Why Media-Savvy Real Estate Brokers Should Write a Book

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By Stephanie Mojica

The entrepreneur world has grown massively in the last 5 to 10 years. As someone who’s been in the field a long time, I’ve learned that there are so many ways to grow as an entrepreneur online. Something that I do is help entrepreneurs write their books in order to market themselves and their services.

A well-written book can dramatically increase the number of people who say yes to your product or service as an entrepreneur — and licensed agency brokers fall into this category.

A published and popular book can be huge for marketing in your field, because you can have the financial joy of standing out as an expert in your field rather than just being another number in the crowd. There are many reasons why entrepreneurs should write books. But I’m going to go over some of the most important reasons you should as a business owner.

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Clients Get to Know You

As an avid reader, there have been many times that I’ve discovered someone new in the entrepreneur world simply by picking up their book in the store. By writing a book, clients can get to know you before your pitch. They hear your story and come to see how your expertise can help them achieve what they want in life. Being a published author helps create trust between you and your potential client. In the long run, writing a book will help you have a great return on investment.

Expert in the Field

Social media is where entrepreneurs go to sell their services and market themselves as the experts in their field, but this can be altered and manipulated. However, having a book can help really set you apart in your field because it shows you care enough about the topic to write about it. This again creates trust between you and your potential client, because it shows you know what you’re talking about and you actually have the expertise and knowledge to back it up.

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Visibility in the Crowd

There is a whole world out there in the book and publishing community that might not be on social media, and this is where you can find a whole new crowd of clients. Writing a book in your field can be very beneficial, because there can be so much good marketing for you. If the media ever needs an expert on a topic like yours, they will come to you because they trust experts who write books. By having a book in your name, getting media marketing can be so easy.

Get a Book Coach

If you’re looking into writing your first book as an entrepreneur and are not sure where to start, check out some of my amazing resources as a book coach. Having a book coach makes it easy to get started and get organized for your future successes!

Stephanie Mojica

Stephanie Mojica, writer of How One Writer Shifted From Settling for $12 an Hour to Prospering at Over $90 an Hour and shorter books such as Quick Answers to Frequently Asked Credit Questions, is an award-winning journalist with publications such as USA Today, The Philadelphia Inquirer, San Francisco Chronicle, and The Virginian-Pilot, among many others. She helps executive coaches, business consultants, business owners, attorneys, and other decision makers generate more money online and become the go-to expert in their field by guiding them step by step through the process of writing and publishing a book.

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Osage County, OK Sheriff’s Office to Conduct State’s First-Ever Online Foreclosure Auctions with Bid4Assets.com

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In a Move to Increase Proceeds and Accessibility, Osage County Moves to Virtual Foreclosure Auctions

Bid4Assets, a leading online marketplace for distressed real estate auctions, has been selected by the Osage County, OK sheriff’s office to conduct the state’s first-ever online mortgage foreclosure sale. The sheriff’s office has cited maximizing excess proceeds for defendants and eliminating long travel times for auction bidders as the reasons they chose to transition from in-person to online auctions.

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“Osage is the largest county in the state, which creates a challenge when it comes to our foreclosure auctions. Some bidders have to travel an hour to the courthouse if they want to participate,” said Osage County Sheriff Eddie Virden.

“With our move to a virtual auction format, all citizens can now place their bids from anywhere, on any computer or mobile device. We want bidders to feel confident in this process, so we selected a veteran of the industry with over 20 years of experience. We recommend bidders use the links we provide on our sheriff’s website to ensure you’re on the correct platform.”

Bid4Assets collaborated with sheriffs and foreclosure attorneys to pass Senate Bill 976, which was signed into law by Governor Kevin Stitt on May 25, 2022. The bill gave Oklahoma sheriffs the option, but not the mandate, to conduct foreclosure auctions online. Several other sheriffs’ offices are preparing to move their foreclosure sales online following the bill’s passage.
“Online auctions increase participation and sale proceeds by opening the process to more bidders,” said Bid4Assets President Jesse Loomis.

“Virtual sales are more efficient, will scale with rising foreclosures and come at no cost to counties. We have several other pending contracts in Oklahoma and expect virtual sales to quickly become the new normal.”

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When sheriff’s sales have strong bidding, excess sales proceeds are used to pay off the entire debts associated with a property and the defendant can claim those excess proceeds. In other states like Pennsylvania, sheriffs who have transitioned online with Bid4Assets have expressed a significant increase in excess proceeds to the benefit of their communities.

