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

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: Brandon@thehousebuyinguys.com.

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

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Realty411′s 2021 VIRTUAL Investor Expo – Learn REI Lessons Online with Experts

OUR VIRTUAL WEEKEND INVESTOR EXPO WILL BE LIVE AND IN REAL-TIME VIA ZOOM.

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This January, Realty411 magazine will once again unite the most successful, knowledgeable and savvy investors in the REI (Real Estate Investing) industry for ONE SPECIAL INVESTOR WEEKEND!

Realty411‘s 2021 Virtual Investor Conference will be held the weekend of January 23rd and January 24th, beginning at 9 AM PST. The online event is free; however, replays will not be made available.

Joining us on this special conference to help guide our readers will be HIGH-LEVEL industry experts who will be donating their precious time for all of our readers.

Realty411 wants to make sure all investors start 2021 with the right information to take them to new levels of success.

Some of the important educators joining us for this special educational weekend conference, include:

  • PropStream - Introducing 2021′s Best Real Estate Tool for Investors. Discover Why PropStream is Creating Waves in the REI Industry.
  • Gene Guarino - Founder, RAL Academy — The Industry’s National Authority on Residential Assisted Living Discusses Why there is Enormous Opportunity in this Niche for 2021 and Beyond.
  • Vinney Chopra — Best-Selling International, Over $358 Million Multifamily Portfolio, Over 4100 Units Under Management — My Journey from $7 to a $250 Million Portfolio with Apartments!
  • Teresa Grobecker, MBA, CPRC (Real Estate/Investment Banking & Tech Expert) – Trends in Real Estate: Winners and Losers, Plus What’s In Store for the Year Ahead. Get The Edge on 2021.
  • Justin Ford, Top Producing-Broker – Detroit, Michigan – Learn the Power of Prospecting with a Multi-Million-Dollar Closer. The Techniques Justin will Share Will Skyrocket Your Agency/Brokerage.
  • Michael Lally – Founder, Lally Wealth Management — Discover Why Real Estate Investors Should Diversify Their Portfolio with Stocks. PLUS: How to Create Constant and Diversified Cash Flow and Growth.
  • Leon McKenzie – Founder, US Probate Leads – Learn Why Probate Properties Remain the Most Untapped Niche in Real Estate and How You Can Profit From It. Learn from the a Respected Industry Leader!
  • Randy Hughes, “Mr. Land Trust” – The Nation’s Authority on Land Trusts Will Explain Why Every Investor Should Use this Strategy.
  • Mark Robbins, J.D., CEO – Lending Resources Group, Inc. — Investing Your Retirement Funds in Real Estate Non-Recourse Financing.
  • Kaaren Hall – CEO of uDirect IRA Services –Build Tax-Free Wealth with a Self-Directed IRA Starting Today.
  • Paul Finck – The Maverick Millionaire — Maximize Your Mindset & Transform Today’s Negative Landscape Instantly.
  • Anne Marie Rogers – Quest Trust Co., — Find Out How Your Self Directed IRA Can Save You Income Taxes Every Year.
  • REI COVER FEATURE: Brandon Cobb - Owner, The Home Buyin’ Guys — Discover How Brandon built a $9M Annual Real Estate Flipping Empire in Less than Five Years! Brandon Walks Expo Guests Through a Flip in Nashville, Tennessee, as If We Are Onsite!
  • REALTY411 COVER FEATURE: Sunil Tulsiani - Founder of Private Investment Club — Sunil is a Best-Selling Author and International Speaker, He Has Worked with Such REI Giants as: Robert Kiyosaki, Robert G. Allen, Kevin Harrington, and more.
  • EMCEE: Linda Pliagas -- Publisher, Realty411 & REI Wealth — Welcome to 2021. It’s Our Mission to Help You Succeed this Year, Here’s How We Plan on Accomplishing This During the Pandemic.
  • EMCEE: Desiree Doubrox Founder of HomWork — Discover How this Creative Real Estate Investor Designed the PERFECT Home / Work Situation for Busy Professional Women.
  • EMCEE: Jeremy Rubin - The Friendly Flipper — Coming straight from the Central Coast of California, Jeremy will Reveal Tips for Flippers Everywhere. Replicate His Success.
  • EMCEE: Dave Grimm, End 2 End Results — Dave is an Expert in Lead Generation Techniques for Serious Real Estate Investors.

