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New Office Building in Cherry Creek Breaks Ground

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“Hospitality-infused” office building at 2nd & Adams in Cherry Creek predicted to be 70 percent leased at the start of construction

Cherry Creek North, CO (May 2024) – Magnetic Capital is proud to announce the groundbreaking ceremony (please see invitation in email for details) for Cherry Creek’s newest office building, located at 2nd & Adams. The 100,000 square foot, “hospitality-infused” building is expected to be 70 percent leased at the start of construction, including a 30,000 square foot lease to Bow River Capital.

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“We’re very excited to announce the start of construction for 2nd & Adams, and provide our tenants with an office building that is designed and configured with the ultimate in hospitality in mind,” said Chris Carroll of Magnetic Capital. “Cherry Creek represents a ‘flight to quality’ among businesses that want a safe, friendly and first-class location where their employees can live, work and play. While downtown Denver continues to struggle with office vacancies, Cherry Creek has experienced 65 percent rent growth since Covid and a steady influx of new office and retail tenants, as well as residents filling existing and new multifamily communities.”

Bow River Capital, a Denver-based private alternative asset manager, will locate the company’s new headquarters at 2nd & Adams and become the building’s anchor tenant.

“We’re thrilled to be moving Bow River’s headquarters to 2nd & Adams and to be the first of many companies that will enjoy the building’s forward-thinking design,” said Bow River Capital Chief Operating Officer Jane Ingalls. “We were drawn to the focus on hospitality and elevated common areas that 2nd & Adams will provide to our team and guests.”

Construction of the mixed-use office development is scheduled for completion in the third quarter of 2025. The project will include approximately 80,000 square feet of office space and 20,000 square feet of retail. The development team is focused on what it calls a “hospitality-infused office operating model” with a heavy emphasis on food and beverage and the broader activation of common areas. The project will have multiple food and beverage and retail concepts across the ground floor and the rooftop will feature a 5,600 square foot bar and restaurant, anchored by best-in-class national operators.

OZ Architecture is the architect for the project and Mortenson Construction is the general contractor. OZ Architecture recently released an article on the project here. Blake Holcomb at CBRE is handling office leasing and can be reached here.

More information about 2nd & Adams is available at https://secondandadams.cbre-properties.com/

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Cherry Creek North Dynamics: Cherry Creek North’s unique concentration of high-end retail, executive housing, luxury multifamily, and premium hotels, all within a 16-block radius, positions it among the top office markets in the US today. With a vacancy rate of sub-2% and physical occupancy at ~95%, Cherry Creek contains fundamentals comparable to Sand Hill Road, Beverly Hills, and Century City. More information regarding Cherry Creek North is available at www.cherrycreeknorth.com.

About Magnetic Capital
Magnetic Capital, led by Dan Huml and Chris Carroll, is a privately held real estate investment and development company focused on developing and operating real estate assets often overlooked or undervalued by traditional investment firms. Headquartered in Denver, Colorado, Magnetic Capital is focused on development and multifamily acquisitions opportunities along the Front Range.

For more information on Magnetic Capital, please visit https://magneticcap.com/.

About Bow River Capital
Bow River Capital is a private alternative asset manager based in Denver, Colorado, focused on investing in the lower and middle market in four asset classes: private credit, private equity, real estate, and software growth equity. Through its subsidiary Bow River Advisers, LLC, Bow River Capital also offers a registered, closed-end mutual fund – Bow River Capital Evergreen Fund (EVERX) – designed to provide institutional-quality private market access to a broader set of investors. Collectively, the Bow River Capital team has deployed capital into diverse industries, asset classes and across the capital structure.

Bow River Capital Evergreen Fund is distributed by Foreside Financial Services, LLC, which is not affiliated with Bow River Capital or its affiliates.

For more information on Bow River Capital, please visit www.BowRiverCapital.com.

