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Five (5) Important Methods to Lessen Risk in Multifamily Real Estate Investing

There have been rumors of an impending recession for the past several years. And this probability now seems more likely considering the present trade wars with China, the present inverted yield curve, Brexit, and a lot more indicators. Does this simply mean that one should stay away from purchasing real estate properties or invest in them?

Of course, the answer is a big NO. While it is true that it is better to obtain no deal at all than tying yourself up with a bad deal. But it does not mean that there will be no better deals along the way. Patience is a virtue. Again, the competition is stiff and the prices are a bit too pricey. That is why you require to be even more cautious and selective. You have to pay close attention to the essentials when investing in multifamily real estate. We have listed five important methods to minimize your risk when investing in multifamily properties:

  1. Market Condition. A bad market will destroy even an excellent property investment. On the other hand, an excellent market will make a bad investment not look so bad. You have to pinpoint which types of industries are most likely to get the hardest in times of economic downturn. You have to stay away from cities that depend heavily on those types of industries. 

You also have to look for places with excellent employment potential and a broad array of opportunities because this type of place is a lot more economically resilient as compared to a city that is so dependent on just one industry or sole company.

  • Cash Flow. Having healthy cash flow is imperative in maintaining a happy investor. A property with a great cash flow generates at least six (6) percent cap, which is the net operating income (NOI) divided by the initial purchase price. You may not have this 6% minimum cash flow at the onset, and it depends on where you purchase, but you should have reached this number at least after some renovation. 

But, prospective cash flows are solidly dependent on the capitalization rate of a specific market. The cap rate of a hot market is somewhere around 3-4 percent, so it is a bit complicated to obtain a property in this kind of market to a 6 percent cap, even after adding value to the property.

Ergo, you require making sure that your real estate investors know of this. Let them know that a significant amount of the return will not be realized until the property is disposed of. In this regard, they will get the idea if they do not see a high return during the holding period especially if you hit a recession and require extending the holding period several more years. 

  • Appreciation. Always be conservative with your underwriting. Do not depend much on appreciation or growth in rent too much. Even if there is significant growth in the market last year, do not expect the same growth each year or for the next succeeding years. You have to peg an amount that is closer to the history over the past decade. 

If the present market cap rate is five (5) percent, you have to assume that you will be selling the property at around 5.25% or a bit higher in the next five (5) years. The principal rule is to enhance the capitalization rate at a sale by five basis points yearly. 

  • Capital Reserve and Capital Raise. Do not ever depend on cash flow to finance and shoulder your renovation cost. This will surely lead you to disaster. Depending on when you rely on your cash flow to finance the renovation, it will restrain your capital and slow down the progress of your value add. It will be too risky if the cost will land much higher as compared to the original budget. Do not earmark money that is just enough for renovation. You have to raise an additional ten (10) to fifteen (15) percent of the computed budget since the world of construction is full of surprises. 
  • Term of loan. Try to secure permanent financing as soon as probable. You can sign for either twenty (20) or thirty (30) year loan immediately, or obtain a loan with an option for permanent financing. Permanent financing is very crucial because you will not have to worry in terms of refinancing for many years. If a recession manifests and negatively affects your property, you do not have to worry in terms of refinancing at a much lower value or selling your property.

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  • High Net Worth individuals
  • Doctors
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  • Engineers
  • Individuals who worked for a major company over Ten (10) Years
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  • Agie Women
  • Women CEO/Founder
  • Socialites/society
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Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

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BIG SISTER SECURITY

Time for some updates. This is annoyingly long.. buckle up.
I was so upset at myself that I was having some subpar relationships (or worse) in the Multifamily space.
I assumed everyone was like me- radically transparent, giving to a fault first versus using others, stood for justice, treated others how they wanted to be treated, worked their ass off for the long game without shortcuts, did not use others weaknesses against them to take advantage of their shame and past pain….
It kept happening about 50% of the time at the beginning of my career.
The other 50% were soulmate partnerships that I was LUCKY to attract. Always prioritizing the organism of the team over the cell.
I couldn’t understand why the vast difference.
Then I started deep research to look at the patterns and origin of the people, the groups they came from, who they surround themselves with, their past professional behavior patterns, digital footprint, and things they hadn’t even been caught for yet.. this revealed a lot about behavior patterns which will always repeat.
Deep research has forever changed my life!!!
Mostly the pattern found was that- those who preyed came from a group led by a sex offender. This is PUBLIC information. Those who associate with this type of person find it normal to prey on the innocent.
Also a big WAKE UP moment for me… ask yourself why am I attracting these fuckers?
I kept living in the past and the current story of the family trauma I’ve experienced and still deal with (aftermath). 
My healing journey is mine and I no longer need to share everything about that with everyone.
Since realizing this I have slowed down to really evaluate those who aggressively pursue me, watch their behavior over time while “business dating” and always using my deep search resources. This is So I can empirically compare with what my intuition/eyes tell me.
Facts now prevent and stop this bad behavior. I no longer feel scared. I no longer feel the need to create artificial closeness quickly, the right people will support you no matter what pops up. I no longer partner with weak people.
Now the business has picked up immensely since I now can identify those who deserve success and are on the same path as me to make a forever impact.
My life is only getting better now with the right people. Go read #whonothow!!
I am the most peaceful, influential, powerful, proud, woman of my generation, and nothing can stop me. 
My goal is to see 1B women around me build the confidence that struggle begets to stand up, value, and care for themselves!!
In the journey, you will have pushback to keep you down. You must make the decision to ask for help. With help, you can do ANYTHING!
We have now launched a service for women going through a partnership or business abuse. Click here for more info and support.
Www.bigsistersecurity.net
#bigsistersecurity
#apartmentqueeninvestments#youareaqueen

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Housing is a serious issue for Women

The housing crisis has hit women a bit harder as compared with men, because of a lot of factors like domestic abuse which is number one, and earning less income. Sometimes, women are regarded to be “hidden homeless” because of these circumstances. 

No matter where one lives, or how you pay for your home; whether social renting, homeownership, sheltered accommodation or private renting. One of the nuclei of the United States housing crisis has affected a significant amount of people all over the globe, regardless of age, in many different types of households. We have listed the ways by which the housing crisis disproportionately handicaps women all over the United States:

Women earn less income but they pay more, in rentals. The silly gender pay gap simply comprehends that women continue on average, to obtain income significantly less than men. It simply means that households supported by women are shelling out money bigger than average proportions of income on rent. According to studies, the gender pay gap presently pegs at 18%, with more women working in low-earning jobs or not full time. Across an existence, this simply means less disposable income, a higher value earmarked on rent, more difficulty saving for a deposit minus the financial security.

Services on Domestic violence are being cut. It has been said that about 25% of women experience domestic violence throughout their existence and 8% of them will suffer domestic violence at any given time. There is a big concern that housing benefit changes are making it more complicated for women’s shelters to support and operate women who flee from their homes because of domestic violence. 

Women who are homeless do not obtain the services they need. A lot of women who become homeless have multiple complex needs. A lot of women who become homeless have several complicated needs. Based on the report, it was found out that higher rates of drug use among the feminine gender and a higher occurrence of mental health issues have been prevalent. As per the statistics commissioned in the United States, about 33% of 4000 correspondents are experiencing homelessness, and 33% of them are drug-dependent females. There is also a huge occurrence among homeless women diagnosed with mental health issues like depression. A smaller number of homeless women means a lot of homelessness services default to the needs of men can be unintentionally hostile for the opposite sex. 

At the end of the day, women still bear the force and effect of caring responsibilities. They are often regarded as the main carers after severance of one’s marriage. This simply means that they are more likely to live in a home classified as under-occupied under the government parameters because of kids being young enough to share a room or just move out. 

In our society, women always carry the burden. In turn, they lose their house security. That is why __________________ helps women from all walks of life to raise their dignity and uplift their disposition towards life. In real estate investing, they help women increase their wealth and widen their portfolios. 

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  • Ultimate passive investors
  • Women with 1031 exchange over 500k
  • High Net Worth individuals
  • Doctors
  • Dentists
  • Engineers
  • Individuals who worked for a major company for over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
  • Individuals with pension fund
  • Endowments
  • Women-owned family offices or offices/funds that support the social initiative to teach financial literacy to women
  • Angel investors supporting women

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You
can find my form “The Apartment Queen™ Investor Questionnaire” at: https://form.jotform.com/200207883604451

Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

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8 Ways to Identify the Best Places to Buy Rental Property

8 Ways to Identify the Best Places to Buy Rental Property

How do you regard a market steady and high growth rate in rentals for the next ten (10) years? If you are looking for markets with the highest rental growth in the previous years, then you are not on the right track. 

A solid performance in the past does not mean it will also perform well in the future. You require paying close attention to the essentials that are driving rental growth. Sometimes, the essentials are there, but the growth in terms of rent has not manifested yet. Those are “hidden treasures” that you want to invest in. 

Investing in a real estate industry is based solely on concrete historical track is like purchasing a growth stock in blindsight. The investment has been doing well but it can be reversed in a period when the demand goes at a decreasing rate. Like how individuals sell their stocks when they feel that such a company is becoming overvalues, residents can obtain priced out of a market when the city becomes high-priced.

We have listed eight (8) fundamentals to explore that will aid you in spotting the most efficient real estate markets:

  1. Growth in Population. Communities possessing 1.5 percent minimum year-over-year (YoY) growth for the last twenty (20) years and a population of more than 100,000 people. It is imperative to look at population growth at the onset since it is efficient for trimming down the list. Rank the cities covering about 100,000 individuals from highest to lowest YoY growth in the last ten (10) years. Try to look for ten (10) markets that you are interested in. A market where you know a lot of people living there should be on top of your list. 
  1. Income Growth of Households. You have to look for an income of a household growing at about one (1) percent minimum YoY for the last twenty (20) years. You have to be reminded that without substantial income growth of a household, there will not be great growth in the rental. If a city possesses a strong rental income growth but a weak growth in household income, then it only signifies that its settlers are getting priced out of the market. The effect is that population growth will begin to slow down. 
  1. Crime rate. You have to pay close attention to a crime index that has been consistently declining over the last ten (10) years. A falling crime index is an efficient sign that the community is improving steadily. Companies also make an analysis in terms of the crime index in making sure that their office locations are enticing to workers, especially those with families./
  1. The ratio of household income to rent. You have to look for the minimum present median household income to median rent ratio at 1:4 or more. This is an efficient basis for measuring affordability in the location. You have to be sure in using median and not average because high household incomes can surely affect the average. 
  1. Employment growth. You have to look for at least 2% minimum employment growth for the last twenty (20) years. It is a known fact that employment growth is a key indicator of the condition of the economy. An increasing population is not sustainable without excellent employment growth. But, you have to identify what companies or sectors are propagating, whether the growth will continue or stop. 
  1. Employment Miscellany. You have to compare the present employment ratio to the national employment ratio. You have to look for cities with excellent diversity about employment. You have to look for cities with excellent diversity about employment. It simply means that the local ratio of the city should be within a few percent of the National average across all industries. You should eye for employment diversity to lessen the risks relative to specific industries falling. 

In an industrial community where there is a thick job availability, say in manufacturing, but the national manufacturing job ratio is not that high. This simply means that manufacturing is an important industry. But statistics showcase that the amount of employees has been declining. However, one should not worry if the local employment ratio is a bit higher in terms of the professional services industry or education since the same possesses an excellent long-term outlook and is stable in a way.

  • Median House Value. You have to look for at least 2.5% YoY growth in the median house value over the last twenty (20) years. This is an effective indicator of the entire wealth in the city. To add, if the median house value has been consistently appreciating for twenty (20) years. This simply means that it is not cheap to purchase a house, forcing renters to be renters for a long while. 
  • Landlord-friendly communities. Although this will not be a deal-breaker, you have to stay away from States that have hard rent control and guidelines on eviction of tenants. If you have selected a market that is not landlord-friendly, then you have to make sure you record this in your projections and underwritings. Get in touch with a seasoned property manager to know the trades deeper and how fast you can renovate your units so that they can add value and eventually increase rents. 

Conclusion. Everyone does their market research in the approach that they know is right for them. 

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  • Ultimate passive investors
  • Women with 1031 exchange over 500k
  • High Net Worth individuals
  • Doctors
  • Dentists
  • Engineers
  • Individuals who worked for a major company for over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
  • Individuals with pension fund
  • Endowments
  • Women-owned family offices or offices/funds that support the social initiative to teach financial literacy to women
  • Angel investors supporting women

Take the QUALIFYING QUIZ NOW!


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You
can find my form “The Apartment Queen™ Investor Questionnaire” at: https://form.jotform.com/200207883604451

Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

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Addressing Rental Eviction Issues

Addressing Rental Eviction Issues:

Truly indeed, eviction is a pain in the arse. The emerging issue that creates risk on eviction on our portfolios and how we can make use of pioneering and state-of-the-art financial products to enhance both the lives of the tenants and their ability to pay rent but also the performance of your portfolio. Based on studies, it is said that about almost a million eviction happens each year. A lot occurs in the shadows and landlords utilize different taxes to obtain residents out of our portfolios who are considered delinquent.

Why do evictions happen? The bottom line is the rent is extremely high. That is a fact and everyone heard that. Affordability issues are affecting the entire community as landlords in looking for residents who have the proper capability to pay rental charges. There are notorious skippers and professional informal settlers. Some property managers have faced battles for those. But more importantly, the cash flow challenges within the resident base. Drive almost all of the default and eviction that was witnessed in one’s portfolios and put the risk of eviction on a wider set of residents.

Why do tenants face eviction issues and risk in cash flow? They have a median household income of about forty-five thousand dollars and that is the tradition we all know. Also, there is stagnant growth in wages with increasing costs rent being the main cost that they replace on the resident base. In the same manner, half of the American population recognize 25% month-to-month volatility on income.

Also, the majority of the population in the United States has limited savings. Half of the country has below four hundred dollars in accessible savings to battle the financial turmoil. As landlords, they are putting a restriction on the residents’ base themselves.  They are placing a cash timing constraint by charging rent every first of the month which makes it complicated for the tenant who is likely to pay thirty (“30’) to fifty (“50”) percent of their salary to the landlords on that very day.

So, if a tenant will not be able to pay rent, what should they do? What present alternatives do they have? They have family and friends, family banks, relatives to ask for help, and the like. That might work but the truth is people are a bit embarrassed to do that and the capital base is limited inherently. We have banks and real banks. The truth of the matter is a lot of the tenants, especially in the workforce housing space are underbanked obligations. They have restricted access to the credit solutions and right capital that can stabilize their financial capability and means to shoulder rental charges on time.

Some have internet peer-to-peer banks they utilize. These are shelling out a lot of personalized lending solutions that can aid in solving this issue but a lot also possess main requirements that are more than what the clients basically need. They also have title lenders and payday. Many of the residents are utilizing payday and title loans in financing rent. These are giving their residents about two (2) to four (4) weeks to pay them back as well as charging them 3-700 percent APR’s.

To add, there are three (3) times as many payday lenders sitting in the rental communities as there are fast foods all over the United States. So they are the real capital source for their tenant base. And the worst part in terms of the residents utilizing them as a credit solution is that they are enhancing the long-term default risks on the tenant base. Basically, the traditional payday loan will be refinanced about eight (8) times. And once the borrower reached the last cycle, they are likely in default to both the payday lender and to utilize the landlord

Lastly, it is imperative to highlight the landlord. And as landlords, they offer credit to their client base but it is not an efficient credit. They usually have payment plans. This is applicable for tenants who are responsible and they hit a cash timing issue. A payment plan is destined for them because you do not want to lose them and in the same manner, the cost of eviction is a bit pricey.

But more predominant is the second form of financing that is also offered to appropriate tenants. They are just giving tenants a form of financing more commonly known as late fees. Verily, the late fees are pegged at five (5) to ten (10) percent of the rent for that specific cycle and an allowance of two (2) weeks to pay.

What happens if the defaulting tenant doesn’t pay? That is the time they file a case for eviction and charge them and if they do not pay then they put them on the street. Let us analyze the late fees for instance. Say, it is pegged at 10 percent they will give them about fifteen (15) days. That is about two hundred (200) percent APR and they are not giving the tenant any sufficient period in resolving the problem that they are experiencing.

Fair housing makes customized rental payment solutions a bit of a challenge. And the landlords are under-resourced to make this kind of credit. Landlords do not actually have an idea of what the credit risk of the residents is if there is a need. So there is a myth that should be dismissed and hear all the time from our landlord partners and people around. Some treat late fees as revenue. But the truth of the matter is, it is not. At consolation, it is a breakeven value proposition.

Landlords are bad at delivering credit. Landlords tend to look at their income statements and there is a lame line of thinking that late fees make landlords feel good. Some are running a portfolio that possesses a million dollars in yearly leave fees. The challenge in understanding the ins and outs of late fee revenue is understanding the underlying costs that drive and are linked with the collection effort. It is best recommended to go look at each portfolio and basically pull apart these costs to know if you are truly generating money. And it is almost 100 percent sure that you are not. Traditionally, there are five (5) different items sitting in three (3) different sections of an income statement. Bad debt, is easily tracked because it sits in revenue. They also have excess vacancy because of longer turnover for eviction as compared to a traditional turnover. It also sits on revenue but it is a bit complex to comprehend. Another thing is the collection team costs, eviction filing cost which is not apparent in property management expenditures. It is not a surprise that eviction costs us a lot. Turnover beyond the regular turnover that is hidden somewhere. In reality, they push it as a capital expenditure but are also hidden in maintenance as well as turnover costs. Verily, the worst part is that the resident is the largest loser in this equation. So even if they are not evicted, they will surely experience the stress of it, monthly. But the other hand, the ones that were evicted are damaging their state of confidence. This is because there are destroying their credit scores as well as their capability to look for housing in the future. A lot of families who are evicted are forced into transitional housing with friends or family hotels or homeless shelters. Children are ripped out of schools and the result is that there is an entire community loss. Parents who are the breadwinners of these families experience instability and uncertainty in terms of money. They are also parted from their job opportunities making it complicated for them to basically earn income to rent a home.

Some firms like Till presents a series of financial products that are particularly tailored for the multifamily and single-family rental realm. They have a central rental loan that is destined to address financial emergencies. It is a quarterly or semi-annual type of loan. They underwrite the tenant on their capability to pay. They are making sure that they have the ability to pay not only the lending company but also the landlord in the very near future. Firms like Till partner with landlords to deliver this type of scheme. This is another solution that the property managers have to give their tenants who are having a problem paying their regular monthly rental. These firms take the whole risk from the landlord and they will pay the same on time and direct. Each tenant’s balance that borrows from these firms goes to zero when they pay landlords. Also, they have a short-term rental loan that is designed to solve intra-month cash timing problems. As stated earlier, almost half of the income of tenants is spent on rental fees.

They have tailored as landlords a very uncompromising scheme allowing tenants to pay rent when they have an issue and they utilize sticks with late fees to oblige them to have payment on time. The short-term loans allow the firm to pay such landlords monthly on time and it gives the tenant the definitive flexibility over that months’ time to pay the firm back. The scheme to pay them back is dependent on the tenants. They can pay them back weekly or even daily; whatever enhances their ability to pay to lower their entire default and fees.

Truly indeed, affordability issues can be addressed with innovative financial solutions. Alternative credit particularly tailored for the rental industry can do well, and can financial stability of each tenant can be enhanced while enhancing the performance of your portfolio in the same manner.

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button ABOVE to quickly
send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

Our Ideal investors is usually one of these individuals:

  • Ultimate passive investors
  • Women with 1031 exchange over 500k
  • High Net Worth individuals
  • Doctors
  • Dentists
  • Engineers
  • Individuals who worked for a major company for over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
  • Individuals with pension fund
  • Endowments
  • Women-owned family offices or offices/funds who support the social initiative to teach financial literacy to women
  • Angel investors supporting women

Take the QUALIFYING QUIZ NOW!


To be qualified for our next investment Let me give you our investor quiz  so you’ll be put on the list for events and deals 

You
can find my form “The Apartment Queen™ Investor Questionnaire” at: https://form.jotform.com/200207883604451

Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

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Multifamily Real Estate Investment: Apartment Complexes Eyeing to Enhance Pet-Friendliness

Pet shelters immediately emptied during the emergence of the pandemic. It was one of not so many heart-warming facets of the year 2020. A lot of those new-homed pets inevitably went into the apartment industry. Based on the Multifamily Pet Policies and Amenities Survey recently given by J Turner Research and PetScreening, about ¼ of the pet-owning commissioned respondents shown they obtained their pet during the pandemic. The rate pegged before increased to almost 40% when restricting to student-only commissioned respondents. The said survey, which commissioned the feedback of more than two thousand (2000) apartment residents, also stated that 20% of the respondent that presently does not own any pets, shown that they are eyeing to obtain one by the year 2020. That simply implies the increase in pet adoption will not be in plateau anytime soon. 