Bid4Assets began the process with Osage County working alongside Captain William “Willy” Hargraves, who was involved in a fatal car accident before the project could be completed. Those wishing to donate to Captain Hargraves’ family can do so via a GoFundMe.

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What Lies Ahead for Real Estate and the Lending Market in the Coming Months

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By Edward Brown

Many fear a recession looming in the coming months that will negatively affect real estate prices. In a typical recession, house prices usually drop. According to the Joint Center for Housing Studies at Harvard University, housing prices dropped in four out of five recessions that have occurred since 1980. During those recessions, house prices dipped on average about 5% for each year the economy remained down; However, in the Great Recession in 2008, the average price dropped by nearly 13%.

During the recession of 1980, inflation started to skyrocket, much like we have been experiencing in this past 12 months. However, there are vast differences between the recession of 1980 and the possible one to come. First, the population in the United States in 1980 was just over 226.5 million people. Today, there are over 333 million people according to the US Census Bureau. Everybody needs a place to live, and supply has not kept up with demand. Many cities have dissuaded builders by imposing large fees as well as taking too long to issue permits. This could be due to downsizing of government staff, but another phenomenon that was not as prevalent in 1980 as compared to today is that neighbors have a lot more say in what goes in their neighborhood. When there are too many roadblocks, many builders shift to fix and flip.

In addition, there is still a large supply chain issue left over from Covid. Also, costs of materials and labor has substantially increased. Lastly, finding qualified trade workers has been quite a challenge for builders.

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One of the major differences in the early 1980s as compared to today is the interest rate on mortgages. By 1981, mortgage rates were as high as 19%. Although current rates at 6% seem incredibly high [since they bottomed out in the 2+% range during Covid], they are still less than a third of what they were in 1981. It is true that house prices have substantially increased since 1981, but so have wages.

Some factors that affect the demand side of home purchases are that millennials are coming into the market in droves. These same millennials
witnessed their parents’ difficulties during the Great Recession, but enough time has passed, and millennials are now in positions of starting families as well as becoming a strong impact in the workforce.

Probably one of the most overlooked area of why demand should at least come close to supply [to keep residential real estate prices relatively stable] is that there were millions of homeowners who refinanced when rates were very low. These homeowners will not be able to replace their current mortgage rate for the foreseeable future.

Thus, there has to be a compelling reason for these people to sell their house. Currently, the Fed is trying to tame inflation by raising interest rates. This has started to work, albeit slow and not strong enough. Anyone buying groceries will say that true inflation is closer to 15% rather than the 6% the government is touting.

Raising the interest rates usually causes a recession, as costs of production are impacted. If a recession then causes interest rates to decline [due to lack of demand and falling inflation], we may see the refinance market pick up again and more mobility of home buyers driving up demand again. So far, there has been a slowdown in sales volume. This, in combination with slower refinances, has caused many mortgage companies to lay off workers. For the private lending industry, this should cause volume to move in their direction.

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Private lending use to be the last resort for many borrowers, as the costs were higher for these borrowers; however, with the smaller pool of lenders due to the layoffs as well as mainstream banks making it harder for borrowers to qualify due to the uncertainty of the economy, private lenders have moved up the chain with regard to the choice of lenders for those needing to borrow. In addition, we may likely see more bank regulations due to the downfall of Silicon Valley Bank and Signature Bank.

The Fed wants to exude stability in the market, so they will probably clamp down on what banks are allowed to lend on as we saw the Great Recession produce new regulations via Dodd-Frank.

There may be a drop in real estate prices over the coming months, but it most likely will not be what we saw in the Great Recession, as that was a credit issue, where the banks were too lax in giving loans to borrowers who may not have had the income to repay. Current regulations make lending much stricter, so borrowers have to show the ability to repay the loan. Thus, even a coming recession should not see a tremendous drop in real estate prices.

ABOUT EDWARD BROWN

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company.

Additionally, Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

Edward Brown, Host
The Best of Investing on KTRB 860AM
The Answer on Saturdays at 8pm
and Sports Econ 101 on Saturdays
at 1pm on SiriusXM channel 217
21 Pepper Way
San Rafael, CA 94901
[email protected]

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Exclusive invitation: Discuss your deals with UCC’s CEO today

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Ready to start making more with every closing?

I’m Eric Tran, CEO of Universal Commercial Capital, with over 25 years of experience in the Real Estate Lending.

I can help you to earn more on your next deal. Connect with me today if you need help with:

HARD MONEY
FIX and FLIP
COMMERCIAL
Purchase, Refinance, Cash Out

Not sure if you have a fit for my programs?
Call me now and let’s discuss your funding needs.

