Posted on Leave a comment

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

pexels-jovydas-pinkevicius-2462015

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

Posted on Leave a comment

WOMEN WHO INVEST WEDNESDAY TONIGHT!

Graphic 2

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

Posted on Leave a comment

COME WATCH US PITCH OUR COMPANY!

5DDDFFAD-D08F-42F6-85FC-335835F9E6C7

 

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”

Posted on Leave a comment

5 Things that Family Offices are Looking for, and How We Work with Them

pexels-christina-morillo-1181355

5 Things that Family Offices are Looking for, and How We Work with Them

Because of the global outbreak of the covid-19 pandemic over the last few months, businesses all over the world have almost come to “idle status”. Practically, it is said that it will be a bit longer before the world gets up from the economic turmoil because of the pandemic.

The coming months will surely become dynamic yet volatile. While it is a bit premature to predict the economic fallout from the wrath, economies of developing countries will surely face huge challenges before they get back on their feet as compared to first-world countries. 

Verily, the ongoing global recession over the last ten months had ignited a slowdown in the real estate sector. The lockdown has caused a short term wound in several investment industries like stocks, real estate and the like. Real Estate investment has been in stagnant mode because of social distancing and liquidity issues. But still, family offices are slowly emerging as the big players in worldwide real estate investment markets. Family offices are prevalent for the purpose of managing and investing funds to sustain long-term prosperity and wealth. Also, please be reminded that the wealth controlled worldwide is around ten trillion dollars. 

Based on studies, it was estimated that there are more than five thousand single-family offices of which the majority are in the North America and European Region. Further. There are a lot of multi-family offices which service up to a few hundred wealthy families. It has been predicted before that one should wisely invest the majority of one’s assets in property. At this point, in times of creative monetary dilution, family offices are starting to remember this principle.

But, in the last few months, the stock market has drifted by almost forty (40) % of its value. Losses in portfolios have been prevalent in several investors with investor erosion seen in even the high ranking affluent and rich business families. For a family office, it will be a bit challenging to function during a lockdown. However, family offices seem to survive because of love for the real estate investment industries and investment providers who are willing to help in this type of looming industry. But, given the comparatively low correlations with the stock market industry, real estate is specifically suitable for a diversification of family offices’ equities, bonds and other alternatives. 

We have listed things that family offices are looking for in real estate investment providers:

  • Investment that will work for single-family offices. It is a known fact that family offices are specifically mindful of value preservation. Hence, real estate exposure should primarily represent a key part of a family offices’ investment portfolio allocation. One key is transparency, should be strictly taken into account. Remember the 2008 financial turmoil, a lot of funds are tailored as so-called “blind pools”. We provide real estate investors with a manager with capital without any idea on how investments were made along broadly recognized investment principles and parameters.

Direct influence and transparent structures are emphasized on wealthy private real estate investors and family offices. The secret in direct investments in the real estate industry is that investors like you can decide and control the key parameters. You take your destiny in your own hands, with our help. Direct investments will only attain desired success if family office is coupled with specialists that have the capability to steer the wheel. We possess relevant experience and access to appealing investment opportunities.

  • Aid in capital preservation, tax efficiency, growth and income. During low returns season, in almost all major asset classes and despite cap rates being close to their lowest levels in a lot of key real estate markets, real estate investment continues to gain significant and appealing net yield spreads. We help family offices not only to strive in acquiring lucrative return on investments, but to conservatively preserve the wealth for tomorrow. 

A lot of families, now wealthy, that we helped before often run significant family businesses. A main motivation is basically the fire within to safeguard and separate assets from the operational family business as well as create a lasting and professionally managed real-estate exposure. That is where we come to the picture. Real estate gives family offices freedom to come up with an array of investment strategies coupled with the risk potentials and corresponding returns. We help you in attaining a comparatively and stable cash flows. In reality, family offices have a tendency to pay close attention to lower risk profile core prospects. In the event that they obtain confidence in the said class, family offices may consider investments on the high risk to enhance returns. We can basically help you on this and walk you through the proper way of investing.

  • Aid in 1031 exchange funds. Some investment providers like www.theapartmentqueen.com have a program complete with outlined processes’. From a long term family office approach, the fund term is a bit of a complex and very delicate aspect to be considered. We, as your guide will tell you that you should be aware as an investor of these kinds of risks in case market values and conditions enhance unfavourably around the pre-defined exit period. Another restricting consideration may be the limited flexibility of indirect investments in the event in alterations in investor preference or fund strategies.

The 1031 Exchange funds are regarded as one of the most tax efficient investment systems which is available to real estate investors for a long time now. But with the emergence of the Opportunity Funds under the Opportunity Zone program, the 1031 Exchange is being recognized as an efficient run for its money. This is because of the fact that Opportunity Funds not only showcase real estate investors the skill to reduce and defer their initial capital gains tax bill, they also give a way to eradicate any capital gains taxes garnered from their Opportunity Funds investments under certain scenarios. 1031 Exchange funds can save you a significant amount of investments ranging from 8-10 %.

  • Aid you in coming up with appropriate investment strategies. We will help you in coming up with investment strategies. Indirect investing is one; it basically involves buying shares in a fund or a publicly listed company. One can also purchase shares in a direct real estate. It is imperative for executives of family offices to tailor their strategy and operations in the context of key features between indirect and direct real estate investing. This will surely post significant impacts on returns, control, diversification and risk. In any type of scenario and particularly given the recurring nature of real estate markets strategic planning, sound market analysis together with risk management should be on a family offices’ control in all phases of the market sequence. 

Further, an “indirect investment” is regarded as a comparably uncomplicated and immediate recourse for rather “passive” family office investors. The benefit is that a higher diversification degree can be attained especially for investment in huge portfolio funds. It also supplies investor access to products in special types of properties, strategies in specialized locations. Another advantage is that fund managers are basically regulated and should do the work based on ethical standards. To add, in case of listed funds, family offices sometimes hit higher shares liquidity as well as subsequent exit is favourable.

Another way of smart investing is more commonly known as club deals. Some real estate investors or family offices invest together with the structure of joint venture or partnership. This has the edge that smaller checks have to be released as compared to sole ownership. In that manner, the concentration risk can be lessened. In that regard, the cluster risk may be lessened if the co-investors can utilize the expertise of a credible lead specialist or investor like us. In order for this to work long term, it is imperative that investment styles and values are in coherence with all parties.

  • Aid in placing a Roth conversion. A Roth IRA conversion showcases transferring retirement funds from the traditional 401k into Roth Account. It is a known fact that the 401k is tax-deferred with a Roth Account and is regarded as tax-exempt. The deferred income taxes must be paid on its due on the converted funds. Early withdrawal penalty is not prevalent. This can basically lower your taxes that you will pay to invest by self-directing your Roth Account. In other words, this principle refers to taking all or part of the balance of a traditional IRA and transitioning into a Roth account. 

Truly indeed, that quality real estate might not only preserve your wealth but may surely bring you significant growth in your capital and experience long term income streams, which are essential factors to consider when talking about multi-generational ambitions and strategies. Private wealth sectors and family offices will endure to be a key player in worldwide real estate markets. This enhancement is specifically driven by the broadening family office wealth base together with increasing allocation to real estate as part and parcel of their substitute assets.

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

Posted on Leave a comment

Seven Mistakes Rookie Apartment Investors Make and How You Can Stay Away from Them

pexels-andrea-piacquadio-3760529
pexels-andrea-piacquadio-3760529

Seven Mistakes Rookie Apartment Investors Make and How You Can Stay Away from Them

  1. Selecting the wrong community. Investing in an apartment is not a small task and it is expected from real estate investors to commit some mistakes during the process. Individuals who are eyeing to purchase an apartment for the first time, however, have the chance to learn imperative lessons from their forerunners. Mentors will all agree that getting the proper location is prime in terms of buying an apartment complex. The worst thing that you can experience in terms of your financial well-being is getting a structure in a declining market where there are tons of vacancies, thus, forcing the rental prices to go down. 
  1. Rushing into closing the deal without proper market analysis. It is easy to get so excited when you look for an apartment building that seems too good to be true, whether it be by price or location. It is very important for real estate investors to undergo a preliminary financial investigation, followed by a thorough analysis. Investors who rush their deals without performing proper due diligence might end up on the losing end in terms of their finance in the long run.
  1. Failing to perform their due diligence. Same to the preceding method, investors who are eyeing to purchase a specific property should always request copies of financial books as well as documents from present owners. Taking a look at the present rent roll, income reports, expenditures, can aid you in getting an excellent concept of the present financial well-being of the property. To add, this information can aid you in coming up with your own estimates. 
  1. Not having available sufficient cash. Intelligent investors learn to expect the unexpected by creating a healthy case reserve. Let us say that you obtain and found an excellent apartment unit with efficient financial well-being. 
  1. Investing in a multifamily unit with poor cash flow. Real Estate investors will sometimes be tempted to buy properties that have promising potential, especially after renovations, but do not showcase cash flow right from the beginning. But, this is a no-no. Having the right amount of cash flow is not only important to help augment expenses, insurance, and mortgage, it will also help to cover unexpected expenditures. Not planning enough of a buffer margin will almost certainly eat into any type of profit margin. 
  1. Coming up with a wrong property management decision. Needless to say, an apartment building needs a property manager, whether you select to fill that responsibility or not. Some investors are naïve when they feel that they can serve as their own landlord even without having enough experience and end up coming up with their own downfall. Getting an efficient property manager can aid you in easing the investor’s role in maintaining their property, thus, helping make time for them to venture into other investing gigs and enhance their financial status.
  1. Putting off taking the leap. Lastly, newbie investors make the mistake of putting investment in multifamily into the “unattainable” class, and never take the plunge or the so-called leap of faith. Even though multifamily investment is a bit complicated and should be done with some caution, there is no reason to sit on the sidelines. Each rookie investor is properly qualified to invest in multifamily units, as long as they put on a sufficient amount of preparation and research.

 

Extraordinary Ways to Add Value to Your Multifamily Rental Units

When talking about multifamily unit investing, there are several exit techniques to consider. One of these techniques involves purchasing an apartment complex at an excellent price, and then, earmarking funds to add value to it. Thus, it will help you raise the price and create value. When choosing this technique, it is helpful to put yourself in the shoes of the tenant and think about what types of amenities and services would help validate a higher rental price. 

When people look for apartments, a lot have a wish list of amenities some of which are listed below. For example, some might want in-unit laundry over a common laundry area. This, they would be amenable to pay extra amount for a reserved parking space in a good location or have access to an added storage facility.

Further, owners can look for additions that not only add value but aid in cutting down on long term expenses. Say, for example, they can utilize led lighting which can help light up exterior and common locations, while helping cut electricity costs. Lastly, general renovations in multifamily units, as well as within individual apartments can aid you in increasing the value of your property. 

Multifamily unit investing offers a lucrative feature for real estate investors who are eyeing in broadening their portfolios, are looking to go inside an extraordinary investing realm, or even both. As with any kind of investing scenario, there is a wide array of mistakes to be made when purchasing a multifamily unit. But, those prospective pitfalls can be addressed with sufficient research and preparation, as well as consulting with seasoned specialists. Investing in multifamily units offers are a plethora of unique advantages that are waiting to be unraveled.