The drift has placed the burden on apartment managers and operators to enhance their pet-friendliness guidelines to aid in capturing the ever-increasing amount of pet-owning tenants. It has also got their attention to come up with the most pet-friendly environment possible in their communities to aid in ensuring that pet-free tenants remain comfortable in their personal space. 

On a macro context, a present American Pet Production Association National Pet Owners Survey stated that 2/3 of the United States households possess at least one pet, which showcases a solid increase from 56% in the year 1988, the year when the survey was first commissioned. We have visited some of the guidelines operators have enacted to aid in meeting the pet scenery. 

Pet-based Leasing Incentives and Rescue Partnerships. Some Apartment complexes and property management was already a pet-friendly operator. A wide array of multifamily communities have pet parks. Some companies also partner with a local ASPCA. Some companies also incorporate pet-based incentives into their lease. Say, for example, tenants who sign a contract of the lease on a specific weekend may receive the freebie of no upfront pet charges. On the other hand, some apartment complexes also host pet-adoption events and showcase pets available as prospects and present tenants.

It is a known fact that pets are near and dear to everyone. A lot of us bring our pets to the corporate office during work. It is but normal to walk past someone’s workstation and have a baby gate up because their pups are with them. Some have also pup showers at their office when someone has a new pet dog. Some apartment operators come up with treats available for pets in community leasing offices. Some companies are making partnerships with local rescue organizations and one just hosted a Great Dane puppy activity at Austin Texas-based locations. A lot of those puppies got homes. Partnering with your local rescues to aid in giving pets in homes. With the information that nearly 70% of tenants share their homes with pets, apartment complexes should continue to address their request on having that companionship, specifically in this time of the pandemic. 

Amenities, Socialization Channels, and Pet Perks. Based on surveys, the outpouring of new pets in the year 2020 and those who want to aid them is merely recognized Considering a lot of communities are armored with fancy pet spas, pet snack bars and upscale dog runs, it is an open story that a lot wanted to become part of the solution

Most of the communities eradicated pet deposits and charges for adopted or forested pets. These complexes wanted to make sure tenants knew that they appreciated efforts in giving their pet a new home. They wanted to do everything they can to help. Some communities also partner with local shelters and make a cash donation for each contract signed. They continue to be very knowledgeable of their pet population. Some of them throw a pet-supply drive during the holidays. Some also engage in activities such as giving a pet-pack gift set for random acts of kindness. 

There is also a so-called Pet Perks Program that focuses on pets like Instagram contests, and the like. Some are the best costumes and best pet attire, cutest pet, and many more. They also added pet-themed events that create lasting memories with the entire community and residents. Some also do holiday portraits with their pets and tenants with themed backgrounds.

Coming up with a Pet-responsible Involvement. As property managers and owners extend extra efforts to boost up their pet-friendliness, they do not want to disaffect another class or residents which are the non-pet owners. That simply means the policy of the property must not only be pet-friendly but also pet-responsible. As the population of pets increases at apartment complexes, it can sometimes be overwhelming. Property personnel has to efficiently manage all of the new pets and make sure they possess a proper record of each of them. On the other hand, some other complexes are lessening the breed and weight restrictions to enhance their amazing appeal, but it has to be a responsible, measured parameter to be efficient.

Based on a survey commissioned from J Turner Research and PetScreening, non-pet-owning residents are reasonably accepting of the animal population of a community. On a scale of one (1) to ten (10), with zero (0) being “not so adorable” and ten (10) being “very comfortable”, non-pet-owning tenants possess an average level of comfort pegged at 6.3 with having pets on the complex. But such residents are not without problems of contention.

The three (3) main complaints were off-leash pets pegged at 37%, barking pegged at 62%, and pet waste pegged at 84%. With pet waste as a precise worldwide issue, a lot of communities have stepped up their efforts in maintaining things clean. That includes teaming up with Doggie DNA providers that can track the waste back to a specific pet.

Several communities utilize it, and they love it since it decreases the accumulation of pet waste. With pet waste being the number one complaint, they want to ensure that communities and complexes are kept clean with waste stations placed throughout the property. The surge in the pet population is not a dream. And while a large population would agree that it is a hugely positive trend, it has shifted

And while the majority would consent it is a hugely positive trend, it has taken over the picture in the realm of the apartment industry. Property managers that take an inactive approach to the increasing arrival unquestionably will thrive to remain competitive with their competitors that strive to sharpen their levels of pet accountability and pet-friendliness. 

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AI and the Real Estate Investment Industry

AI and the Real Estate Investment Industry

Over the last decade, the major ingredient for success in real estate investing is investing in it. Some have performed better than others. But the market was on a steady up and it is a known fact that the next decade will probably look a bit different. Guy Zipori, co-founder and CEO of Skyline AI will tackle the meeting point between real estate and artificial intelligence. They are coming from the technology industry and not from the real estate realm. 

When talking about Artificial Intelligence, it is changing the way one works. It does also alter the way people do business and the way one discovers, unravel and vet new information. However, it is coupled with fears. A lot of individuals are speaking in terms of how Artificial Intelligence is coming for jobs. When you hear some news about driverless vehicles and other things makes people fear and it is a fact. Hollywood has done a tremendous job scaring us about the new technology. It turns out that a story on how Artificial Intelligence and AI will rule the whole wide world sells a bit more than the story on how AI aid is in enhancing our business revenue. 

Remember Skynet from the Terminator? It has nothing to do with Skyline Artificial Intelligence. Just to be clear at the onset and the fears that individuals experience nowadays are pretty same to the fears that individuals felt way back in the industrial revolution. Hearing the gadgets that will come and take over their day jobs. But eventually, the industrial revolution comes up not just with new jobs but new opportunities and transformed economies for the best to reach greater heights. We all know that it is much easier to look at innovation when trying retrospectively and now it is time for a change. Real Estate is at an all-time high in terms of dry powder about 280 billion dollars that is sitting there un-deployed just this June, and Artificial Intelligence technology is very far. Computer nowadays can detect anomalies more efficiently than humans. Looking at the history of Artificial Intelligence, there is always one plot and that is machine versus human. Whether it is Deep Junior or the one who defeated Gary Kasparov in chess, or Watson beating trivia at Jeopardy.

But, the truth of the matter is, this is not how real-life application of Artificial Intelligence appears to be. Both should incorporate each other. Machines with men work in a variety of ways in a very powerful tandem. One good example is the CIA used Artificial Intelligence to capture Bin Laded, or forecasting flooding in India to save tons of lives. The combination of machine and human is formidable. If you take the efficiency out of both of them, maintaining the machines doing repetitive responsibilities, like data crunching, and leaving the humans for strategy and creativity and other tasks that we perform much better than machines. Artificial Intelligence is not replacing lawyers in court but is aiding them in reviewing contracts in pinpointing mistakes. It also helps doctors with x-ray scanning allowing them to analyze and identify cancer and diseases. 

Do you have any idea how much time out of a 16-hour flight from Los Angeles to the Philippines is manually flown by a pilot? It is only eight (8) minutes. So, at this point in our lives, we trust Artificial Intelligence so much. But what about our investments? Imagine a 14-year old boy who is a geek at his age, selling superhero toys on Amazon. And imagine women managing billions of dollars of our pension funds who have less technology than the 14-year old kid. And this should be the scenario. Nowadays, computing power is much more powerful as compared to before. Computers that were once a “want” for only businesses owning supercomputers or seven-digit capitals are now in the hands of each people and more data is available. For instance. Planet Data, possessing twenty-one (21) satellites and they are capturing about 1.5 million photos every single day covering more than two hundred million square miles.

Advanced technology, data, and computing power give us the freedom to sequence the DNA of Real Estate investing. Say for example, instead of eyeing comparable assets but assessing vintage or location or other still features, now, we can utilize data such as the internet browsing data, where individuals are, looking for on the internet to better comprehend and analyze what assets are truly comparable. 

Skyline AI is a commercial real estate management technology company. They work hand-in-hand with major commercial real estate players to come up with investment vehicles with the help of Artificial Intelligence. At this point, they are linked with more than one hundred thirty (130) different sources. They try to be hands-on on each piece of information that may affect the value of the real estate. They utilize artificial intelligence technology to obtain insights and acquire forecasts based on this data. And together with their real estate partners, it aids us in coming up with better real estate investment decisions and attaining excellent outputs as compared to the industry benchmarks. 

Our technology is impacting the lifecycle, the entirety of it in terms of real estate investment. Whether it is looking for a deal giving freedom to find the best opportunities available no matter where they are hidden, or scrutinizing those opportunities a lot faster instead of weeks and with hyper precision. 

Or within the period of ownership, realizing the scenario in our asset and constantly compare it to competing assets around us. For testing, they took a portfolio of one of the top real estate investors in New York and they allowed their technology to specify which asset would include if they support the firm. So they have two (2) portfolios. The one is maintained only by the human and the second one is a subset of this portfolio to which, only the asset that the technology would recommend to acquire. And the output was astounding. The technology together paired with the human brain 21.87% IRR as compared to just 15.6% IRR destined for the real estate investment firm alone. That is a whopping 40% higher in terms of returns. The Artificial Intelligence revolution has begun. DO you want to be part of this history?

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Three (3) Methods to curtail Risk in a Real Estate Portfolio

Three (3) Methods to curtail Risk in a Real Estate Portfolio

When you invest in single-family rental property, it can be an inert risky type of business. Granting that there are sufficient opportunities that can result in a substantial income, there are the same multiple parameters that might go the way we don’t want them to be. The good news is that there are tons of good ways to curtail your risk as well as the awful likelihood of ending up with a “below the profit” rental unit. By determining the main three (3) ways to lessen the risk in your real estate portfolio, you will drive your investments away from unwanted complications of investing in rental properties to lessen your risk:

  1. Invest in several locations. Among the evident effective ways to secure your real estate portfolio from economic downturns in any one market is to enhance and broaden outside of a sole location. Novel platforms and technologies have made it a lot convenient than ever to invest in properties nearly at any given point all over America. Further, if you incorporate a trusted property management company as same as real property management varied and expanded on your team, you could obtain rental homes within your proximity and even hundreds of miles away. As an output, you can be able to stretch the market-related risks and own investment properties in some of the country’s mainstream markets altogether. 
  • Purchase value. One efficient way to lessen risk in real estate investing is to purchase value. “Value investing” means looking for properties priced below market value. In the real estate market, this could be as straightforward as looking for below-market value properties. But as it occurs, there are some approaches in mulling overvalue. Investing in rental properties with lower than the prevalent market rate supplies a chance to escalate rents and maintain steady cash flows

Another clever course of action would be to look for a property that, with minimal cost-efficient enhancements or more up-to-date type of services would improve the tenant appeal and the value of the property, or all at the same time. Definitively, monitoring a close eye on future development and purchasing in locations before housing prices start to appreciate can also be an effective way to always make certain that your investment can give you stable returns in the future. 

  • Obtain practical financing in your favor. Relative to financing, there are a lot of ways you can use to be able to aid in reducing risk. Shelling out a higher down payment can sometimes lessen your rate of interest and monthly mortgage payment. When you have your cash available, this is the chance to make the future costs low and secure your investment from real estate market fluctuations

Another efficient consideration is to look for lenders who can supplement your advantageous and practical terms or say more creative financing options. Maintaining practical financing solutions can cause low-interest rates and higher cash flow shortly. Say, if you are eyeing to hold a property for less than a decade, you might take advantage of an Adjustable Rate Mortgage (“ARM”). ARMs are traditionally connected with a lower interest rate at the inception, which simply means improved cash form for you. Finally, if the rate of interest drops, you have to know whether it is a good moment to refinance a higher rate of interest. 

Conclusion. By investing in broad markets, buying with an eye toward value, and ensuring your financing works for you, you can practically lessen a lot of the risks that are present with investing, regardless of what type of investment. 

If you are looking to move to Dallas Texas and need an expert to help you find the right neighborhood, contact us today at ReByKayle

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Four (4) Things to Comprehend Before Investing in Markets with Decreasing Populations

Four (4) Things to Comprehend Before Investing in Markets with Decreasing Populations

Small communities with decreasing populations are prevalent in every state. As an enthusiastic real estate investor, it is almost unavoidable that you will find, come across, experience, or be presented with chances to buy properties from excellent sellers in communities with a decreasing population. While some of these gigs may seem lucrative outside, there are serious factors that may require scant consideration before you invest with your money and time.

When investing in places with decreasing populations, you must practice the so-called “due diligence” to comprehend and understand the marketplace as a whole together with your exit approach. Listed are few facets to watch out for when purchasing properties in places with decreasing populations:

 

  1. Understand the marketplace in micro-approach. It is imperative to get a proper feel on the whole local market and have an idea where most locals live in connection with the specific property you are eyeing to buy. Investing in locations with a bigger population will traditionally enhance the odds you will be able to immediately sell and obtain income from your investment property. Contrariwise, selling in a location with a declining population may restrict the number of serious purchasers you may come across to find for this investment. If people are living in the city in droves, it is crucial to understand the reason why. One excellent way is to speak with a local real estate agent in this location with decreasing population to obtain an understanding of the number of days on the market the same properties are undergoing.

 

  1. Understand the mass exit that may be happening. There is a very sound reason for any significant decline of settlers in a community. Perhaps, there was a major factory that closed out of business or moved to other states. It can also be that a major company just redacted or laid off a significant amount of employees in said town. Worst case scenario, an entire industry left the community, like Detroit, or major contamination makes it unsafe for the people to live there. When eyeing a new community you are not familiar with, visit the local police station, convenience store, or local Chamber of Commerce to ask about the crime rates and the reason for the city’s transformation into a ghost town.

 

  1. Know the demands of both parties (buyer and seller). This is truly more than meets the eye. If this declining town’s population is diminishing, then the town is subjected to a state of a so-called “buyer’s market”. The reason being, there is a higher supply of sellers as compared to lower demand or low buyers. While it is true that you can buy a property with a significant discount from a motivated seller, you may experience complex time in renting or selling said property for the similar reasons the present seller is experiencing. It is a known fact that over time populations and cities expand and grow. If the specific property you are looking at is a location next to a growing city metro, it may be a logical forecast that in the next few years, the metro city will expand and grow into this presently declining market. It may show financial and business sense to purchase and hold properties within the so-called “way of progress”.

 

  1. Know your extraordinary advantage, if there is. What are you doing that you are good at? If the property seller you just bought from was experiencing a very complex time selling his property, what do you have in mind you think you will be able to resell a similar property any more easily? And for significantly higher returns? In simple terms, the answer to this question is that you require bringing something extraordinary the seller was lacking. You maybe can:

 

  • Advertise and promote the property better so it is seen by more prospective clients.
  • Clean and fix the property so it is more appealing to more prospective buyers.
  • Sell together with owner financing; this eliminates the need for a purchaser to look for a bank and apply for a tedious process.
  • Renting, which is enticing to any local lessees.
  • Relocate the home physically to a new area.
  • Doing some optional approach to enhance demand in the property/unit.

 

Conclusion: Before buying any unit in an area you are unfamiliar with, and obtain as much clarity as needed. Do not rush into purchasing or come out with impulse buying or even closing any real estate opportunities quickly. You have to always remember that as a real estate investor, you are in control and most sellers are eyeing your cash for then they eye for the property/home. Aim to take action every day and aid, local sellers. If a question emerges, you should not hesitate to ask seniors and seasoned specialists on this website www.theapartmentqueen.com

 

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Guide Inside the Mind of Blockchain Real Estate: A Definitive Guide

Guide Inside the Mind of Blockchain Real Estate: A Definitive Guide

Amidst disruption of the blockchain of financial services, as well as the extensive application all over industries. It is a bit complex to look for a segment that has not been touched by the technology. Cryptocurrencies have given a solid impact in terms of foreign exchange, remittances, and more importantly, payments. Initial Coin Offerings (“ICO”) have challenged stock investing, onset loans, and venture capital. And mind you, even the food industry has been touched by blockchain.

 

Blockchain is regarded as an ingenious and ground-breaking technology that is formed to change several different industries like real estate. It is recognized as a digitalized ledger that can decentralize access and enhances trust by being a sole unalterable source of information and truth. Often regarded wrongly as cryptocurrency, like bitcoin, blockchain possesses the capability to upend the real estate industry in a series of ways.

 

It is a known fact that real estate has been the sure-fire investment eyeing to build and look for a generation of good wealth for the long-term. We will help you steer this real estate class and supply you with an overview of blockchain in real estate, the use cases when purchasing, and financing real estate property, and whether an investor should eye in utilizing real estate tokenization.

 

Blockchain in real estate. Blockchain is always confused with cryptocurrencies such as bitcoin. In simpler terms, bitcoin is a cryptocurrency that uses blockchain as its technology to function. Blockchain gives the tracking of records and transactions all over the distributed network of computers. Blockchain enhances trust as it acts as a solid ledger that is distributed across a variety of computers that is not editable and unalterable and easy access to all parties. We have listed the specific process on how the same works:

 

  1. Request for a transaction record.
  2. Said request is broadcast to a node or a network of computers.
  3. With the use of algorithms, the nodes will take care of the request.
  4. The request, which can be a record, legal contract, or any type of currency and information is verified by the nodes.
  5. As soon as it is verified, the ledger is updated with a new block of data.
  6. This block of data is incorporated into the blockchain and is considered unalterable.

 

As you will notice, this method has several real estate applications like financing, legal contracts, buying and selling of a property, and the like. Blockchain can incorporate an added trust level in a real estate business process such as transactions, negotiations, and leasing. The utilization of technology and algorithms to legacy real estate processes will lessen a significant amount of speed and friction up the processes of selling, buying, leasing, and financing this class of asset.

 

Blockchain had made a mark on real estate and its disruption. Before, transacting with high-value assets like real estate exclusively through digital channels has not been the tradition. Real estate transactions involve engagements in person with several parties. The emergence of smart contracts in blockchain platforms now gives assets like real estate to be tokenized like bitcoin and eth.

 

Blockchain can “tokenize” real estate. You have to think of tokens as a store of value. In a commercial or residential real estate blockchain, tokens signify and embody an ownership stake in several classes like debt, equity, or cash flow. For instance, a 100-unit multifamily apartment is owned by say fifty (50) different investors contained on a blockchain, each of those investors could own a token to reflect their ownership in the asset equity.

 

In this case, the real estate blockchain platform is utilized to record, verify, and store these ownership tokens. The said tokens can be easily traded, liquidated, and sold. The true value of blockchain is not just efficiency and trust, but more importantly, liquidity.

 

The real estate industry is naturally an illiquid type of asset as the sale of the same is process-heavy, tedious, and long. If real estate tokenization is given using a blockchain, it becomes a lot easier to purchase or sell and trade your investment in any real estate asses with the use of a blockchain as a platform by which the transaction manifests and is verified. It also gives more freedom for real estate investing.

 

Again, that very same one hundred (100) unit apartment building stated above is worth twenty (20) million dollars. Instead of REIT or accredited or wealthy investors buying this, a lead investor purchases through a blockchain transaction. The lead investor divides the cost into twenty (20) million shares or tokens. These tokens can be sold to main real estate investors for a dollar each. This will give the lead investor access to a wide array of prospective clients and thereby creating a marketplace to buy and sell tokens of this specific asset.

 

At this point, real estate tokenization is presently emerging. One good example is the Saint Regis Aspen Resort, which utilized “Aspen Coin” tokens to garner eighteen (18) million dollars.

 

Blockchain technology is altering the real estate realm. This type of platform technology can be applied to several aspects of the real estate business. We have listed some of the aspects so that everyone will have an idea:

 

  • Smart Contract. Project Manager of JLL, United Kingdom Nick Clare, states that blockchain can audit, authenticate and draft contracts in real-time, all over the globe and without intervention from any individuals or the so-called middle-man, have instructions emanated in the transactions for the payment to be taken as long as instructions are fulfilled. Thereby supplying transparency to all parties and lessening the probability of disputes in payment. Smart real estate contracts give blockchain freedom that will not only speed up the leasing process and save a significant amount of money on costs but can also enhance due diligence. Blockchain would have the capability to verify identities and incomes and eradicate the probability of fraud.

 

  • Intermediaries are eradicated in the picture. Lawyers, real estate brokers, and banks have long been part of the real estate ecosystem. But blockchain may surely shift in different participation and tasking in a transaction. Novel platforms can assume functions like payments, listings, and documentation about legal matters. Taking the intermediaries out of the picture will result in the main parties getting their much-deserved money as they save on fees, charges, and commissions by these so-called intermediaries. This will also streamline the process faster as the thread between these intermediaries gets cut out.