Media Contact: Paul Suter, Suter Media Relations

720-771-9093 or [email protected]

Unlocking Wealth: 5 Real Estate Mistakes to Avoid for Smart, Passive Income

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By Hugh Zaretsky

Real estate investing is an extremely powerful tool for building short-term and generational wealth. This includes offering a route to financial freedom while delivering passive income. However, navigating this path successfully requires awareness of common pitfalls that can thwart even the most well-intentioned investors. With a diverse portfolio that spans from $40,000 single-family homes to million-dollar properties, I’ve gleaned valuable insights on effective strategies and mistakes to avoid. Here’s a detailed look at the smart ways to invest in real estate and the top five mistakes people often make, enriched with real-life stories from my experience and some pro tips.

1. Failing to Do Thorough Market Research

What to Do: Conduct comprehensive market research before investing in areas, especially in locations that you do not know well. Have you seen the Homes.com commercials? They joke about going undercover and doing the research for you. However, this is what you need to do especially for out-of-the-area markets. You need to understand local economic drivers, population growth trends, employment rates, and housing demand.

Is there a new casino going into the area or is a factory closing? Both can have a significant impact on the local economy and the housing market.

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Use resources like:

Local Government Websites: Access economic development reports and city planning documents. It is mainly free and open to the public. You just need to know where to look.

Real Estate Portals: Sites like Zillow, Homes.com, Redfin,PropertyShark and Realtor.com offer market trends and property value data.

Market Analysis Reports: Industry reports from companies like JLL, CBRE, or local real estate associations provide in-depth market insights.

**Mistake to Avoid:** Investors often buy properties that are cheaper but in areas with declining populations or economic instability, leading to poor returns and high vacancy rates.

Story: Early in my career, we bought a portfolio of “cheaper properties” compared to where I live in a small midwest town with the expectation of significant growth happening in the area. However, the city delayed the major growth project in the area. While other areas of the country grew 10 to 50% before or during COVID this area stayed flat. This taught me the importance of thorough market research.

2. Overleveraging and Poor Financial Planning

What to Do: Maintain a conservative debt-to-equity ratio and have substantial cash reserves. This includes:

Budgeting for Contingencies or Whoops factor: Set aside funds for unexpected repairs or vacancies.

Creating a Financial Plan: Include investment goals, cash flow projections, and exit strategies. Make sure to find out the cost of a refresh in your area.

Mistake: Overleveraging can lead to financial ruin if the market shifts or unexpected expenses arise, leaving you unable to service debt or cover costs.

Story: The real estate market will not go up forever. I learned this lesson the hard way during the 2008-2010 housing market crash. Instead of taking profits along the way by selling off some of our properties. We were caught in the downturn. We lost a few properties and had to sell others at a loss. This experience underscored the necessity of maintaining a healthy balance between debt and equity.

Pro Tip: I typically have my client’s people set aside or keep a reserve of 1% of the purchase price or 10% of the rehab budget whichever is higher when fixing a property. You should also have 3 exit strategies and not just one for each of your properties.

3. Ignoring Property Management:

What to Do: Either manage properties efficiently yourself or hire a reputable property management company. Key responsibilities include:

– Tenant Screening: Conduct thorough background and credit checks.
– Rent Collection: Implement a reliable system for on-time payments.
– Maintenance: Regular inspections and prompt repairs to maintain property value.

Mistake: Poor management leads to high tenant turnover, property degradation, and loss of rental income.

Story: I have lots of my clients and students who have had bad experiences because of not doing proper screening on their tenants. The least of your concern is the tenant not paying rent for 6 to 9 months. One couple that I coach wanted to be nice to their tenant and listen to a local attorney who said, “The tenant would leave after a few notices.” It had already been several months of late rent and not paying in full when they engaged the attorney. Well six months later, they finally listened to me and got the eviction process started. The tenant fought it but did move out when the sheriff finally showed up to evict them. Sometimes we have to make a hard choice.

Pro Tip: Don’t be cheap and make sure to do background checks on your tenants.

4. Skimping on Due Diligence

What to Do: Perform your due diligence before purchasing and use professionals even if not required in your state. This includes:

– Property Inspections: Hire professional inspectors to check for structural issues, pest infestations, and compliance with safety regulations.