Thanks,

Eric Tran
CEO
714-300-8223

Universal Commercial Capital
[email protected]
www.universalcommercialcapital.com

BRE#:01217502 NMSL#:1730798

The Interconnected California & Global Real Estate Markets

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By Rick Tobin

Did you know that the median Southern California and statewide home prices have fluctuated between the $750,000 and $850,000 range over the past year? Generally, the housing price-to-household income for California has varied between 8x to 10x (times or multiplied) for home prices as compared to the qualifying household income. For example, a home with a purchase price of $800,000 is 10 times (10x) the combined household income of $80,000.

While California is usually one of the most expensive places in America to own or lease a property, it’s still “affordable” in comparison to these Top 10 most expensive home price-to-household income locations on the planet which are as follows:

#1 Shanghai, China – 46.6x
#2 Beijing, China – 45.8x
#3 Hong Kong, China – 44.9x
#4 Colombo, Sri Lanka – 43.7x
#5 Beirut, Lebanon – 41.3x
#6 Shenzhen, China – 40.1x
#7 Manila, Philippines – 37.6x
#8 Guangzhou, China – 37.3x
#9 Mumbai, India – 36.6x
#10 Ho Chi Minh City, Vietnam – 34.5x
Source: Numbeo – Property Price Index 2023

The Top 10 priciest home regions have both skyrocketing home prices and annual wages that are extremely low which makes California and the rest of our nation seem reasonably priced when reviewing home price-to-income ratios.

The California economy is now the 5th largest economy in the world. Our economy is on a growth pace that may soon make it the 4th largest economy if our state surpasses Germany. We attract investors and new residents from around the world such as from Asia, Europe, Mexico and Latin America. In fact, there are more Hispanics or Latinos in California as of 2015 than any other race or ethnicity.

The Southern California (So-Cal) region within our state consists of upwards of 24 or 25 million residents located in 10 counties which include: Imperial, Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, San Luis Obispo, and Ventura.

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So-Cal and U.S. Real Estate Trends

In the So-Cal Real Estate Investors – Canyon Lake group that I lead, we discussed the following real estate and financial topics at our latest in-person meeting at Canyon Lake Golf & Country Club on April 18th, 2023:

1. Home values over the next year could fall, be flat, or even increase if the Fed is forced to pivot and start rapidly cutting rates again. Be prepared for any and all investment possibilities and opportunities.

2. Home equity represents the core wealth: The bulk of a homeowner family’s overall net worth comes from the equity in their primary residence. The average US homeowner at retirement age has approximately 83% of their overall net worth tied up in the equity in their home and pays monthly expenses from the remaining 17% of overall net worth that’s held in checking, savings, or pension accounts.

3. Riverside-San Bernardino-Ontario, CA Metro Area (March 2023)

  • Home Value: $542,000
  • Median Household Income: $77,095
  • Home Price to Household Income Ratio = 7.03x (5x is national avg.)
  • Home Value Growth (Year-over-Year or YoY): 3.0%
  • For Sale Inventory: 7,511
  • Sales Inventory Growth: 71.1% YoY
  • Price Cut Share of Listings: 16.8%
  • Rent for Apartments: 2,494/mo.
  • Monthly House Payment: $3,426 (PITI)
  • Rent for Homes: $3,243/mo.
  • Monthly Difference Between Home Mortgage and Rent: $183
  • Listing Inventory as % of All Homes: 0.5%
    Sources: Realtor.com, Zillow, and US Census Bureau

“The difference between monthly mortgage payments and rents hasn’t been this big since 2006, around the peak of the housing bubble that led to the Great Financial Crisis, according to the National Multifamily Housing Council. Assuming a 10% down payment, the group found that a monthly payment on a 30-year fixed-rate mortgage was $1,176 more than renting an apartment up to the end of 2022. The buy-to-rent premium hasn’t been this steep since the third quarter of 2006.” – Business Insider

The exception to this current massively widening mortgage payment-to- rent trend is Riverside Metro with only a $183 monthly price difference.

4. Lack of a sufficient down payment is the most common reason why an individual or family can’t qualify to purchase a home unless they can qualify for a VA loan or even FHA loan with $0 down after factoring in seller credits and gift money. There are at least 311 down payment assistance (DPA) programs available to California residents and upwards of 2,300 DPA programs available nationwide, as per the Down Payment Resource group. Yet, many people are only familiar with the California Dream DPA program that had $300 million already committed to buyers in just the first 11 days before it shut down. Originally, the plan was for California to offer first-time buyers up to $500 million, but the state had to use $200 million of those earmarked funds to cover other budget deficits.