RSVP NOW!

TO LEARN MORE DETAILS, VISIT OUR WEBSITE:

https://realty411expo.eventbrite.com

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With nearly 14 years experience in hosting live real estate industry events, in twelve states, Realty411 expo guests can rest assured that the best companies and professionals in the industry are invited.

And, for our first virtual event of 2021, we’re bringing many of these awesome experts together for one special online conference.

This is the place to learn time-tested tips and techniques from some of the industry’s most sought-after leaders.

Normally, virtual events of this caliber are hundreds of dollars to attend, but Realty411 is making this special weekend conference COMPLIMENTARY for everyone.

Guests must register in advance to reserve their space, only 500 “virtual seats” are available, so please register now:

RSVP NOW!

TO LEARN MORE DETAILS, VISIT OUR WEBSITE:

https://realty411expo.eventbrite.com

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Expo guests will have the opportunity to learn from some of the most successful leaders in the industry all in your home or office. Plus, guests can chat DIRECTLY with each educator to get their questions answered, in real-time.

LEARN TO REHAB ONLINE – LEARN ABOUT HOT MARKETS FOR BUY-AND-HOLD INVESTORS – HEAR ABOUT OUR BIGGEST MISTAKES AND HOW TO AVOID THEM – NO FAIRY-TALES – HONEST, REAL AND RAW

Stay tuned as we finalize additional speakers for Realty411‘s January event, we will update this page with more details soon, including a detailed list of speakers and topics.

RSVP NOW!

TO LEARN MORE DETAILS, VISIT OUR WEBSITE:

https://realty411expo.eventbrite.com

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Hundreds of Investors Register for Realty411′s First Virtual Expo of 2021

The Online Weekend Conference Features TOP Industry Experts Ready to Share Vital Information and Perspective on the Market Ahead – RSVP Here.

It’s time to start the year off right and to help our faithful and new readers prepare to skyrocket their portfolio this year, Realty411 once again will unite the most successful, knowledgeable and savvy investors in the REI (Real Estate Investing) industry for ONE SPECIAL INVESTOR WEEKEND!

This VIRTUAL Weekend Expo will be LIVE and in REAL-TIME via Zoom. Guests Can Chat with Educators. Get Your Questions Answered Here with Industry Leaders.

These HIGH-LEVEL experts are taking time out of their busy schedules and preparing new presentations, which are timely and exclusive. This informative conference will help guests gain valuable insight.

It’s time to learn time-tested tips and techniques for financial success. This knowledge is normally passed down in only the wealthiest of families or to top-level real estate executives.

In fact, as a general rule, investors would have to pay hundreds of dollars to attend an event of this caliber. However, thanks to Realty411‘s long-time sponsors, subscribers, and VIP members, this conference is complimentary.

The 14-year media company, which also publishes REI Wealth magazine as well as operates a half-dozen real estate websites, is hosting this top-tier online event at no cost to attendees.

Serious investors who want to take their investment knowledge to new levels must reserve a ticket now as only 100 “Virtual Seats” remainRealty411‘s existing platform currently caps at 500 guests.

Additionally, only a set number of attendees will be admitted so that all questions can be answered during the live chat sessions taking place after each presentation.

CLICK HERE TO RSVP

Joining us on this special conference to help guide our readers will be HIGH-LEVEL industry experts who will be donating their precious time for all guests.

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Realty411 wants to make sure all investors start 2021 with the right information and contacts to take them to new levels of success.

Some of the important educators joining us for this special educational weekend conference, include:

** PropStream – Introducing 2021’s Best Real Estate Tool for Investors. Discover Why PropStream is Creating Waves in the REI Industry.

** Gene Guarino
– Founder, RAL Academy — The Industry’s National Authority on
Residential Assisted Living Discusses Why there is Enormous Opportunity
in this Niche for 2021 and Beyond.

** Vinney Chopra
— Best-Selling International, Over $358 Million Multifamily Portfolio,
Over 4100 Units Under Management — My Journey from $7 to a $250 Million
Portfolio with Apartments!