– Hire Attorney to Perform Legal Checks: Ensure there are no liens, easements, or zoning problems.

– Surveying: Verify property boundaries and land use restrictions.

Mistake: Failing to uncover these issues can result in costly legal battles, unexpected repair expenses, or inability to use the property as intended.

Story: This is one of the biggest things that my clients and students want to push back on in states where attorneys are not required to purchase a property. Do not be CHEAP as there are lots of horry stories. I would much rather pay an attorney $750 to $1,500 to do a closing than find an issue later the cost $20,000 to $100,000+ to fix or even worse an EPA issue. I was just talking with someone buying their own home that had asbestos only in their floor. Anything EPA related will most likely cost 25%+ more than you expected and take longer 30 to 90 days longer to fix than you planned. So, be prepared. The government does not move fast.

5. Underestimating Costs

What to Do: Accurately estimate all costs involved. This encompasses:

– Closing Costs:** Fees for legal services, title insurance, and loan origination.

– Renovation and Repairs:** Obtain detailed estimates from contractors.

– Ongoing Expenses:** Property taxes, insurance, utilities, and maintenance.

Mistake: Many first-time home buyers and investors focus solely on the purchase price, underestimating the total investment required, leading to cash flow issues. Most people are shocked by all of the closing costs on their first deal.

Story: On my first home, I did not review the HUD (Now, closing statement) before my closing but that is the time to see all of the expected costs on the closing of your home or property. I ended up paying an extremely high fee to my mortgage guy. My attorney caught it at the closing but it was too late to change it for the purchase.

Pro Tip: Make sure to review all of your fees on the documents you sign before closing. Make sure to have your professionals outline their fees upfront.

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**Conclusion**

Real estate investing is a powerful tool for building wealth and achieving financial independence, but it requires careful planning and informed decision-making. By avoiding these common mistakes and following strategic investment practices, you can enhance your chances of success and meet your financial objectives. For more insights, Pro Tips, and detailed guidance, visit [www.hughzaresky.com](http://www.hughzaresky.com), where I share my experiences and tips from decades of real estate investing.

Happy investing!

Hugh Zaretsky

Hugh Zaretsky, was an IT executive until his wake-up call came on 9/11. Realizing how short life can be, Hugh transitioned his career to become a real estate investor, international speaker, best-selling author, philanthropist, and advocate for empowering individuals. Hugh started investing in the precursor to Short-Term Rentals back in 2005. His expertise in cash-flowing properties (STR, SFH, and multi-family) has allowed him to successfully train over 12,500 real estate investors and entrepreneurs to complete profitable real estate transactions, launch businesses, or take them to the next level.

Hugh has been a certified real estate continuing education instructor in 4 different states. His latest book “The Launch Button” was an Amazon best seller in 4 categories including all of real estate. He recently spoke at the Humanity Summit in Portugal on the global issue of “Sustainable tourism (including STRs) and how to work with local communities”. His dedication to mentoring and coaching aspiring entrepreneurs makes Hugh a highly sought-after coach, trainer and speaker. Get ready to be inspired and gain invaluable insights from Hugh’s wealth of experience. To learn more about Hugh go to www.HughZaretsky.com

IG – @hughzwealth
FB – @hughzWealth – My personal page is full so use this link

www.thelaunchbutton.net or buy direct on Amazon. – My book “The Launch Button” is an amazon best seller helping people find their passion or take their business to the next level.

www.eframily.com – Want to work, train or get coached by Hugh?
www.hughzaretsky.com – To learn more

“You have to change your mindset before you can change the size of your wallet.” – Hugh Z

You’re invited to National Private Lender Expo® Commercial Real Estate Conference

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You’re invited to National Private Lender Expo®
Commercial Real Estate Conference
Thursday May 30, 2024
Antuns, Queens Village New York
3:00pm to 8:00pm

Queens New York May 30, 2024 register/view details

Miami Florida November 21, 2024 register/view details

Carson California March 27, 2025 register/view details

View Sponsors

View Agenda Thursday May 30, 2024

View video clips of the past National Private Lender Expo®

Schedule a call for sponsor, on-stage speaking engagements, PowerPoint presentations

It’s truly an honor to have these distinguished, illustrios indiividuals provide powerful presentations live on-stage at the National Private Lender Expo commercial real estate conference in the heart of the five boroughs of New York. If you’re involved in the private lending industry, you’ll make priceless connections in a royal atmosphere at this annual flagship event attended by private lending professionals, accredited investors, major commercial real estate players from across the continent.