5. Short-Term Rentals: Coachella Valley had the highest March/April 2023 ADR (Average Daily Rent) of the top 50 short-term rental markets partly due to the Coachella and Stagecoach music festivals; U.S. short-term rentals earned over $62 billion in revenue in 2022, which was a 25% year-over-year increase; San Diego was the most profitable Airbnb metropolitan region in the world in 2021; Big Bear City was ranked #8 in the entire world for highest-grossing Airbnb revenue in 2020; and Moreno Valley was the most profitable Airbnb city in the U.S. in 2019.

Investors can qualify with as little as 15% cash down using DSCR (Debt Service Coverage Ratio) programs where the current or proposed rents cover the proposed monthly mortgage payment (PITI and HOA, if applicable) on an EZ-Doc type of basis.

Flipping homes or paper: With even shorter term real estate options that may be be completed within hours or days, you can either flip properties or paper such as lease-options, wholesale purchase contract assignments, seller-financed notes or deeds, or partial income streams from beneficial or lender interests in the promissory note (“IOU for debt”) or trust deed.

6. Distressed mortgage and rental property data from 2021. Today’s 2023 numbers are probably significantly worse and rarely published.

  • An estimated 15 million people lived in households that owed more than $20 billion in unpaid rent as of July 2021.
  • 7.43 million rental property units were not current.
  • 5.95 million owner-occupied housing units weren’t current.
  • 8.71 million lived in owner-occupied homes where the homeowners have little or no confidence in their ability to pay their mortgage.
  • 12.71 million lived in rental properties where the heads of household had little or no confidence in their ability to pay their rent.
  • Serious mortgage delinquencies were up 20% in July from June and were the highest recorded since 2010.
  • By mid-August 2021, 3.9 million homeowners were in active forbearance, which represented 7.4% of all mortgages nationwide and $833 billion in total unpaid principal.
  • An estimated 11.6% of all FHA and VA loans were in active forbearance.
    Sources: U.S. Census Bureau and Black Knight Mortgage Monitor

7. 2023 Consumer Debt Data and Trends: It’s claimed that upwards of 15,000 cars are repossessed every single day here in the U.S. alone. Mortgage and all consumer debt and payment rates and fees all just hit record highs at the same time. Average DTI (debt-to-income) ratios for existing mortgage borrowers reached an all-time record 44% DTI and FHA defaults reached almost 12% in February 2023.

Average interest rates (March ‘23):
– Credit Card: 24.5%
– Used Cars: 14.0%
– New Cars: 9.0%

Meanwhile, we have record levels of debt:
– Total Household Debt: $16.5 trillion
– Auto Loans: $1.6 trillion
– Credit Card Debt: $986 billion
– Student Loans: $1.6 trillion

The interest on student loans has been suspended since 2020 due to Covid, but is set to resume later this year. How many defaults will happen?

8. Understanding Credit: FICO scores range from 300 to 850. The higher the score, the better the credit grade. The three main credit bureaus or credit reporting agencies (CRAs) include Experian, TransUnion, and Equifax. The credit scores are derived from the following factors:
● Payment history—35%
● Amount owed—30%
● Length of credit history—15%
● New credit—10%
● Types of credit used—10%

New Credit Score Models: The average American has a FICO credit score near 690. In October 2022, the Federal Housing Finance Agency (FHFA) announced the approval of a new credit score rating system named FICO 10T and VantageScore 4.0 for use by Fannie Mae and Freddie Mac. FICO 10T and VantageScore 4.0 will consider payment histories from rent, utilities, and telecommunication bills. Yet, a rental payment history can be very bad for tenants on Covid moratoriums with years of no payments.

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9. Generational Home Purchase Trends: Between 2015 and 2022, the Millennial generation was ranked #1 overall as the largest generation of home buyers and tenants. Now, Baby Boomers (born between 1946 and 1964) take back the lead as the #1 home buyers partly due to having more cash and equity available from other properties. Senior housing and reverse mortgage opportunities are rapidly increasing as well.