 

  • Marketplaces and platforms. Real estate technology has originally focused on listing as well as linking both parties. But, blockchain gives novel methods to trade real estate. They have the power to enable trading platforms and internet marketplaces to aid real estate transactions in their entirety. Some real estate companies have developed a platform that utilizes blockchain technology to facilitate rental property and real estate transactions. By tokenizing a real property, assets can be traded akin to stocks and all transactions can be performed online. These firms give freedom for the sellers to tokenize their assets, fundamentally handling them like a stock sale, and liquidating such assets with a token sale with the use of the platform. The garnered tokens can be traded for fiat currency, with purchasers owning a percentage of such property.

 

  • Transactions. The comprehensive real estate transaction process can be executed on the blockchain. The submission of an offer, verification, and acceptance of such an offer, the process of due diligence, financing scheme, and closing can all be codified inside a digital ledger. The utilization of blockchain for real estate transactions possesses significant implications destined for jobs as agents and brokers.

 

  • Financing. Credit checks, identity and income, debt-to-income ratio, and a lot more can be held on and confirmed through blockchain. The mortgage financing method is fraught with frustration and friction. If all your crucial and pertinent documents are stored on the blockchain, you need not look for it to obtain dozens of different papers from your broker or bank.

 

The transparency related to a decentralized network can also lessen costs relative to real estate dealings. Beyond the savings made by eradicating intermediaries, commissions, and professional fees, there are other costs like registration fees, taxes, inspection costs, and charges relative to real estate. These costs change depending on the place that has jurisdiction. Such as intermediaries, can be lessened or eradicated from the transaction as platforms automate these procedures and make them part of the system.

 

Worldwide real estate is worth a lot of money but is dominated by rich players and huge corporations. With the use of blockchain technology, more individuals will probably have the freedom to access the market where transactions are showcased transparent, equitable, and secured. Real Estate transactions may become person-to-person (“p2p”) transactions with blockchain-powered platforms performing the majority of the work.

 

  • Land Titles and Deeds. Titles are commonly maintained offline, but the technology of blockchain can verify and store these real estate deeds and contracts, documents, and the like Imagine if you can be able to log into blockchain land registry to verify the ownership of the title of any parcel of land in your area.

 

  • Leasing. Specify contract signing and verification can be facilitated and held on a blockchain. Whether it is the tenant’s income verification, other references, or employer checks, this can all be served and held on a digital ledger.

 

  • Liquidity. Real estate has been regarded as an illiquid asset because it takes time for the entire process to conclude. This is not the story with cryptocurrencies and tokens because, in theory, they can be readily traded with fiat currencies using exchanges. But, as tokens, real estate can be traded any time of the day. A seller does not have to wait for a purchaser who will buy the entire property to be able to obtain some value out of it.

 

If an asset becomes tokenized to a thousand investors instead of ten, you can increase the liquidity automatically of that said investment. If purchasers and sellers of tokens are a lot easily able to sell and purchase a share in a specific asset. Then, it will follow that liquidity issues and exit strategies drop significantly.

 

  • Decentralization. Blockchain pushes security and trust as decentralized technology. Information embedded on the blockchain is accessible to all parties included in the network. This will characterize the data as immutable and transparent. One only has to reminisce the housing bubble crash in 2008 to witness how lack of transparency and greed on the part of institutions can have disastrous consequences. A decentralized exchange has trust embedded inside. Since information can be verifiable to people, purchasers and sellers can have more confidence in executing transactions.

 

  • Fractional Ownership. A real estate blockchain can be utilized s a sole source of truth to verify ownership of assets. This also comprises fractional ownership with the use of a token, and all the owners of those tokens will be available to the public.

 

By heeding to fractional ownership, blockchain also lessens the hedge to real estate investing. Generally, investments would need significant money upfront to be able to obtain property. Optionally, real estate investors could also pool their money to obtain bigger tokenized properties. With the use of blockchain, investors would simply have to access a trading app to purchase and sell even part of it. To add, fractional ownership would also aid them to stay away from property management like leasing and maintenance.

 

There is a new level of future in real estate with blockchain. It has significant implications for the realm of real estate. It could eradicate the need for more parties involved in a transaction, enhance trust among parties, act as a record keeper, expedite all leases, contracts, and transactions. Enhance liquidity, lessening fraud, and unwanted costs and charges. This is a main disruption, but much of this innovation is theoretical.

 

Even though some real-world examples of blockchain are prominent, we are this close to executing on a full-blown promise of blockchain in the realm of real estate. Real estate investors should consider the parameters and begin thinking about schemes to expose themselves to these upcoming technological advancements in the realm of real estate.

 

Blockchain technology has made an impact in the real estate industry in an array of ways, such as offering new means for sellers and purchasers to link with one another. It can be utilized to cut intermediaries out of the real estate transaction procedure, hence, lessening the costs. This technology will help in its codification of fractional ownership of the real estate.

 

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Wealth and Legacy’s New Packaging: How women are Recognizing wealth Giving and Legacy Planning in a New Dimension

Wealth and Legacy’s New Packaging: How women are Recognizing wealth Giving and Legacy Planning in a New Dimension

The emerging economic thump of women is probably one of the most important economic shifts for the last ten (10) years or so. Not only women are managing and garnering a rising amount of income, but they are also steering the economy itself by leading major corporations and instrumental economic players like the International Monetary Fund and the United States Federal Reserve.

 

To add, touching the worldwide economy, women are beginning to run novel businesses at a fast pace. In the United States alone, women were the majority owners of almost ten (10) a million businesses of all scales with more than eight and a half million employees about nine (9) years ago, based on a 2016 report by the Small Business Administration (“SBA”). These businesses obtained about One and a half-trillion dollars in sales. Another 2.5 million businesses were equally own by people of both genders, had 6.5 million employees, and recorded for another whopping 1.1 trillion dollars in terms of sales.

 

Paired with accumulated effects of fifty (50) years of increasing female contribution in the work industry, this translate to solid financial control and supremacy:

 

All over the globe, women held thirty (30) % of entire wealth controlled by families or individuals in 2015, up by a third in 2010; almost half had enhanced their wealth as independent entrepreneurs.

In the year 2020, women are anticipated to manage about seventy-two (72) trillion dollars, a third of all wealth, and up from 51 trillion dollars about six (6) years ago.

In this regard, the Economist Intelligence Unit (EIU) conducted a study of high net worth individuals with a million dollars or more in assets, sponsored by RBC Wealth Management. The survey catered to about 1,051 individuals; 549 are men and 502 are women in the United Kingdom, the United States, Asia, Canada, China Singapore, and Hong Kong. The results are insights and key findings in terms of a very wide and growing set of women who are essentially rethinking the meaning of wealth and giving and who are paving their legacies that will crucially affect the globe and the intergenerational responsibility that the next one will inherit.

 

Samples and Exhibits Utilized in the Survey Report

For this type of study, the EIU commissioned 1,051 people possessing 1 million dollar or more investable assets, specified not including their personal property and assets like collectibles, consumer durable, and primary residence. The western market comprises 79% of the sample. The remainder comprises Asia.

 

The generational breakdown was as follows:

  1. Women are on top of their wealth creation. One study emphasizes the increasingly prominent responsibility women are taking charge in the high net-worth class and suggests their influence is likely to continue to rise considering the number of women in the young age bracket who see an excellent chance to gain wealth.

 

Even though there are still a lot of high net-worth men as compared to women, the proportion of their wealth; women to men in the study, those possessing 5million dollars or more in assets is roughly similar. The ratio is 27% for men and 22% for women.

 

Millennial women which are born from 1981-2000 are going in the highest circles of asset ownership faster than older women. On the other hand, about 1/5 of Baby Boomer women that are born from 1946-1964 possess $5million or more in assets, while millennials come in at 1/3.

 

It is noteworthy that the share of men who think they had a lot of opportunities to obtain wealth than older people, 83% is only a bit higher as compared to the share of women saying the similar thing, pegged at 78%. Indeed, about 1/5 of women with 5 million dollars or more in investable assets are founders/owners of a business, entrepreneur, or self-employed, pegged around 16% of HNW women with lower investable assets. That is interrelated with the study that younger women more often than older women say they have acquired their wealth through business instead of inheritance. In comparison, more than half of baby boomer women stated that they inherited money while a little over 1/3 stated that they acquire their wealth through business.

 

Half of the millennial women created their wealth.

 

Exhibit 1. Opportunities to acquire wealth. A percentage of each group who chose each selection, women’s sense of where the opportunities lie for the generation of wealth differs in terms of age as well. While it is true that Baby boomer women specify opportunities and resources to succeed in the workplace as the secret to the acquisition of wealth, younger women pay close attention to resources that aid them in initializing successful business.

 

The topography of women’s wealth is so broad in the countries commissioned and varies in terms of levels of wealth. The latter, on the other hand, varies by geography, with the United States garnering the biggest share of women with between One million and five million dollars in investable assets.

 

Exhibit 2. Wealth Distribution.

 

[1]

 

  1. A lot of individuals are taking control of legacy and wealth decisions. As more and younger women generate more wealth, they are somehow asserting themselves as strong decision-makers over the entire realm of finance-related quandaries. One specific notable finding is that less than half of the boomer women say they are the household’s main caller of the shots in terms of financial planning. However, for Millennials, the figure increases to more than 1/3.

 

Meanwhile, the study/survey unraveled considerable variation on the wealth level. For every problem covered, from estate planning, wills, and succession, financial planning to charitable giving, women who possess more than $5 million in terms of investable assets. The difference is broad when it comes to financial planning, where about a third of these women report they are the main decision-maker, as compared with just half of HNW women. Given the share of millennial women possessing $5 million or more in investable assets, it is evident that youth is one primary reason for this finding.

 

Women also differ as to whom they depend on for advice in terms of wealth planning. More than half of HNW women say their partner or spouse has the most influence, while a little below half of the richest women approve. Younger individuals, though they just married as older people, will less likely say their spouse had solid influence in terms of acquiring their wealth as compared to baby boomers. So that is 41% vs 54%. Almost half of the men, in contrast, state their partner or spouse has the most influence in terms of their decision-making.

 

Also, children have become more essential influencers as women age: at about eleven (11) percent composing Boomers cited them, as compared to seven (7) percent of Millennials. By contrast, friends and peers, lessened in importance: about ten (10) percent of older women cited them. On the other hand, 10 percent of older women while 26% of younger women stated as well. The theory is that Boomers’ children are more likely to be adults.

 

Even though half of the Boomer women regard planners or financial advisors as vital influencers, as compared with almost 37% of Millennials, the more wealth women gather, the fewer influence advisors wield, the study proposes. Almost half of HNW women state they depend on a financial planner or advisor as compared with 42% of women possessing at least $5 million in investable properties. Meanwhile, 44% of men say the same. About more than a third of Millennial women are mainly decision-makers for financial planning.

 

Who is making decisions? Share of each class who are the main decision-maker in each category.

 

  1. Younger women defining wealth on a different level. Considering all the differences in HNWI’s sources of wealth and how they come up with decisions. What was noteworthy to emphasize is that few differences in genders are prevalent in how they describe and give meaning to life goals or wealth at a worldwide level; though there are notable differences in terms of age. The majority of the time, HNWIs regard wealth as independence and financial security, selected by 62%, or entire financial asset value, selected by more than half. The only significant difference between male and female HNWI is in how they describe wealth is that almost 40% of women include preparedness for the future in their characterization, as compared to just 30% of men. It is also outstanding that female and male business owners are hitting equal in terms of how often they include the entire value of their business, the economic implication of their business in the communities where they are situated and operating as well as the ability to come up with change using corporate giving as part and parcel of how they describe wealth.

 

As on a lot of other issues, senior HNWIs possess a different description of wealth as compared to younger individuals. As on a lot of other issues, older HNWIs have a different description of wealth as compared to younger ones, with about 67% of Boomer women, for example, paying close attention to financial security compared with just a little bit half of millennial women. Having said that, it is noteworthy that across all classes of age groups HNW men and women share the same life objectives, most often enhancing their physical and mental well-being, strengthening their relationship with relatives and families, enhancing their wealth, and paving a path to wealth for their children and the future. They also experience similar challenges to meeting those goals predict tomorrow, as stated by half of the men and about 48% of women. They may, in huge part be since men and women in the study possess a lot of background similarities. Nearly about equal in terms of percentage are living as married, or married; 85% of men and 82% of women, respectively. These individuals are business owners or previous business owners, business consultants, professionals, and executives.

 

Exhibit 4: The true meaning of “wealth”. Equal shares of women and men, about 63%, also anticipate to come up with some kind of significant impact on the world with their wealth as compared to previous generations. But, some significant differences are outward between male and female HNWIs in terms of the responsibility and direction of society to contribute to it. Say, 61% of Boomer women agree society has turned to be a lot inclusive while 61% of men and 72% of younger women still say the same.

 

About two-thirds of women believe they possess more occasion to discuss societal issues using impact investing, as compared with 56% of men. Among selected business owners, 72% of the women agree in terms of the importance of their business in coming up with a positive charitable community impact, and about 71%, the positive economic impact. The percentage for men are 65 and 67, respectively.

 

A lot of millennial women than Boomers anticipate the following generation will gain more wealth than they have, with men overall landing in the middle, pegged at 57%. The majority of women of all ages, 92% state they have confidence that the next generation will possess opportunities at a higher rate to own a business. But, although a majority of HNWIs who own and operate business would like to pass them on to their heirs, they are one with facing a serious challenge in persuading their heirs to take over an already founded business instead of working 8-5 in the corporate world or initializing their own business.

 

  1. Younger women giving back through spending, investing, and a lot more. Very few HNW women and men, pegged at 4% say they do not have sufficient wealth to give to charity at this point. Among the majority that is sharing, their main preferences and influences are the same but they vary among generations. And there is even a wider array in How HNW people coming from different generations decide where to share and how they regard giving; all factors to consider to legacy and wealth planning as well as the charitable giving itself.

 

It is also noteworthy that women, more often than the other gender, state that the ability to come up with the greatest impact and specifically measure such impact influences they are giving. 29% vs 26 pay attention to the greatest impact while 17% vs. 11% pay close attention to measurement. Also, significant differences in generations manifest. 44% of HNW Boomer women state that they do not mind the results as compared with 20% of the Millennials and 27% of men. This may emulate a generational gap in how hand-son individuals chose to be with their charitable giving. Older women barely depend on social media or even traditional media commentary/coverage to assess their sharing as compared to younger men or women. But, anecdotal and formal feedback from the recognition and recipient from family are among the top indicators that all three classes; Millennial women and men, Boomer utilize to assess the impact of their giving. There are also generational gaps in how they assess where to give. Millennials often say the ability to come up with the greatest impact about a third, while both Boomer and men prioritize the significance and bearing of the recipient to themselves. On the other hand, tax benefits appear far lower on the list of the millennials priority list at about 19% and are cited by more Boomer women and men at about 29% and 25%, respectively.

 

Relative to how they give, younger women at about 39% more often align their investments with giving goals. For example, using impact investing, then either adult women pegged at 24% or men at 26%. Younger women also see impact investing as a form of charity, with about 70% consenting; as compared with 52% of Boomer women and 47% of men.

 

The same pattern shows up among women business owners. In its entirety, they are more concerned than men about the non-financial impact of their wealth. The more often say it is imperative to them to secure the livelihood of their employees as well as their relatives and families. And that their business possesses a charitable impact on the communities by which it moves, pegged at 72% vs. 65%.

 

  1. Women describing legacy coupled with social attention. If millennials will pave the future, then increasing the confidence of women in their capability to preserve and accumulate wealth is pointing them on a more idealistic path by which they prioritize charitable giving, integrate, and align their legacy goals coupled with their investments. For example, using impact investing, and create social obligations bigger attention of their legacy planning.

 

Millennial women agree they have a larger opportunity to discuss social issues that personally entice them: 83% compared at 65% of older women and 66% of men. They are more often as older women agree they possess an obligation to transfer wealth to the next generation which is 65% vs. 55%. And the majority of them more often say they possess a personal responsibility in utilizing their wealth to benefit the wider community, 65% compared with 52% of older women. Also, they have the chance to discuss societal issues particularly through investing, pegged at 76% compared with 59%.

 

In that regard, it is oddly surprising that Millennials as compared to Boomers specify their legacy goals from their parents’ goals: 81% of millennial men and 69% of women state they describe their legacy separately from their parents as compared with 58% of Both Boomer women and men.

 

Another noteworthy difference in gender: Women will often say societal causes have become a lot essential as compared to accumulation of wealth in defining a legacy, with 62% of women agreeing as compared with 53% of men. This implies that as women garner bigger assets, they may turn more capital toward social projects and charitable giving, even at the cost of abundant wealth in the future. Although engagement of younger women as regards impact investing may blunt any reduction in the accumulation of wealth.

 

When HNWIs assess and plan their legacies, noticeable gender differences arise. While both genders, by huge majorities, regard wealth as the major enabler of their legacy, the amount becomes overwhelming for Millennial men, pegged at 91%, far ahead of millennial women. In the same vein, when asked if they have more opportunity to create a legacy other than previous generations. 75% of all women, old and young, and Boomer men agree, but for Millennial men, the figure increases to 83%. Also, women say by more than 2/3, that they are acting now with their legacy in mind. But here again, millennial men posted an especially high figure of 79%. This may imply that men are still more likely even as compared to younger women to witness their careers and wealth-building activities as making a lasting legacy.

 

But, women increasingly are moving in their direction: 85% of Millennial women agree that it is imperative to come up with a foundation to describe their legacy for their family and future generations as well, as compared with ¾ of Boomer Women. But, younger and older women agree that it is important to bring into line their wealth plans they want to leave, pegged at 83% and 85%, respectively. Overpoweringly, they also agree that they are in control in terms of their legacy.

 

Lastly, the survey revealed some significant differences between how individuals plan to steer their legacy. 41% of Boomer women anticipate giving their wealth to their children, fare more than the Millennial women pegged at 15%. While for all men, leaving wealth to their children and spouse are pegged at 35% to spouses and 31% to children. Both genders are expected to come up with modest provisions destined for extended families. Older women expect to share a portion to charitable targets like the community in which they do business, endowments, or foundations, or employees.

 

Conclusion. Women not only control and won larger wealth as compared before, but they are also changing the direction of wealth management and the goals of wealth creation. Meanwhile, HNW millennial women, specifically, are taking new heights and paths. To add, while a lot of women still feel some of the usual gender constraints, specifically as decision-makers, the survey proposes that the younger they are, the more wealth they can obtain, the less these apply. The scenario that emulates is of high net-worth women who regularly begin and operate the business and who direct their wealth building. The more assets they acquire, the more they control and direct their legacy and wealth planning themselves. In turn, their influence will be left.

 

 

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[1] Percentage of women in each category in each country or region

 

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The Lifting of Mask in Texas Creates Solid Reactions from Lone Star Apartment Operators

The Lifting of Mask in Texas Creates Solid Reactions from Lone Star Apartment Operators

While it is true that the status quo is prevailing, some employees and companies are happy about the decision of the government. The pronouncement made by Texas Governor Greg Abbott on February 2 in terms of lifting the requirement of the state that its citizens wear masks in public has made the apartment operators split. They are mulling over as to whether to alter their protocols regarding the wearing of masks of residents and employees.

 

Property management specialists’ reactions have ranged from “relief and gratitude” to “wild cheers in the corporate office from employees. While others are still afraid of the consequences in terms of health that could be caused by the decision of the governor. Those trying to adjust will place them immediately or within the succeeding week. Others are just waiting for the next move while they are recovering from the pandemic brought about by the COVID-19.

 

The President of GWR Management, a Houston-based firm, Gina Y. Erwin stated that they transmitted an email today to their personnel telling them that they will no longer require masks of employees. They can remove the signs from the walls and doors already. But that does not discount the idea that one can still wear masks if they feel more comfortable by doing so. The majority of them are excited. However, we cannot deny the fact that there are some in the apartment industry who express their concerns and will continue wearing masks. But in its entirety, the majority are happy to showcase their smiles once more.

 

Before all this, GWR mandated masks at each property. Some property owners require their staff to wear masks at all times during work and while inside occupied units. As long as people can maintain social distancing of six feet while outside, they were not required to wear a mask. Some apartments require all residents, customers, and guests to wear masks before entering the vicinity and the leasing offices. Signs are posted at each entry point and hallways.

 

For the common areas inside complexes, some apartment management posted signs that fundamentally put the burden on residents for taking measures about the pandemic. That includes wearing face masks, social distancing and only allowing a specified amount of people to go inside, depending on the capacity. Meanwhile, outside common areas and pools had similar measures as far as distancing and capacity is a concern, but there is no requirement for wearing a mask.

 

Apartment complexes, as well as other businesses, can specify what policies about wearing masks and the utilization of amenities are best for the employees and tenants. Some apartment owners and managers in Texas are sharing best practices and other measures to aid in lessening the spread of the virus.