Follow our company page to keep apprised of the latest news in the private lending industry.

This flagship event is organized by Peretz Toiv – CEO HardMoney.com
Follow Mr. Toiv on LinkedIn

Antuns is located directly across the street from the LIRR Queens Village Station and near Mass Transit. Three free parking lots for your convenience.
Bring lots of business cards:)

Ask the Right Questions! To Determine the Viability of a New Loan Request

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By Dan Harkey
Educator and Private Money Finance Consultant
949 533 8315 [email protected]
Visit www.danharkey.com

Introduction:

The following is an example sequence of questions that loan agents can use to obtain the information from the borrower. These are suggested. Each loan agent may set up their questioning sequence, which will vary but accomplish the same result.

Conversations with borrowers may be fluid and take the loan agent into complex life stories to obtain intended information. I often pause to let them talk because I know they are upset, not about me but their life circumstances.

Borrowers love to tell you their life’s problems while you are attempting to obtain material facts. Compassionate listening is a natural, thoughtful, learned trait that helps develop trust and lasting relationships.

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Any sales career endeavor involving products, goods, or services will have a similar best practices sequence of questioning. All salespeople should take the time to write down a sequence of questions as an effective platform for intended results. The intended outcome is to obtain the material facts, represent the customer with good intentions, explain and answer questions, determine the transaction’s viability, and close and drive the transaction forward. Or decline the transaction if it does not fit the company’s requirements.

Educating a client or customer is part of the job of any professional salesperson. The customer should come away with the idea that the salesperson honestly had their best interest in mind. A byproduct of this philosophy is a lasting relationship, spreading goodwill, and referrals.

Stage I: Questions as a Best Practices Platform Include:

• Loan amount, for what term?

• First or second lien?

• Type of property: single-family, owner- or non-owner-occupied, commercial, apartments, industrial, occupancy, or other.

• Loan purpose: This question is paramount if the loan request is single-family owner-occupied. Is the use of loan proceeds primarily for business purposes? Primarily means 51% or more of the loan proceeds. What portion will be used for consumer purposes?

• Where is the property located?

• Property value. How did the borrowers determine the value? A borrower’s estimate of value is often incorrect or intentionally exaggerated.

• Cash out requested?

• Current total liens

• Are the liens current? If not, how much is the arrearage and the reason? Get the complete story in writing. Completeness may make or break your transaction. Some reasons may be rational, while others are just an attempt to conceal.

• Loan-to-value: LTV ratio total loans divided by appraised property value (APV)

• Description of collateral property.

• Property address

• Exit strategy: What are the borrower’s plans to repay this loan?

• Rental income stream? What gross rents, vacancies, and expenses are required to determine net operating income, often called NOI? The NOI calculation excludes debt service. Will the NOI cover the loan payments and property expenses?

• Most recent payment statement(s)-Please obtain.

• When was the property purchased, and for how much?

• Have they made any significant improvements or upgrades? Please provide a list of upgrades and costs.

• Pictures of the outside and inside: In most cases, pictures are found online, with Zillow, Redfin, Realtor.com, and Trulia. Photos of the inside and outside are necessary if the property has undergone significant upgrades that enhance its value.

• Is the property owner/borrower a private individual(s) or an entity? If an entity, what is the purpose of the enterprise?

• If the property is newly or partially reconstructed, inside and out pictures are necessary, as well as a list of improvements, costs, and what improvements remain to be completed.