“Baby boomers now make up 39% of home buyers – the most of any generation – an increase from 29% last year. Generation Z now makes up 4% of buyers, with 30% of Gen Z moving directly from a family member’s home into homeownership. When relocating, all generations are moving farther distances, with younger boomers (ages 58-67) moving the greatest distance at a median 90 miles away.” – National Association of Realtors

10. Ballooning Commercial Loans: $270B of commercial real estate loans are set to mature in 2023, which is an all-time record for loan maturities. An estimated $900 billion in commercial property loan debt may come due within just the next two years. If so, upwards of $630 billion dollars’ worth of commercial loans may come due in 2024 which would be 2.333 times the all-time ballooning commercial record loan set this year. How will this potentially affect commercial property value trends?

For more details, please visit www.socalrealestateclub.com.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

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Mag Mile Capital Merges with Myson, Becomes Publicly Traded Company

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Mag Mile Capital, a Chicago-based full-service commercial real estate mortgage banking firm, announced the completion of a merger with Myson, Inc. (“Myson”) (OTC PINK: MYSN). The transaction creates a new public entity to be named Mag Mile Capital, Inc. (Company).

“This is an exciting time for our national CRE platform. A merger such as this provides us with the resilient structure of a public company framework to aggressively grow our business,” said Rushi Shah, CEO of Mag Mile Capital.

“Underpinned by the liquidity of publicly traded shares and infusion of cash, we will seek out and prudently pursue strategic acquisitions, consolidate revenues and launch our technology platform.”

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Mr. Shah was appointed Chairman of Myson’s board of directors, as well as named CEO of the combined publicly traded company that will be traded under a new ticker symbol. Other significant shareholders in the company include Beverly Hills, California-based Reddington Partners, a private investment holding company.

Mag Mile Capital was established in December 2016 through a merger among three partners. Rushi Shah became the sole member of the company in July 2018 through a series of partnership buyouts. Subsequently, Mag Mile Capital’s commercial real estate capital markets and financing platform has continued to expand nationally with the addition of talented originations and underwriting leaders. In addition to its headquarters in Chicago, Mag Mile Capital operates offices in the states of New York, Massachusetts, Connecticut, Florida, Texas, and Nevada.

Mr. Shah added, “We are confident this monumental evolution in our corporate history will serve to accelerate growth. Along with other mortgage banking and capital markets brokerage services platforms, we will seek to diversify the company’s revenue stream by exploring accretive business combinations of other CRE services, including but not limited to investment brokerage services, direct lending businesses, designated underwriting and servicing (DUS) businesses, pure play CRE mortgage servicing businesses, appraisal services, property management businesses, and GP and co-GP development platforms to name a few.”

Mag Mile Capital is a national platform comprised of skilled capital markets advisors with real estate debt placement and equity arrangement experience throughout the full capital stack and across all major asset classes. The nimble, boutique-sized firm offers preferred access to premier structured debt and equity advisory solutions and placement for real estate investors, developers, and entrepreneurs delivered through a high-touch, disciplined approach that leverages its wide-ranging lending relationships and deep-rooted equity capital connections.

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Mag Mile Capital’s mortgage banking platform is poised to grow both strategically as well as organically. The firm is developing a proprietary technology that leverages advanced technologies including Artificial Intelligence, Machine Learning and automated learning models to automate tedious underwriting and valuations processes for CRE. Mag Mile Capital is confident that this technology will allow the business to scale efficiently.

Under the merger Reorganization Agreement, the shareholders of Mag Mile Capital will be issued 87,424,424 shares of Myson-issued common stock, representing an 88% interest in Myson. In connection with the merger, the newly formed Company issued 5,000,000 warrants with an exercise price of $0.50 per share to an unnamed institutional investor in Europe, with a total potential investment of $2,500,000 in the company’s growth. These warrants expire in 21 months if not exercised.

Mag Mile Capital intends to engage in several corporate restructuring efforts, including adding additional members to its Board of Directors and establishing a Board of Advisors to execute the company’s growth strategy.

“This merger and formation of a public company is a first step to springboard towards a multi-year and multi-lateral roll-up strategy backed by a technology platform where deal flow and data becomes more valuable as we grow,” said Mr. Shah.

“The goal is to create a full-service commercial real estate ecosystem with thriving and profitable businesses that leverage each other and the underlying technology to grow. We believe that this is a momentous/meaningful win for the existing and new stakeholders, employees, origination team, as well as loyal clients of the firm as they will be able to participate in growth by owning the public shares of the company through equity participation programs that will be launched.”

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What About “Cap Rate?”

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By Bruce Kellogg

It’s a popular and confusing measure!

You had to ask! It’s probably the most used real estate investment metric lately. Many people, syndicators and trainers especially, are talking about it. It turns out that there are more than one version of it, and they are not consistent. So, here goes!