If your heart does not beat for investing in a multifamily unit, did this guide tickle your senses in any way? Or perhaps you were already eyeing and were at the start of the phase of your research. What did you find most enticing? Let us know at the www.apartmentqueen.com

Meanwhile, we have listed some amenities and services that can be incorporated with your apartment or multifamily unit that will help in adding value to your property.

  • Vending machines
  • Covered parking
  • Pet rent
  • Added storage
  • Washers and dryers
  • Upscale parking spaces
  • Led Lighting
  • Garbage pickup service
  • Renovations

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.

> 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

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

Posted on Leave a comment

Generational wealth building Summit -You don’t want to miss this! If you sign up before 11/17 at 5 pm hours and email admin@theapartmentqueen.com the receipt-You’ll get a $49 refund! Register here: http://ow.ly/amwr50Cnujx

We Want to Teach You How to Become the Generational Wealth EXPERT In your Family!

Generational wealth building Summit -You don’t want to miss this! If you sign up before 11/17 at 5 pm hours and email admin@theapartmentqueen.com the receipt-You’ll get a $49 refund! Register here: http://ow.ly/amwr50Cnujx

Have you ever thought…

“Is it really possible for you to have
Generational Wealth…
Or It’s only for (The Rich)?”

I see people online talking about retiring young… leaving a legacy… making a real impact for their families lives.

And I would love that for my family… but…

“How am I, someone who was not born in a wealthy family, that saves and still doesn’t have enough… ever going to make enough to last for generations ?”

JOIN The “Generational Wealth Building Summit!”

You don’t want to miss this! If you sign up in the next 24 hours and email admin@theapartmentqueen.com the receipt. You’ll get a $49 refund!

Register here: http://ow.ly/amwr50Cnujx 

Group Graphics 2
Posted on Leave a comment

How to be the Wealth-Building Expert in your Family? Heres’s how to get started!

Group Graphics 2
Do you want to learn how to make money & make it last? How about a better life for years to come? To pass along wealth to your children and grandchildren?
Learn how on November 20th at The Generational Wealth Building Seminar! Listen to a full roster of incredible speakers including credit experts, wealth specialists, and real estate investment gurus. You will gain knowledge, get cross-industry insight, and get some pretty unbeatable freebies! Register for this exclusive seminar and take part in this amazing event that will change your life, for generations to come! To register ➡️ https://www.generationalwealthbuildingsummit.com/register1604152348288
#wealth #girlpower #educate #empower #womensrealestateinvestorsassociation #womeninspiringwomen #womeninrealestate #womenempowerment #womeninbusiness #speaking

 

https://mailchi.mp/1a1a1e148549/do-you-want-to-learn-how-to-make-money-make-it-last

 

Posted on Leave a comment

Manifesto: What an Apartment Queen is: Basic and Beyond

pexels-pixabay-260024

We welcome you to our Apartment Queen Investments Community. It is crucial for me to put our manifesto into writing since it captures precisely the embodiment of a true apartment queen. Being part of the community is a complete devotion of helping women attain their financial inclusion. It is also our endeavor to identify and come up with a plan for ending toxic codependency and rightfully stand on our own. Listed is our manifesto, as follows:

  • Specifically, being an Apartment Queen also implies that we frown and we do not support narcissistic behavior or bullying of other women. This comprises people who are fond of bringing other people down to attain self-gain, or who control others by fear. 
  • Being an Apartment Queen also implies having regard to the importance of having a team and being able to collaborate with others to attain the same purpose. Being part of the Apartment Queen Investment community simply means that you know how to pave the way to the manner that men lead is broken. It is a known fact that women lead a team as democratic as possible as compared to men. Women decide to never lead by being autocratic and forcing others to perform your way or not. 
  • An Apartment Queen does not get tired of asking too many questions as a way to understand the idea of another person before engaging in an important decision. 
  • An Apartment Queen usually starts the question with how or why and is solution-focused. She constantly gives compliments to other queens and is not looking through other people’s success. But instead, she is inspired to acquire added knowledge from other individuals. 
  • Somebody who embraces challenges and who welcomes being radically transparent even if it is not music to one’s ears or a bit painful to tell is also an embodiment of a true apartment queen. 
  • An Apartment Queen is not always available any time of the day, she schedules times for work and demands respect for her time.
  • An Apartment Queen always has time for self-care and puts not only physical but mental health as well before other people. 
  • An Apartment Queen is not afraid to admit mistakes and ask for help. 
  • An Apartment Queen always welcomes the idea of continuous learning and wants to learn every facet at all times.
  • An Apartment Queen is someone who is not only asking for help but also willing to help their team however which way they can. 
  • An Apartment Queen does not expect anything in return, or act entitled.
  • An Apartment Queen is willing to listen more than she talks. 
  • An Apartment Queen is someone who has solid talent in negotiations and is willing to put hard work to learn such skills. 
  • An Apartment Queen is one who has an eye for the future, and who possesses a five, ten, and twenty-year plan. 
  • An Apartment Queen writes these plans down and checks in with these on a yearly basis, and if possible, quarterly.
  • An Apartment Queen is very aware of the five (5) people that they spend significant time with and realizes that these people are not only significant but an embodiment of who she will become. She always sees to it that these people whom she is always around will surely give advice or talk about what they do. She looks at exactly what type of person they are today and decides if that is who she embodies as her future character.
  • An Apartment Queen will only listen if the advice comes from a person who is living a successful life and has attained the goals of her future self. Otherwise, she will just take the advice with a grain of salt.
  • An Apartment Queen is a woman who always asks for what she wants. She does not have to worry about how asking for things will make other people feel.  
  • An Apartment Queen always wants to lead and excel in a male-dominated industry. She likewise acknowledges the fact that she must have close ties with males in the given industry who, in return, respect boundaries and limitations as well. 
  • An Apartment Queen is an individual who specifies what her restrictions are, and on point, makes those clear to those who she works with.
  • Being an Apartment Queen simply means helping people by paying close attention to what they are best at. We find and identify strengths and compliment them on it. 
  • An Apartment Queen is grateful for everything that she has, which embodies the character of resiliency. 
  • Being an Apartment Queen also means one can operate with radical open-mindedness and will realize that we do not know the answers to all the questions that may arise. 
  • An Apartment Queen is always true to her word while under-promising but over-delivering. 
  • We will never forget that we put our families first and we do not prioritize work over families.
  • Being an Apartment Queen simply means that we operate with our solid values and principles, especially when making complicated and hard decisions. These principles can sometimes be applied to a board or a team. 
  • An Apartment Queen should give credit to what is due and should always celebrate all wins. We all know that life is short and it is essential to celebrate all types of wins, whether big or small. 
  • Apartment Queens means that one should always be transparent in giving feedback on a regular basis. In this regard, it helps our team to grow and in the near future, expand. 
  • An Apartment queen will always come up with decisions with the team’s consensus in mind and not just decide for personal gain. 
  • An Apartment Queen will always treat others how she wants to be treated. 
  • An Apartment queen will come up with decisions for long term strategy against short term strategy. 
  • An Apartment Queen should not be intimidated or afraid of the title of an investor and will not be overwhelmed by the status or wealth of other investors. 
  • An Apartment Queen will be very transparent about what she wants not only for her but for the entire community at large. She will be able to integrate it to her line of business. 
  • An Apartment Queen will focus to build her own equity and net worth for herself. She will work hard at becoming an accredited investor. 
  • An Apartment Queen will enjoy passive cash flow and will treasure it because of the hard-earned principle. 
  • An Apartment Queen will share knowledge with others about what she knows to aid them in empowering all. 
  • An Apartment Queen will surround herself with a community of women who are focused on solutions and not on the problem. They should speak about the future or long term goals on becoming better each day. They should not talk about other people because it is just a waste of time. 
  • An Apartment Queen does not gossip and does not complain about misfortune. She should regard such as a fortunate experience, to make right all the mistakes that she made or experienced before. 
  • An Apartment Queen pays close attention to what they have and not on what they do not have. 
  • An Apartment Queen will take charge of their mental health and regularly visit a professional to consult and speak with instead of ranting with their family and friends. 
  • An Apartment Queen should pay close attention to the tranquility of the mind and will not permit outside stimuli to ruin her day. 
  • An Apartment Queen does not only know how to grind, she also takes regular vacations and knows what she wants after thorough mulling over consistently. 
  • An Apartment Queen is in control of her path towards her destiny by being “in-the-loop” and possessing financial independence. 

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!

 

Posted on 1 Comment

Ten Step Guide for Purchasing an Apartment Building for Newbies

pexels-sevenstorm-juhaszimrus-981916
  1. Ensure that apartment investing is the proper real estate investment for you. Expand your investment portfolio and generate higher income potentials. In this regard, you can obtain a higher rate of return.
 
  1. Have a specified ideal area and class of your prospective apartment. Determine the number of units and the type and class of your apartment whether luxury or subsidized. Amenities are also important to determine. 
 
  1. Make a shortlist of apartment buildings in the market by utilizing a quick financial test. Assess the size, location, and several units. Obtain the present occupancy rates and the present rent rolls. Have a figure on the annual income, mortgage payments, and all other types of expenses. You have to go for listings that supply positive cash flows. 
 
  1. As soon as you find an ideal property, you may want to request for a walk through appointment. Confirm the overall condition of the building, the sizes, and location of the property. Estimate potential expenses. 
 
  1. Get all the information you need to implement a thorough financial analysis. Come up with a list of monthly income and expenses from t-12 (trailing  12 months of P+L). Compute for your net operating income by estimating your cash flows as well as your cash-on-cash returns. Then, compute for your capitalization rate.
 
  1. Present your letter of intent. all exterior deferred maintenance must be included. in the industry if you are a re-trader no one will want to do business with you.
 
  1. engage an atty. to write up all documentation and help oversee the risks from the seller.
 
  1. Perform your due diligence. Ask the present owner for expense reports and tax returns. Also, get copies of tenant leases as well as the rent rolls. It is also important to know the reason for selling. Investigate the present vacancies of the units. (we have checklists for these if you reach out for them).Ensure to conduct a professional property inspection on a given schedule. Get the services of a professional contractor and inspector. Be sure to walk through the property with a fine-tooth comb so that you will not miss out on any detail. Do not forget crawl spaces and exterior areas. List down your estimates and possible cost of repairs.
 
  1. Protect your source of financing in time for closing. Secure loans like traditional or conventional loans. You can also do partnerships to lessen the fund/capital to be released. Syndications are also a great option!
 
  1. Sign all the final documentation to seal the deal. Arrange an insurance policy and have security deposits transferred to you. Lastly, sign all the paperwork and you are good to go.
  The above steps outline the “essential” methods of purchasing an apartment, which can be a tedious task. It cannot be stressed enough that purchasing an apartment complex, and maintaining them, is a bit of a different planet, from owning and renting out single-family units. But, investors armed with a lot of research, apartment investing business plans, and an array of great mentors and specialists, are sure to pave their success.      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. > 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  
Posted on Leave a comment

Eighteen (18) Wayzz to VALUE ADD FOR DAYZZZ!

pexels-bidvine-1249611

Value-add is the manner that we force appreciation on our properties. Forcing appreciation means instead of holding the properties long term to create a large increase in value, a period of time is set to take money that was set aside for our renovation to make value-add changes. This “forces appreciation” because the value enhances immediately as compared to just holding the property for a long period of time and giving freedom for immediate rent increases and value of the land. 