 

Effective March 10, all amenity spaces will resume basic occupancy requirements for each unit. Face shields and masks will remain a mandatory requirement for indoor amenity spaces as well as elevators. Wearing masks is consistent with the advice of health specialists and protocols from the United States Centers for Disease Control and Prevention.

 

While there are many people excited about the changes, you have to be reminded that not all are comfortable with others in close distance, not wearing protective face shields. It is strongly recommended that face masks and shields should be worn throughout the community and follow the protocol on social distancing. It is being taken positively by the majority of the tenants in the whole of Texas.

 

Meanwhile, other apartment companies are sorting through rental assistance programs as well as storm recovery. It simply means that they have not given this new mask protocol a lot of thinking yet. Some of them feel that the said confirmation is moving towards the proper direction in terms of recovering from this pandemic. Maintenance personnel who are still interacting with tenants going into homes, as well as office personal conversing with tenants, should still wear a mask. It is a case-to-case basis, for that matter. But after all, it is a given to have some respect for the wishes of others who still opt to wear masks and reciprocate around them.

 

For some of the apartment managers, some believed that residents would be a lot satisfied with the decision and it would make the experience of customer service a lot better. At the end of the day, we cannot deny the fact that there will be a divided opinion regarding this topic in the coming weeks.

 

The optional virtual tour. A leading company stated that the national developer and manager of Class A multifamily properties are having a conservative approach and is needing employees to wear face masks when inside the office working with each other and tenants or when engaging in a property tour.

 

 

 

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Understanding the Roth IRA 5-Year Rule: Basics and Beyond

Understanding the Roth IRA 5-Year Rule: Basics and Beyond

5-Year Rule Trilogy

 

One of the most sought-after benefits of the Roth IRA is your capability, about other retirement accounts, to withdraw funds anytime at your desired rate. But in terms of tax-advantaged vehicles, the Internal Revenue Services (“IRS”) will always make anything complicated. While it is true that direct contribution to a Roth can be withdrawn at your desired time, without taxes, withdrawal of other class are more difficult to withdraw without restrictions. Access to the latter is subjected to a waiting period, which is commonly known as the five-year rule.

 

The five-year rule is applicable in 3 scenarios through account earnings, conversion of the traditional IRA to Roth, and inheriting a Roth IRA. Unless you are eligible for an exception, income taxes and penalties will be applied to you, in violation of the said rule. Roth IRA gives meaningful tax benefits. The money appreciates but tax-free within the account. You do not have to pay income taxes when you withdraw it. But just like any tax benefit tool, there are considerations and restrictions. If you are eyeing to maintain your distributions clear and free of taxes you need to know the important facts.

 

Important facts:

 

While relatively less limiting as compared to other accounts, Roth IRA’s do impose a waiting period on some types of withdrawals known as the five-year rule.

The Trilogy: The five-year rule is applicable in three (3) scenarios: (1) If you withdraw account earnings; (2) If you convert the traditional IRA to Roth; and (3) If a beneficiary inherits a Roth IRA.

 

Failure to abide by the said rule can result in payment of income taxes on earnings withdrawals on top of a ten (10) percent penalty. You need to dig deeper into the nitty-gritty of the five-year trilogy to make sure that withdrawals from your Roth do not activate tax penalties pegged at 10% of the amount is withdrawn and income taxes.

 

Fundamental parameters in the withdrawal of Roth IRA 

 

Let us take a closer look at Roth. Roth IRA’s are individual retirement accounts that you fund with the use of after-tax dollars. This simply means that you will not obtain tax deductions for contributions when you make them. You will not also incur taxes on distributions when you take them, which is the opposite of the traditional IRA’s.

 

Roths are funded with “after-tax contributions” which simply means that you will have no tax deduction for performing it on time, and that explains the rationale that no tax is due on the money the moment you withdraw it. Before mulling over the five-year rules, we listed a quick review of the Roth regulations in terms of distributions to which IRS generally means withdrawal:

 

  1. You can always withdraw contributions from a Roth IRA with no penalty on top at any age or at any given time.

 

  1. When you reach the age of 59.5, you can withdraw both earnings and contributions with no penalty, provided, your Roth IRA has been open for a minimum of five (5) taxable years.

 

“Tax years” or sometimes regarded as taxable years, relative to five-year rules simply means that the reckoning point is January 1 of the taxable year when the initial contribution was executed. For instance, a Roth IRA contribution for 2020, can be up to July 15, 2021, but the reckoning point begins on January 01, 2020. In this scenario, you could start withdrawing funds without penalty on January 01, 2025, and not July 15, 2025.

 

A “qualified contribution” is regarded as a withdrawal that is penalty and tax-free.

 

On the other hand, a “non-qualified distribution” is a type of withdrawal that incurs penalties and taxes. Failing to differentiate the difference between the two types of withdrawal earnings is one of the regular shortcomings of taxpayers.

 

In totality, if you get a distribution from your Roth IRA earnings before the five-year cutoff, and before reaching the age of 59.5, you are bound to pay income tax and penalty pegged at 10% of your total withdrawn earnings. For regular account owners, the five-year rule is only applicable to funds converted from a traditional IRA and of course, to Roth IRA earnings.

 

Five-Year rule for Roth IRA Withdrawals

 

The first of the Five-year rule trilogy is utilized to know if the earnings or interest savings from your Roth IRA are tax-free. To avail of a tax-free withdrawal, you should take earnings on or after you reach the age of 59.5. You can also avail of the tax-free benefit when you withdraw the earnings five years after the first contribution to any Roth IRA you possess.

 

Please be reminded that for multiple account owners, the reckoning point of the five-year clock begins with your initial contribution to “any” Roth IRA. It is not the one you are withdrawing funds from. As soon as you satisfy the requirement of five years, you are good to go. Any succeeding Roth IRA is automatically held for five (5) years. Rollovers from one Roth IRA to another do not mean that the five-year prescriptive period should be reset.

 

Five-Year Rule for Roth IRA Conversions

 

The Next of the five-year trilogy specifies whether the distribution of principal from the conversion of traditional 401k or IRA to a Roth IRA is free from any penalty. You have to realize that you are supposed to pay taxes when you convert from the pre-tax funded account going to Roth. In terms of contributions, the five-year rule for Roth conversions utilizes tax years. However, the conversion must emanate by December 31 of the calendar year.

 

For example, if you converted your traditional IRA to Roth IRA in November 2020, your five-year period reckons on January 01, 2020. However, if you convert it in February 2021, the five-year period starts on January 01, 2021. Do not be confused with the extra months’ allowance you have to shell out a direct contribution to your Roth.

 

Each conversion possesses its five-year period. Say, if you converted your traditional IRA to Roth IRA in 2019, the five-year period for assets that were converted will reckon in January 2019. In the same vein, if you convert other traditional IRA assets to a Roth in 2020, the five-year period starts on January 01, 2020. It is a bit confusing but to know whether you are affected by this rule, you need to know whether the funds you now want to obtain comprise converted assets. If the answer is yes, you have to determine what year those conversions were made.

 

Try to remember this principle in mind: IRS ordering rules state that the oldest conversion should be taken out first. In terms of the order of withdrawals for both IRA’s are contributions, then conversions, and the last is earnings.

 

If your age is below 59.5 and takes a distribution within five years from conversion, you will shell out a 10% penalty. But this is with the exception:

 

  • You utilize the money up to $10,000 to purchase your first property
  • You utilize your money destined for advanced education
  • You utilize the money to pay for expenses about adoption or birth
  • You died or became disabled
  • You utilize the money for medical reimbursements and health insurance premiums while not employed.
  • You take distributions in significantly equal installments.

 

 

Five-Year Rule for Roth IRA Beneficiaries

 

It is given that Death is also an exception. When a Roth IRA owner passes, beneficiaries who inherit their account can avail of distribution without having to pay penalties regardless of whether the distributions are earnings or principal.

 

But, death does not entirely get you off the radar in terms of the five-year rule. If a beneficiary would take a distribution from a Roth IRA that is inherited and was not held for five (5) years, it will automatically be subjected to tax. But with the help of the withdrawal order stated earlier, you may still end up not having to pay any tax because earnings are placed at the last part of the IRA to be distributed.

 

Stretch IRA. Beneficiaries of Roth IRA have to take required minimum distributions (RMDs) from the IRA until they are regarded as original account owners. They have several alternatives as to the schedules. Before, non-spouses inheriting retirement accounts could spread out disbursements over their existence. This is more commonly known as the “Stretch IRA”. But after the enactment of the SECURE Act of 2019, this provision was eradicated and repealed. The new rules say that it will need a full payout coming from the inherited IRA within ten (10) years from the death of the decedent which is the original account holder. But, this is only applicable to heirs of the decedent-account holders who died in 2020 onwards.

 

With the five-year prescriptive period, one has the flexibility of taking a lump sum each year or distribution at any time before December 31. Also, be cautious that if you fail to entirely drain the IRA by December 31 of that fifth and last year, you will incur a penalty of 50% of the amount left in your account.

 

Roth IRA Beneficiaries under the recently enacted SECURE Act

 

SECURE, or more widely known as Setting Every Community Up for Retirement Enhancement Act of 2019 has altered the key regulations destined for IRA beneficiaries. Before, anyone who inherited a Roth IRA could select to take distributions stretch during the entire existence. This was part of the provision in “Stretch IRA”. But, under the newly enacted law, only a spouse has the permission to stretch the Roth IRA throughout his/her existence. Any other heirs/beneficiaries like a child must be able to close the said account within ten (10) years.

There is a third 5-year rule that applies to Roth IRA Beneficiaries. Specified Beneficiaries have the choice of stretching the statutorily required minimum distributions (RMDs) inherited from Roth IRAs. The option to stretch is either via the five-year rule or over the life expectancy of the same. Hence, under the newly enacted law, this is only applicable to beneficiaries who are spouses. The rest of the beneficiaries must cash out within a decade.

 

In some rare scenarios, the documents of the Roth IRA may determine the five-year rule. If you elect the five-year option, the inherited Roth IRA proceeds must be distributed on or before December 31 of the fifth year following the year of the original owner or decedent’s death. Within the five-year prescriptive period, one has the entire flexibility in terms of distributions. You can obtain your lump sum or make a withdrawal every year. You just need to make sure that the Roth IRA is all withdrawn by or before the end of the five years and you will be incurred a 50% penalty on the amount not withdrawn in the year.

 

If the account has not been opened that long, you can try a few alternatives:

 

  • Disclaim the assets that are inherited. You can opt not to accept the funds if you do not need the money or do not want to face tax consequences.
  • Perform a lump sum withdrawal. You will have to pay taxes on the earnings of the account all at one time. However, this might be more effective if you are placed in a low bracket.
  • Withdraw your money yearly about your life expectancy. This alternative is available to minor children of the decedent as well as the surviving spouse. This is also applicable for chronically ill individuals, persons with a disability, and beneficiaries who are less than ten (10) years younger than the decedent; a sibling is a good example.
  • Roll the money inherited into your own Roth IRA or open a new Roth IRA Account. This is only applicable to surviving spouses.
  • Defer withdrawals. You can just leave the money in the account until the five-year mark has lapsed.

 

Bottom line. Roth IRA’s can be an effective source of tax-free income, but it is imperative to comprehend the nuances of the withdrawal parameters and regulations specifically the five-year rule. Breaking the rule can be pricey, especially if your age is below 59/5. So, your approach should be planned carefully. Otherwise, you can end up paying taxes and penalties.

 

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  • Women with 1031 exchange over 500k
  • High Net Worth individuals
  • Doctors
  • Dentists
  • Engineers
  • Individuals who worked for a major company for over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
  • Individuals with pension fund
  • Endowments
  • Women-owned family offices or offices/funds that support the social initiative to teach financial literacy to women
  • Angel investors supporting women

 

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Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

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Why Risk Is the Most Inaccurately Assessed Factor When Investing

Why Risk Is the Most Inaccurately Assessed Factor When Investing

Put ten (10) investors in a room, and they will come up with tons of definitions of real estate, not investment risk. Not only that, they will have a lot of ways to assess that risk. Another thing, there is also a risk about which more seasoned real estate investors are cautious; the risk of letting good opportunities pass because of either lack of data and information or sudden changes in the market they miscalculated. But hey, as if we can time the market, correct?

 

It is really hard to go from zero to a real estate hero and generate your first buck. At the onset around 1975 until Labor Day of 1979, there was little to no risk in purchasing residential income property. Then the following month, the tables have turned and interest rates went as high as the sky. Imagine a 16.5% FHA rate and a 21% prime rate? How about an 18-19 percent rate in an investment property? Wait, there’s more, how about a 14% inflation? All of these occurred in a span of three (3) years from 1979 to 1982.

 

Hold your horses, the year 1981 made it a lot worse with a recession. The Federal cut taxes everywhere and the Reserve supplied us the cure nobody has ever wanted. But the truth of the matter is, that was the recipe for a quick recovery. Volcker, the Fed Chairman started to squeeze inflation by restricting the amount of new money released by the Fed. That is a concrete cure indeed. There were months when the yearly employment rate reached almost 10% at a certain point, and sometimes went beyond that.

 

Despite all the “not-so-good” news, imagine how well some real estate investors were placed in residential income property with single-digit fixed-rate thirty (30) year loans. The broad majority were able to weather the storm brought about by the terror economic years in the early 80s which prevailed until the early months of 1984. But although things were a lot better in December of 1983 compared to the last several years, the condition was still not enticing.

 

Say, for example, your client was put into a 7-unit multifamily apartment situated in a great community. And you found him an adjustable-rate loan. Verily, his interest rate on the said loan will decrease every six (6) months for several years. In San Diego Alone, those who abstained from purchasing income property before October of 1979 were placed on the sidelines for the next six (6) years, but dependent on their comfort zone.

 

On the other hand, those who did not purchase property or obtain cash out through refinancing at single-digit fixed rates before it all hit the fan were safely placed to take benefit of the repeat of the similar rapid inflation in the next half of the 80s. These people repeated what they have done ten (10) years earlier, which was trade up, and for some lucky real estate investors, three (3) times in just about six (6) years.

Back then, the risk was prospectively losing out on the “last breath” of obtaining in before the music stopped for a while. A similar scenario occurred at the end of the 80s with the emergence of the S&L crisis which left the market declining over the next several years.

 

Key takeaway. It is wrong to regard risk only in the zone of property or note acquisition. The risk of investing can oftentimes be just as devastating to one’s future retirement success.

 

Some Traditional Example of Risk Myth. It is a known fact that purchasing non-performing initial position discounted notes protected by real estate is a lot riskier as compared to purchasing the performing note across the street. This is a no-brainer. Would you rather avoid non-performing notes in the first position protected by real estate or also put them in your performing note portfolio?

Let us make computation and you see for yourself. Over the last three (3) years or so, a lot of individuals come in believing the opposite of what they originally knew as settled fact.

 

In a normal middle-class community with two properties, identical in each way. They both have a worth of $150,000.00 and both have a loan balance of $100,000.00 on a first position note possessing similar terms and conditions. You can purchase the performing note for $80,000.00 while the amount for the non-performing note is $50,000.00.

 

Regular payments are on time from the performing choice. On the other hand, there are no payments from the defaulted note. These projected note purchase amounts are obtained directly from studies and averaging.

 

Which side are you on? If the performing note pays off years from now, say seven (7) years, you have garnered an excellent cash-on-cash return through the payments together with the income of 20% during cash out. On the one hand, you choose the defaulted note, you might end up doing these:

 

  • You pay around four grand to foreclose.
  • You install new carpet/paint and hype a light fix-up at around ten (10) grand to make it stage-ready.
  • You have to pay your back taxes to the tune of three and a half grand.
  • You now have at least $67,500 invested.
  • You let go of it for $150,000.00 within market value together with sales and closing fees pegged at 8%.
  • The net price is around $139,000.
  • Please remember that you have $67,500 invested which leaves you with an extra of about $70,500.

This may all occur in about six (6) months, more or less. Regularly, it may land at an average of eight (8) months. For tax purposes, you may prefer to make it at about thirteen (13) months, because you can be able to claim a long-term capital gain approach. At that point, your tax rate is approximately pegged at 15%.

 

But the question is, what if you cannot let go of the property away? In the year 1984, people not only experience huge local real estate values starting to rise again. The net income coming from the debt-free real estate cured their wounded pride as they waited for values to hit high or anything they had in mind. In 1986, almost all properties were easily sold and came out smelling like fresh cookies out of the oven. But, lessons learned here.

 

When you look back at the recession in the mid-70s, a similar situation had played itself out. And the similar scenario is being utilized after the 19080s for foreclosures used in the mid-90s. Although it looks and sounded longer for that one. And in the year 2002 onwards, real estate values have appreciated enough to have garnered an entire race of brilliant minds. The most updated example has been there for the last several years. Those who had first position notes on homes defaulting after the conclusion of the bubble burst or recession hit, found themselves searching for tenants and not buyers. When your home is foreclosed in November of 2010, sometime from 2014 up to the present you likely would sell and obtain a good profit.

 

In all these scenarios, the investor choosing the non-performing note or land contract in the first position came out positively better as compared to if they purchase the performing note across the street. It would take you three (3) to nine (9) years to satisfy your liens and obligations but you cannot apply that range to a given note. They just pay off randomly. On the other hand, the non-performing portfolio turns over a range of one (1) to two (2) times annually. Except for the stated economic downturns mentioned above. Truthfully, is that in retirement, most look at passive income from performing assets and not the labor-intensive type of assets like what we are discussing here. It is best recommended to stay away from the temptation of purchasing the non-performing notes/land contracts without seeking professional help. This is because what the majority do not or will not tell you is that it is almost impossible to purchase a defaulted first position note in your community.

 

To add, none of those were in the first position, and none were considered non-performing. This simply means that you will be investing in something a lot far, say a thousand miles.

 

Conclusion. When you realize, investing about $50,000 instead of $80,000 for the similar debt amount secured by the similar value of the property, practically on the similar street and community is not riskier as compared to the alternative. Oftentimes, common knowledge is nothing but a traditional myth.

“Believe your math and not your myth”.

 

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  • High Net Worth individuals
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  • Individuals who worked for a major company for over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
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  • Endowments
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  • Angel investors supporting women

 

Take the QUALIFYING QUIZ NOW!

To be qualified for our next investment Let me give you our investor quiz  so you’ll be put on the list for events and deals

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Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

 

 

 

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MULTIFAMILY MARKET REPORT DALLAS- FORT WORTH Fourth Quarter 2020

MULTIFAMILY MARKET REPORT

DALLAS- FORT WORTH

Fourth Quarter 2020

  • The first quarter of 2020 was an excellent flight to the year for multifamily real estate transactions. But it came to a sudden halt because of the pandemic brought about by COVID-19, worldwide.

  • Purchasers and sellers have pushed the pause button, and real estate brokers are waiting for the next plan.

  • But, mid-summer, the market is slowly getting back on track, and transactions significantly are up, and GreyStone ISG had one of its excellent times yet.

  • Real Estate Investors are going to Texas, DFW specifically because of forecasted future growth to add to the fact that capital is having complications in placing equity in retail, hotels, and office, leaving industrial and multifamily as the most effective and efficient alternatives.

  • Major firms like Charles Schwab, Facebook, CBRE, and Uber have already transferred or expanded in the DFW community.

  • DFW is presently the fourth biggest market in the United States and has been at the top all over the United States in terms of growth in 2017, 2018, and 2019.

  • Fortunately, the multifamily real estate investment industry is quick to recover and still making big numbers for both purchasers and sellers.

Dallas-Fort Worth Multifamily Occupancy Rates and Effective Rental Rates

YOC Occupancy Rate T-12 Absorption
1800-1969 90.7% 0.8% 321
1970-1979 93.0% 0.2% 229
1980-1989 93.7% 0.4% 1,643
1990-1999 94.2% -0.3% 479
2000-2019 91.8% 5.0% 14,563
2020-21** 27.7% 81.5% 5,273
All 90.3% -0.8% 23,822

YOC Effective Rental Rate T-12 YoY Change
1800-1969 $952 2.2% $21
1970-1979 $962 1.9% $18
1980-1989 $996 1.3% $12
1990-1999 $1,270 -0.9% ($12)
2000-2019 $1,378 -0.8% ($12)
2020-21** $1,539 -6.1% ($100)
All $1,182 1.0% $12[1]

2020 Amendments in the Perspective of a Broker

  • Amidst travel restrictions, information was always provided as much as possible, including virtual tours.

  • There is an increase in price in Dallas-Fort worth because of rising demand in the fourth quarter of the year, paired with lower rates of interest.

  • Increase in “new-to-market” purchasers coming from coastal markets.

  • Net migration to DFW is said to be the highest all over the United States, and it is anticipated to grow with the Biden Administration since changes in policies are also expected.

  • DFW is leading in the market for sales transactions in 2020 after finishing on the third spot in the years 2018 and 2019, next to Los Angeles and New York, respectively.