Realtor.com’s Version

Realtor.com describes Cap Rate as “How much you earn on an investment”, and they measure it as Net Annual Income divided by Purchase Price, expressed as a percentage. They say to calculate the annual rent, but what if there are coin laundry machines, and the garages are rented extra, or rented as storage units? Do you see the problem here? Now, should the Purchase Price include closing costs, and the new roof that was installed immediately after closing? Do you see the problem here?

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One thing all versions have in common is that debt on the property is not included. It is computed as though there is no debt. That is how  Cap Rates can compare properties with each-other. So that’s good.

Realtor.com quotes a Realtor and attorney who says, “Cap Rate is a proxy for determining the risk of an investment.” Hmmm. More on that shortly.

Realtor.com says Cap Rates usually range from 4% to 12%. A lower rate makes the property more expensive, usually.

Investopedia’s Version

Investopedia regards Cap Rate as a “rate-of-return on investment” that can be used to “compare similar real estate investments”. It “indicates the property’s intrinsic, natural, and unlevered rate of return.” Yes, intrinsic and natural. We like that!

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So, Investopedia says Cap Rate = Net Operating Income divided by Current Market Value. Except when it says Net Operating Income divided by Purchase Price. The first one differs from Realtor.com’s definition, but the second one is the same. Clear now?

Some sources say to use actual rents and expenses from the previous year to compute a Cap Rate. Nowadays with so much syndication going on, they go beyond that to PROJECTING income, costs, and Cap Rates out 3,5,7 years for the life of the project. One prominent national syndicator with about 30 projects recently said he likes to buy in the 5-Cap range, add value, then sell in the 3-Cap range. Now that multiunit sales are 5-Cap or higher due to increased interest rates and wealthy clients becoming less wealthy anymore, he might find his model being a challenge. Cap Rates generally rise as interest rates rise, and as Yogi Berra famously said, “Predicting is risky, especially when it’s about the future.”

What’s this about risk?

According to Investopedia “a lower Cap Rate corresponds to a better valuation and a better prospect of returns with a lower level of risk. On the other hand, a higher value of Cap Rate implies relatively lower prospects of return on property investment, and hence a higher level of risk.”

So, here are some of the risks they mention:

  1. Age, location, and status of the property
  2. Tenants’ solvency and regular receipt of rentals
  3. Term and structure of tenant lease(s)
  4. The overall market rate of the property and the factors affecting its valuation
  5. Property type: multifamily, office, industrial, retail, or recreational
  6. Macroeconomic fundamentals of the region as well as factors impacting tenants’ businesses

As a practical example, suppose you have two indentical 20 year-old 4-plexes. One is next to a small shopping center containing a convenience store, a nail parlor, a bar, and a “strip club”. The second one is next to a good-size church with a medical clinic across the street. Which is likely to have the lower (“better”) Cap Rate? So, that’s risk.

An Educational Example

Exhibit “A” is a listing of a vacant 78 year 0ld 2082 sf. house on a city lot. The agents say it’s a single-family residence (SFR), but it can be turned into a Residential Care Facility as a “value add” opportunity. Maybe add an ADU since the lot size is apparently sufficient.

The second page shows a Cap Rate of 16.40%! That’s amazing! They figured that to two decimal places on a vacant property! It’s not really a miracle. They PROJECTED the Residential Care Home on to the property.

Here is the lesson:

This is a PROJECTED Cap Rate. Who knows what will happen? It is basically meaningless. Yogi was right.

Conclusion

Cap Rate is one measure out of about ten that are useful for real estate investment analysis. It has value on larger projects like multiunits and other commercial properties, but on smaller residentials, say 1-20 units, it’s not necessary. Just compute the cash flow, and see if you like it.

Cap Rate has several formulas, which can be confusing and even contradictory. If you’ve decided to use it, select a formula that has meaning for you and apply it consistently to your investment decisionmaking.

Calculating investment metrics is “desk work”. Necessary, of course. But also needed is “field work”. Go investigate the property. Where are the bar and “strip club”? Or the church and medical center? Remember, you can improve the property, but not the neighborhood.

And don’t put too much stock in anybody’s projections. The property needs to make sense today.

Bruce Kellogg

Bruce Kellogg has been a Realtor® and investor in California for 44 years. He purchased about 350 investment properties for himself, mostly with high leverage and tax-deferred exchanges. In the process, he made three fortunes, and experienced three real estate downturns since 1980. He has transacted about 550 properties for clients, creating fortunes for several. His first book, Real Estate Investing Wisdom, is in publication, and he can be reached at [email protected] or (408) 489-0131.