 

The amount of forced appreciation can be computed by using the formula Net Operating Income over the cap rate. On the other hand, Net Operating Income (“NOI”) is income minus all types of expenses. The cap rate is more commonly known as the capitalization rate. The same is the yield of a property over a one-year time frame with the assumption that the property is purchased in cash and not with a loan.

 

You can readily witness the huge impact that incorporating a specific renovation has on the entire purchase value. For example, if you increase the net rents by $10 each unit on a 50-unit complex at a compressed capitalization rate of 8, it would simply increase by $75,000 in value to the purchase prices in just a year.

 

Isn’t that CRAZY AMAZEBALLZ AWESOME!?!?! Just imagine looking for a gem complex that is 15% below the rental levels in the market. That is a good find!

 

So, let’s get to the meat of this post. We have listed some of the things you can do upon takeover of the multifamily complex to force appreciation in a period of one (1) to four (4) years:

 

  1. Utilities. More commonly known as RUBS, the Ratio utility Bill-back-to-take the present bills by which the complex is paying and divert them back to the tenants. This is a matter of incorporating the accounting and business perspective. 
  2. Application fees. This includes the credit check and background check. There is a corresponding fee for this type of service. And you can take over this task with the business side in mind.
  3. Returned check fees or late fees. These are types of fees that coincide with default in payment. You can also take over this kind of service with business in mind as this posts a legitimate concern with corresponding penalties. 
  4. Pet fees. For tenants that have pets, pet fees are equally important. And you can also incorporate this into your management for your complex.
  5. Pet Rent. Pet rents will also help you with your force appreciation of not more than four years. Again, this is also a legitimate thing since pet rents are not new to the real estate industry especially those who are managing multifamily units.
  6. Parking. Of course, parking is at the top of the list. Almost all multifamily complexes have parking destined for each tenant. But there is a fee on top of the rental fees for the unit itself. Fees may vary depending on the availability of parking space. 
  7. Cable TV service and fees. Cable service also adds significant value to your unit on rental charges. Units with cable TV are regarded as a premium and it may help with your force depreciation in no time. 
  8. Facilities fees. We cannot deny the fact that some complexes possess good and grand amenities. There are fees on top of using such and it can also help add value to your units in your multifamily complex.  
  9. Laundry facilities. This is also part and parcel of the majority of the multifamily complexes and the same can maintain service. The tasks can also be outsourced bringing 20% of the income.
  10. Low flow toilet, showerheads, faucet aerators. With these fixtures installed, this will possibly save at least 1/10 of the water bill for the entire complex. 
  11. Curb appeal. This will not instantly translate into money but the idea is that more traffic means more prospects that will turn into occupancy. Ergo, there will be less expensive in terms of advertising.
  12. Upgrades on each unit. This item is where you can really charge more each unit after renovation, depending on the type of your market. 
  13. Office. It is imperative to always upgrade the office to one notch higher than the complex itself. It is the primary thing individuals see when they come in and will be a huge sell-out if it is comfortable, cozy, class, sophisticated, and has something hot such as freshly baked cookies and hot coffee. 
  14. Wasted space.  If you have some space that is not used, you better incorporate tons of value for sale by adding more units. This will help you in your force depreciation plan.
  15. Amenities. Amenities include features like clubhouse, gym, benches, playground chairs for pools, barbeque grills, depending on their class. Well, basically, it is crucially needed in class A type of complexes. Upgrades like these are dependent on the need, preference, tenant type, complicated neighborhood, and other similar parameters. 
  16. Renovation on exteriors. This is somehow related to curb-appeal where if the multifamily complex is beautiful and enticing, the less you need to shell out a significant amount of money on advertising. In turn, the nicer it will feel to residents. The more security you incorporate the better since everyone feels about where they live; the longer they will stay. This will augment vacancy and translates to more money you will generate.
  17. Vacancy and economic loss. It is given that you may tend to lose a significant amount of money when there is a vacancy or loss to lease. So this is not just simply physical vacancy, but it also includes non-payment of tenants. This is something that should be monitored on a monthly basis upon one’s takeover. There should also be periodic monitoring on a quarterly basis as soon as your renovation tasks are finished. If your tenants are not paying on time, you need to check with your property manager in terms of how he/she handles new tenants. 

 

The 3: income requirement/principle must be justified by present pay stubs, and they should possess good credit. You can still work with them even if they do not possess an excellent credit rating. However, you may charge an additional month’s rent to cover for one month. The property manager’s approach should be that if there is a missing payment by the third of the month, late fees rack up and the tenant gets notice of eviction. At least, you have a couple of more days to replace the new tenant and that period is covered.

 

  1. Utilizing one internet provider and/or energy broker. This can add value and additional income to the complex.

 

Accordingly, these are just some concepts that can be used in generating more money and at the same time, adding value to each apartment unit. 

 

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

Posted on Leave a comment

The Edge of Females in Real Estate Investing

pexels-christina-morillo-1181533

 

 

More than half of the real estate agents are female. So might assume that women are well-represented in the Commercial real estate industry. The answer is a big NO. This is because only thirty (30) percent of real estate investors are women. But that figure will soon be amended as more women discover that they have some built-in benefit in terms of flipping and fixing properties to come up with a good profit. 

 

Women who flip. Even though there are some famous property flippers on HGTV, a lot of people still think that construction in real estate can be left to men. There are prominent female REI-flippers and it is not surprising that channels such as HGYTV chose such personalities because they firmly believe in their passion. The city of Dallas is still a hot market for flipping. Based on statistics, the city of Dallas is growing by a minimum of 500 residents per month. So veteran investors are snapping and jazzing up properties near the metro, which are popular with millennials, including older homes, which they can and then convert to multifamily units. 

 

Multifamily units can be a lucrative investment because a single family house purchased for $500,000.00 can benefit a smart flipper with several units’ worth of income for between $650,000 and $950,000. And so why do females still comprise a small piece of the real estate investor’s pie, and what are the routes to be successful?

 

Becoming a Real Estate Investor

 

Real Estate investors begin as home inspectors, appraisers, brokers, contractors, and all of which tend to be dominated by men. But those are not the only paths to pave in becoming a real estate investor. Realtors are also excellent candidates for real estate investors with their thorough knowledge of local markets, pricing, and sales cycles. As are those entrepreneurial class who may have to obtain a career break to take care of elders or kids now want to reboot a career.  

 

So what does it take to become an effective female real estate investor? Confidence and knowledge are crucial elements. With a thorough understanding of the market, say for Dallas, and of the figures involved to translate it to a profit. Successful female Real estate investors’ counsel that you should not depend on your guess or intuition when buying properties. Instead, you require to study topics on what costs will be utilized and initialize a system for analyzing properties with the use of numbers. 

 

Persistence is also an essential factor. All you have to do is to follow up with every lead and be the last to give up on a good deal. Create and link relationships with efficient resources like hard money lenders and real estate agents. You can turn to when you need to look for a great deal or obtain a case for your project immediately. Veteran women Real Estate investors suggest that one, if possible, should mimic another investor working on a renovation before flying on her own. One should not be afraid to ask questions and each real estate investor out there was also a newbie at one point in their career. 

 

The Edge of Female Real Estate Investors

 

When talking at the plus’ and minuses’ of being a woman in the real estate industry, interviews with several successful female real estate investors stated that all have some problems in terms of how the opposite sex treated them. However, the women said being a female real estate investor has a lot more advantages as compared to disadvantages. 

 

Naturally, women are excellent at the skills that are needed for the success of real estate investing. It was known that female real estate investors are very good at creating relationships and looking for solutions to problems. It was also a known fact that women have the inherent ability to acquire network and trust, skills that are tailored to real estate investing. Another important thing is support from family. One woman, who is a married flipper, said that having a working spouse that has a steady income gives her the freedom to pay close attention to her investment properties and allows her to jump on few risks in the course of her career.

Being collaborative versus autocratic is also a reason women, who choose not to discount their femininity, are extremely successful in negotiations and in hodding meetings with their peers. These are essential to success as a real estate investor.

 

Looking for support for Your Dream

 

So are you a female who is interested in becoming an Apartment investor, but would like to know more about others to exchange ideas and brainstorm? Or are you already a female real estate investor and just looking for ways to connect to other investment opportunities? Whatever your purpose is, we can offer you resources to become one of the best female real estate investors in apartments.

 

WE ARE LOOKING FOR MORE INVESTORS LIKE YOU PLEASE HIT THE forward button  ABOVE to quickly
>  send 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!


> 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

Posted on Leave a comment

Securing your retirement Assets in a Self-Directed IRA

pexels-skitterphoto-9660

 

Securing Your Retirement Assets in a Self-Directed IRA. The term self-directed asset is an efficient feature for the solid investor who is willing to take the risk for the betterment of his financial future. A lot of investors are not aware that the IRS gives freedom for IRA owners to select from an array of commonly permitted investments, which shall go far more than the ordinary mutual funds supplemented by big brokerage firms. 

Why is this essential? The answer is because diversification is one of the most efficient ways to secure your retirement assets. It doesn’t matter if you select the common IRA or the self-directed ROTH IRA, yours can purchase a plethora of asset classes to secure your money from unwanted fluctuations within the several financial segments in the market. The real diversification goes efficiently beyond an infusion of bonds and stocks; individual retirement accounts can be utilized for real estate investment, a limited liability company, and a bunch of other alternative assets. 

To tell you the truth, the IRS does not specify which types of investments you can make use of with your self-directed IRA in purchasing, it has come up with a shortlist of prohibited asset types as well as transactions that IRS regulation do not permit. One good example is self-dealing in property, whether directly or indirectly owned by a service for the owner or a fiduciary of the IRA. It has been tested for years now that CamaPlan has been on top in providing self-directed IRA services for all types of investors who are eyeing to jumpstart and enhance their pocket within their own terms.

Select your IRA custodian wisely. Choosing the destined IRA custodian is considered as part and parcel of securing your retirement savings. As a self-directed IRA custodian, CamaPlan supplies a multi-type of service as compared to the traditional huge brokerage house. In reality, the average investment firm produces financial benefit to push an account owner to put their money in a mutual fund or other financial products managed by the broker. There is a conflict of interest in getting advice in investment from a company with vested interest in generating income from your IRA investment asset. In CamaPlan, it is totally different. They do not sell financial products and they do not acquire commissions; ergo, their primary objective is to empower you, being the account holder and owner of money to capitalize and take full benefit of the array of investment options there are for self-directed IRAs.

CamaPlan supplies retirement plans with easy-to-understand free structure, transparent, and present investor education opportunities, and transparent risk and benefit information. Their specialist personnel is experienced in  self-directed IRA guidelines and are always present to support the extraordinary needs of each investor. CamaPlan manages the needed paperwork, documentation and reportorial requirements for the IRS, while you mull over which alternative asset classes will be more lucrative and secure for your individual finance goals. When you are prepared to divert your funds to a self-directed retirement account, CamaPlan is the best thing to go for since they are recognized as the number one IRA custodian.