  • BFR and SFR portfolios already recovered and are in high demand because of the side effects of the pandemic brought about by COVID-19. It is beginning to create a shadow market that cannot be overlooked.

Construction of Multifamily Complexes for the last five (5) years; 2016-2020

  • Five (5) cities in North Texas constructed multifamily complexes at an amazing rate for the last five (5) years, overtaking other United States regions in construction volume, as stated by the RENTCafe.

  • During the five (5) years covered period, developers come up with a whopping 22,848 new apartments within the suburbs of DFW such as McKinney, Grand Prairie, Garland, Frisco, and Farmer’s Branch which represents around 4.5% of more than 500,000 units constructed all over the United States during the said period as per RENTCafe and Yardi.

  • Frisco is the leading in the entire nation for total apartment construction during the five years, with the suburb constructing around 8,044 units. That is about 42% of its apartment stock is now a new product.

  • The North Dallas community of McKinney placed second in RENTCafe’s analysis of apartment construction, with the city structures, 4843 units over the last five (5) years’ time, pushing its share of new units to about 1/5 of its entire multifamily product.

  • RENTCAFE also showcases the top 20 and it features Farmers Branch with a total of about 3,788 new apartments over the last five years, Grand Prairie garnering a total of 3,308 apartment builds, and Garland at 2,865 units.

  • Analysts state, despite the pandemic brought about by COIVD-19, DFW is not that suffering from oversupply and still holds the class of growing population needed to justify the inflated pace of construction it has recorded for the last five (5) years.

  • Frisco had experienced an increase in population from around 152,000 in the year 2016 to approximately 206,000 in 2020, based on Frisco information.

  • The second place, Mc Kinney, projected its estimated population increase from 155,000 in the last quarter of 2015 to 195,000 in the first quarter of 2020.

  • As the population increases and the area deals with residents moving in, multifamily real estate is in heavy demand among residents for practical places to live.

  • The DFW region is not reaching saturation or oversupply in terms of housing, according to Doug Ressler, Manager of Business Intelligence. To him, renting has emerged to be an affordable alternative because of the lack of single-family and restricted growth in income.

  • The growing population in DFW of young professionals in the 22 to 34 age bracket is another consideration in maintaining a steady trend in multifamily real estate prior, during, and after the pandemic.

  • DFW has a relatively young range in population. Generation Z and the younger millennials are in their prime period bracket where they are demanding in rental properties, according to the former chief economist for the Texas A&M Texas Real Estate Research Center, Jim Gaines.

  • The average age of the DFW-Arlington region hovers around 35 years, with about 30% of the population in the 20-39 age bracket as per the United States Census Bureau.

  • As the pandemic brought about by COVID-19 pushes young professionals toward the middle of the United States in search of practical housing and jobs, multifamily real estate specialists firmly believe DFW will still emerge to be demandable in terms of multifamily apartment rentals in the next several years.

  • These have maintained priced parameters of multifamily investment sales significantly steady during these trying times.

Dallas-Fort Worth Multifamily Properties Sold within more than twenty (20+) units in the last quarter of 2020

 

YOC

1800-1969 Q4 – 2020 YoY for Q4 – 2020
#Props 1 -90.9%
Units 133 -90.0%
Price per Unit NA $78,385
Cap Rate NA 5.4%

1970-1979 Q4 – 2020 YoY for Q4 – 2020
#Props 2 -60.0%
Units 674 -9.0%
Price per Unit NA NA
Cap Rate NA NA

1980-1989 Q4 – 2020 YoY for Q4 – 2020
#Props 7 -30.0%
Units 1664 -36.5%
Price per Unit $114,139 NA
Cap Rate NA NA

1990-1999 Q4 – 2020 YoY for Q4 – 2020
#Props 1 0.0%
Units 312 -22%
Price per Unit NA NA
Cap Rate NA NA

2000-2019 Q4 – 2020 YoY for Q4 – 2020
#Props 9 200.0%
Units 2,352 118.6%
Price per Unit $161,031 NA
Cap Rate 4.8% NA

2020 – Q4 – 2020 YoY for Q4 – 2020
#Props 1 NA
Units 371 NA
Price per Unit NA NA
Cap Rate NA NA[2]

Unemployment

  • In DFW-Arlington, the unemployment rate as of the first week of January 2021, was pegged at 7.1%.

  • There is a minor increase as compared to 6% in December of 2020.

  • The year-over-year (“YoY”) unemployment rate was pegged at 3.1%.

  • We have listed the numbers as of the first week of December 2020, for weekly unemployment claims in Texas since the first reported United States Case of Covid-19:

  1. Total Weekly Claims before adjustment = 47,521 claims
  2. The unadjusted four-week moving average is pegged as 37,528 claims.

  • Meanwhile, as of January 2, 2021, we also collected the numbers for weekly unemployment claims in Texas since the first reported United States case of COVID-19:

  1. Total Weekly Claims before adjustment = 43,583 claims
  2. The unadjusted four-week moving average = 37,164 claims.

Figures in Leasing Activities

  • An increase in North Texas apartment leasing during the last quarter of 2020 was good news for rental landlords.

  • Net apartment rentals in DFW are pegged at 4,455 units during the final quarter of 2020.

  • Leasing activity was solidly strong in the last quarter of 2020, it was pegged at about double the average volume for the last five (5) years.

  • For the entire year of 2020, net apartment leasing in the area added up to more than 20,400 units. DFW lead the United States for both completions and demand in the year 2020.

  • The demand for an apartment in DFW for the last 2020 was a bit below 25,810 units in net leasing in 2019 as per RealPage.

  • The solid last quarter of 2020 in terms of leasing activity during the pandemic could not keep up with apartment construction in the vicinity.

  • Developers finished a whopping 7,289 new rental units in the last quarter of 2020, bringing 2020’s tally to more than 26,101 apartments added to the DFW market.

  • Occupancy levels decrease to a tremendous 95% because of the oversupply of apartments.

  • Entire quoted rents were also down a bit for 2020.

  • The loss was because of restrictions in urban Dallas neighborhoods. Prices came down 5% to 7% over the last twelve (12) months in the Intown Oak Lawn, Dallas, and Medical District communities, contrasting to the plateau to a bit of an increase in rents in the majority of the parts in the metro.

  • Tenants in the past who paid a premium to live in gated apartments convenient to entertainment sites and downtown complexes before the rise of the pandemic were more enticed to practical, economical, less dense locations farther out.

  • Average apartment rental in the area of DFW was pegged at $1,183 at the end of the year. This is practically down from levels in the second and third quarters of 2020 as per RealPage.

  • These rental figures comprise basic concessions a lot of landlords now offer to tenants of new units.

Construction forecast and data in 2021

  • As per RealPage, project-by-project information in terms of ongoing development showcases a total of 583,280 market-rate units under construction all over the United States’ 150 biggest metros by the end of 2020.

  • That figure is off its present peak by close to 100,000 units, reflecting that building began slowed during 2020.

  • But, scheduled completions in 2021 have overtaken the delivery total in 2020, given that a lot of the projects now underway are close to completion.

  • Deliverables by 2021 reached 403,644 units, up to about 17% from last year’s new supply figure of 344,380 apartment complexes.

  • It is anticipated that some of these projects will miss their scheduled completion dates. But that means that the present year’s new supply is likely to surpass last year’s tally by a minimal edge.

  • If the topic is about construction, the state of Texas will always play a major role in the talks.

  • DFW is still the United States apartment delivery king over the last ten (10) years or so by a significant margin.

  • Anticipated products on the way are pegged at 36,400 units.

  • Since starts slowed a bit in the year 2020, that’s the smallest block of ongoing construction that North Texas has been in the last five (5) years, but still possessing an aggressive building pace.

  • Apartments that are set to deliver this year are pegged at 28,500 units.

[1] ALN, 20+ units, excludes Senior and Student, Counties include Collin, Cooke, Dallas, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Tarrant, Wise
** vs. 6-months end of July

[2] Sources: ALN (rent-vacation) and CoStar (sales, 20+ units), Countries Collin, Cooke, Dallas, Denton, Ellis, Hunt, Johnson, Kaufmann, Parker, Tarrant, Wise

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Saving Dollars on Your Biggest Real Estate Expense!

Saving Dollars on Your Biggest Real Estate Expense!

This chapter will talk about your biggest or at least one of your biggest real estate expenditures that any traditional owner or settler, and manager of a multifamily portfolio is going to experience and faced.

 

When talking about real estate expenses, what comes to one’s mind? Most individuals think of utility charges, cost of insurance and employee cost in the management and administration of your property, and a lot more. But the truth of the matter is that your property tax is your biggest expense. Are you shock?

 

About four (4) years ago, in the United States alone, more than five hundred billion dollars was paid in property tax, and somewhere around three hundred billion was paid by owners as well as multifamily portfolio investment and business organizations. Naturally, when speaking to multifamily owners, and asked them what they pay in their property taxes, it is typical to obtain an answer ranging from two hundred (200) to five hundred (500) million dollars. Safe to say, an average of three hundred (300) million dollars. And it is still quite a significant range for one of your biggest expenses. That is because individuals look at taxation a little bit differently. They have dissimilar outlooks when it comes to it. Verily, when you utter the words property taxes, eyes immediately roll and it is because one has no patience for tax or even property tax. They just recognize it as another payable. But truth be told, is not like just any other traditional taxes. Yes, that would be fair if you are talking about sales tax, income tax, corporate tax, and usage tax that are easily explainable based on fact. You are supplementing the individual taxing jurisdictions’ information in terms of your sales, your income, your profit, and that is a fact. That is result-based on why they are taxing you. But when talking about property taxes, they will tell you what the value of your property is, and practically, based on your value, that would be the tax you are going to pay the government.

 

Property tax is a cut above the rest. The same is very subjective since you are getting values from the individual jurisdictions and mind you, there is over seventeen thousand (17,000) different taxing jurisdiction all over America, so when you discuss standardization and transparency, it is all over the place. All the more reason that this needs to be controlled and maintained because there are huge opportunities for savings. Just to emphasize that principle for a moment, there was a study performed by an international entity that measured all the various jurisdictions both in the United States and all over the globe that found the average US jurisdiction just got a grade from a C to a D in terms of standardization and transparency. To reiterate, there are huge opportunities here.

 

So, whatever resources you need to control and mitigate this cost and expense you just have to regard it as it is. However, on the downside, there is a huge pressure on the department handling it to do something in terms of controlling this wide and broad expense property taxes are, also rising and such research has shown that even when values are pegged at a constant, meaning such values are not going up, the taxes are still appreciating because those local jurisdictions, such fees are not going down and they need to pay for their local improvements.

Another interesting fact about property tax is that it surely impacts your organization in several different manners across all facets of each department. It will be very traditional or typical to look for a couple of individuals within a property tax department sitting anywhere in the office. Again, which department they belong to is somehow questionable, but sitting there doing their thing and maintaining their taxes as well as presenting some information to the accounting department. In other words, as you can see the whole property tax management method is very tedious and complicated. It is linked to all facets of different departments.

 

As soon as you verify your payments, you will transmit them off to accounting. On the side, you have your finance department performing their forecasts and budgets. They also perform isolation in a silo with the use of their data and spreadsheets to find out what they think property tax is going to be at. You will have acquisitions in terms of buying more properties for your portfolio. Sometimes performing their work up or not even looking with property ta as to what the tax impact is going to be. At this point, this is now becoming a requirement. Specific companies are letting their acquisitions team obtain without having some sort of a suggestion or a report from property tax.

And the long list goes on. It affects operations as well as your leasing in terms of initializing your rent or even recovering tax from those portfolios. It all boils down to one thing; it affects the entire department. And at this point, it is done in silos each with its own. That sets of data without one talking to one another and that is where they are coming from.

And this, it is being assessed that the property tax itself is going to be one of your biggest expenses. It is a known fact that there are significant opportunities in terms of saving a good amount of money. At this point, people know that it is fairly mismanaged and it is all done in solos all over the place. And there is a ton of data included in the process itself. Truth be told, from a data perspective, you are getting data from a lot of individual jurisdictions. It is common for an individual property to have at least hundreds of pieces of individual data every year. Again, deduce this to a portfolio of more than three hundred (300) properties you are easily dealing with approximately thirty thousand (30,000) pieces of data every year. That is an issue.

But how do we address such an issue? Everyone has to rethink the way you manage your property taxes and that is frankly some firms like ____________________ come to the rescue and give you the freedom to optimize and manage the entire process and bring everyone together on common ground. And that is going to attain and allow you to empower your users to come up with smarter and better decisions in terms of each aspect of your operation that includes or addresses property tax. These are not just buzzwords.

It is very essential since all these technologies exist nowadays and they fit naturally and property taxes can blend in with those other departments like the ability to automate the workflow. And as soon as you obtain a new forecast in terms of the value and budget, they would know exactly what they can adjust and amend. You can integrate in real-time with other systems so you can apply an eye to aid you in determining whether the values are out of sync maybe specific values and certain properties. This should be the focal point to appeal to drive savings.

The bottom line is, we are all trying to attain a similar goal. The objective is to optimize the value of the portfolio. Instead of paying much attention to the revenue side which a lot of systems and usually some of the easy pickings so that one can acquire the excellent properties to ensure they are fully rented out to maximize and drive the revenue coming from individual locations. That is a great way to drive revenues and value. But another way to come right is by looking at the expense side and being able to manage the costs especially something as huge as the property tax. The same is going to have a noteworthy impact on the value.

 

Conclusion. The meat of this article is to not ignore your property tax. There is a huge potential saving in it. If they control all tax, you just need the proper tools, information, and data available so you can properly assess it and come up with well-informed decisions that will impact not just the tax side but all other departments within your system.

 

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button ABOVE to quickly
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  • Women with 1031 exchange over 500k
  • High Net Worth individuals
  • Doctors
  • Dentists
  • Engineers
  • Individuals who worked for a major company over Ten (10) Years
  • Real estate brokers/agents
  • Female Athletes
  • Agie Women
  • Women CEO/Founder
  • Socialites/society
  • Dutchess/heiress
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  • Angel investors supporting women

 

Take the QUALIFYING QUIZ NOW!

To be qualified for our next investment Let me give you our investor quiz  so you’ll be put into the list for events and deals

You
can find my form “The Apartment Queen™ Investor Questionnaire” at: https://form.jotform.com/200207883604451

 

Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

 

 

 

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Women’s economic and financial empowerment: Important in Reducing Abuse against Women and Girls

Women’s economic and financial empowerment: Important in Reducing Abuse against Women and Girls

Insecurity in housing is the main hedge to leaving domestic violence. It may leave abused women with no choice, to live in an inadequate state, or to just simply endure the abuses. On the other hand, immigrant women experience added barriers. Interviews were implemented on abused immigrant women living in three (3) United States cities and investigated the main causes of housing insecurity. Results show a requirement in targeting systemic factors, a wide array of issues foregrounded along pavements in and out of homelessness; this is also a complex indicator of risk.

 

Advocacy is the secret to eliminating abuse and getting secure housing as well as cultural competency in services is required to sufficiently aid immigrant women who experience domestic violence. In some parts of the United States, where less than 10% of the registered small and medium enterprises are run and owned by women, some support groups provide training and support to these women’s organizations.

 

April is Sexual Assault Awareness Month in the United States. At this point, a lot of countries are celebrating the so-called “denim day”, with organizations encouraging people to wear blue jeans as a show of support for victims and programs to promote empowerment for women and its awareness. The World Health Organization (“WHO”), who recognized violence against women as a public health problem pegs that more than 33% of all women all over the globe have experienced some sexual or physical abuse. In South America, violence against women is pegged to cost each country their gross domestic product, as per the World Bank.

 

There are a lot of organizations like the Women’s Business Resource Center (“BRC”) in Papua New Guinea that have aided almost two thousand (2000) women battling this issue. Based on the study, it was shown that specific factors put women at higher risk of violence all over the globe, including low educational attainment, restricted economic opportunities, a weak policy and legislative framework, and lack of punishment for perpetrators.

 

Based on studies, initiatives that possess the greatest impact on violence versus women are community-based possess a multi-pronged approach, and incorporate engagement with several stakeholders over time.

 

Here, the _________________________ strives to empower women and eradicate main hindrances they experience by empowering them and give them a new meaning to their lives. IN terms of house security, the same empowers women to engage in real estate gigs and transactions so that these women gain back their confidence in dealing with people from all walks of life. In this regard, the __________________________ helps to give new meaning to their lives and make their existence worthwhile.

 

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  • Ultimate passive investors
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  • High Net Worth individuals
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Kaylee McMahon

Apartment investor/TREC Brokerage, LLC Owner

C: 469-990-4627 (text or call)

IG: The Apartment Queen

www.theapartmentqueen.com

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward

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WOMEN with

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Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

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Top Ten (10) Reasons Why Multifamily Real Estate is a Good Investment

Top Ten (10) Reasons Why Multifamily Real Estate is a Good Investment

Let’s admit, multifamily real estate is an effective investment not only in terms of the risk that you are about to take but also of the benefits that you will reap in the future. We have listed the ten most efficient reasons why multifamily real estate is a good investment:

 

  1. Cash flow. Cash flow is king and even more efficient than cash flow is a passive type of cash flow. The reason being, it generates a taxable document more commonly known as K-1. This type of document can be utilized to show passive losses. If you are in an investment that does not pay any type of distributions in the said taxable year that you are obtaining your k-1, these losses can be presently carried forward and back based on the law also known as the “care Act”. If you are a full-time in the real estate industry, or someone like a real estate agent, contractor, developer, builder, wholesaler, home flipper, and a lot more, you can truly benefit from this. How passive cash flow can affect is that those k-1which include passive income can offset your taxes that you are paying on your active real estate income. Being able to lessen your taxes is an efficient way. If you have ever wanted to retire early or if you ever want to make your money work for you passively, employing investing in multifamily units is a concrete way to do this. And the reason why it is concrete is that it is based on physical assets as compared to paper assets. You can also generate income from other sources of investments such as investments in gas and oil. However, there are other additional advantages that you will not obtain.

 

  1. Principal Down Payment. Your tenants are practically paying your mortgage and fundamentally also covering your interest. SO when you purchase a multifamily unit with 90% or full occupancy, cash flows at the beginning and essentially your tenants are paying down the loan that you purchase on the property and having the grad time to collect the extra cash.

 

  1. Appreciation concerning forced appreciation. Look for heavy value add assets. That there are a lot of units that are not renovated because expenses are rocket high. Also, management costs a lot. To add, the property is not being operated as a business where you are taking advantage of profit centers such as parking, laundry, and more. Forced appreciation, on the other hand, means taking measures to add value to the property within a limited period. That normally happens over ten (10) years or more. Real estate is cyclical but surely, it will appreciate as time goes by. So with the incorporation methods to add value, force appreciation is bound to happen.

 

  1. Multifamily real estate investment is an investment into a hard asset and not a paper asset. It is a known fact that hard assets do not disappear overnight. They do not follow the trends in the volatile stock market that is dependent on consumer confidence. The real estate industry does not trend with consumer confidence. If the building catches fire, as long as nobody is hurt, insurance will take care of all the legal claims as well as the cost of rebuilding. Sometimes, rebuilding, it increases the value of the property even more. Safe to say, one should always think of ways on how to create lemonade out of lemons.

 

  1. You gain more tax benefits from cost segregation. This is also about the inherent benefits of depreciation. Cost segregation will give you the freedom to gain more advantage of bonus depreciation. This depreciation emanates from the tax cuts and JOBS Act which mean that you are able to depreciate up to 100%. Your real property assets naturally depreciate overtime in the initial year since you purchase properties that are not new and need to be renovated. We get to avail of this regularly.

 

  1. Multifamily real estate investment is the most stable asset class. Did you know that multifamily real estate beats Self Storage industries during a recession? You can also add to this by looking in recession-resilient markets. For those people fortunate enough to live in Dallas, Texas, the latter is being regarded as the number one most recession-resilient market.

 

  1. You become part of the multi-million dollar project that you think you cannot possibly be a part of your lifetime. One good example is a property in Houston, Texas that was closed last February. It was a whopping 23.3 million purchase prices. Offerings are syndicated together, giving investors the chance to take part in this huge project which is not going anywhere. The bigger the deal, the lesser the risk will be involved. Say you have vacancies, there is less impact with a lot of units.

 

  1. Multifamily real estate is an excellent investment because we buy C-class or workforce housing. It differs for each multifamily class. But C class is a lot more efficient. This is an excellent investment because you are not dealing with D Class apartments. D class complexes have a lot of deferred maintenance. And it would surely take a long period and tons of headaches and very complex property with a significant amount of risks involved. It also needs a lot of renovation. We pay close attention to 40-year old C class properties which have a lot of deferred maintenance; vintage. But we can look for properties that don’t need a lot of renovation and still can generate more income. In this class of assets, there is no supply. Meaning, nobody is building this anymore. However, the demand is high since workforce housing is for individuals who work in industries like huge power companies, manufacturing plants, or large corporations. You cannot build a property. That is a 1970s vintage with present building standards.