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KeyWe Debuts with Disruptive Real Estate Technology Platform

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Property Tech Start-up Merges Tools & Access to Property Content in Compact “Ecosystem” Platform to Make Home Buying and Selling Easier & Faster

In a move that promises to vastly improve real estate transaction efficiencies, KeyWe, Inc., a property technology start-up in Silicon Valley, today debuted with its breakthrough technology platform for home buying and selling. The system is the industry’s first fully integrated solution designed to drive customer engagement at the earliest stage and dramatically reduce the time and effort associated with buying or selling a home. It gives brokers and agents an innovative engine to grow revenue and deepen brand loyalty, while smoothing the transaction process for buyers and sellers.

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KeyWe was founded in 2021 by a team of real estate (RE) and technology experts to fix a problem that persistently inhibits growth for brokers/agents: the disaggregation of critical tools and real-time property information, and the lack of advanced analytics. This “silo” dynamic makes transaction management extremely inefficient for motivated buyers/sellers, and difficult for brokers/agents to convert leads into customers. For RE professionals, aggregation is the ‘Holy Grail’.

Although the RE industry has benefited from digital innovations, there are limitations because few products were developed specifically for the industry and user. RE professionals and their clients must utilize different tools for every step of the transaction process. KeyWe greatly simplifies the process by seamlessly integrating discovery, creation and management of property listings, real-time communication and chat, integrated scheduling, offer creation and management, and agent-to-agent referrals in one platform. Future features will include transaction management capabilities and a version that includes rentals. In addition, the system is designed to enable advanced analytics that will further accelerate efficiencies and drive informed decisions.

KeyWe Founder and CEO, Michael Riese, called the platform a ‘power tool for the RE industry’, noting that the concept emerged from his experiences as a RE professional. “The gaps are so obvious, yet the solution always was beyond reach,” he said. “The space is ripe for a solution that empowers brokers/agents with advanced capabilities, drives revenue growth, and increases their value to customers. The KeyWe platform delivers, while simultaneously reducing confusion and frustration for buyers and sellers.”

CTO, Brendan Logan, added, “In addition to rich functionality and a platform to enable advanced analytics, our priority was to make the user interface intuitive and uncomplicated, as well as elegant and attractive. We want RE professionals to migrate seamlessly to the platform, benefit immediately from its unique advantages, and extend the value to their customers.”

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A closed Beta was recently completed following months of agent and user testing. The full solution will be rolled out initially across the U.S. West Coast, with plans to extend availability nationwide in the coming year. The system runs on Android, iOS and the web.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Realty411’s Lone Star Investor Summit — IN PERSON EVENT

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Saturday, September 16 · 9am – 5pm CDT

Sheraton Arlington Hotel 1500 Convention Center Drive Arlington, TX 76011 United States

Celebrate Real Estate Investing with Realty411 – Join Us for Our In-Person Event in Arlington, Texas.

We have exciting news regarding our In-Person Event in Arlington, Texas. Our special one-day conference will host incredible educators from around the country, who are ready to share their valuable insight.

Be sure to join us in person. While General Admission is complimentary, please consider purchasing a VIP ticket to join us for a SPECIAL INVESTOR NETWORKING BREAKFAST to start the day off right. We will have wonderful resources, plus guests will have access to private capital, and business and commercial funding as well. Now is the time to grow your real estate business to new levels.

Now is the moment to grasp this opportunity — the chance to network with sophisticated real estate investors joining us from throughout Texas — as well as from around the nation!

Be sure to pencil this date now and join us in-person to gain specialized insight and knowledge. The information shared on this day could catapult your portfolio to new levels. This one-day conference has something for everyone regardless of their experience level in real estate. Join this memorable day and receive knowledge for a lifetime.

Learn the Latest Niches in Real Estate + Connect with Influential Investors from across the nation right here in Arlington, Texas!

Are you ready to Grow Your Real Estate Business, Portfolio and Network?

OUR COMPLIMENTARY CONFERENCE IS THE #1 SOURCE FOR REI 411

This is Your Chance to meet TOP Leaders in REI, Local & National Experts

  • Learn from Leaders & Industry Pros
  • Meet Local PLUS Out-of-Area Investors
  • NON-Stop Tips for Real Estate Success
  • Bring Lots of Business Cards

This event is produced and hosted by Realty411.com. Since 2007, we have dedicated our time, resources and energy to help expand real estate investing knowledge and education by producing complimentary magazines, virtual conferences, webinars, podcasts, and live events.