Expand your Assets. Do you have an idea that self-directed IRA plans can be utilized to purchase real estate, invest in entrepreneurs and small scale business, buy tax liens, come up with equity trust plans, or purchase precious metals? Retirement experts are one in their answers and they agree that diversification is immensely a good key in protecting your assets. Frankly, there are few restricted types of assets for self-directed IRAs. State securities regulators together with the IRS prohibits the utilization of self-directed retirement plans for several specific classes of transactions, like making personal loans to yourself, transacting with a disqualified individual like lineal descendant, spouse, or separate juridical entity like partnership, corporation, limited liability company, trust or even estate, of which half or more is owned directly or indirectly by a service provider or a fiduciary partner. 

It is also prohibited to deal with an entity that is 10% or more partner, or in a joint venture with a separate juridical entity that is half or more owned directly or indirectly or held by a service provider or fiduciary. Why you can practically utilize your IRA to purchase real estate, there are certain exceptions for specific approaches in real estate investment. Say for example, utilizing a self-directed IRA real estate plan to purchase real estate investment for personal gain is not permitted. Self-directed IRAs are being invested by investors in a plethora of high-yield assets, like:

  • Real estate
  • Precious metals
  • Mortgage notes
  • Hedge funds
  • Tax liens 
  • Private placements like investing in a start-up business to generate equity as it go by.
  • Oil, gas, timber, and mineral rights
  • Stock shares or futures

You have to bear in mind that you can broaden by making an IRA purchase within sub-categories of main alternative types of asset. Say for example, a real estate IRA can be utilized to purchase commercial property, rental property, multifamily property or virgin lands. Further in IRA held property, you have the freedom to invest in a limited partnership that invests in real estate or manages mortgage notes. The more widespread your retirement portfolio is, the more effective you will be in weathering the fluctuations in amounts of real estate, stock market, precious metals and other types of investments. 

How to become a knowledgeable investor. Of course, you will not take an examination without reviewing or reading the review materials first, and the same should be parallel with your investments. A knowledgeable investor is the one practically to come up with sound investments that will generate the highest returns. CamaPlan is delighted to supply people with ongoing investor education their Cam Academy articles, tutorials, videos, seminars and webinars. They offer investors the vehicle they require in becoming informed and widen their personal information about an array of topics, including alternative asset types, how to assess prospective investments, federal and state parameters for traditional and Roth Self-directed IRAs and a lot more. 

CamaPlan does not give people investment advice. The Self-directed IRA owner should always do their due diligence on any prospective investment. It is highly recommended to consult your tax professionals and personal financial advisers about the possible ramifications of investments you are about to engage with, such as those pertaining to tax-deferred accounts as well as capital gains tax. It is a bit of a complex for investors to maintain up-to-date with all the statutes that have restricted securities industry transactions in previous years, so having experienced advisers to work for you is imperative. When you enrich yourself with information, select a good pool of specialists and professionals, and broaden your retirement portfolio, you are surely on the right path in securing your assets and making your future solid.

Building a concrete plan to generate wealth. CamaPlan was founded by investors, for investors. They believe that investors should possess the versatility in utilizing their self-directed IRAs to create wealth on their own approach. Part of securing your assets is to come up with a strategic approach to maintain growth. It is crucial that the savings utilized to fund your self-directed IRA do more than being idle in an account earning small returns. Your money should be working hard solely for you, so that when you are about to retire from your work, you can be able to reap what you sow and retire comfortably. The real advantage of self-directed retirement plans is that they can be utilized for a lot of types of investment. Why should you contain yourself to the narrow list of bonds stocks and mutual funds showcased by most brokerage houses when there is such a wide range of investment portals available?

CamaPlan’s role is to take care of the needed IRS reporting and supply you with the investor education that will give you the power to manage your own finances. Call us today to be able to engage in a CamaPlan self-directed IRA, and know the ins and outs on how to secure your retirement assets while generating wealth. 

When talking about securing assets, CamaPlan is on top! 

 

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

Posted on Leave a comment

30 tips for passive apartment investors 

2E6964B6-2AEE-46C1-B88A-1241F7530BF3

 

 

1-Know and understand the exit strategy.

2-Know the people you’re trusting with your money

3-know your numbers 

4-never listen to the owner or real estate agent on their numbers, be conservative so you have padding

5-assure you have a good team that have your success in mind

6-Just get started, investing is a learning process. 

 

7-research the different roles it takes to buy, run, and sell a property, and confirm with the team that your investing with, that each of them is experienced and dedicated to those roles.

 

8-Know that higher return means higher risk. The ways to mitigate that risk is in the expertise of the team that runs the business so know the team, decide if you trust them- if not take a step down be ok with a lower return strategy for a lower risk.

 

9-There will always be more properties. Never justify the numbers

 

10-Enjoy making money for practically doing nothing.  It’s super fun!

 

11-Invest from education not emotion

12-Operator is the most important

13-Learn how to get over obstacles. There will always be challenges with every project. Must maintain solution focus not problem focus.

No mountain is high enough. You really can accomplish anything you put your mind to

14-Know who you are “getting in bed with”

15-Learn to underwrite like you’re the operator. When evaluating an offering, ask questions to understand the sponsor’s underwriting assumptions. If you find areas you disagree on, underwrite it yourself to see how the performance compares to theirs

16-evaluate the Operator then the deal

17-Track record, transparency, references, business plan, understand the risk

18-Look at the potential returns. If they’re too high (above ~10% cash on cash year 1), it means it’s a riskier deal. Understand and get comfortable with those risks. Not necessarily a bad deal if you / whoever is running the deal know what they’re doing.

19-Make sure you understand your short term and long term goals. Everyone wants financial freedom but you need to be more specific. Put a number to it. 

20-Manage your risk versus reward!  If it appears to good to be true, it probably is

21-have your Attourney overlook the operative agreement and don’t be afraid to ask for changes 

22-The sponsors matter as much or more than the numbers. Vet the sponsors very well – background checks, past deals and experience, etc 

23-checkout the asset. Is it real?

24-Remember that your money is tied up and you cannot get to it until the Lead investor makes a decision to sell, distribute, or refinance. You have very little control.

25– get a background check and do your extensive home work on the operator

26- check sponsor resume , check it again 

27-Find that needle in the haystack operator that knows this business inside and out 

28-ask what happens when there is a capital call

29-ask about when distributions start best AND worst case

30-ask sponsors how much skin in the game they have

 

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

Posted on Leave a comment

Five Important Things to Look for When Investing In Multifamily Properties

 

Usual window shopping for your dream properties is a good thing to do on a Sunday morning. However, multifamily investing is more than meets the eye. It needs more evaluation than just an open house. For real estate investors, it needs sufficient diligence that will not only cover locating a house which is below market value, but also exerting efforts to assess and analyse its financial responsiveness/economic impact.

 

Together with the actual complexities of looking for your dream property, it takes a fusion of things to secure a quality multifamily deal. In the majority of all the cases, the search commences by getting a potential property and then comparing property prices, long and short term costs as well as estimates on rental fees/market rent comps. While this will practically give you an estimate of what real estate investors can expect, it is up to the specialists to continue their due diligence and fine tune those figures to make sure we have solid success. Because investing in multifamily real estate investment involves a close attention to the economy as compared to other real estate deals, an investor’s initial concern should always focus on those figures. These numbers will not only showcase the future success of an investment property, but will basically reveal its discount from the actual valuation from current performance. To add to the figures, there is an option of underlying considerations that may and will surely influence multifamily real estate investment purchase.

 

For those who are eyeing to invest in a real estate multifamily investment deal, the search commences with the following factors:

 

Location.  It has been stated before, location is of utmost essentiality for real estate investors, and more importantly in multifamily properties. With more tenants, this property needs to appeal to renters. Location is considered to be the most desired criteria.  When one invests in multifamily properties, each should pay close attention to high-yield properties with high growth nearby. They should focus on communities with high-demand and well-maintained locations. Especially higher class locations/neighborhoods.

 

Number of units. The next step is to assess the prospective property in its entirety. Real estate investors should consider the number of units of the prospective property, together with the number of amenities and features in each unit. Starters should begin their search for property focused on three (3) categories of multifamily properties: (a) small property (20-50 unit), (b) medium (70-150 unit) property, and (c) the institutional sized 250-plus unit property. These sizes of properties do not only showcase the rance up to the most scalable properties, with lower risk for investors to have a project fail (bigger the more professional support you can afford), but they are basically showing the range of scalability for pricing everything= more affordable.

 

Prospective Income. The next step is to specify the potential income the prospective property can obtain. Sites like costar.com and Loopnet (owned by the same company) are helpful sources for knowing the rental charges and income in the market (comps). However, investors should still practice due diligence, which takes everything into consideration. Other income, average billback in the community, potential for more rent based on market average. For those trying to be conservative, the 50 percent rule is a basic recommendation. Fifty (50) percent on real estate investment’s income should be devoted to expenses (above the line) and not to the mortgage when looking at the health of a property’s income. This is regarded as an effective rule of thumb for starting in real estate investments. if the income is below 50% this is usually an opportunity to fix something and make more income.

 

The price or cost. Each scenario will basically differ when financing the real estate, mainly multifamily properties are compared to other nearby properties for performance to come up with the loan/leverage. Say for example you go with a 20 unit versus a 250 unit the lender will give better interest, better interest only terms, your insurance cost and r&m (repair and maint. cost is less (plus more) so your returns and proceeds will be higher. This simply means that the income post-business plan can be much higher/boosted easier on a large property which makes exit returns better and qualifies for better/best terms from the lender. 

 

Investors, on the other hand, are usually required to consider their credit score when thinking of financing options, as this crucial figure will immensely affect the process of qualification. Generally, lenders will look at three factors namely the credit, debt-to income ratio, and the down payment. this usually determines the loan terms. NOT in multifamily. You must have basic 650 credit, team net worth larger than the deal, team post closing liquidity over 10% of the deal, and the remaining terms are decided by the income and performance of the building/business!

 

The seller. The seller of the place is one factor when evaluating prospective multifamily property.  This is because of the fact that purchase price can significantly vary depending on the type of seller and their motivation. It is crucial for real estate investors to obtain a knowledge of who they are engaging with.  Also are they crazy, reasonable, just want a high price? you will deal with this person for 60-120 days typically. If they are not really motivated, I have lived through a lot of games and heartache this can create. Consider the value of your time.

 

Truly indeed,  in multifamily real estate, if you consider the factors mentioned above, there is a great chance that you will be closer to your dream property with a very practical price and transaction. However to fast track your success, partnering/aligning with a team with a track record and experience can help you jump years ahead in your progress, and save you from overlooking items which may cost you your entire investment.

 

 

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

Posted on Leave a comment

Cap Rate Calculator: The Ins and Outs of Real Estate Cap Rates

Cap Rate Calculator: The Ins and Outs of Real Estate Cap Rates

Considered to be the most utilized formulations you will ever witness in the realm of real estate investment is a capitalization rate, or more commonly known as “cap rate”. But, what does it really mean to real estate and where you should utilize it for? Unravel the ins and outs of cap rate and use our very own cap rate calculator to know the specific value for an investment unit you are eyeing. You can also find out what specific price would shoulder you the cap rate you are eyeing.

Selecting the appropriate investment property is basically about the amount of money you will acquire in contrast with the amount of money you put into investing. An effective investment comprise of proper balance and realized income with a conservative amount of risk.