 

  1. The types of loans that you can take out in terms of a multifamily property are different as compared to the loans that you can take out on a single-family property. When you are getting loans that are around 750,000 and more, your deals can be financed with a government back to Freddie Mac or Fannie Mae Loan. These are more commonly known as non-recourse loans. Non-recourse loans are good since if something happens with a project where it is on a failing end, it just simply go back to the bank. It does not result in the entire investors having their assets gone after. The other significant reason is your capability to utilize somebody else’s money to finance your deals. Bigger leverage equates to more cash flow available and since inflation changes from time to time, you do not lose the time value of money on your present cash flow. You don’t become illiquid. Those are basically the largest challenges in real estate. To add, something that is truly interesting that others do is structuring an investor’s capital in the deals and recognizing it as preferred equity. This means that they get paid a percentage return on their money each month. Just like a banker would but they don’t have a lien on the property. Multifamily real estate is also enticing since the returns are basically high so that it exceeds inflation.

 

  1. You can use a 1031 exchange to come up into apartment syndication. 1031 can be used to level up into a bigger deal or multifamily deal. But if you utilize 1031 exchange into syndication, you are one of the main owners and you get bigger tax benefits and income in the long run. Depending on your arrangement with the sponsors and other co-owners your tenancy in common into syndication may mean that owners will have to do minimal work.

 

  1. BONUS!!!!! Multifamily Real Estate is the economies of scale. So you can be able to purchase supplies in bulk and save a significant amount of money on them. We can also avail of the benefit of up to 100 units per property manager. So you pay the same salary, to have one person operate and manage your multifamily property. Regardless of the number of units, an owner will need a full-time manager and a leasing agent. Basically, the cleaning agent is paid on a commission or hourly basis or a combination of both. So the bigger the building is, the less expensive necessary functions become including things such as internet contracts and huge cable contracts. One can renegotiate for a better rate since you are essentially a part of the city and a very huge customer.

 

Truly indeed, there are tons of more advantages to investing in the multifamily real estate industry like enhancing the branding and value of the community having after-school care services for kids, educational schemes and systems, and a lot more. If you are eyeing engaging in multifamily real estate investment, there is never a better time to start than today!

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1031 exchange over 500k- High net worth individuals Doctors

Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

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Apartment investor/ TREC® Brokerage LLC Owner

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How to Get Over Limiting Beliefs About Rich People

How to Get Over Limiting Beliefs About Rich People

Last year I was headed to this multimillion-dollar home for a fundraiser and I realized I had fearful tapes playing in my head. I worried “what if the ultraconservative people who are going to be there treated me like I was nothing special? What if they just ignore me? What if it’s worse than that church-feeling of being judged…”

My hope is that by sharing this, others will understand and become more comfortable in situations with affluent individuals.

I knew if I didn’t figure this out, I would be less effective in raising capital and my business wouldn’t grow as fast. I didn’t want my internal head trash to slow me down. When I started in this business I sometimes placed people that made more money than me on a pedestal. Now I realize that is absolutely ridiculous.

Being the confident person that I am I was surprised that I was feeling this way and began to do my normal routine of suppressing my feelings. I caught myself though, and decided instead of suppressing my feelings, I would be aware of them. And think about where those feelings of inadequacy came from.

I grew up Catholic. In my church, it was very important to give but we were never told the why behind it. So, all I saw was that you must volunteer, give money donations at least once a week and help others even when you can’t help yourself. There are so many stories of beggars and people who had nothing in scripture giving or helping being rewarded for their actions. As a kid, it was “just what you’re supposed to do.”

As an adult, this makes no sense to me. I know I must take care of myself before I can be an overflowing cup to help others. This means mental, financial, spiritually, and more. Once you have more than you need to thrive, yes give unconditionally.

As a child this perspective created resentments in me, for two reasons:

  • Those who have so much surely must take more than they give so they are living life wrong
  • People with money use it for stupid things that they use to gloat about and make themselves feel important (I experienced this first hand)

So, my attitude my whole life was that money must be evil.

But now I know that money is a tool. I believe it only amplifies who you really are. As an adult, I realize money is good, but it’s not the most important thing in this life. So, it’s simple, regardless of status or money, we need to judge someone on their actions or character, not the stuff they have.

I chose that instead of letting somebody’s status, income, or political activities make me feel any different than I normally do, that I would choose to lean in and to lead with confidence.

At this event, I made sure to ask lots of questions and show interest in what people wanted to talk about. I did lots of mirroring to make certain I was respectful of the atmosphere. What I realized before this event, and reminded myself at this event, is that wealthy people are only slightly different than most of the people that I deal with.

Usually, someone wealthy did not get that way from stealing, they treat other people right and are generous and giving. We were at a fundraiser for god-sakes, and after their donation, these individuals didn’t receive anything but a tax break. They still pay taxes, get out of bed, brush their teeth, use the bathroom, shake hands, and more just like the rest of us.

By being engaged (i.e. staying off my phone and actually giving a shit about what they thought/felt) I created relationships with these people.

Once the relationship and trust were built I experienced that these high net worth people wanted to know what I was passionate about. Any human is going to remember you for what your “why” behind your daily actions. They won’t remember you for trying to sell to them on products and services. They remember you for your personality and what you shared with them.

Here are some tips on how to create high-quality relationships in any setting:

  • Be yourself.
  • Every time somebody talked to you think of a way to tell them what’s in it for them. (What they get or how can you give).
  • Listen more than you talk – don’t try to fill the silence.
  • Ask them more questions about the things that are important to them.
  • Watch your body language – make sure not to cross your arms, face your legs away, or close your palms/hands.

These were my only sales strategies for the night. People opened up to me and felt connected. I figured if business came up, as it did, I would simply be able to describe the difference between working with me versus other people. But only when asked first.

That night I put my self-worth and value in my ability to find common ground with each person that I spoke with.

Guess what? It Fricken worked! I met new clients and friends that evening.

Most of the negativity in our heads came from someone or something else. We can’t control that. All we can do is control our actions and perceptions.

I recognized this as a win for myself. After all, it’s important to me to feel my value and self-worth, confident, and believe in myself in everything I do. So, I’m very proud of myself for getting a hold of my deep internal doubts and thoughts that I didn’t even know I had until presented with the situation and turning those nervous butterflies and feelings into common connections and a comfortable situation.

I now know I can walk into any room full of millionaires and billionaires and create valuable connections.

I now welcome any event which is for wealthy or high net worth individuals, because I know my value and I know that this is key to grow my business and chase my big WHY in life. If you are a high net worth individual looking for ways to protect your wealth and help me create 1 billion more female investors by 2030 click the link below to book a call and see how we can best help each other.

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward

button  ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

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WOMEN with

1031 exchange over 500k- High net worth individuals Doctors

Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

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Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

 

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Rich People Put Their Money: How Debt Can Control You (part 2)

Rich People Put Their Money: How Debt Can Control You (part 2)

A big difference between owning real estate investment and other investment types is the power of debt. A lot of people do not realize the strength of debt. When there is debt, amortization follows. Wealth is built in the amortization of the debt you shell out on a specific property. Say, for example, the $800k in debt you put in the building will have an array of tenants paying down your mortgage obligation on a monthly basis; that is the so-called amortization.

Let’s conclude the amortization in the example. Utilizing the loan terms the initial year of the loan will come out to have a $14k reduction from the owed amount. If the value of the property stays the same, that can also be seen as an increase in the same amount based on equity. In the event that we add that $14k to the after-tax cash flow, we are left with an all-inclusive after-tax return of a whopping 22.4%.

In this type of example, there is an assumption that the value of the property will not go high in value a cent; which is smart since assuming is another term for speculating, and speculations are considered risky in all types of investment. But, in multifamily having 5 units or other commercial investment real estate, it is noted that the property value is based on the income of the property it produces. Wealthy individuals love to control things. This is precisely the reason why rich people pay close attention to commercial units like multifamily apartment complexes in investing. Being that you control the expenses and income in a property, it follows that you also control its value. This simply means that you have a way to enhance income by increasing the rents or say, billing the tenants on their utilities, or incorporating any other source of lateral income to operational expenditures, you will also add value to the property.

Also, the other side of the coin is that if you lessen the expenses by renegotiating operational expenditure cost, reducing turnovers, billing tenants for utilities, putting in energy-efficient light bulbs and eco-friendly fixtures, or any other schemes to lessen your operational expenses, you will surely increase the value of your property.

Enhancing Value of Multifamily Units

Let’s have hat example once again. Say, this $1million building is composed of a twenty (20) unit apartment complex. The reason for the purchase of this property is because you have an eye on good opportunities; one of which is to add value both by decreasing expenses and of course increasing income. Nothing major in terms of renovation; just the things you could properly do after buying to help the bottom line.

Before buying, you realized that the previous owner had been in possession of the building for a bit longer, they had not been keeping up with market rents. You realized that there are some units in your area for which the rent is about $900-925, but your unit was only renting for $850. On the same and equal footing, the tenants were on a month to month leases, you went ahead and increase a minor amount of $25 to all units in month one. Of course, you wouldn’t want to keep the rent above the market value so you can keep your tenants. This simply added more than five grand of your income annually.

Another chance you smartly envisioned was in vendor costs. Over the last twenty (20) years, the vendors had slowly crept prices up above the rates on the market for their services. The previous owner was complacent with the operations and had close ties with his vendors so they never bothered to look at the prevailing market price.

On your first day of owning the complex, you were able to deal with the following monthly expenses, as follows:

  • Dumpster charge, monthly savings of $15 dollars or $180 annually
  • Cut grass expense, monthly savings of fifty dollars per cut or $1000 annually
  • Property management charge of 8% down to 7% or an annual savings of $1,600.00

This all does not seem as simple to do. But let us scrutinize how this will greatly affect our example.

After e=increasing your annual income by $5700 and simultaneously decreasing your operational expenses by $2780, you were able to increase your wealth by $8480 annually. The extra cash is significant, but the true advantage behind this is the fact that commercial real estate is valued based on the income it generates. Since you increased your income, the value of your property increases as well. That is direct proportionality.

In other words, your property is basically in a similar market and an asset class that gives it a similar cap rate of 8% that you purchase it for. Now that you have new schemes to add $8480 to your NOI or net operating income, this will give you a total NOI of $88,480. By dividing the NOI with your cap rate, we can therefore find the new value of the property. Thus, it reaches $1.106 million dollars. Have you seen that making minimal alterations in your approach would increase the value of your property by $106 thousand?

If you noticed, your mortgage did not change, and you still owe the same. You just increased the equity you possess in the property by $106k without putting an extra buck into the said investment. It is not magic.

Novel and Enhanced Tools and vehicles to know what all-inclusive return is now that you possess and added value, incorporate $8480 to your stable income, which will be an added $2968 due to the tax mandate.

This will take you to your novel total after-tax cash flow to $36472 or after-tax cash on cash return of 18.2%. Add in your entire $120k equity that has accrued in the initial year and you will have an entire return of 78%. Now that you have your strategies to generate all your income, you may be wondering the taxes will hit hard as soon as you let go of the property.

The reaction to that should be “why to sell it?” That is a great property. All you got to do is to hold on to this cash cow, but the entire equity out in a cash-out refinance, which is not a taxable event. Put some in a trust and hand it off to your legal heirs.

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward

button  ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

 

Our ideal investor is usually one of these individuals: Ultimate passive investors-

WOMEN with

1031 exchange over 500k- High net worth individuals Doctors

Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

** GET Qualified for the next DEAL or GET more INFO NOW!

TAKE THE QUALIFYING QUIZ NOW!

Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

c: 469-990-4627 (text or call) IG: theapartmentqueen_

www.theapartmentqueen.com

 

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Real Estate Investment 101: 9 Steps to Jumpstart Real Estate Investment

Real Estate Investment 101: 9 Steps to Jumpstart Real Estate Investment

I can still remember, being a rookie in the field of real estate investment. One with nada experience in the real or business world. It was a bit overwhelming to get going. I can do a little that time and all the information that I learned was from the seminars, books, elders, and the school of hard knocks.

But drowning yourself with these isn’t always the answer, at least, at the onset. As you read more, you are surely becoming more aware of a lot of challenges and choices in store for you. Ironically speaking, knowing a lot can lead you to analysis paralysis.

Not that I have regrets, but if I were given a chance to start all over again, I would usually start from a methodical plan from an experienced real estate specialist. This approach will surely give me an idea to learn in phases while still moving forward. It will surely help me pay attention to the important and not on the not-so-important. By following these steps, I would surely save time and energy and stay away from a lot of frustrations. I should have also avoided being overwhelmed on all matters.

Easier said than done. I cannot deal with the past, but I can help you with your future. Here at www.rebykaylee.com, we came up with a step by step analysis and plan to jumpstart people in real estate investment with the use of my own experience. That is what you will witness in the rest of this article.

Listed below are the nine (9) steps that will show you how to get started with the realm of real estate investment:

  1. Specify your financial capacity. Investing in real estate is only one of the vehicles to enhance your finances and improve your pocket. So you have to mull over your financial topography. The majority of the new investors practically want to attain financial independence. You can think of this as the top of the Eiffel tower where all your expenses are simply covered with income from real estate investments. The essentials of climbing the Eiffel tower are similar whether you invest in any type of investment. To reach greater heights in a fast manner, you simply have to boost up your rate of savings. Then, you can be able to divert your assets to your choice of investments, such as real estate.

 

There are several real estate investment strategies that will aid you with your saving rate. But, at this point, you need to specify where you are on the financial mountain. Are you at the very bottom or are you in the median? Or should we say are you on the top? You want to have an idea of your present condition because depending on where you are, a specific real estate strategy will truly make more sense as compared to others.

  1. Select a Specific Real Estate Investing Strategy. In this scenario, you could come up with a forty-page business plan that even an MBA would surely be proud of. However, you should not forget that the primary objective is to get started. So let us start with something fast. You can come up with a huge, detailed plan later on.

 

But for now, just select one real estate strategy that will aid you in moving from your present financial status on to the next one. Beginning with one determinable strategy does not mean you will not have obstructions or even an entire alteration of the route later on. Well, an accident happens and you just have to be adaptable to the situation. But beginning with just one will help you pay close attention. Practically, this will give you the determination and confidence to jumpstart.

 

  1. Pick a Target Market. With prices in the ceiling in a lot of communities, people often ask whether they should engage their money on properties close to home or select an entirely new market. Well, it is a good but practical question. Because the market you will select could come up with a huge difference in your final results. It is a wise strategy to invest closer to home, if possible. Since being a local gives you the benefit of deep knowledge of the trends in the market. While it is true that managing a real estate property far from your home is doable, it is still more effective and efficient to be local.

To begin evaluating the market close to home. If prices appear to be a bit high in your neighborhood, you can extend your proximity and explore a little far before looking at other locations. You can drive an hour away. More often, the suburbs of main urban areas become much more reasonable and affordable for investments. Next, is to go for tiny niches within your market. Properties like mobile homes, condominiums, note investing, and tax liens can still be profitable even though they are regarded as a high or high-end market.

But whether you invest far or close to home, you should initially come up with your own market analysis first. It is suggested not to get stuck with this step since the process is dynamic and everybody should keep moving forward to the next step. Well, nobody is perfect and this realm is a world of trial and error.

  1. Mull over regarding your investment property criteria. Your investment property criteria have a lot to tell in terms of the efficacy of a practical investment. Try creating a written investment profile that you can share with prospective partners, lead source,s and investors like real estate agents.

 

Your profile should come up with two major categories like target property and target amounts or the figures. The first category was earlier discussed in the preceding step. The next category on your investment profile is actually the “figures”. Such criteria may vary over time but you have to select fundamental investment property criteria that are within your preference. Then, you can shift to the next step.

 

  1. Create your Dream Team. Real Estate is like playing basketball. It is a team sport and considers yourself the leader of the team. You do not necessarily need to hire employees, but it is required to put independent contractors and specialists who can aid you in their areas or field of expertise, just like rebykaylee.com. If this idea does not excite you, then, a different class of investment may suit you.

 

  1. Consider Financing. Unlike other types of investing, it is but normal to utilize financing as an aid in buying real estate properties. And there are a lot of options to select from. Some notable loans are the FHA, the Veteran Loans, Portfolio loans, Seller financing, and a lot more.

 

The type of financing you will select is basically dependent on your financial capability, your chosen strategy as well as your personal preference. You surely can depend heavily on your mentors as well as your great team members to aid you in lining up the best loan that fits you and your budget. As soon as you have a concrete plan for your financing, you can move on to the next step.

 

  1. Generate cash for your Reservation and Down Payments. Investing in real estate is a business that gives you the freedom to utilize other people’s money to aid you in moving forward. But you should not solely depend on building your business without shelling out of money. Even if you utilize the highest leverage situations, like zero down payment loans, you will still need a case for reserves.

 

So, the important question is how much amount do you need and what is the manner of raising it? Again, it will depend on the initial steps that we discussed like the strategy, the prices in the market, your property criteria, and the like.

 

  1. Come up with a great plan to look for deals. Good deals do not just land in front of you. Looking for excellent deals is like hunting treasure. You have to turn over tons of boulders before you can find the hidden treasure. Except during the years of 2008-2011 which is regarded as the great recession. Back then, the hunt for excellent deals is a bit easy.
  2. Prioritize your next move by scheduling your time strategically. Real Estate 101 is given to you to help you jumpstart. This process will help you in transferring all of this information into an effective and organized action immediately. You have to have a good schedule of your time and you have to sort out priorities for your next actions.

CONCLUSION. These steps will surely save you frustration and time as individuals getting started with the realm of real estate investment.  Studies have shown that too much information at hand may surely give you a prototype to get a jumpstart immediately. And if you continuously move, you can stay away from being overwhelmed and move past those other pesky rookie obstructions like analysis paralysis. Too much thinking will lead you to no clue.

But naturally, these steps are only the start. Reality is dynamic and the most important plans you will make will surely be challenged in the real world. SO you have to stay fluid and versatile.

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward

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Our ideal investor is usually one of these individuals: Ultimate passive investors-

WOMEN with

1031 exchange over 500k- High net worth individuals Doctors

Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

** GET Qualified for the next DEAL or GET more INFO NOW!

TAKE THE QUALIFYING QUIZ NOW!

Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

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Women Taking over Apartment Investing

Women Taking over Apartment Investing

You may ask yourself-

What kind of skills do you need to purchase a Multifamily Property?

Why Purchase or Invest in Multifamily Properties?

WHY SHOULDN’T WOMEN BE JUST AS SUCCESSFUL AS THEIR MALE ASSOCIATES?

Kaylee McMahon and underwriting guru Karolina DiMario, in conjunction with a team member and General Partner Deep Paknikar, negotiate, fundraise, and manage a very forward-thinking group of female investors where they put their superpowers to work buying apartment complexes in Texas.

READ NOW about our experiences JUST getting across the finish line before the hard work even started on our most recent Fort Worth Deal. This deal was not possible without the funds of our limited or “passive” partners.

“Leuda May is the first Apartment that I have been part of the purchase of as a General Partner. Knowing residential real estate, there are a lot of big differences. [you need a whole new team] I have learned a lot so far and I am excited to keep learning. The best part is to be part of a women-only team that is helping other women invest in real estate and become financially independent.”

Karolina DiMario

“Women belong in all places of opportunity and value creation. Real Estate is no exception. With the new online world, there is more opportunity for women to collaborate on large scale investment projects. I believe the team’s complementary skills, ability to support each other, is what got the apartment purchase to a close. It was a tough deal with many unexpected turns testing the team. No-deal was not an option for this team. Personally, it was a great learning experience working with a talented team of go-getters with a never say die attitude!” –Deep Paknikar

“YOU GET AN OPPORTUNITY TO EMPOWER WOMEN by giving Her Access to life-changing passive income from apartment investments=poverty reduction, Empowered Female Sponsor Team to add diversity in commercial real estate, Investment education through our technology, the SheVestApp. Understanding=EMPOWERMENT=NO MORE FEAR OF MONEY  like I experienced! My PERSONAL SOLUTION of cash flowing real estate was my way out of abuse”-Kaylee McMahon

Why is Apartment investing?

  1. MAJOR tax BREAKS
  2. Cashflow distribution plus Appreciation distribution. You can have your cake & eat it.
  3. The stock market some consider legalized gambling- you instead may want an option to build reliable generational wealth

In DFW Multifamily Real estate has been the most recession resilient USA market in the last 30 years!

Why Should Women lead in Apartment Investing?

1- #1 Fastest way for HER to build wealth and Financial FREEDOM

2-Women THRIVE with Secure Investments

3-Women are better portfolio managers and investors historically.

