales and Marketing Manager, Nippon Tradings International, [email protected]

Priti Donnelly

Priti Donnelly is the sales and marketing manager at Nippon Tradings International, a proxy and buyers’ agency representing foreign investors with purchasing, selling and managing real estate in Japan. She understands the importance of transparency in today’s international market. Through her insight, she focuses on breaking barriers and helping investors feel confident about their overseas property investments.

Phone: +1 226 336 4097 / +81 3 4520 9262
Email: [email protected]
Website: http://www.nippontradings.com

Don’t Stop Marketing when Times are Tough (and the Going Gets Rough)

By Sharon Vornholt

If there is one piece of advice I could give every struggling investor who is trying to stay afloat in today’s challenging market, it would be “don’t stop marketing”.

I know that’s what most people do. But it’s during these times you need to actually step up your marketing. You can’t stay in the game, if you don’t play.

Let’s put it another way.

When you can’t seem to get a deal no matter what, most investors stop marketing to conserve cash. But I can tell you that your business will die a quick and painful death if you do this. You may have to change the way you’re marketing, but whatever you do, don’t stop marketing when times are tough.

So What Can You do If Your Business is starved for Cash?

There are a lot of things you can do but here are some suggestions:

  • Networking is free (or almost free). Get out every day and talk to people. Be sure you have business cards. You can get affordable business cards at Vista Print.
  • What can you cut out to have money for marketing over the next couple of months for direct mail and other things that have a cost associated with them? Do as much marketing as you possibly can.
  • Can you partner with someone? Offer to go look at houses and make offers for someone that has cash for marketing, but maybe has small children and little time.
  • What about spending the day in eviction court? You’re sure to find some tired landlords there.
  • Get a list and call prospects. You’re already paying for your phone, so why not put it to good use?
  • Go driving for dollars. Do some door-knocking to find out who lives in that vacant house.

There are a lot of marketing strategies that cost nothing more than your time.

I can tell you this for sure; it’s these times when “average” investors close up shop. Just keep plugging away. Don’t stop marketing and you will come out way ahead of your competitors over time.

Spend Your Cash Wisely when Money is Tight

This is a time when you need to be smart with your money and your resources.

Here are some more tips for you:

  • Make sure your lists are laser focused. Don’t get too broad. You want to make each mail piece count since they are costing you money.
  • Don’t forget about follow up. Go back through all your leads in the past 12 months. Look at all those who said no. Maybe they are ready to say yes now at the end of the year.
  • Get to work on that stack of direct mail. Do you know someone that has TLO or another similar service that might split the cost for one month to check all of those returned mail pieces?
  • Are there additional real estate niches where you look for opportunities? Think tired landlords, pre-foreclosures, houses with code citations, etc.
  • Remember time and circumstances change all things. This is certainly true of motivated sellers. Just because a seller told you no before, they might just have meant “not now”.

Don’t Stop Marketing During the Holidays

This is probably the biggest mistake investors make. They stop marketing during the holidays. You can take advantage of that, but doing the opposite of what everyone else is doing. This is a good time to look for opportunities where other investors dropped the ball.

Final Thoughts

It’s great to do a marketing brain dump every now and then. Maybe there is something you used to do that you stopped doing. Do whatever it takes to stay in the game.

Get creative and see what you can come up with.

Sharon Vornholt

Sharon Vornholt is the owner of Innovative Property Solutions, LLC in Louisville, KY.

Sharon owned and operated a successful home inspection company for 17 years. She began investing in real estate in 1998 and became a full time real estate investor in January of 2008.

Sharon specializes in wholesaling, and is also an experienced landlord and rehabber.

In addition, Sharon is an internet marketer and also writes articles for several national real estate sites. Sharon is the author of a popular real estate blog called the “Louisville Gals Real Estate Blog”. For your FREE REPORT “Probates and Absentee Owners: Your Fast Track to Real Estate Riches”, stop by her blog at: http://LouisvilleGalsRealEstateBlog.com.