The balance for each investor is varying. Coming up with the proper decisions relating to real estate investment involves paying close attention to each property and selecting one that makes up all your preferences. A very common thing investors look for primarily is the cap rate of the property.

 

UNDERSTANDING THE PRINCIPLE OF CAP RATE. More commonly known as capitalization rate. This principle denotes the percentage of the purchase price, a property invested presently generates not in gross, but in net income. The capitalization rate is basically computed before taking any kind of loans, or paying loans into account. You can regard cap rate as return on investment or ROI, a real estate investment would give you if such a unit was bought in cash and the income is at the same rate. 

Say for example, the purchase price of the property is one million dollar and the yearly net operating cost is fifty thousand dollars (50,000.00 usd), the cap rate is usually around 5% since  the latter is 5% of one million.

REASONS ON WHY A CAP RATE IS USED. Cap rates supply an investor a general knowledge of the performance of the property you are eyeing for. An investor may not spend a significant amount of time contemplating a property with a low cap rate since they can be easily regarded that they will most likely won’t provide prospective ideal income. The investor would be focusing its attention on a property that has a cap rate within the specific range they are eyeing.

A cap rate can also come up with the amount an investor wants to pay for a specific property. In the event that your preference involves a cap rate, you can easily specify the price to obtain that cap rate with the basis of the present net income.

On the other hand, lenders also used cap rates in the event that they are underwriting a loan. It will aid the lender in deciding if the income generated from the property is sufficient to cover the payments of the loan. It will also give them the idea on what loan to value ratio they can give.

Syndication Regulat Cap rate Calculator. If you already have an idea with the NOI of the property, you can just simply enter it below the purchase amount to see the value of the cap rate. In getting the Net Operating Income, you can simply input the gross income and the operational expenses.

Are you trying to come up with a figure in terms of the amount of your investment property or you just want to offer an investment? Just click on the price tab and put the value of the NOI as well as the market cap rate.

CONTEMPLATING ON A GOOD CAP RATE

Mulling over an excellent cap rate is basically dependent on several factors. It is dependent on what your entire goals are in terms of investment, the type of property, its location, and a lot of things. 

Definitively, an efficient cap rate is one that supplies an excellent return as compared to other same investments. If you are eyeing for a class c apartment unit in a community with a “not-so-good” value and slowly declining, a fair cap rate will be much higher than that of a class A unit in a steady or increasing market. 

Say for instance, Cordone Capital looks into investing in class A properties in increasing markets simply because they shell out excellent returns on investments coupled with a very minimal risk. Generally, the cap rate on these will also be lower than a property coupled with a high risk level. 

Properties that are considered high risk may be enticing and eye candy because of the potential returns, but mind you, there is a big chance that you can lose the entire property. The odds of any single family unit becoming a loss is not that high. But, if you are propagating and cultivating a portfolio of multiple units, the odds of one high risk property becomes negligible. 

In the event that only a sole property in your portfolio goes up, that will not ruin the ROI across the entire portfolio. Not to mention the drastic fluctuations in occupancy as well as the higher maintenance and repair expenses  going out on a yearly basis will have  small effect.

In order to have an idea of an efficient cap rate, you can take a look at average cap rate, as well as other types of investment metrics and formulations published by Costar and Loopnet.

PARAMETERS THAT AFFECTS CAP RATES. Just like interests on CDs or bonds, or even bank charges for a mortgage, cap rates fluctuate. These variations fluctuate based on the supply and demand in the market. When a lot of buyers are competing over similar properties, it is natural that prices will surely go up. It simply means that a higher price gets a lower cap rate. If sellers are having difficulties looking for buyers for their real estate properties, they basically begin lowering the purchase price. Now, a lower price means a higher cap rate. 

Interest rates on mortgage also play a very important role in cap rates. In the event that the rate of mortgage increases, it means that the difference between what an investor is paying for the money as well as what they are getting from such investment is smaller. The bottom line is that they are making less income. It is a known fact that investors may demand higher cap rates which translate to lower sales prices. 

Ergo, it is imperative to obtain an attractive rate of interest from your lender. The lower you are shelling out in interest, the less vulnerable you are to altering rates. This will translate to higher cash flow as well. If you are not able to obtain enticing interest rates, you might partner with an investor who has the ability like The Apartment Queen. It is a known fact that interest rates can play a major role in the cash flow you obtain on a monthly basis as well as the equity you acquire.

Pricings for new construction also affects cap rates. In the event that more units are being constructed within the vicinity, the demand for leasing residential apartment properties may lessen. This can have a very high rate of vacancy as well as haggling for lower rates. Intelligent real estate investors can realize which areas are ripe for development and tailor their investment strategy with the assumption and foresight that there will be apartment units that will be constructed in the future. 

 

IMPORTANCE OF CAP RATE

A cap rate is just a facet to regard investment property. The cap rate gives you the return on investment linked to the present income as well as the assumption that you are paying cash. The truth of the matter is, the Net Operating Income will vary, and you will leverage the investment. Another thing is that the real estate will appreciate and such that you will build equity.

Simply put, these parameters play a very big role in the entire return you will earn on your investment. Other considerations you require looking at in terms of return on investment (ROI):

Internal Rate of Return (IRR): The IRR is a formulation that showcases an excellent idea of what the Return on investment (ROI) will be over the matured term of the said investment, instead of just the present period like a cap rate. 

Cash-on-cash Return: This is the value of cash in your pocket annually, after loan payments, as compared to the value of cash you put into the investment. This also considers loans on the property.

Equity multiple: As an investor, you are paying the principal balance on your loan on a monthly basis with the rental income. The two are inversely proportional because as the balance decreases, the equity in the property increases. When it is time to sell the property, you will acquire more than the case you put into it. You may put one million dollars in an investment and you might obtain another two hundred thousand dollars back if you sell in say, four years. 

On the other hand, people are asking if a property with a good cap rate will be considered a good investment. The simple answer to this query is NO. It is a guideline in specifying if a property will obtain cash flow, but it does not specify if such investment is viable or not.

The fundamental factors to look at when selecting a real estate investment are:

  • Cash flow. The property should have positive and good flow of cash at the onset. It has to be an efficient producer of income.

 

  • Number of units. The more units the property possesses, the easier you can enhance the overall income.

 

  • Friendly Debt. Banks must be able to lend on it and be on top of the game with practical financing terms and good interest rates. 

 

  • Location. Must be in a strategic location that will continue to boost up. You cannot pay too much for a great location.

 

  • Competitive Market. You want to eye on properties that have tons of interest. IF nobody is running after it now, there is a great chance that nobody will run for it five to ten years from now.

 

 

STEPS ON HOW TO CALCULATE CAP RATE

Basically, a cap rate is not a complicated formulation. The most essential thing to perform before you calculate the cap rate is to arrive at the net operating income (NOI) of the property.

Do not be confused with the NOI the broker is advertising. It should be the NOI that you calculate after reading over the financials. You need to watch out for sellers incorporating back expenditures that are not included, or basing it off a projection for the next one year.

You have to take a look at the present yearly gross income, then subtract the operating expenses and depreciation, as well as the interest expense and all other that should be added back.

Simply put, 

Net Operating Expense (NOI) = Gross income – operating expenses.

Then divide the NOI by the purchase price.

Cap Rate = NOI/Purchase price

Since the answer will be in decimal, you have to convert it to a percentage by simply multiplying it by 100. 

 

Let’s have an example

Purchase price: $5,000,000
NOI: $600,000

$600,000 / $5,000,000 = 12% (.12)

 

IMPORTANCE OF CAP RATE TO EACH INVESTORS

Computing for the capitalization rate is an essential thing to perform when eyeing for a real estate investment but it practically should not be the only vehicle used to come up with a solid decision on purchasing a property. There are several more other things and factors that compose to come up with a better picture of an ideal investment property. You have to take all of it into consideration before you come up with a sound offer. 

Having an idea what a capitalization rate is will aid you come up with the appropriate properties to eye for. However, you have to ensure that you check all the boxes on a property you are referring to. If you have a determinable criteria, you are better off being patient and waiting for the right property instead of impulsive decisions on something that is not appropriate for you.

In the event that you decide on investing on individual or single family properties is not the right one for you, then investing in Apartment Securities will give you the freedom to get in touch with professionals that study tons of deals and invest securely with a fair risk and great returns.

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 1 million-

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

Posted on Leave a comment

6 Reasons Why Apartments Are a Solid and Effective Investment

With the advent of a global financial turmoil, it is normal to see investors on a daily basis who want to broaden their knowledge and options with investment that will secure them against the abnormality of the market.

Some people spent enormous amounts of time trying to diversify their portfolio of multifamily investments, administering the purchase, development and operation of tons of properties. Having said this, individuals often ask this question: What are the most efficient investment options especially if you are eyeing for future long-term returns? The answer is a no-brainer. It is a known fact that multifamily apartment rentals are effectively applicable to stand a looming economic downturn. 

Entirely, specialists recognize real estate as an effective investment vehicle since it is a solid asset that is perfectly tangible, visible and operates efficiently in an inflationary community. Its capability to obtain excellent cash flows makes the real estate industry an appealing choice for a lot of real estate investors. When you integrate cash flow with depreciation tax benefits as well as the value of the property increase through time, then you have a great investment vehicle. Further, the real estate industry gives passive investors a kind of asset that does not need to spend a sufficient amount of time.

But, some property classes give significant value as compared to others Multifamily properties, specifically, give an array of advantages. We come up with a list of advantages in multifamily investment:

  1. Multifamily operators are more swift and responsive simply because streams of income are based on multiple shorter-term leases. They can adapt to meet the preference of each and every lessees’ changes and demands in the industry which will result in enhanced investor returns in the future. 
  2. Following, the demand for multifamily units has been in demand for the last decade. Since the recent global recession, we have witnessed a shift in the demand in terms of home-buying. This is because of the fact that Generation x-ers, millenials and even baby boomers opted to rent instead of buying properties. Almost half of the present household in the United States are renters which is the highest in the last fifty five (55) years. Renting is the way to go and there is no resting for this demand in the coming years.
  3. Based on statistics, younger generations will initially choose to spend their hard-earned money on travels and leisure instead of purchasing and managing properties. They are more leaning towards renting in order to change jobs if they want to or easy, move to different locations. In addition to that, as loan requirements have been a bit complicated, it has become complex for younger generations and people with not-so-good credit and high debt to secure mortgages. Also, higher down payment makes purchasing even more difficult.
  4. On the other hand, when talking about baby boomers, they are selling their properties and chose to move closer to urban cores. They want a lifestyle that reaches everything a few steps away. In the multifamily communities, individuals and the younger generations find amenities that they cannot avail in single-owned properties like fitness centers, resort style pools, grilling areas, clubhouses, cabanas and a lot. Suburban apartment units also entice a lot of young renters because of an array of considerations, especially proximities and accessibility to great schools, churches, highways, and shopping places. Further, suburban communities often showcases flexibility level and cost-efficiency not found in urban communities. 
  5. As compared to retail, industrial or office assets, apartments have the advantage of a broader renter base. This simply means that investors do not have to depend on single or double tenants, but on several hundreds. So losing one tenant will not hurt so bad and will not significantly affect the cash flow of the investment. In turn, lessening the risk during financial downturn. 
  6. It is a known fact that a wise investment technique starts with looking for the proper location that possesses enormous population growth, high end demographics and high entry barriers. Furthermore, investors should have a look at micro and macro-economic trends for income as well as dependable growth in jobs.