4-$176.8 Billion Industry=Unlimited Growth for our Mission

To work with us please reach us at admin@theapartmentqueen.com or www.theapartmentqueen.com

 

To find out about future Investments take the Investor Questionnaire” at https://form.jotform.com/200207883604451

Apartment deal analyzer: https://theapartmentqueen.com/resources/advanced-underwriting-spreadsheet/

 

More about the team:

 Kaylee McMahon

  • Founder of The Apartment Queen, ReByKaylee LLC Residential Real Estate Brokerage, SheVestApp, PropertyManagementai,

 

General partner/Key Principle of a 45 MM Assets Under Management Texas, 17.1 MM Assets Under Management Phoenix Arizona

Deep Paknikar

  • Owned multiple single-family and multifamily units across USA – WA, OH, NV, LA, OK, FL and TX.
  • Licensed Real Estate Agent in Washington.
  • 10+ years in Hi-tech.Worked in Fortune 500 companies Amazon and Microsoft
  • MBA from Univ of Washington and MS in Computer Science from Univ of Missouri.

Karolina DiMario

  • 6 years in Real Estate
  • 135 units owned across CA, TX, and OH
  • Licensed Real Estate agent in California
  • BA in Business Economics
  • 10 years in Business Analytics

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward

button  ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

Our ideal investor is usually one of these individuals: Ultimate passive investors-

WOMEN with

1031 exchange over 500k- High net worth individuals Doctors

Dentists Engineers

Individual who Worked for a major company over 10 years Real estate brokers/agents

Female athletes Aggie women

Women CEO/founder Socialites/society dutchess/heiress

Individuals with pension funds Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

** GET Qualified for the next DEAL or GET more INFO NOW!

TAKE THE QUALIFYING QUIZ NOW!

Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

 

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How you can use Debt to Win!

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Taxes and opportunity costs, together with interest in inflation are the main components that investors in the main community on the buyer’s side have to face. What are the actions to battle those forces? This article will walk you through on how you can be able to combat opportunity cost and interest taxes, efficiently structured debt, leveraged deal, and control inflation.

 

When utilizing effectively, it is commonly known as optimum capital structure and it gives you the freedom to utilize a proper mixture of equity and debt to minimize your risk, supply you the best possible return and take you to the most effective method to stay away from major forces that real estate investors have to face. Another thing that you have to ignore is the principle that debt is a bad thing. Yes, it is possible to fear debt, or you can choose to master it. What we need to pay close attention to is how to rework our thoughts and skills when it comes to real estate investing. 

 

Initially, we want to pay attention to financing instead of focusing on the asset. Secondly, we want to focus on efficient financing coupled with more stable assets and lower risk for best returns. Instead of getting high risk assuming for better returns, you may want to pay lower taxes by focusing on real money instead of paying higher taxes but focusing on obtaining a small amount of money or past value figures. Focusing on stable assets with minimal volatility and higher liquidity is the way to go. To add, you want to come up with an efficiently-tailored debt to have a predictable cash flow and net worth. Instead of feeling the pressure to purchase the assets with higher volatility because of pressure and time constraints to obtain higher returns in a quick amount of time.

 

You should make the system work for you instead of fighting it and shelling out a significant amount of time to get educated. Pay close attention to higher liquidity with the use of manageable leverage to obtain wealth. Normally, individuals possess little to no money because they want each penny to make money. Consider the effective use of money; financing is included together with spreads and risks and also the present tax environment. Before looking at returns the old-fashioned way of thinking is to look at returns, exclusively. When all these other components must be treated the proper way to think in terms of enhancing net worth is using inflation opportunity cost interest. Also, using tax benefits to come up with an environment where there is a certainty of enhancing your net worth. The traditional approach of increasing net worth was to purchase and pray for you to increase net worth. 

 

Now, when you are on the proper side of investing, you have to take time in rethinking on how you normally invest, you are going to be a sophisticated type of investor. And less risk will then be created. Using debt to your advantage is really the thing to do when it comes to using interest. The approach is, if you were to put your money into an account, the interest will only reach at least 3% which is actually higher than a lot of accounts are presently and steadily want that account to grow, you would make 3% and then you have to subtract.

 

Other components, because of the future value of money; subtracting your taxes. As soon as you take it out of these accounts and more. Instead, you could utilize your leverage on a property for example. You can also use leverage on something where your interest was tax-deductible. Then, what you obtain is using a loan, for example, pegged at 6% interest. You are basically saving or writing off 6% interest so you are essentially generating a 6 percent return on the investment you are trying to leverage. So you have to think that way. If you were to have both of these mentioned accounts at the same time, you will notice that based on the loan or the leverage that account would actually make you 3% more money over a similar period of time. 

 

Here is another idea that is efficient, especially when you are trying to come up with generational wealth, is to consider the family bank in very simple terms. You can have a pile of wealth with your family when there is a family board, which means once monthly minors are only allowed to learn but not to vote. The family will then decide what they are going to utilize their money to lend on. 

 

For example, if someone needs a laptop for college, if we are going to purchase a property, etc. everybody will have a say on this. If we are going to buy a laptop, for example, the individual that is going to take out the loan says it is your daughter or son, they would then have to take out that loan from the family bank instead of a big bank. They would be paying interest on the family’s bank as such this is one way not to lose out on the interest. 

 

So now, we have figured out a way to come up with loans from other banks’ interests that work for us. To add, we can also make that interest payback to us as well. So, you are not missing out on an opportunity cost, you are generating interest. Further, you are being able to utilize alone, to be able to generate a higher percentage of interest on things such as real assets or things that you can write off the interest on the family bank is an excellent way to teach young kids financial literacy when they are coming into a family who regularly meets and mulls over the benefits of the most efficient ways to utilize the money to increase their wealth. To add to that, another imperative component as stated before is focusing not only in garnering the optimum benefit from interest on loans but also having bigger tax savings. Utilizing loans or leverage is excellent for beating inflation since you are the bank. This is because when you lend or take a loan out on something, as long as your income from the property is keeping up with the inflation. 

 

Another excellent thing in terms of debt is that you can utilize debt to buy, up to three times more than the amount of property that you could if you did not, and you would be able to triple your net worth. The beauty of this is that you will be able to stay liquid. These two (2) things will aid you in being able to obtain more loans from the bank.

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button  ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

 

Our ideal investor is usually one of these individuals:

Ultimate passive investors-

WOMEN with

1031 exchange over 500k-

High net worth individuals

Doctors

Dentists

Engineers

Individual who Worked for a major company over 10 years

Real estate brokers/agents

Female athletes

Aggie women

Women CEO/founder

Socialites/society

dutchess/heiress

Individuals with pension funds

Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

** GET Qualified for the next DEAL or GET more INFO NOW!

TAKE THE QUALIFYING QUIZ NOW!

Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

 

c: 469-990-4627 (text or call)

IG: theapartmentqueen_

www.theapartmentqueen.com

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Rich People Put Their Money: Multifamily Real Estate Investments (part 1)

Based on statistics, almost eighty (80) percent of millionaires attribute their wealth to the realm of real estate investment. Such individuals are living the good life of generating income from real estate. Incorporate this with unimaginable experience of unpredictable, disappointing stock markets, and you will obtain a significant amount of people realizing they practically have zero control over almost all of their investments and of course, their future savings in their pocket. People are sick and tired of following 401k stuffers and a lot have begun at why a lot of wealthy people own good real estate properties.

In this article, we will dissect the figures in their simplified form and yet rarely talked about the realizations behind the wealth-generating capabilities real estate investment possess.

Who does not want to pay close attention to the liberty and wealth real estate can actually give you? Of course, everybody loves it so much that almost all forgot to explain the ins and outs of it. The gap in education leads people to impulse decisions in not knowing that even some types of investment strategies in the real estate industry do not carry advantages for some.

Listening to meetings and going to meetups, or even reading articles, you always hear about individuals generating wealth and their success stories and accomplishments through investing in the real estate industry. What we always tend to forget is how and why owning a real estate investment is able to make your dreams turn into reality so much better than any other investment strategies like flipping, private lending, or any other type of investing.

Focusing on Multifamily Real Estate. When talking about real estate investments, one should pay close attention to multifamily real estate or apartment complexes because of the control it gives in specifying the investment outputs. Control, taxes, and debt are considered to be some of the strongest components in real estate. For the average investor, leverage is practically utilized in real estate, but not in private lending or even stocks. Furthermore, the owners of the real estate investment properties as well as the IRS might be best of friends because the IRS has made a lot of guidelines on investor’s advantage.

There are tons of useful information wrapped in this article. You have to read this article and nurture the information by heart. If you are alien to a specific term, stop and look it up. Before you do the math, learn to understand important concepts. Even though you will be faced with tons of numbers, it is only the basic addition, subtraction, multiplication, and division. So do not let the math overwhelm your guts in engaging in real estate. As soon as you have a good grasp of all the words and figures behind it, you will surely know how simple it is to generate wealth in real estate and why rich people contribute to relating their financial liberty to real estate investment. The most engaging way to illustrate the truth is through examples and figures. Instead of looking at the same old best results, we are going to pave our way down into why all these billionaires point their wealth to real estate and particularly multifamily and other commercial real estate investments.

Say, for example, you shell out a $200k down payment on a total purchase price of $1 million multifamily building figured at an 8% cap rate which is very attainable. This will give you an $80k NOI or net operating income. When you borrowed the $800k from the bank, they will lend it out for a minimal 4% interest rate on a thirty-year amortization. This simply means that your mortgage on the initial year will be at $45, 832.00, out of which, $14,088 is the principal. The rest is interest. That will leave you with $34,168.00 in your cash flow or pre-tax cash on cash return at a rate of 17%. So if your cash flow at @34,168.00, do you pay tax based on the same? Of course not! Another advantage of leverage and real estate is the depreciation tax benefit. This is one benefit that the IRS showcases to the investors who are in the real estate industry. Even though you only shell out 20% of the $1million dollar property, you will acquire ALL the depreciation benefits.

It is a known fact that multifamily apartment units are depreciated over 27.5 years, which simply means you get to depreciate the value of the property. You also have to be reminded that the value of the building is not equal to the value of the properties because the building sits on land, and the land also has a specific value. The IRS will not let you depreciate the land. A basic percentage of a property value that is diverted to land value is about 20 percent. So, in this example, it will be around $200k. This will leave you about $800k of construction value to be depreciated over the next 27.5 years, or $29,090.00, yearly.

So what does this imply? It means that you pay almost nothing on that 34k cash flow you made on the property You actually have a taxable principal of $19,166 and a $14,088 portion of your mortgage payment less than $29,000.00 depreciation. We then add the principal amount of your mortgage payment since it is not taxable and then subtract the depreciation we stated above.

And because you were able to come up with $200k down on your property it is safe to assume you are doing financially well. Having said this, it is also safe to assume that you belong to the 35% tax bracket. And because the taxable gain bracket is 35%, $6,708.00 will then be deducted to your taxable gain of $19,166.00 in favor of the IRS. Now leaving you with a whopping $27,460.00. It simply means that the after-tax return is around 13.7%.

This is the point where a lot of individuals close their minds and say “my financial specialist says I can earn a good 8-9 percent in a mutual fund, and those have no lessees, no property manager means no complexities in management. SO you think that that peace of mind will is not worth owning a property? I don’t think so. There are main parts to this puzzle that the rich individuals utilize that a lot of people give up at this step never witness.

 

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Introduction To CRE Apartment Investing-why do it?

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Introduction To CRE Apartment Investing-why do it?

Purchasing an apartment complex can be an excellent investment for an array of reasons. Even newbies can purchase an apartment complex especially if they abide by the so-called 10-step guide. Also, be aware of the seven common mistakes rookie real estate investors make and know how to stay away from them (previous article from us).

 

Apartment investing may sound like a huge undertaking, especially for people who are relatively new to the real investment realm. Although purchasing an apartment complex is a method that should be taken seriously, it offers an array of advantages that simply cannot be taken for granted. 

 

Is purchasing an apartment complex an excellent investment? Just like any class of investing decisions, there are advantages and disadvantages connected with purchasing an apartment that could be given consideration.

 

Investing in apartment buildings supplements an array of advantages that are extraordinary when compared to investing in single-family units. Recurring rental income every month for several units aids in increasing growth in income, while splitting maintenance fees lower the cost on each unit. To add, investors are given the freedom to spread the risk to all its units. When a tenant moves out from a single-family unit, the vacancy rate is entirely 100 percent. In contrast, when one tenant moves out from a ten-unit property, the vacancy rate is a fraction of the total. Further, the owner has the liberty to solidify the potential ADDED  income of the property by incorporating amenities that are paid for by tenants, like vending machines, laundry, and the like.

 

Investing in multifamily units, however, are not without a possible disadvantage. Owning a property with multi-units is the same with the intensive type of management, such as dealing with a turnover of a tenant, or dealing with maintenance issues as well as repairs. People eyeing in multifamily investing should ask themselves if they are really prepared on becoming a landlord. If the answer is “no”, perhaps hiring a property manager or getting the services of a property management firm is the most efficient solution (what we do). Lastly, some may not take buying an apartment into consideration because what can be perceived as the prohibitive purchase price. But it should be stressed that when it comes to investing in multifamily real estate units, banks tend to look more at the potential financial wealth of the property instead of an apartment investors’ personal financial standing. In the case of multifamily units, the value of the building is a function of both market value and prospective income. Having said this, financing an apartment multifamily complex in some cases may be a lot more accessible than getting a loan for a single-family real estate investment.

 

Commercial Retail Space Unit vs. Apartment Building Rentals

This will only matter for those eyeing to take the plunge into real estate investment to also wonder about commercial retail spaces as well. Both sides can have an idea of needing a significant expense for acquisition, while others may believe that a commercial building will bring in more income. It is imperative to carefully balance the pros and cons of both investing features before selecting and going forward.

 

Initially, some may assume that it is a bit easier to look and manage tenants in the commercial space. However, because of the present economic downturn and those brought about by the pandemic, a lot of small retailers are being squeezed out by large scale ones and online retailers. Although a business may occupy a retail space for a longer period of time, vacancies are likely to be much harder to fill. In contrast, the demand for residential rental units is rising in demand. 

 

This is practically the case in concentrated markets where it generates more financial sense to rent instead of purchasing, or where house buying is not attainable. Lastly, investors should also take managing turnover into considerations in the retail industry can be a bit expensive. When a business moves in, they have to figure out space according to their preference. As with any scenario, investors should mull over prospective downfalls linked with any type of investing niche.

 

Purchasing an apartment vs. purchasing a Condominium

A lot of people actually think that owning a condo as well as an apartment is just similar, but they are basically very different in a lot of ways for both homeowners and real estate investors. When talking about condominiums, the buyer owns the interior space of the unit itself, while the exterior spaces are actually owned in common, such as parking lots, stairs, grounds, pools, and the like, homeowner’s association. Those who opted to invest in condominiums are expected to pay monthly dues and face stricter rules that might make remodeling, renting out, or reselling the unit. In comparison, real estate investors who own the apartment unit will basically own the entire structure, making them free to enhance and rent out units as they please. 

 

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>  be qualified for our next investment Let me give you our investor quiz  so you’ll be put into the list for events and deals 
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The 15 Most Efficient Real Estate Investment Strategies

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The 15 Most Efficient Real Estate Property Investment Strategies

Real Estate Investment is said to be an ideal kind of investment. But the real estate niche comprised of a lot of different ways to generate money. There are a lot of strategies to engage. As a rookie investor, these options can be a bit overwhelming. 

So, with this article, we have collated fifteen (15) of the most efficient strategies in real estate investing. These recognized techniques will showcase to you a good grasp of how to generate a lucrative income in real estate investing. It is well-hoped that one or more strategies mentioned here will be a tailored fit for your scenario. And if that happens, this article can shell out the perfect jumpstart for your own real estate investing escapades. 

It is proper that we should know the difference between, tactics, strategies, and goals.  Basically, you could regard real estate investment as well as wealth building as reaching the peak of the mountain. And you, of course, the hard-working and dependable mountain climber. We envision the peak as your life goals and financial dreams. And there are tons of milestones that will surely go along your way. 

Strategies are akin to plans on how to climb the mountain. These are the routes that you will pave on the way to the top; plans that will take you the safest and fastest means. 

On the other hand, tactics are like the tools that you will utilize in climbing such as the binoculars, ropes, and ladders that will aid you in practically climbing those routes. But a lot of real estate investors are caught up in tactics of being vague on why they are using that in the first place. Getting excellent at using tactics without a strategy can only make you good at hiking right off financial cliffs. So, it is best recommended to obtain clear on fundamental real estate investment goals such as financial liberty or a specified amount of clear and free rental properties. Then acquire a precise one or two strategies that you feel you are good at. Then, all the tactics that you will acquire throughout practice will be very much effective.  Strategies are classified into groups such as business strategies, starter, wealth, debt and passive strategies. We have listed below fifteen of the most effective strategies based on how they are utilized:

BUSINESS STRATEGIES. This is more on the business side as it can generate income and replace your day job. However, you should be prepared to invest the upfront effort and time of a state-up business to be able to make them effective. 

  1. FIX AND FLIP. This principle is the business of looking for properties that requires repair and extensive work and reselling them at the prime amount for a profit. If you know HGTV channel, that is basically what they do.
  2. WHOLESALING. This is the business of looking for good deals on investment properties and afterward, will resell them immediately for a small profit. The nucleus of this type is being extra good at negotiation and marketing to obtain good deals. If you are excellent at sales, you will surely be complacent at wholesaling. But if the concept of sales makes you cringe, just look for a different strategy. ”Bird-dogging” on the other hand is a strategy used to hunt down excellent deals for other more experienced investors. That is the strategy used by newbies apprenticing for seasoned investors. 

ROOKIE STRATEGIES. These strategies are considered the safest way to jumpstart in real estate investing. All it requires is a little hard work, even with a small amount of cash in your pocket, you can roll the ball!

3. HOUSE HACKING. This means living in a home that also generated a profit at the same time. It is best explained in duplex, triplex, quadruplex, or property with extra rentable space such as a guest house, basement, and spare bedrooms. By renting out spaces in your residence, you can lessen your housing cost. 

 

House hacking is also a good strategy because you will be able to learn the landlord approach while living at your rental. And as long as you are living there, you cannot move out and transition your unit to a long term rental.

 

4. LIVE IN THEN RENT PRINCIPLE. Live in then rent principle says it all. It is simply living in a house that will practically become a rental. This essentially means that the property must be utilized as your home and as a way to generate income in the long run. But as compared to house hacking, you do not rent the property while you settled in there. By performing this strategy, a couple of times is an efficient way to generate a small portfolio. And you can get the advantage of living next to your tenants as in house hacking. 

 

5. LIVE-IN-FLIP PRINCIPLE. This is a kind of strategy where you purchase and move into a home, jazz it up, and wait for about a couple of years or more to resell it for an income. If you have an idea about the IRS guidelines, profits that are below $250K for an individual or $500k for a couple, will not be subjected to tax. 

 

6. BRRRR INVESTING.  BRRR means Buy Remodel Rent Refinance Repeat. That’s the story. When carefully executed, it is an effective way to create a rental portfolio without running out of liquid early in your investing years. Fundamentally, you look for fixer-upper houses that you can purchase practically below their true value. You utilize financing or short term cash to purchase the house, and then, as soon as it is stabilized and fixed, you refinance with a long-term mortgage. If successful in implementation, you can be able to obtain your original capital amount back out for your next engagement. 

 

This is best recommended to use in your early years to create your portfolio. Apparently, it is best to pay close attention to lover risk and lower leverage approaches instead of always leveraging as much as possible. A great example of such a transition is the rental debt snowball below. 

WEALTH BUILDING STRATEGIES. The attention of these core wealth-building strategies is turning tiny hatchlings into a big amount of wealth. Real Estate investing has long been an effective tool for this goal. 

7. SHORT-TERM AND HOLD RENTALS. This strategy focuses attention on purchasing and holding rental properties for a practically short period, say one to five years. Often, the goal of this strategy is to force property appreciation by means of remodeling, increasing the rent while lessening the expenses, and any or all of those. This type of principle works effectively for multifamily units run around gigs. It also works efficiently with rentals in high-end properties. 

 

8. LONG-TERM BUY AND HOLD RENTALS. This is the principle of owning properties with the simple intention of keeping with them for a long period of time. The advantage of this steady and slow efficient strategy include rental income, tax shelter from depreciation expenses, price appreciation and more importantly, amortization of loans. These types of properties attract the best lessees and are considered to be the least hassle to maintain and have the tendency to appreciate significantly over a long period of time. 