• Any exceptional circumstances? Weaknesses in the transaction include a history of late payments, significant arrearages in payments, accrued unpaid property taxes, outstanding judgments and liens, state and federal taxes due, probate sales, bad credit, open bankruptcy, pending divorce proceedings, tax liens or judgments, the property has a recorded notice of substandard condition, red tagged for code violations, successor trustee acting on behalf of a family trust, multiple borrowers, multiple cross-collateralized properties, etc.

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• Forward the prospective borrower a loan application and authorization to obtain credit. Request the most recent property loan payment statement and at least three months of bank statements. Use a commercial loan application rather than a 1003 residential form when possible.

• Ask for a handwritten purpose of the loan letter.

• Does the borrower have an online presence? If they are a company, they may have a website. If they are individuals, they may have a presence on LinkedIn. Does the borrower have a promotional summary about themselves? Add these items to the executive summary sent to the lender. Positive promotional material will add credibility to the prospective borrower.

The above information is sufficient for the loan agent to write an executive summary and email it to a prospective lender. Then, follow up with a phone call.

Stage II: Driving the Loan Process Forward:

• Private money vs. institutional lenders have different borrower requirements, requiring tax returns, recent pay stubs, w-2s, and 1099s.

• Profit, loss, and financial statements are necessary if the borrower is an operating entity. Two data sets, one for personal and one for business, may be required separately.

• In addition to a borrower’s signed letter of interest, loan application, and credit authorization, the agent will need other data, such as a property owner family trust document, an operating statement for a limited liability company (LLC), insurance broker contact information, and association management company contact information.

• If the loan request is for a junior loan, information about the senior loans will be required. Documents for review may include a copy of the promissory note, loan agreements, and a recent payment statement from the senior lien holder or loan servicer. Reviewing the recorded documents related to the senior lien associated with the deed of trust is prudent.

• Does the first lien have a written provision in the deed of trust referred to as an “alienation clause” or a “due on further encumbrance clause” that would require the lender to obtain written approval to place a junior lien on the property? If the loan agent is working on a second lien loan, they should review the deed of trust and the loan agreement to see if there is a prohibition of placing a junior lien without obtaining the first lien lender’s approval.

This fact is important because, in many cases, the original borrower may have been parents, possible deceased members, siblings, co-trustees of a family trust, ex-spouses, or other miscellaneous parties. Some earlier property purchases were taken “subject to” a lien that prior owners obtained in the past. Completing a property sale “subject to” means that the purchaser/borrower purposefully failed to notify the first lien holder of the transfer. Was the sale transfer kept a secret, deliberately to get a lower interest rate? Therefore, the loan documents still show the obligor as the prior owner on the note and deed of trust.

• Does the person requesting the loan have the sole authority to borrow and encumber the property with a new lien? Are there other parties of interest who may object to recording a lien on the property? An estranged ex-husband, ex-wife, business partner, or trust beneficiary would be an example.

• Are there multiple borrower parties that a lender must include in the application, processing, underwriting, and closing process? A lender’s frustration will occur when the discovery that the borrower has intentionally excluded an undisclosed hostile party. I assure you that an unknown borrower party will not fool a good loan processor or the title company. When the title insurer underwrites their coverage, they will ensure that the correct parties have signed the documents. Verifying the proper parties is part of their insurance underwriter and approval process.

• Additional documentation may be required to drive the process forward as a loan processor sets up their file. The loan agent should maintain a respectful and enthusiastic relationship with the processor.

Sifting Through the Maze of Questions and Answers to Develop a Well-written Executive Summary to Send to the Lender

Loan agents ask prospective borrowers questions to determine the transaction’s viability. They are responsible for obtaining specific information from the borrower or the borrower’s agent.

Some agents are responsible for asking appropriate questions but then calling a lender with fragmented and incomplete information to discuss the potential loan transaction. The lender will respond that they need more information. The agent will answer, “What do you need?”

There are dozens of questions that may be asked at the front end, but getting to the basics of whether the potential loan transaction is viable is the beginning. Sifting through the maze of complexities includes:

  • Property types, income generating, and occupancies,
  • Agent’s competency, property ownership variables,
  • Borrower creditworthiness,
  • Borrower’s propensity to withhold material facts,
  • Some borrowers will withhold information, unaware they will get caught while processing the loan. A critical thinking questioning sequence will avoid most of this.