As part of a comprehensive portfolio, investors should look for rentals that entices families and baby boomers who have let go of their properties and want a more dynamic kind of lifestyle. Look for assets that are close to good educational institutions, proximities to retail as well as leading business establishments and with high volume of traffic within their community. We have listed location targeting advice to first-time multifamily real estate investors:

  • Specify a market using Neal Bawa’s Real Focus Market underwriting spreadsheet. This can be found free on the web. Have knowledge of each and every multifamily real estate broker in the markets which meet your criteria to check who is around for the long term, versus brokers trying to make a quick buck. The deal you invest in, you can find out which broker listed it. Each investor must look at multiple deals.
  • Get in touch with  the brokers in that market, and acquire introduction to their capital markets group to understand the most practical financing options. these change often. It is fundamental to also comprehend what lenders are looking for in terms of sponsor group or a specific deal. These are good measures for what group you invest with as well.

 

Here at www.theapartmentqueen.com , our multifamily investments have had a minimum return of 8% cash-on-cash annual return and 15% internal rate of return or IRR. While we can say that nothing is solid recession-proof, multifamily real estate investments are excellently put in place and still suited to battle the stormy financial crisis. 

 

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 1 million-

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 

Posted on Leave a comment

7 Ways SEC EXPANDED Accredited Investor Pool Means More People Can Invest for Better Returns NOW!!

 

 

Becoming an accredited investor in the United States is no longer just about wealth. Or being a rich old white dude!

 

 Recently, the SEC talks about the amendments to such a definition. And now, the Securities and Exchange Commission or SEC just amended its definition of an “accredited investor” in relaxing the entirely wealth-based requirements, after manifesting the plan in late 2019. 

 

Basically, accredited investors in the United States enjoy special privileges with the Securities and Exchange Commission such as the liberty to participate in specific types of simplified securities sales like the so-called Regulation D.

 

The SEC reiterated that past definitions simply relied on particular net worth and income brackets, which basically did not take their present “financial sophistication” into consideration. IN the case of the United States, these requirements can result in about a million in net worth or a steady individual income of around $200,000 annually. 

 

The consideration is now expanded and relaxed as the “product of the years of effort not only of the commission but its staff to analyze, assess and consider approaches to amending the accredited investor definition, as SEC Chairman Jay Clayton stated. 

 

7 notable additions to accredited investor qualifications are listed hereunder:

 

  1. In good standing of the Series 7, Series 65, and Series 82 licenses as qualifying natural persons.
  2. Indian Tribes, governmental bodies, funds, as well as entities organized under the laws of foreign countries, that own “investments” as defined in Rule 2a51-1 (b) under the Investment Company Act, in excess of $5 million. 
  3. Limited Liability Companies (“LLC”) with $5 million in assets may be considered as accredited investors and add SEC and state-registered investment advisers, exempt reporting advisers, as well as rural business investment companies (RBICs) to the list of entities that may qualify. 
  4. Investments in a private fund, natural persons who are considered “knowledgeable employees” of the fund;
  5. Family offices with at least $5 million in assets under management as well as their “family clients”;
  6. “Spousal equivalent” is also added in the accredited investor definition, so that spousal equivalent may pool their capitals for the purpose of qualifying as accredited investors.
  7. “Qualified institutional buyer” in Rule 144A to include RBICs and LLCs in the event that they meet the $100 million in securities invested and owned threshold in the definition. 

 

The new definition emphasizes on allowing people to qualify as accredited investors based on professional designations, certifications or credentials, for that matter. They will also be basing the accreditation on the credentials issued by an accredited educational institution. 

 

These educational institutions are to be controlled at some future time at the discretion of the commission. It is not clear what kinds of institutions become accredited for these objectives and whether it will need specialized general economics and training courses as well as financial literacy.

 

Other small expansions of the parameter include “knowledgeable employees” of private investment funds and also family offices with not less than $5 million in assets under management.

 

Private offerings are how rich individuals have the doors to opportunities in terms of growing their net worth faster than any type of common investments. 

 

Conclusively, the decision must be regarded as consequential for crypto-based fundraising, as it would broaden the list of prospective investors in security token offerings. But, it remains to be seen if the novel parameters will be generalized and sufficient to expand the list of accredited investors by a major amount!!

 

 We define what the old rile included as accredited and as of 26 August 2020 is broadening the definition and people who do not have the capability to invest in alternative apartment investments can now invest!

 By this time, a lot of people can be able to grow their wealth faster, with better returns than typical retirement savings investing AND have the opportunity to have access to investments secured by real assets. This will come in VERY handy when we soon see inflation of the US dollar!

 

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 1 million-

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

Posted on Leave a comment

7 Ways to be a Valuable Partner and What Matters

My friend and I had enjoyed two full days in Monaco. He’d just left and I was enjoying a few solo days there. We’d gone to different regions of the south of France. He shared a special town that his family loves to visit- Menton, France. We shopped, enjoyed the wine, enjoyed the sun and talked about current legal and family battles we are both facing.  We both needed support. Life is hard enough-doing it alone makes it worse. Sitting in Monte Carlo, I realized there are very few people to whom I should REALLY devote my time.  Those who open up, those who are honest, those who always keep their word.  This friend always has, even when I often didn’t return the favor, because I wasn’t ready to be that vulnerable. As he left, I had a realization… I get older, I feel worse when I drink a lot. When I drink a lot, I forget and time passes way too fast. I want to create rich memories with those I love. So, I decided to drink less and focus on who is around me. I will surround myself with people who have my back, so I won’t need to “drink the time away.” Turning 30 and having these thoughts I don’t think come as a coincidence. For how I was raised, I feel I have done a great job at enjoying places, people, and creating memories instead of buying stuff. But now, I need to focus on giving love to those who TRULY matter.  Focus on the people aspect of everything I do.  Work, love, friends, fitness, faith and family.  I want to keep them all in balance but I am changing the order of these things. It will now read friends, love, fitness, work, family, and faith. This is the order I am currently comfortable with, as I am still growing, evolving, changing, learning. I am not perfect and that is ok. As long as I’m headed in the direction of my purpose (supported by those around me) my life will be ok. My purpose is to show others how to create independence from toxic codependent situations. First is to help them identify the codependency, because admitting there is a problem is the hardest thing (from personal experience). I have been there- but instead of sweeping it under the rug and pretending like everything is perfect, I had to dig in and change me. Counseling has been life changing. Sticking with it is even harder through the ups and downs. This change is now my number one priority.  I have to do self-work. Even while in Spain, I’ve meditated to battle all the flying issues muddying up my thinking. I need to stay on track and on purpose to get there.  Just jump in, not dance around it.  It’s so easy to get off track. I have caught myself exhausting myself with people who want to suck information from me via text, social media, group message, email, in person at networking events and more. They want the knowledge I’ve obtained by reading, paying for seminars, meeting with operators, touring properties, buying properties, relationships with mentors, and more.  It’s taken time and money and these people want to rob me of it with NOTHING in return.  I only have so much time and energy- and the way it’s going I will have none left for what matters. I must require that others be conscious of my time, like I am for those who mentor me. For my mentors, I only contact them with questions if it’s a desperate situation.  I also send all questions in one email whenever possible. I send gifts or try to bring something back when I travel so they know I’m thinking of them. I REALLY THINK about those around me, and how we spend time together. Am I surrounding myself with givers, like me? If the answer is no, it’s time to go. This applies across love, friendship, health, and work relationships. Work relationships especially, since we spend so much of our lives working. If you’re curious what a GOOD, APPROPRIATE addition is to my active team for partnership opportunities – I’ll spell it out. Here are some things we need help with: I thought it would be helpful to define in work, for me, what a good relationship looks like.
  1. Partner who brings money (personally and has raised capital before)
  2. Partner who has the skills to work out or negotiate the deal
  3. Partner who can bring mentorship or years of expertise
  4. Partner who can bring a proven track record or credibility
  5. Partner who can be sponsor or a loan guarantor
  6. Partner who brings the deal
  7. Partner who is a rockstar at systems and operations
I need to create more time so that I can focus on my goals to be closer to family and friends. I cannot do this if people keep trying to shortcut learning on their own time, skip networking and conferences and take my time to learn instead. I have been letting people take for too long. No more. I am allowing myself to be selfish and not feel bad any longer. I will only give to those who give in exchange. It’s not about a fair trade, but being protective of my time and energy. No one will protect it but me. Thank you, Monaco, for the lesson- it was perfect timing. 
Posted on Leave a comment

Multifamily investment strategy or syndication explained

Multifamily investment strategy or syndication explained

You may ask yourself “What is apartment SYNDICATION investment strategy ?And what do investors get?”

 

A real estate syndicate is a group of investors who combine their capital to buy a property. Together, individuals and companies have more buying power than on their own. Syndicates are commonly structured as  limited liability companies (“LLCs”). This special purpose entity is the method by which investors purchase property, like apartment complexes we purchase at The Apartment Queen.

 

The practice of teaming up to acquire real estate goes back hundreds of years,. It used to be that real estate entrepreneurs or professionals (now known as “sponsors”) could advertise their investment ideas to anyone; today this is “public solicitation”.  The Securities Act of 1933 required all new securities offerings to be registered with the Securities Exchange Commission (“SEC’) to provide oversight and protect investors from fraud. Now the problem existed that registering each offering and jumping through the necessary hoops made syndication less efficient. Although this effectively stopped public solicitation, private syndication continued. This what we do at The Apartment Queen most of the time as a Regulation D 506B offering. This law change forced syndicators to gather capital from private “black book” of money sources.these for some often included members of the country club, family trusts,  working professionals, and more. Those real estate syndications were put together quietly and relied heavily on personal connections or licensed fund brokers.

 

The SEC released “safe harbor” rules that allowed for sponsors to avoid registration under certain conditions. The safe harbors still do not allow for public solicitation. Sponsors had two choices: 1.) raise money without public solicitation and avoid registration, or 2.) register the securities with the SEC, wait for approval, and then solicit investments from the public. We have found like most, the prior is more efficient for sponsors, and therefore we almost always choose private syndication.

 

What do you get from a syndication?

A sponsor has the knowledge and experience to locate, analyze, and purchase a multifamily property with major upside ( investment earnings potential). 

 

Passive investors  (from here on out referred to as equity partners) usually don’t have the experience, free time and funds to purchase commercial multifamily property on their own.

 

Equity partners have the misconception that investing in a syndication means their money will be tied up during the entire hold period. (A hold period is the time that the property is held under ownership by all members/ shareholders in the LLC who own the building. The time period is usually measured in years, industry average hold time currently is five to seven years (Our hold times are 3-5 years).

You buy a property in a syndication model, this means you are part of a group of investors who all own shares of the property. You may have the ability to sell your shares to other investors in/outside the group . An investor or their family could have an accident, become ill or experienced hardship. We know when this append they need cash. The syndicator may allow the sale of shares in some specific cases.

 As a equity partner, your due diligence should include knowing if the prospective syndicator allows investors to sell their shares, and how.