 

9. THE RENTAL DEBT SNOWBALL PLAN. According to studies, this type of strategy is the all-time favorite strategy for effectively generate income, build an ongoing income and more importantly lessen the risk from rental properties. It basically incorporates a gathering of all the cash flow from your present rentals as well as other sources of income and then putting that cash flow to pay off a single mortgage debt at a time. The key to this strategy is the speed that debt payoffs begin to accelerate or snowball over a long period of time. If you are eyeing to retire within ten to twelve years or less, this strategy is destined for you. 

 

10. THE ALL-CASH RENTAL PLAN.  This scheme is the same to the Rental Debt Snowball Plan since it snowballs rental income for income generation. But instead of utilizing mortgages, you just save up a significant amount of cash and purchase a rental property straight up without any debt. 

 

11. THE TRADE-UP SCHEME. The rental trade-up scheme or principle is excellent for entrepreneurial investors which are willing to focus on a lot of dynamic sense. This strategy is an approach to immediately come up with real estate wealth and generate income by transitioning from smaller to bigger real estate units. It typically utilizes a technique more commonly known as “1031 tax-free exchange. 

 

DEBT STRATEGIES. These types of strategies put you into the lucrative role of lender of an owner of a specific property. 

12. HARD-MONEY LENDING. Hard money Lending is the strategy of coming up with short-term loans to real estate investors who flip properties or purchase rentals. Basically, high-interest rates are applied with the loans, and lover loan to value ratios. While it may be true to say that the strategy may be lucrative in nature, it also possesses high risk. If you have to take the unit back at foreclosure, you need to ensure you are secured. 

 

13. DISCOUNTED NOTE INVESTING. This strategy means coming up or purchasing notes at a discount to be able to avail of the value of the full notes. And because of the so-called margin of safety, you can come up with huge returns and lessen your risk. 

 

One classification of Discounted Note Investing incorporates purchasing notes that are typically delinquent, from banks or owning financing sellers. This is a bit of an advanced strategy so it needs a lot of studies before this can be availed of. 

PASSIVE STRATEGIES. Although some of the passive strategies listed below still incorporate essential upfront investment decisions, they need a minimal day to day management as compared to some of the earlier strategies. 

14. CROWDFUNDING AND SYNDICATIONS. Crowdfunding is ideally a new form of syndication investing where deal chances are marketed over the web or internet. The majority of these sites need you to be an accredited investor, but sometimes you can start investing with a minimal amount from $1000 dollars to $5000 dollars each investment. If you want to learn more about this, visit www.theapartmentqueen.com .

 

Generally, syndication is crucially pooling your money with some other investors to purchase property or make loans. It is a path to invest in any other types of strategies discussed earlier without having to put the deal together. You invest your hard-earned money with general partners or what we know as syndicators who look for and maintain deals for you. Although this type of strategy has been regarded as a passive real estate investment strategy, this is somehow misleading. This can be very easy and passive but effective investors per se are still considered active. 

 

These active investors actively screen general partners and sponsors. They also transact opportunities before saying yes to investment. Simply put, they tend to say “no” instead of saying “yes”. And that is highly different from passive investing where you come up with very few active decisions. 

15. REAL ESTATE INVESTING TRUSTS. More commonly known as REIT, are very akin to a mutual fund. But instead of giving you the freedom to own a piece of a lot of bonds or stocks, these REITs allow you to own a piece of income producing properties such as commercial units and multifamily units. And unlike some of the other investment strategies above, this type of strategy is passive when you purchase it.

CONCLUSION

Basically, there are different paths up the financial mountain utilizing real estate investment. Each has it’s own negative and positive. You have to bear in mind that the majority of the investors incorporate different strategies at different aspects and periods. You can mix and match the strategies if you want to. And do not worry if one strategy will not work for you effectively since real estate is considered an investment in an entrepreneurial venture. Sometimes you have to do things and experiment with it so that it can help you find your timing.

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button  ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

 

Our ideal investor is usually one of these individuals:

Ultimate passive investors-

WOMEN with

1031 exchange over 500k-

High net worth individuals

Doctors

Dentists

Engineers

Individual who Worked for a major company over 10 years

Real estate brokers/agents

Female athletes

Aggie women

Women CEO/founder

Socialites/society

dutchess/heiress

Individuals with pension funds

Endowments

Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women

Angel investors supporting women

** GET Qualified for the next DEAL or GET more INFO NOW!

TAKE THE QUALIFYING QUIZ NOW!

Kaylee McMahon

Apartment investor/ TREC® Brokerage LLC Owner

 

c: 469-990-4627 (text or call)

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Four Practical Benefits of Investing in Multifamily Real Estate

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A multifamily property, more commonly known as a multi-dwelling unit (“MDU”), or apartment is a kind of residential housing property with two or more units under one roof or several buildings under one basic complex. They basically consist of a lot of configurations, with the most ordinary examples being duplexes, condominiums, townhouses, and the like. Each unit has its respective living rooms, bathroom, and kitchen. Even though the definition varies from each scenario, a multifamily real estate property practically consists of owning a mixture of the house and lot on one document. In some scenarios, it can be owned by several individuals or entities. 

 

While there are at least several types of residential structures, investing in multifamily real estate is considered to be a positively favored technique among all types of investors. It is a good source of steady income, together with a long term appreciation of the property. For investors, the benefits of owning a multifamily real estate property include these four:

 

  1. Enhanced, cash-flows. If a single-family property acquires a single monthly income, why not engage in multifamily property investing generating a series of sources of income? While the allure of investing in multifamily properties is clear, these investments represent a strategic chance to acquire additional income from one investment. To add, Investors may decide to reside in one unit and then have the other units rented for income purposes. When talking about passive income retirement investing, a multifamily property can be utilized in a lot of ways. This kind of investment is long term.
  2. Strong control over its value. The more income a property generates, the higher its value will be. This is because of the fact that multifamily properties are comprised of more units which simple means generating multiple streams of income, these classes of investments are specifically valued at higher rates as compared to single-family units, since the latter is dependent on comparable sales as rentals.
  3. Scalability. Multifamily investments reflect and embody the idea of scalability. Instead of purchasing individual properties and slowly growing your business each transaction, these investments mirror the chance to obtain multiple properties within a single complex.
  4. Huge base of tenants. One of the underlying advantages of multifamily real estate investment is the risk factor; it is less to negligible. How did we say it? This is because of the fact that unlike single-family investment where income is cut when unit is vacant, multifamily properties possess a lot of units and lessen total economic loss for real estate investors. They are efficient for those eyeing to propagate their real estate investment portfolio and take their business to the next level with the option for investors to engage in the realm of mixed-use as well as apartment investing in the future.

 

Having said this, new investors should regard multifamily real estate as an infusion of single-family property and a condo where both the building and the land is owned and filed in one document. Together with the capability to obtain income as compared to single-family investment unit, these types are efficient for those eyeing not only to make their business grow but learning to offset risks when getting monthly income.

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Real Estate Industry: Take a Peek at What’s Happening in the Third Quarter of 2020 Multifamily Market Report November 2020 Dallas-Fort Worth

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Take a Peek at What’s Happening in the Third Quarter of 2020 Multifamily Market Report

How’s the Market?

  • Prior to 2020, cranes seemed to be on each corner you turned in DFW, with another multifamily real estate units manifesting. With the emergence of the pandemic, the cranes kept working, but the builders were not sure if there would be any settlers for their projects.
  • But, a 2021 rebound is in the works with DFW’s dynamic market, population growth, comparative job growth and low taxes.
  • When new projects bounce back in 2021, structures will be different according to Tom Bakewell, president of development and co-founder of Streetlights residential. 
  • Everyone should anticipate a filtered, touch-less, sanitized lifestyle.
  • Apartment begins in DFW in the second half of 2020 and in 2021 will significantly lessen from the accelerated building pace of the previous years.
  • That will give freedom for occupancies to tighten back up and rent growth to come back into the market, probably in the last quarter of next year.
  • MIllennials will be visible in the urban community for the entertainment and dining scene as soon as the pandemic settles.
  • The proximity to several jobs that begin to fill a lot of the newly constructed office structures in uptown and surrounding urban communities will also welcome millennials back.
  • A demand for healthier building is anticipated for lasting change in terms of touch-less entry doors and elevators, efficient water and air filtration, and changes in expectation for sanitizing and cleaning common areas.
  • Since the emergence of the pandemic, all the markets have witnessed some occupancy and rent dips.
  • Contractors and builders also foresee a significant decrease in construction costs, which never manifested, making new enhancement even more challenging to start with.
  • The increase in development costs will result in lower supply, so the new projects can entice capital should hit success in a more robust leasing market in the coming years.

 

**Dallas Fort Worth (DFW) multifamily Occupancy Rents and effective rental rates as of November 19, 2020

 

YOC Occupancy Rate T-12 Absorption
1800-1969 91.2% -0.4% 624
1970-1979 93.3% 0.4% 423
1980-1989 93.9% 0.7% 2067
1990-1999 94.2% -0.3% 417
2000-2019 91.5% 5.3% 16989
2020** 24.8% 151.4% 5252
All 90.4% -0.2% 26372
YOC Effective Rental Rate T-12 YoY Change
1800-1969 $952 2.2% $20
1970-1979 $960 1.7% $16
1980-1989 $997 1.3% $13
1990-1999 $1267 1.0% ($13)
2000-2019 $1378 0.9% ($13)
2020** $1509 2.8% ($43)
All $1178 1.1% $13

 

Unemployment Report

  • As of October 28th, the unemployment rate in DFW is pegged at 7.5%.
  • This is an improvement of 6.3% as compared to last month’s data.
  • In terms of the year-over-year (YoY), the unemployment rate was pegged at 3.2%.
  • We have listed the figures as of October 3rd 2020, for weekly unemployment claims in Texas since the first reported U.S case of COVID-19.
  1. Total weekly claims before adjustment is 42,338 claims
  2. Unadjusted month moving average is 45,375 claims

 

  • Here are the figures for weekly unemployment claims in the state of Texas since the first reported U.S case of COVID-19 as of November 7, 2020.

 

  1. Total weekly claims before adjustment is 32,422 claims.
  2. The unadjusted monthly moving average is 37,632, claims.

Rental Report

  • Rents in Dallas has lessened to 0.5% month-over-month and are down by about 2.6% since the emergence of the pandemic in March of this year, as per analysis by Apartment List.
  • YoY growth from the end of third quarter is presently pegged at -2.6%, compared to 1.3% at this time last year.
  • Igor Popov, Chief Economist for Apartment List stated that median rents in Dallas presently stand at $981 for a one-bedroom apartment and $1,176 for a two-bedroom apartment.
  • As the COVID-19 pandemic as well as its economic downturn continues to overwhelm renters all over the United States, the monthly rent estimates manifests the protracted nationwide slowdown and uneven recovery, Popov added.
  • The rest of the DFW is foreseeing varying rent trends despite the fact that rent prices have decreased in Dallas over the past year.
  • Of the biggest ten (10) cities that Apartment List had data for in DFW, half of them had realized increases while the other half is gradually decreasing.
  • Arlington has realized the fastest growth in the metro, with a YoY increase in 6.2%. The median two-bedroom is pegged at $1238, while that of one-bedroom go for $1015. What is likely striking this trend is the fact that Arlington has witnessed a lot of trade in properties over the last few years. Now, the new owners repositioned the properties.
  • Plano has the most lucrative and pricey rents of the biggest cities in the Dallas Metro, with a 2-bedroom average of $1513. 
  • Rents decreased in Plano for about 0.3% over the past month and 1.7% over the past year. Plano has the biggest units in the nation which is an added factor, so to speak.
  • Fort Worth has the least expensive rents in the metro, with a 2-bedroom average of $1125. However, rents decreased by 0.2% over the past month and 0.8% over the past year.
  • The average rent for a 2-bedroom apartment in several cities in North Texas as well as the Yoy percentage rent change is listed below:

 

Increase in Rent Decrease in Rent
Mc Kinney $1360 and up -2% Plano, $1510 and down by 1.7%
Mesquite $1260 and up -3% Carrollton $1340 and down by 2%
Grand Prairie $1215 and up by -3% Irving $1310 and down by -2%
Arlington $1240 and up by 6.2% Dallas, $1180 down by 2.6%
Garland $1220 and up by -1% Fort Worth @1120 and down by 0.8%

Renters vs. Homeowners

  • Based on new analysis by apartment search website RENTCafe’ in the DFW community, twelve (12) of the fourteen (14) cities with more than 100,000 residents had their share of renters increase in the last decade, with Plano and Frisco leading all over the nation.
  • Homeowners recorded significant gains in just a city, Mesquite.
  • Four of the top ten (10) cities with huge leaps in renter share are in Texas, and three of the four are located in North Texas.
  • Frisco is the only city in the United States that more than doubled its renter growth population, pegged at 58,000 last yr. The share of renters in this city significantly increased by 59% in 10 years.
  • Plano has the same growth, with the total growth percentage of renters pegged at 41% over the last decade. On the contrary, the share of homeowners decreased by 16%, the most significant drop among the cities in the DFW area.
  • One reason for the increasing number of lessees in fast-growing communities like DFW is a shortage of affordable housing, as stated by David Howard, executive director of the National Rental Home Council.
  • “People are growing more and more comfortable with a concept of renting a home for an array of reasons.” Howard said in an interview with the Dallas Business Journal. “What really comes down to is there is a supply issue in this country when it comes to housing”.
  • Further, the pandemic is changing the outlook of people on renting vs. owning a home that is according to co-founder and CEO of CONTI Organization, Carlos Vaz, a Dallas -based multifamily property owner-operator. 
  • After the crisis and economic downturn we experienced in 2008, individuals began thinking about renting as an effective option. Maybe they should rent instead of purchasing a house,” Vaz stated in an interview with the Business Journal.
  • “After 2020, people are going to think about renting as a permanent housing solution. They are not even going to think of buying a house anymore. It is a different dynamic”.
  • “A lot of people are now having to tap into their savings,” vaz added. “They have lost their jobs, or their business is not afloat any longer. Or their businesses have incurred a significant amount of debt. That is why a lot of people are going to think twice about buying a house as an investment or even as a residence.”
  • In the analysis of RENTCafe’, in terms of a 10-year growth, renting gained ground across the board in North Texas, except for Mesquite.
  • Renters in Mesquite lost about 10,000 residents, which translates their share by 2%. The percentage of homeowners increased by 12%, the only “up” among the DFW cities. 
  • With 55% of its population renting, Dallas made another step in terms of being a renters’ city. The region’s largest city added far more renters at 101,000 as compared to owners at 45,000 over the last ten (10) years.
  • Besides Dallas, there are three (3) more renter-majority cities in the DFW area, namely Irving, Lewisville, and Denton.

 

What is in store for us?

 

  • The DFW market has remained as one of the most dynamic markets all over the United States
  • While the pandemic has slowed things down, DFW is emerging with renewed strength because the factors driving its growth have not changed. 
  • There is also job growth, population growth, and a business-friendly climate all over DFW.

 

 

Condition of the Market

Construction of apartments in the Dallas Fort Worth is increasing which brings us to raise issues of overbuilding amidst pandemic. We have to thank the jobs market for rebounding immensely. Owners of apartments in DFW are faring better as compared to owners in other parts of the country in the Covid-19 market, based on studies.
But, there are still a lot of problems to be faced and one of the major things is the job market. Although it started strong at the onset, DFW lost about 282,000 jobs since February up to date.
Some of the jobs were reactivated and resurrected but there is still a significant amount of deficit approximately at 152,000 jobs.
DFW has lost about 4 percent of its jobs, but that very same percentage of downsizing is one of the better outcomes throughout the country.
To add, the type of jobs makes a big difference. DFW has done a bit better as compared to other markets at hanging on to higher-paying jobs. Significant losses come from the retail and hospitality industries.
The retention of the renter is up for 67 percent of individuals who had leases expire in the second quarter of this year, ended up in the same position.
Lease-up is tolling for multifamily complex projects that are trying to generate their initial client base. That is why rent growth is slow.
Also, based on studies, it is expected that occupancy in DFW is to drop for about 100 basis points in the last quarter with a baseline of about 93.7% up to either the first or second quarter of 2021.
On the other hand, rents have stabilized as of the moment. It is also forecasted that there will be at least two (2) percent loss with no real growth until the first quarter of 2022.
Amidst the COVID-19 pandemic, and the looming unemployment issue, rent payments during the previous months have been recorded to be just about a percent below normal, although the miss of August may land about three (3) percent.

How is the rental industry doing?

Based on the report, rental rates are in steady-state, but concessions are increasing for apartments located in North Texas.
At about 22,970 apartment units and 82 apartment complexes have opened in the last twelve (12) months, bringing the entire supply across DFW to more than 760,0000 units and 3206 complexes.
To date, another 99 complexes with almost 30,000 units are on its way.
Concessions like rent-free periods and move-in specials, which were not common about a year ago until the first quarter of this year, are increasing as the supply is greater than the demand since it is impacted by looming economic downturns and unemployment since the start of the pandemic brought about by the COVID-19 virus.
38 percent of the entire units available on the market, across apartment classes, are offering concessions.
However, in classes BCS, you will less likely see rent reductions and move in specials. That specific analysis has showcased a decrease of about 6.5% across apartment classes in Dallas Fort Worth. Obviously, Class A took the biggest blow with a whopping 8.1 percent reduction in rent. In classes B, C, and D units, reduction fell between four (4) to five (5) %.
In terms of renter retention, and because of the difficult economy and layoffs, a lot of property managers and landlords are taking steps to hang on to the lessees they have at this moment.
Before, the average increase in rent on renewal leases was in the low 4-5 percent. But now, some landlords are offering a reduction in rent to lessees who will stay in place. It is not a significant reduction of about 1-2 percent. In this time of the pandemic, if you have got a household that has been an excellent tenant and still has a job and has the capability to pay rent, you are going to do what you need to do to make them stay but at the same time, generate some revenues.

Unemployment Report

The unemployment rate in the DFW-Arlington as of September is at 7.5% as compared to 8.2% in the second quarter.
However, the YoY or year-over-year unemployment rate landed at 3.6%.
Before the end of the third quarter, we also report the numbers for weekly unemployment claims in the state of Texas since the first reported US case of COVID-19; total claims before the adjustment is around 61,490 while the unadjusted four-week moving average is around 83,042.
On the other hand, as of early September of this year, the total clams landed at 56,759 while the unadjusted four-week moving average is around 55,654.

Report on the Construction Industry

The number of apartments hitting the market for the last two (2) years is one of the main challenges that the state of Texas is facing.
A total of 44,000 units is the total ongoing construction in the DFW area, the most aggressive figure anywhere all over the United States.
A total of 4,671 apartments are under construction in Frisco, 3,387 are in the works along Allen/McKinney area, while 3,536 are under construction in Dallas.

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button ABOVE to quickly send to a friend who can benefit from our strategic, forward-thinking strategies and investments.

Our ideal investor is usually one of these individuals:
Ultimate passive investors-
WOMEN with
1031 exchange over 500k-
High net worth individuals
Doctors
Dentists
Engineers
Individual who Worked for a major company over 10 years
Real estate brokers/agents
Female athletes
Aggie women
Women CEO/founder
Socialites/society
dutchess/heiress
Individuals with pension funds
Endowments
Women-owned family offices or family offices/funds who support the social initiative to teach financial literacy to women
Angel investors supporting women
** GET Qualified for the next DEAL or GET more INFO NOW!
TAKE THE QUALIFYING QUIZ NOW!
Kaylee McMahon
Apartment investor/ TREC® Brokerage LLC Owner

c: 469-990-4627 (text or call)
IG: theapartmentqueen_
www.theapartmentqueen.com

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WOMEN WHO INVEST WEDNESDAY TONIGHT!

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CLICK HERE FOR ONLINE AND IN-PERSON TICKETS DFW

About this Event

Women who invest in anything are invited to share what they are doing, how they are doing it and what REAL results (positive or negative) they experience with each other once a month! Investing is NOT a “boys club”! Our goal is to create a community of women who are actively building wealth by investing and willing to share and encourage other women to grow in a similar fashion.

For this next event, we decided to get comfy and make it a PJ themed-event, so wear your favorite sleep/lounge wear.

If attending in person, we ask that you wear a mask when not eating/drinking. One glass of wine will be provided for attendees. Additional drinks/food can be purchased separately.

Event will also be available virtually. A link to join via Zoom will be sent the day before event.

CLICK HERE FOR ONLINE AND IN-PERSON TICKETS DFW

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COME WATCH US PITCH OUR COMPANY!

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Hey Queens! I’m pitching THE APARTMENT QUEEN LIVE for Get Sh!t Done Demo Day on December 15th at 6PM (EST). When you apply to attend, you’ll get to watch me pitch, ask me questions, and see what we’ve been up to. Learn more & Apply to attend here: http://ow.ly/YGw750CGglu Select “Guest of Kaylee Mcmahon” on the drop down menu for “How You Hear About Demo Day”