The material facts of the transaction should be summarized and submitted to a lender via email as an organized written executive summary, followed by a phone call discussion. Usually, a request for more information is anticipated. Emphasize the positives first and the negatives later. However, do not bury the negatives so the lender discovers them later.

Lenders have long memories about who is professional and honest, supply only fragmented data, and summarily leave out adverse material facts. After a couple of repeated offenses, the assumption will be that the loan agent withheld the negatives intentionally. Reputations, both negative and positive, accrue quickly. Experience, understanding, and the propensity to fully disclose and protect the lender’s interest will ensure lasting relationships.

After reviewing the material facts, the lender may express an interest or decline the proposed transaction. Or the lender may ask for more information. If you receive a positive response, that is great, and if you receive a rejection, it is a rejection of your request, not a rejection of you. Move on to the next lender. Lenders have different risk assessment standards and pricing structures. For example, some lenders require an independent third-party appraisal, and some do not. Some lenders care about FICO scores, and some do not. Some lenders need assurances about the ability to pay, while others are less concerned. Some lenders should be more skilled in processing and underwriting and, therefore, take riskier deals unknowingly.

The loan agent looks forward to a term sheet or a letter of interest. The written term sheet will state the lender’s terms and conditions to make the loan subject to an appraisal and underwriting of the material facts submitted by the borrower.

The above is helpful as a platform for questioning borrowers for adequate information to submit to a prospective lender to obtain an expression of interest, a terms sheet, or a letter of interest.

I sincerely hope that you find value in this article. If so, please forward it to your associates. Please refer your friends and associates to me at [email protected].

Thank you,

Dan Harkey

Dan Harkey

Dan Harkey is a contributing author to Weekly Real Estate News and is a Business & Financial Consultant. He can be contacted at 949-533-8315 or [email protected].

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.

KEYS TO BEING A GOOD REAL ESTATE INVESTOR

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By 

Investing in real estate is a skill that can be developed over time. However, the skill of real estate investing is composed of sub-skills and traits that add up into the overarching experience and know-how on how to invest in real estate. By understanding the keys of what makes a good real estate investor, you can make the adjustments needed to also become a good real estate investor. The good news is that none of the skills or traits needed to become a successful real estate investor require anything that you wouldn’t have access to.

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Develop Your Network

Becoming a good real estate investor involves developing the right relationships and growing your network. Every good real estate investor knows that the right network provides support and opportunities. Who should be included in your network? Focus on finding mentors, other investors, agents, mortgage brokers, lawyers, and potential business partners. You can leverage each individual’s experience to further your own investment goals. Sign up to local real estate organizations and online communities to find individuals to network with.

Stay Educated

A good real estate investor understands the value of constantly learning. It is important to stay up to date with the latest industry news, current events, and changes in laws when it comes to real estate and any other business as a matter of fact. But also, it is important to continue learning new real estate investing related skills and sharpening the ones you already have. Investing in real estate can become very competitive. By taking the time to learn and continue to educate yourself, you can become a good real estate investor and stay competitive in the marketplace.

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Focus On A Niche

A jack of all trades is a master of none. There are many different niches within real estate. Most investors fail by trying to tackle them all. Niches such as buy and hold, fix and flip, wholesaling, section 8, commercial, and much more are some of the many niches that an investor can get involved in when it comes to investing in real estate. Take the time to find a niche that aligns best with your goals and approach to investing. Once you’ve chosen your niche, take the time to master that niche. By being the best at one thing, you are setting yourself up for greater success.

Know Your Market

The best place to start investing is in your own backyard. Why? Because you already know the market. You are familiar with the good neighborhoods versus the bad. You know where all the public transportation is and all the best shopping. If you don’t live in the market you are investing in, then still become an expert. Every market is different. The more you know about a particular market empowers you to make better decisions and avoid costly ones. Take the time to truly understand your market and you will be able to spot better quality deals which in turn, will be much more profitable deals.