 

A private placement memorandum(PPM) you will sign when making an investment into a syndication. It’s a SUPER LENGTHY legal document (required by the SEC/ written by our well paid securities attourny ).This includes the partnership agreement. The PPM outlines all the information about the project, how everyone is compensated, the fee structures, preferred returns  (if stated) and how income and appreciation will be distributed. It also addresses circumstances in which an investor incurs a hardship and needs to replace themselves as equity partners.

 

The PPM is going to be your “go to” document for everything.  I have a feeling no one reads these, but please try.  It contains a treasure trove of information.  There is an intro paragraph that provides a summary of the deal.  Next, The down and dirty is the “risk factors” section.  Here is where you want to spend most of your time.  No one knows the risks like the sponsor putting the deal together.  This is well written by our experienced SEC attorney.  Everything is in here because if there were ever a lawsuit, the sponsor did their job to explain the risks.

 

GOOD QUESTIONS- What are the loan terms?

 What kind of loan did the sponsor get?  What is the interest rate?  How long is it fixed for?  How much money was put down?  Is the philosophy to pay down debt and then distribute money?  Or is there a return that can change after 5 years?  Is there an interest only loan?

 

How is the syndication funded/ how much do you need to close?

The sponsors usually have to come up with the remaining cash to close after the loan coverage (75/25 Loan to value is typical leaving 25% of acquisition and development to raise) plus additional soft costs/closing costs. Needs for the money raise on our projects is given to private individuals. This benefits equity partners greatly to make life-changing income. Last project for example- 50k capital contribution (excluding quarterly payouts) ended up turning into 105% of that on sale.. wow. We also offer 70-75% of the asset to be owned by equity partners even though managers do all the work, very generous. To do this we need to have access to other investors who can help fund our deals at all time. Otherwise we have to go with debt lenders who provide all the capital for 50% of the deal and none of my friends, or family benefit from the hard work that we do. I  LOVE making my friends RICH.

 

What about the stock market?-

How is the stock market different?

investing in the stock market, investors cannot enjoy the many tax benefits that real estate investments carry, such as depreciation and expense write-off. Don’t forget its highly volatile-canning one day to the next.

 

Keep this in mind if you’re looking at someone “newer” to the syndication game.

An early operator just starting out, can be a slam dunk investment.  The newer operators are eager to make you happy, provide overly favorable terms, and in many cases, take a loss on you just to simply get your business and referrals again!  Searching out a new player with the above due diligence can be a superior combination.

 

Returns-

We payout quarterly cash on cash after the first year value-add period is over.

If the project is a heavy value play we will usually refinance and distribute cash to shareholders.

Again on sale we will be distributing more checks. This is the big one.

 

So you can possibly make three returns- cash on cash, refinance cashout, and sale returns. 

In the past we have seen 9% cash on cash and 85-100% return on sale. 

 

If you’re interested in more information about upcoming multifamily investment projects and how we can serve you, email us at admin@theapartmentqueen.com

Or book a call with me calendy.com/Kaylee-6

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 forward-thinking strategies and investments.

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

 

our ideal investor is usually one of these individuals:

Ultimate passive investors-

WOMEN with

1031 exchange over 1 million-

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

Share:

More Posts

16 Ways To VALUE-ADD For DAYZZZ!

Today, on my mind is the value-add structure pending upon takeover of two multifamily apartment complexes we are closing on at the end of the

Send Us A Message

 

Posted on Leave a comment

4 ways to Help Your Residents Pay Rent 

 

Coronavirus has hit us pretty hard. And you may be a landlord, just like me. As a landlord, what’s your number one concern? It’s probably collecting rent, right? 

From the landlord side the moratoriums on evicting people who chose to not pay can be frustrating. 

From the tenant side of things, the idea of not paying rent may sound appealing. I’m in a unique situation because I chose to rent my home. This allows me flexibility and, in this case, it also helps me see this situation from both sides. 

From a renter standpoint, I felt exactly what everybody felt whenever the first opportunity to not pay your rent came about. I decided to pay my rent each month, even though I knew my landlord could not currently evict me, because I wanted to treat other people the way I’d like to be treated. 

Some renters may feel like this is an opportunity to “screw the man.” But most landlords are individuals. We (the landlords) are regular people just like you. 

To keep the property from foreclosing, we have to pay the mortgage, taxes, and insurance every single month. On our large multifamily properties, we also have to pay maintenance staff and front office staff. We have to keep the grounds safe, and also clean and sanitize the property. If something breaks we still need to pay people to fix it. 

I think a lot of people think landlords or investors are greedy. They’re wealthy billionaires who have tons of money and can afford to take a hit. So a rent strike or “screwing the man” may sound appealing. 

But you’re not fighting the man, you’re fighting your fellow entrepreneur. 

Owning apartments is a business. So, if we can’t get the rents that we need, we can’t pay the mortgage. We can’t pay the insurance, the taxes, etc. We also can’t keep the grounds clean and safe and keep people employed, which is one of our biggest concerns right now. 

We rely on your rent to ensure we don’t have to let anyone go. So, before you decide to skip out on your rent just because you can get away with it for now, think about all the other families and lives that are affected. If we have to get rid of some of our staff on property, they have families that they have to feed that they no longer can. So, you doing the right thing to pay for the roof over your head is also something that needs to be prioritized just like buying food is right now. 

For the Landlords 

You might be freaking out a little bit about people either threatening striking or people paying late because it’s just not the norm. Here are some solutions. 

If your tenant already contacted you and shared that they cannot pay due to COVID, it’s important to work with them. It’s always better to keep good tenants in your building. This situation is just as new to them as it is to you. Our policy is to always work with our tenants

If they are a good tenant, create a plan to work with them. We want people in our apartments who truly want to live there. 

Step 1: Increase communication with all of your residents. 

Be proactive and reach out to all of your residents. Let them know that you can work with them if they have a job loss due to COVID. 

For tenants in this situation we provided resources. Some of the things we provided in our apartments included: 

  • Information on how to apply for unemployment 
  • Information on SNAP in Texas, Supplemental Nutrition Assistance Program to help with buying food
  • Community resources like St. Vincent DePaul, places doing food pantries, and places helping with utility bills
  • Information on paycheck protection program and SBA loans for people who are self-employed, like contractors

Communicate to your tenants “if you have been affected, please come talk to us, we want to work with you.” Be clear that “we know you are good tenants.” 

Step 2: Contact your providers 

Contact your utility companies, phone carrier, etc. Ask if they are doing any credits. Most are also not charging late fees. 

Step 3: When they come to you it’s essential that you empathize with them. 

There are lots of solutions, but the first step is to put yourself in their shoes. Let them know you get it you understand, that you’ve lost a job before and understand the hardship. We get what they’re going through because all of us usually go through hardships when things change in the economy. It doesn’t affect just a small group of people, it affects everybody. 

It may be a scary time for them, they may be afraid of losing their home or losing the ability to pay for their children’s education, or pay for their vehicle. There’s a lot going through their mind. So, let them know that you understand and that you want to work with them. 

Step 4: Figure out what you can give for either rent concessions or ways of being creative. 

Some ideas are: 

  • Give a rent concession 
  • Be creative with pulling monies out of their deposit account to be able to help pay for rent 
  • Split up when rent is due so that it’s not all due at once
  • Waive fees related to credit card payments 
  • Accept late rent all month, with no late fees 
  • Offer a deferral plan. In the most extreme scenarios, you may want to offer a deferral plan. You could defer rents and charge them a very small amount to stay in the unit. Then after a certain amount of days (90, 180, etc.), the entire amount of what was owed is due. You may charge them a fee, in the meantime, because we are financing a portion of our property to this person to use it. When that period is over, the amount is due in full or you can agree to spread those payments out say a 4-month or 6-month period.

Because we signed a lease, rent is still due. Now again, there can be workout plans, we can accept funds late, we can do a discount, we can do all kinds of different things, but the point is rent is not going away. 

It’s your job to remind them of your business agreement together. If you feel like you need to explain it to somebody who wants to argue with you, share that you still have obligations on your end that you have to pay. Once you’ve empathized with your tenants, it’s important to then go back to “rent is still due.” Don’t allow them to roll over you. 

I hope that some of these ideas help you if you are a landlord. 

I hope if you’re a tenant you’re able to see that landlords are regular people who are not out to steal or screw you. But that they do have bills to pay to keep the property working and not repossessed by the bank. So, if you want to enjoy where you live, it’s important for everybody to work together and to try to see through each other’s eyes.

 

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.

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

 

our ideal investor is usually one of these individuals:

Ultimate passive investors-

WOMEN with

1031 exchange over 1 million-

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

Posted on 1 Comment

18 Apartment investing terms no one knows! Ask us! Pt.1

DCIM100MEDIADJI_0009.JPG

 

So We know that not everybody wants to ask us to explain certain terms that they hear us talk about in multifamily, but don’t understand. Based on a little feedback that we got We found some common terms that people don’t always understand in our industry. We thought We would do a little bit of ‘esplanin!

 

1-Accredited investor-

In the United States, to be considered an accredited investor, you have a net worth of at least $1,000,000, excluding the value of primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount in the future.

 

2-Sophisticated investors,

Based on the SEC’s definition, have enough knowledge and experience in business matters to evaluate the risks and merits of an investment. The SEC exempts small companies from registering certain securities sold to these investors. (Regulation D 506b we can have up to 35 of these individuals).

 

3-Gross rent multiplier-

GRM is a way of quickly valuing an asset based on gross rents or determining gross rents based on prices. GRM = Price / Gross Rents. Also can think of it as number of years it would take for gross rents to pay for property based on today’s purchase price. 

 

4-Ppm- private placement memorandum-this is the holy Grail of what risks you’re about to enter into for an investment. Ppm is used across the commercial real estate industry.l and other industries. Some commercial buildings, developments, apartment investments and more are using this set of documents to show investors what risks could be associated with their investment. A PPM is often seen in groups who are syndicating or pooling money together. This is usually in a syndication.

 

5-Cap rate- or capitalization rate is the ratio between net operating income produced by the asset and the original capital cost. Also known as the current market value. there is a going in cap rate and an exit cap rate. Entry cap rate is based the current performance of the asset (and should closely be related to market average of cap rates)  at the purchase. The exit cap rate is the adjusted cap rate when you will sell the property. This is often a controversial topic. Exit cap rate we always use higher cap rate numbers (we assume it is less stabilized at sale than purchase, showing asset performance in a recession or major problem when we MUST sell) to account for any performance issues in the economy. This is considered conservative to increase the exit cap rate from entry 75-200 basis points or less stable than when we bought it. The variance in basis point adjustment at sale heavily depends on that current market condition. But for an area like DFW- there is a level of stability and therefore less of a cap rate increase on sale. (You can get a higher price regardless).

 

Formula for this is: 

NOI/cap rate=market value or sales price 

 

6-Basis points-one hundredth of one percent (50 basis points =.50 rate point adjustment)

 

7-Debt Yield-

One of the most important risk metrics in multifamily loans.I didn’t know what debt yield was till I did bridge loans and how it goes into factoring risk for the lender. It is the NOI/ total loan amount. Lenders use this to determine how long it would take them to recoup their investment if it had to go back to the bank. Many lenders require a minimum debt yield in order to approve a loan, so it’s possible to calculate the maximum loan amount, as long as you know the annual income of a property. They want to see a five going in and higher than 8 after stabilized. 