** Teresa Grobecker, MBA, CPRC
(Real Estate/Investment Banking & Tech Expert) – Trends in Real
Estate: Winners and Losers, Plus What’s In Store for the Year Ahead. Get
The Edge on 2021.

** Justin Ford, Top
Producing-Broker – Detroit, Michigan — Learn the Power of Prospecting
with a Multi-Million-Dollar Closer. The Techniques Justin will Share
Will Skyrocket Your Agency/Brokerage.

** Michael Lally
– Founder, Lally Wealth Management — Discover Why Real Estate Investors
Should Diversify Their Portfolio with Stocks. PLUS: How to Create
Constant and Diversified Cash Flow and Growth.

** Leon McKenzie
– Founder, US Probate Leads – Learn Why Probate Properties Remain the
Most Untapped Niche in Real Estate and How You Can Profit From It. Learn
from the a Respected Industry Leader!

** Randy Hughes, “Mr. Land Trust” – The Nation’s Authority on Land Trusts Will Explain Why Every Investor Should Use this Strategy.

** Mark Robbins, J.D., CEO – Lending Resources Group, Inc. — Investing Your Retirement Funds in Real Estate Non-Recourse Financing.

** Kaaren Hall – CEO of uDirect IRA Services —Build Tax-Free Wealth with a Self-Directed IRA Starting Today.

** Paul Finck – The Maverick Millionaire — Maximize Your Mindset & Transform Today’s Negative Landscape Instantly.

** Anne Marie Rogers – Quest Trust Co., — Find Out How Your Self Directed IRA Can Save You Income Taxes Every Year.

** REI COVER FEATURE: Brandon Cobb
Owner, The Home Buyin’ Guys — Discover How Brandon built a $9M Annual
Real Estate Flipping Empire in Less than Five Years! Brandon Walks Expo
Guests Through a Flip in Nashville, Tennessee, as If We Are Onsite!

** REALTY411 COVER FEATURE: Sunil Tulsiani
– Founder of Private Investment Club — Sunil is a Best-Selling Author
and International Speaker, He Has Worked with Such REI Giants as: Robert
Kiyosaki, Robert G. Allen, Kevin Harrington, and more.

** EMCEE: Linda Pliagas
–– Publisher, Realty411 & REI Wealth — Welcome to 2021. It’s Our
Mission to Help You Succeed this Year, Here’s How We Plan on
Accomplishing This During the Pandemic.

** EMCEE: Desiree Doubrox
Founder of HomWork — Discover How this Creative Real Estate Investor
Designed the PERFECT Home / Work Situation for Busy Professional Women.

** EMCEE: Jeremy Rubin
– The Friendly Flipper — Coming straight from the Central Coast of
California, Jeremy will Reveal Tips for Flippers Everywhere. Replicate
His Success.

** EMCEE: Dave Grimm, End 2 End Results — Dave is an Expert in Lead Generation Techniques for Serious Real Estate Investors.


Realty411 will release the agenda for this conference shortly, please bookmark this page or check back for further updates and details.

For questions or to sponsor a future event with Realty411 or REI Wealth, please contact Veronica Jones at: 805.693.1497 or info@realty411.com


WHAT CAN GUESTS EXPECT AT THIS EVENT?

LEARN TO REHAB ONLINE – LEARN ABOUT HOT MARKETS FOR BUY-AND-HOLD INVESTORS – HEAR ABOUT OUR BIGGEST MISTAKES AND HOW TO AVOID THEM – HONEST, REAL AND RAW!

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Successful Turnkey Real Estate Investing

By Bruce Kellogg

Evaluating Turnkey Rentals

A major trend in real estate has developed since the Great Recession in 2008-09 where real estate investors are investing cross-country in mostly single-family house rentals called “turnkeys”.

Realty411 published an article in REI Wealth Monthly #51 by your author titled, “Enhanced Diligence for Turnkey Investing” that discusses steps beyond “due diligence” that an investor can take to more closely assure a safe and profitable investment.

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.

Marco Santarelli

Head Shot WhiteMarco 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 5 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.

Result

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. That would be Mr. Santarelli and Norada Real Estate Investments. www.NoradaRealEstate.com


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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 Magazine. He is a recipient of an Albert Nelson Marquis Lifetime Achievement Award, listed in Who’s Who in America – 2019.