Joe Arias

Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors. 

RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.

Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.

“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”

From a young latino immigrant  to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.

RealSuccess Website

www.ourrealsuccess.com

Personal Instagram: 

https://www.instagram.com/joeariasinvestor/

Real Estate Investment- Instagram: 

Instagram: https://www.instagram.com/realsuccesseducation/

Video For Finding Money from All Day Training (10 Hour Seminar)

https://vimeo.com/manage/videos/528446162

1 Hour Webinar

https://vimeo.com/manage/videos/530996751

Amazon Book#1:

Amazon Book#2

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.

10 Roads To Real Estate Investing Profits

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By Tamera Aragon

“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.” The Bible – Ecclesiastes 11:2

This is good advice as long as you don’t get so spread out that you are doing too many things but nothing with success. It’s important we understand the fine line between focusing on one real estate niche without putting all your eggs in one basket, (so to speak).

To simplify the terms of real estate investing, there are really only three ways for investors to make money in real estate:

  1. Real Estate Appreciation and Equity
  2. Cash flow while you own it
  3. Assignments: Payment when you flip a real estate contract without owning it.

So where do you start? Let’s try to answer this question on every aspiring real estate investors mind. Since real estate investing encompasses so many types of exit strategies or I like to call profit centers, it’s important to study and pick those you are most passionate about. otherwise called exit strategies.

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The following is a summary of Ten of the Most Popular Real Estate Investment Strategies with their advantages and disadvantages.

1. Rentals or Cash flow Investment Property: These types of investment properties are the ones which generate rental income. These are mainly apartment buildings and rental houses.

  • Advantages: One of the easier ways to get started, and good long term return on investment while also earning monthly income.
  • Disadvantages: Risk of not renting property leaving you with the mortgage payment and no income. Property management can be a challenge. You typically will wait awhile to sell your property so payoff is slow.

2. Lease Option. This is when you buy a property, then sell to someone else via a rent-to-own arrangement.

  • Advantages: You get higher rent, and the buyer is usually responsible for maintenance. Cash flow can be good.
  • Disadvantages: Most rent to own buyers don’t complete the purchase (this can be an advantage too, but it does mean more work for you). Bookkeeping must be done properly and can be complicated.

3. Fixer Upper Investment Property. These types of investment properties are the ones which are in ugly condition and need renovation. These properties can be acquired to flip after fixing-up quickly or held to rent out.

  • Advantages: You can receive a quick return on your investment (months). You usually get below market value pricing on properties bringing you instant equity.
  • Disadvantages: Higher risk. (Many unpredictable expenses come up in construction). You get taxed heavily on the gain when you sell in under a year.

4. Vacant Land. Many options including just holding while appreciating. You can also split it and sell it.

  • Advantages: History has shown that land always appreciates in value (it’s the buildings on the land that go down. It is simpler than most real estate investments, with the possibility of great profits.
  • Disadvantages: It can take a long time to increase in value. You have expenses, but no cash flow while you wait unless you sell the contract before closing.

5. Commercial Real Estate. These are any building containing 5 units or over and/or buildings sited for commercial use.

  • Advantages: Long term triple-net leases mean little management and high returns. Lending is usually based on the value of the property vs. personal credit.
  • Disadvantages: Commercial property valuation requires a more complex method, taking into account the income potential of the property. This is recommended for the more experienced investors as there is a lot more involved to set up and maintenance.

6. Buy property with Forced Appreciation. Buy in the path of growth and holding until values rise. For instance buying a lot in a residential development prior to roads being completed.

  • Advantages: Can yield large profits, especially if you buy low to start.
  • Disadvantages: Future price is not predictable – the market can turn, the developer can go out of business. You have expenses with no income while you’re waiting.

7. Preconstruction Investment Property: These types of investment properties are acquired directly from a developer before the construction or renovation is completed.

  • Advantages: Low money out of pocket to tie up property while being built. If purchased in appreciating markets, you make money in equity at closing and can instantly re-sell at a profit.
  • Disadvantages: You can’t always predict what a market is going to do. If market depreciates, you have lost money. Also higher tax rates in selling quickly.