 

8/9-CAPEX (CAPITAL EXPENDITURES) 

VERSUS MAINTENANCE? What’s the difference?

 

CAPITAL EXPENDITURES ARE MEANT FOR IMPROVING THE VALUE OF THE ASSET AND ARE BELOW THE LINE  EXPENSES IN YOUR PROFIT AND LOSS STATEMENT. MEANING CAPEX IS DEDUCTIBLE FROM YOUR TAXES DIFFERENTLY THAN MAINTENANCE COST.. IT GENERALLY IS RECOVERED THROUGH DEPRECIATION..MAINTENANCE IS A REGULAR SCHEDULED COST OF MAINTAINING THE ASSET IN THEIR ORIGINAL CONDITION-LIKE FILTERS, LIGHTBULBS, TOILET REPAIRS, ETC.. WE BUDGET MAINT COST AS AN AVERAGE PER UNIT WHERE CAPEX IS BASED ON LARGE RENOVATION PROJECTS PLANNED FOR IN DETAIL/IN BUSINESS PLAN.

 

10-Bridge loans-Bridge loans bridge the gap between the time when the Multifamily owner gets the loan for the property and does what they want to do with the property. Super. Ague I know. Many uses. Multifamily and commercial real estate bridge loan terms are typically 3 months -3 years. It’s best to use when all cash is not an option. Because it requires a far less rigorous analysis for the loan the closing time period Is much shorter. there’s a trade off here as interest rates or sometimes double or triple what a conventional loan would be. Bridge loans can be used for substantial rehab of a multi family property and then financed into conventional Multifamily financing.

 

11-Skin in the game-

How much of the sponsors money is in the deal.

 

12-LIHTC

LIHTC (Low-Income Housing Tax Credits) – we do not do rent control like this 

 

13-CMBS –

Commercial mortgage back security. The loan is pooled with other loans then sold off to investors for a return. These are also known as conduit loans, These are long term nonrecourse loans however they come with a hefty prepayment penalty named yield maintenance and defeasance in our industry. This is to protect the return that the pooled investors expect.

 

14-Subscription agreement-

It’s the contract investors get before investing which is an agreement that the investor understands the PPM and has read it fully, they understand what they are purchasing, how they would like to receive payment of distributions and profits, they agree to purchase and tinder purchase money with the subscription agreement (wire funds within a certain timeframe).

 

15-Investor suitability-

One of the forms filled out before investment in a private placement. This form is a self-certification Of whether the investor is sophisticated, accredited or neither. this must be filled out prior to investment, and prior to any wiring of money. It is required by the SEC.

 

16-Cost segregation- 

In the USA tax laws/accounting rules this is the process of removing personal property assets from real property assets. It’s used as a strategic tax planning tool Which allows companies or individuals who have purchased, rehabbed, remodeled, expanded any kind of real estate to improve cashflow by accelerating depreciation deductions and deferring state and federal income taxes. 

 

17-Bonus depreciation-

A business Incentive that allows for A business to immediately deduct a large portion if not close to 100% of its Purchase price of eligible assets in the first year of purchase. This came from the tax cuts and jobs act. It’s known as the additional first year depreciation deduction.

 

18-IRR-

The return term internal refers to the fact that the calculation excludes external factors, such as inflation, the cost of money/capital, and other financial risks.

In simple terms it is The interest rate at which the net present value of all cash flows, including positive and negative, equal zero.

The initial cost of the project is used and estimates of the future cash flows to figure out the interest rate. 

We use a computer- but you can figure out internal rate of return through trial and error — plug different interest rates into Your formulas until you figure out which interest rate delivers an NPV closest to zero. 

Really a project with positive NPV will also have IRR that exceeds the cost of capital. AKA thumbs up.

The rule-business’ should not accept projects with IRR that exceeds the cost of capital.

Posted on Leave a comment

16 Ways to VALUE-ADD for DAYZZZ!

Today, on my mind is the value-add structure pending upon takeover of two multifamily apartment complexes we are closing on at the end of the month.

I’m so ready to go!

Value-add is the way we force appreciation on our apartment complexes. This can be accomplished by designating a period of time and using the cash flow along with the money we have built into the renovation budget to make value-add improvements. This “forces appreciation” because the property’s value increases way faster than just holding onto the property for a long time and letting the gradual increase in rents and land value appreciate.

We can calculate the increased value of the property caused by forced appreciation by using this formula:

NOI (Net Operating Income) is the total income minus ALL expenses. Debt services are not included as an expense in the NOI.

Cap rate is short for Capitalization rate. This is the yield of a property over a one-year time frame assuming the property is purchased in cash and not with a loan (unlevered rate of return).

You can directly see the impact that adding a certain renovation has on the overall value of a property (sales price). For example, if you increased net rents by $10 per month per unit on a 50-unit complex at a compressed cap rate (once stabilization has occurred) of 8% that would add $75,000 in value to the sales price in just one year. Isn’t that CRAZY AMAZEBALLZ AWESOME!?!?!

Imagine finding a complex 15% below market rents…think of the potential!

Now on to the kickass nature of this post. I’m going to give you a list of some of the things you can do upon takeover of a multifamily asset to force appreciate it in the first few years.

1 – Utilities – for apartments that are master metered, you can elect to submeter the utilities (electricity, water, etc.)and make tenants responsible for their own utilities or you can utilize RUBS (Ratio Utility Bill Back) which takes the current utilities the complex is paying and reassigning them back to tenants. Either of these reduces expenses and increases NOI.

2 – Application fees – credit check fees and background check fees (e.g. $35)

3 – Late fees and bounced check fees

4 – Pet fees including pet deposits and pet rent

5 – Parking fees

6 – Cable TV, price shop for lower rate

7 – Facilities fees such as renting clubhouses, cabanas, pavilions, etc.

8 – Laundry services – a company can take care of maintaining, servicing, and bringing in equipment, and they provide 20% of the income

9 – Water-efficient products such as low-flow toilets, faucet aerators, shower heads; these can be installed in every unit for under $100 total and will save at least 1/10 of the water bill for the entire complex

10 – Curb appeal and exterior renovations – although this will not directly translate into dollars, it will provide more traffic which can result in higher occupancy levels and less money spent on advertising. The nicer it feels to residents, the more security you add, the better everyone feels about where they live, and the longer they are going to stay. This helps with vacancy and translates to more money in your pocket.

11 – Unit upgrades – here’s where you can really charge more per unit ($50-$100 per unit after renovations depending on your market)

12 – Office Upgrades – you always want to upgrade the office to one class nicer than the complex itself. This is the first thing people see when they come in and will be a big sell if it’s comfortable, homey, and has something like hot chocolate chip cookies!

13 – Wasted space – if you see some unused space you better bet your ass you can add a ton to the value for sale by adding more units

14 – Amenities – depending on the class of apartment, amenities such as a gym, clubhouse, playground, benches, BBQ grills, chairs for the pool, etc. really are a must for class A properties. Depending on the complex’s existing needs, neighborhood type, tenant mix, and similar factors, adding a couple well thought out amenities could increase income.

15 – Economic loss/ vacancy – you lose major money when there is vacancy but another way you lose income is through economic vacancy or loss to lease. This includes tenant non-payment. This is something that should be checked monthly upon take over, then quarterly after your renovation period is finished. If people aren’t paying, you need to check with your property manager about how he/she is vetting new tenants. The 3:1 income requirement must be proven by current pay stubs, and they must have good credit. If they don’t have great credit, you can still work with them, by charging an additional month’s rent in the event that they don’t pay for a month. The way my current property manager works is that if there is a missing payment by the third of the month late fees rack up and the tenant gets notice that we will be evicting them by the 15th. Then we have 15 days to place a new tenant with our ads, and rent is covered for that period.

16 – Using one internet company and/or energy broker – they can add additional income to the complex.

These are just some of the ideas I use but as things change, I find more solutions to making more money by adding value to apartments.

If you would like to be involved with learning hands-on or hands off how this works, contact me today. I would be happy to form a limited partnership with you!

Or Get qualified now for our next investment by clicking here:

If you want to learn about future investments or if you to partner on a project, book a call with me using the following link:

https://calendly.com/kaylee-6/15min

Posted on Leave a comment

TAOS

It’s time to let go.

It’s time to stay off my phone.

Everything has been delegated.

I expect reports to be completed today and presented to me Monday. If they are not, it’s time to talk (a verbal warning), next step is a written warning, and the last resort/third step is a termination meeting.

I realize in work and honestly every interaction, it’s so important to have set clear expectations. It’s a pain in the ASS to have to type these things up but no one can read your mind, so you have to be clear.

In work, being able to be RADICALLY TRANSPARENT AND RADICALLY TRUTHFUL are two of the most important things to possess. The goal is to get everyone involved to a place where they can share what they really THINK AND ALLOW THOUGHTFUL DISAGREEMENTS. Having everyone discover/use their strongest skill, and focus on developing their strengths, not weakness’ is key.

Then, having everyone stay in their lane is so important. We do not need multiple people doing the same job or micromanaging each other. If someone is having challenges in their role, they have the ability to reach out to the team for help any time.

In addition, it’s essential that everyone involved know your mission, vision, values/core beliefs/culture. If everyone on board wants to be there because their core beliefs align that is a good place to start. It’s my responsibility to constantly remind everyone of what these are. And remind us all that if our actions are not in alignment with these then it’s probably not a good place/ not going to make the persona involved very happy.

Here are The Apartment Queen’s mission, vision, and values:

The mission – stop abuse and codependent relationships by providing convenient education to women about how to create wealth through real estate investing. This will create financial, mindset and other freedoms ultimately leading individuals to find and live their why and purpose in life.

The vision – We WILL change the world and create financial independence for more than 1 BILLION women

Our core beliefs/values/culture –

• We run our business using principles, asking questions and never assuming.

• Teammates make decisions with open constructive communication.

• We value strong, good, and positive statements, while focusing on building our strengths.

• Emotions are good, but must be used in the right time and place.

• We are grateful for everyone and everything we have.

• Ethics are key.

• We want to help put people in the right direction, when we are able.

• We’re always honest with RADICAL TRANSPARENCY and RADICAL OPEN-MINDNESS.

• We keep our word, while under promising and over delivering results.

• Compliments are constant, treating others how we want to be treated.

• We stand up to all bullies.

• We put families first.

• We always ask for help-shit happens

• MENTAL HEALTH IS A PRIORITY, physical health is a priority, and we celebrate all wins.

• We want to know and nurture each employee’s personal financial and business goals.

• We want employees to regularly share good news, what they love/loathe in their role, where they are stuck, new ideas, fears, concerns, opportunities, decisions, and feedback from customers/employees.

Alignment here is key.

This is a deep dive into my personal principals and business principles which are being added to as we speak. If you’re not clear on what you want you will never have it! Focus on having a clear picture to where you can describe what you want to others and they go away if they can’t give it to you on their own! Very powerful stuff.

If you are in alignment with us/me please click the link below to set up a call. We would love to have your assistance in building this empire we envision and help you to grow your wealth in the process. We are truly motivated to make a large impact. And it will happen quicker together!

https://calendly.com/kaylee-6/15min