Be sure to download Realty411’s popular issue, CLICK HERE.

We also produce REI Wealth magazine, which is the longest-running magazine for investors specifically developed for online readership. Our digital, interactive issue is designed to be read and viewed online.

We now also print copies of this fabulous publication as well. Learn more about this publication at: http://REIwealthmag.com

Realty411’s publisher, Linda Pliagas, has owned income property in Texas since 2005. As a licensed agent in California, her company referred nearly $6M in real estate sales in one year alone to Texas real estate brokers.

In fact, she has referred so many investment property buyers from around the nation to the Lone Star State, that she is credited with helping to significantly expand the businesses of several property management companies in the state of Texas. Many of the buyers in her network have actively and successfully owned investment properties in Texas for DECADES!

INVEST YOUR TIME HERE FOR ONE SPECIAL DAY OF NETWORKING & MOTIVATION – TAKE YOUR REAL ESTATE KNOWLEDGE TO A WHOLE NEW LEVEL.

Don’t miss our complimentary real estate investor summit. What can you expect?

Learn with PROVEN Leaders in the Industry:

  • Receive the latest REI knowledge from active investors
  • We feature the latest technology to expand your income
  • Meet other investors with common goals and mindsets
  • Develop relationships with leaders in the industry
  • Share your opportunities with potential clients
  • Learn how to save money with our Realty411VIP.com members’ network.
  • Realty411’s publisher has owned national rentals for many decades
  • We will share life-changing information unavailable anywhere else
  • We host complimentary events to meet our readers and to spread knowledge

Our mission is simple: To provide realty knowledge and resources so that everyone can learn about the benefits of investing.

OTHER SPECIAL BONUS PERKS INCLUDE:

  • Early-Bird Guests Receive Our Investment Magazines
  • Meet Local Leaders & Industry Giants – From Coast to Coast
  • Influential Real Estate People & Business Owners Are Attending
  • Learn How to Leverage and Meet Private Capital Lenders
  • Find Potential Partners, New Friends, Build Your Circle of Influence
  • Your Net Worth = Your Network — Don’t miss this event
  • Mingle with Leaders & Industry Professionals Here

Please bring LOTS OF BUSINESS CARDS, it’s time to Network!

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Realty411.com’s founder is an accredited investor and REALTOR® in the state of California and has been a licensed real estate agent for over18 years. In addition, to real estate and media, her family owns HRS Clocks and Watches, a clock and watch shop in world-famous, Solvang, California, known as “The Danish Capital of America”. Their shop restores fine watches and clocks and is located within Renaissance Antiques, which sells estate jewelry , clocks and artwork dating back from the Victorian era.

Philly Event Replay – Learn from Our Philly Event Educators Online!

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May 13 and 14  (12:00 AM – 5:00 AM AWST)

Philly Event Replay – Learn from Our Philly Event Educators Online!

About this event

Did you miss our in-person event in Philadelphia, PA? No worries, we are now bringing our event back ONLINE for everyone to learn and enjoy.

Be sure to register today! Guests will receive a Zoom link to our INTERACTIVE and live online event. Get all your real estate questions answered by experts here.

Grow Your Wealth with Real Estate Investing – Join Us for an In-Person Realty411 Investor Summit in Philadelphia, PA.

We will have wonderful resources and guests will have direct access to private capital, plus business and commercial funding as well. Now is the time to grow your real estate business to new levels.

Join renowned companies and educators from the local area and nationwide. Some of our guests, included:

Dave Seymour – Freedom Venture Investments

(Dave starred in A&E’s hit show “Flipping Boston”)

Joseph V. Scorese – Lending One

Eric Mauz – MB Capital Solutions

Nick DiFederico – MB Capital Solutions

Jeremiah Dew – The Money Multiplier

Dan Zitofsky – Zitofsky Capital Management

Andrea Lane – Coast 2 Coast Turnkey

Liz Faircloth – The Real Estate InvestHER

Paul Finck – The Maverick Millionaire®

Susan Batterton – Founding Member of REALM

Jack Malpass, SDIP – Next Generation Services, LLC

Julie Harrison – Buy Direct Mississippi, LLC

Adam Levine – Managing Partner, Levine Capital

Cassie Fenerty – Home365 Property Management

Hugh Zaretsky – eFramily.com

Jim Edenfield – Invest Success

AND MORE!!

Be sure to pencil this date now and join us ONLINE to gain specialized insight and knowledge. The information shared on this day could catapult your portfolio to new levels. Join this memorable day and receive knowledge for a lifetime.