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

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Ladies Who Rock Real Estate Virtual Conference to Be February 27 – All Invited

Real estate investors, agents/brokers, lenders and service professionals be sure to pencil in Realty411‘s new “Ladies Who Rock Real Estate Conference” to be held Saturday, February 27th, starting at 9 am.

This complimentary, online, co-educational summit will educate novice, as well as savvy investors, to make wise decisions for their portfolio, business, and overall life.

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RSVP HERE: https://ladieswhorockrealestate.eventbrite.com

A wide range of topics will be discussed, including: private capital and leverage, how to use real estate data to procure deals, as well as creative lease-options to secure single-family residential homes. Investing in mortgage notes will also be discussed in expert detail.

Real estate markets will be spotlighted and live chat will be available so that all guests can get their real estate questions answered. Also discussed will be maximum mindset; plus how creative visualization techniques can improve health, wealth, and overall well-being.

Mass media and PR tips will be shared to position our guests so they can become the “go-to expert” in their market or industry for 2021.

RESERVE YOUR TICKETS!

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Imagine having newspapers, radio and TV stations, popular news sites or social media influencers reaching out to YOU to work with them!

Be the wholesaler, developer, agent/broker, lender, author, blogger, or realty expert that everyone KNOWS and wants to work with — learn to leverage the power of mass media here.

Our female-focused online summit is one that you simply cannot afford to miss. Once again, this online event is co-educational — we want everyone to learn these valuable concepts.

RESERVE YOUR TICKETS!

Our inaugural “Ladies Who Rock Real Estate” had 250 RSVPs, with ladies and gentlemen joining in live and in real-time from around the nation.

Be sure to register early to secure a spot for this unique, exciting educational summit that will provide knowledge, wisdom, and connections

Registrants will receive the agenda for the day once the schedule is finalized this week, so don’t delay — Save your seat today!

Realty411 encourages readers to share this complimentary invitation with their sphere of influence or realty team, as working together towards a common goal can provide momentum.

It’s 2021, time to reach your goals for real estate, business and personal success. Be sure to reserve Saturday, February 27th at 9AM PST for an amazing day of Realty411 education and motivation.

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RESERVE YOUR TICKETS!


For questions, comments or to learn about becoming a speaker at a future Realty411 event, please contact us: 805.693.1497 or info@realty411.com

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Find Equity, Build Wealth

By Linda Pliagas, Publisher/Accredited Investor

Happy 2021, investors. It’s a new year, and everything is moving rapidly. Now that everyone has had to adapt to a “new normal”, an era of living during a pandemic, we’re going to be seeing many shifts ahead.

Fasten your seat belt as we prepare for drastic changes in government policy and economic trends, as well as global and local social shifts.

If 2020 wasn’t bumpy enough for real estate investors, now even more new changes will be heading our way. Policies that will impact every aspect of our lives.

Already scores of businesses around the country have closed up shop. The pandemic demolished family-run restaurants specialty stores, and countless others, many of which had been thriving for generations. Government aide in the form of PPP loans were simply not enough.

Retail is still bleeding, and has been slowly dying for many years — in case you didn’t get the memo on how Millennials are changing the economy. Many once-bullish office and single-tenant NNN investors are preferring to enter safer ground: Multifamily rentals. Hence the huge appreciation in this sector.

Although change can be difficult, stressful and fearful; we must also be open to the many opportunities that transformation can bring.

Get Funded – CLICK HERE!

Get Funded – CLICK HERE!

Some incredible opportunities being seen today are in hospitality, of course; this comes as no surprise. Many small to mid-size hotels are being lost in foreclosure or are being sold at unbelievable pricing. While some investors may fear this sector, others I know are looking for chosen properties to convert into studio rentals. In California, housing is at a premium and “micro-units” are desperately needed in our economy.

Familial moving trends are also causing homes in once-sleepy towns to be sold at premium, thanks to many families who are exiting urban areas to fully take advantage of the new “virtual” economy.

Other savvy urban developers are paying close attention to living trends and profiting. One company I know is creating single-family units with multi-generational living in mind. These three-level units were designed to offer flexibility and privacy for extended families or numerous housemates.