8. Pre-Foreclosure Investment Property: These types of investment properties are the ones which you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.

  • Advantages: You have opportunities to buy properties at below value pricing – “Instant equity”.
  • Disadvantages: Legal liabilities are higher. Finding these properties requires a lot research and footwork to find a deal that works. You can do all the work and still not have a deal with enough equity to profit after expenses to sell, (taxes, realtors, etc).

9. Assignments: This strategy has you get into a property at a discount, preferably with a known buyer in place before you commit to your purchase. After you are in contract to purchase a property, you would sell your contract for a fee to someone else. For example you get into purchase contract to buy a $120K property for $100K. You turn it to an investor for $110K and profit $10K cash without the cost and hassles of ever closing on the deal.

  • Advantages: This is a great way to make quick cash with low or no upfront investment, low risk and fewer headaches from closing and ownership. This strategy creates a win win win outcome for everyone involved.
  • Disadvantages: This will only work if the property you are buying has equity so that you may buy it a discount. In declining markets, this type of property is harder to find. Also when dealing with banks on REO’s or Short Sales you will find they will not allow you assign your contract. However, there are ways to get around this if you plan and handle the contract correctly up front.
    Do you want to know how I have managed to get around not being able to assign a contract? I have purchased properties in the name of an LLC set up exclusively to buy properties. I then sold the LLC to someone, making them the owner of the LLC, therefore making them responsible for closing on the purchase contract and end buyer of the property.

10. Flipping – Wikipedia defines Flipping as is a term used primarily in the United States to describe practice of buying an asset and quickly reselling (or “flipping”) it for profit ..

This description pretty much explains property flipping, with there being a slight difference from that description of flipping assets. In real estate you can get into an agreement to flip a contract you have gotten into before you even buy it. This can be done with ease when you know exactly what your buyers want and with no money out of your pocket utilizing transactional funding. Flipping can also mean closing and quickly reselling your property, sometimes even doing both transactions the same day – this being subcategorized a “double closing”.

  • Advantages: My favorite strategy. You work the deal backwards. You create relationships with buyers who can close quickly with cash. Then you find a property meeting the needs of your buyers. This strategy allows you to profit literally from no money down, with lower risk and very little of your own time.
  • Disadvantages: The law requires you to disclose your intent to resell quickly to sellers. When dealing with banks, this can sometimes cause your offer to be rejected. You must buy properties in the name of an LLC in order to utilize transactional funding. Setting up and maintaining an LLC will cost you money. Though the intent of a buyer might be to close on the transaction, sometimes “life happens” and something causes the buyer to be unable to follow through. You may have to walk away from earnest money if you cannot find another buyer quickly

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Now that you that you have learned strategies to consider, you will need to consider the type of properties you want to go after, developing a marketing strategy to find motivated sellers of those deals. Over the next months I will be sharing steps and strategies on how to profit investing in real estate 12 different ways.

Please leave a comment if you have anything you would like add to what I have written here with the heart to support fellow real estate investors. (Any solicitations for business will not be published) I appreciate the feedback!

Tamera Aragon

Tamera Aragon is a professional online entrepreneur and has bought and sold over 300 properties, establishing her as an expert in the real estate investing field. Since 2003, she has purchased over 10 million dollars in real estate and currently holds properties all over the world. Tamera’s focus is on the booming Foreclosure market, buying Pre-foreclosures, REOs and Short Sales. Tamera who is a noted Author, Success Trainer, Speaker & Coach, shows her passion for helping others with the 17 websites she has created and several specialized products to support fellow investors throughout the world. When Tamara is not busy running her website, she is very involved with her Fiji joint ventures and investments. Tamera Aragon is one of the few trainers and coaches who is really “doing it” successfully in today’s market. Tamera’s experience has earned her a solid reputation in the industry as well as the respect and friendship of many of the top national real estate investment and internet marketing experts. Tamera Aragon believes her success has garnered her the financial freedom to fully enjoy her marriage and spend quality time with her children.

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