Changing home trends, economic shifts, policy reforms, it’s already here. But certainly, expect even more change on the way in 2021.

With life being at such a whirlwind and so many unknowns how can investors be confident in their decisions? Although governments, businesses and cultural norms change, one rule remains constant. If we are to build wealth, we must FIND EQUITY.

Data for Investors: CLICK HERE!

Data for Investors: CLICK HERE!

For it is equity, not cash flow, that will make one become an accredited investor faster. According to DQYDJ, there are an estimated 12,417,040 accredited investor households in the US, which accounts for over 9 percent of all American Households.

Case in point: The local market has increased easily 20% since 2019. Let’s use our friends, a local couple who own a local portfolio for this illustration. For privacy reasons, let’s call them, “PJ”. They currently own five properties under their belt, and they saw a huge gain in their portfolio in just one year.

Here are the actual numbers of their five-property portfolio:

  • Property 1 – Appreciated $25,000 – 2 bed/1 bath PUD – Home in a Planned Urban Development, 950 sq. ft. / B market rental
  • Property 2 – Appreciated $15,000 – 1 bed/1 bath Condo, 525 sq. ft. / C market rental
  • Property 3 – Appreciated $70,000 – 3 bed/2 bath Single-Family Home, 2,050 sq. ft. / owner occupied, A market
  • Property 4 – Appreciated $50,000 – 3 bed / 1. 5 bath Condo, 1,250 sq. ft. / B market rental
  • Property 5 - Appreciated $40,000 – Luxury Condo 2 bed / 2 bath + loft 1,050 sq. ft. / A- market rental

The appreciation in one year alone was $200,000!

Notice that the appreciation of the property is relative to the type of property it is. Appreciation also fluctuates depending on the property size, as well as the area it’s in, plus many other factors.

The $200K gain is not bad considering the pandemic created such an economic disaster last year. Also, the time spent on management is merely a few hours per month. As a bonus, the rents of these properties will be increasing as well, creating about $425 in added monthly cash flow in 2021.

Plus, Zillow predicts properties to appreciate over 10% in the same area this year. That will make take it to 30% appreciation in just a matter of years.

The monthly income is just the icing on the cake; the sweet spot is the appreciation, which added $200,000 to the PJ’s net worth. Now, they can utilize that appreciation and buy another property, which is exactly the game plan.

The bottom line is if you invest in high-appreciating markets and also purchase right. By right, meaning finding under-market gems that require rehab that “force” appreciation; or buying an equity-rich property — one that is severely priced under-market for some reason or another.

Remember investors, the money is made at the PURCHASE. Savvy investors only buy properties that they know are real winners. Also, it’s a fallacy that all deals need tons of work. Not true! We’ve purchased properties where one could eat off the floor at COE (close of escrow), yet they were still drastically under market. Why? The buyer was merely MOTIVATED.

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Many deals that the PJ’s and other savvy investors make are with local senior investors, many in their 80s who are simply ready to retire and cash out. Some need the cash to enter a retirement home or they move in with the kids. Others do not have heirs, or they have children who don’t want to become landlords. You see, to them and many, rental properties are seen as a “headache”.

I know it’s difficult for you and I to believe that there are individuals who do not see the value of owning real estate. Yet, it’s true. It’s happened over and over again in our market.

So how do you find EQUITY RICH deals that will make money on the purchase? Here are some tips I’ve acquired from personal experience that will help secure your next legacy property:

  1. Know Your Market – Whether you invest locally or across the country, a sophisticated investor knows their “farm”. This is the area that is going to produce income. One needs to know exactly what the properties are going for. Learn your farm like the back of your hand. A sophisticated investor instantly knows a deal when they see one because they know their market so well. We know if the deal has equity or not. If you’re ready to invest, study your markets daily, spot the deals, and call the listing agents right away to get the scoop on the property before anyone else does.
  2. Leverage Existing Equity - The old adage, “It takes money to make money” is often true in real estate. Knowledgeable investors can structure deals with OPM (other people’s money), but until you can convince other individuals or a private-lending company to invest in your deals, you alone will be the responsible party. Figure out how much cash you have right now. How much cash can can you get in 30 days? What are your assets? What are your liabilities? Can you qualify for a traditional 30-year mortgage at 3.5%? Will you be rehabbing instead of purchasing long-term? What’s the least you need to put down to qualify for a short-term private money loan at 10%?
  3. Have Cash/Financing Ready to Go – Financing is key for every deal. Yes, someone has to put in actual money to close escrow. This goes back to tip number two. Get pre-qualified for a loan first, talk to a capital partner to understand exactly how much you will need. Will they finance the rehab as well? Will you have to pay repairs separately? The bottom line is: Deals, especially those with a lot of existing equity, are being chased by many investors. In this market, competition is fierce. The deals with equity are always going to be snapped up by those who are prepared and ready to CLOSE.
  4. Let Agents/Brokers/Wholesalers Make Money Too – It’s very difficult for an investor to do every aspect of a real estate deal. Sooner or later they’re going to need people, a team of experts who can help them. Don’t be greedy on your journey towards millions. Never burn people on their commission of a few thousand dollars. Agents and brokers make their living solely with commissions, please respect their time and knowledge. Building great relationships with realty professionals will encourage them to contact you before that equity-rich property is shared with world on the MLS (Multiple Listing Services).
  5. Venture Outside Your Market – The time will come in every investor’s career where they will have to venture outside of their market. Perhaps they live in an expensive area or they get tapped out by high and quick appreciation. Gong to a second or third market can help one continue to grow a portfolio, but do so cautiously. The first rule of Know Your Market applies to every city. Remember, pricing can change from one BLOCK to the next. Study your target city and become familiar with it. One way is by tapping into the regional MLS, which is generally free and public though the local Board of REALTORS. When I choose a target area to invest in, I also like to start reading their local newspaper online. You’ll discover a lot of information that can help you, plus learn who the Top Producers are too — successful brokers always advertise in their local media.
  6. Get Creative in Your Deal Making - Some markets are so expensive that a single-family home will not cash flow. In these circumstances, it’s time to get creative, perhaps consider transforming the property into a residential assisted living (RAL) home? What about a sober living facility? Or, sometimes renting them out by the room to students or singles also increases monthly income. If you are living or investing in California, consider transforming the garage into a legal studio apartment, plus adding an ADU (accessory dwelling unit) in the back of the property. By doing so you’ve essentially turned a single-family home into a triplex! And, it’s all legal, thanks to state laws that passed in 2019 to help solve the housing shortage in California.
  7. Build Solid Relationships - Any industry is difficult to break into at first. As a newbie, people may not take you seriously. Or perhaps, some may dismiss your ambition due to your age, gender or experience level. That’s why it’s important to align oneself with successful, honest and ethical people. Professionals who are in it for the long-term and who take pride in performing honest work. After 25 years as a landlord and 16 years as a licensed agent, I’ve seen so it all. To stay safe, I recommend asking for referrals and take it slow when developing relationships with people. Get to know them before doing any actual business.
  8. Close Escrow or Go Home – Don’t waste time nor burn your bridges with wholesalers, agents, sellers, lenders or private investors. The “fake it ’till you make it” mantra doesn’t set well with established professionals in this industry. Gossip about bad business dealings gets around locally, and nationally, very quickly! Nobody likes shady flakes, deceitful investors, or greedy manipulators…especially in real estate! Investors who engage in deceitful practices may one day awake to discover a Rip Off Report about them or find themselves being served with a lawsuit. Please take real estate, and the industry laws and ethics that govern it, very seriously.

I hope these suggestions help swell your existing net worth in 2021. Remember, the key to multiplying wealth with real estate quickly is to buy equity. Hidden gems are out there waiting for sophisticated buyers, your job is to find them. Best of luck.


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

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.

profits-1953616_1920Image by Tumisu from Pixabay

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?

grandpa-2810809_1920Image by Besno Pile from Pixabay

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.

pexels-kaboompics-com-6054Photo by Kaboompics .com from Pexels

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

scale-2635397_1280Image by Arek Socha from Pixabay

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

career-479578_1280Image by Gerd Altmann from Pixabay

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

benefitsImage by Gerd Altmann from Pixabay

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 Vinney@VinneyChopra.com.