Securing the debt financing to purchase investment real estate has been fairly easy over the last decade as we have been in a long period of plentiful capital and historically low interest rates. It seems you could find lenders in every direction, ready to lend on a good investment property but as recently as a year ago, we started to see a shift. Interest rates had been climbing for a year or so, and newer, inexperienced investors started defaulting. The credit markets and private capital providers alike started pumping the breaks. So how do we as RE Investors, secure the debt financing to invest in today’s environment?

First, you have to start with a “good deal”. You would be shocked at the number of times, potential borrowers fill out an application for a loan on a property that has no chance at profitability. If you are a newer investor, educate yourself on what makes a deal a “Good Deal”. Attend your local REIA meetups, shadow a successful investor, JV with someone more experienced, hire a coach to teach you. Don’t just grab a contract and assume it will be profitable for you. When you present a “bad deal” to a potential lender, you immediately lose credibility. Let’s face it. No one wants their money to be used on your practice.

Next, you need to have your ducks in a row. What I mean by that is, you need to have the project planned out and your personal and business finances in order. Look, I was broke when I sta ... Read More…

What would happen if you were to step away from your business thoroughly?

If that question just gave you the chills, then I have a few more for you: 

• Do you feel your business owns you instead of you owning the business? 
• Do you see poor communication in your team? 
• Do you feel compelled to be involved in every business-related decision? 
• Do you have a problem getting the results you desire from your staff?
• Are you an entrepreneur looking to scale your business but don’t know how you’ll manage any more than you’re already doing? 

I was once told (while struggling with some of these questions myself) that your business is not measured by its success when you are there but by its success when you’re not there. 

It’s true. However, many real estate investors run businesses that cannot operate without them or, more likely, that they cannot release to run without them.  

Every business needs structure and organization, which grows as the company grows. 

For your company to grow, you must add more people to your structure. These people depend on your business for their livelihood, as will you. Think about it:  

When you first started, the entire burden was on you. You were the system. That is not a realistic growth model, however. Your business needs pro ... Read More…

Real estate investment, whether in residential or commercial properties, is a multifaceted endeavor that demands careful planning, strategic foresight, and a keen understanding of market dynamics. Among the myriad of professionals that investors may engage, architects play a crucial role in ensuring the success and profitability of these investments. This article elucidates when and why real estate investors should consider architectural services, highlighting their benefits and the scenarios in which their expertise becomes indispensable.

1. Property Acquisition and Due Diligence

Before acquiring a property, investors must conduct thorough due diligence to assess its potential and feasibility. Architects can provide invaluable insights during this phase by evaluating the structural integrity of existing buildings, identifying design flaws, and estimating the cost of necessary renovations or upgrades. Their assessment can reveal potential issues that might not be apparent to the untrained eye, such as compliance with zoning laws, building codes, and accessibility standards.

2. Maximizing Space and Functionality

In both residential and commercial properties, efficient use of space is paramount. Architects excel at optimizing floor plans to enhance functionality and aesthetic appeal. For residential investments, this might involve redesigning interiors to create open-concept living areas, adding extensions, or converting basements and attics into livable spaces. In comm ... Read More…

Many investors like buying rental properties to make passive income. Passive income is money you earn without having to work for it every day. Owning rental homes or apartments means you can collect rent payments each month without doing much active work.

Take the story of Jim and Cindy, for example. A few years ago, Jim inherited a small two-family home from his grandparents. At first, they weren't sure what to do with it. But after fixing it up, they decided to rent out both units. To their surprise, the rent covered the mortgage payments with some left over. They had stumbled into passive income!

Motivated by this experience, Jim and Cindy used their savings to purchase another rental property a year later. As the properties started building equity over time, they began exploring ways to diversify their investments and revenue streams.

If you already own a few rental properties like Jim and Cindy, you wonder - should I buy more properties, or try making passive income in other ways too? There are several options to consider beyond just more real estate.

Buying more rental properties has advantages. You already understand how it works. The more properties you have, the cheaper it can be per property for things like repairs and property managers. Real estate also tends to go up in value over time, protecting you from inflation. 

However, it's usually smart to "diversify" your investments across different asset classes, too. That way, in times when real estate doe ... Read More…

The other day I saw one of those so called “cutsey” commercials where the narrator talked about the dread of the “Monday morning blues” and 5 more days till the weekend. 

I hate those commercials as it always seemed to me that some ad agency is implying that the majority of the American people hate their jobs. 

To me that is such a sad state of affairs, to spend a good part of your life doing something you hate. I always spoke to my kids when they were young about what were their interests and  what do they really have a passion for. And then the conversation would be, how and what they needed to do to be able to do to end up doing what they love. Hopefully most Americans at the very least like their jobs. 

I sincerely hope you like what you do, as well as like the people you work with. After all a good part of your life is spent working so you might as well enjoy it.

But if you are one of those 5/7ths people, who live for the weekend, and yearn for something better, something you enjoy and can start doing part time, real estate investing may be for you. 

There is no business quite like real estate investing. You can control large amounts of property with small amounts of cash and safely leverage your way to real wealth and prosperity. 

But you need to do it the right way. Educating yourself as to the proper way to structure deals that benefit you and the other parties involved is of vital importance. Also learning how to manage and renovate properties is also of the ut ... Read More…

"It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something." - Franklin D Roosevelt

If you measure your key metrics you can manage the performance of your business, AND you can see problems well in advance of when they might show up in revenue or profit figures.

Each and every business has key performance metrics [Key Performance Indicators (KPI's)], some of which are common to other businesses, some are industry-specific, and some companies create their own KPI's.

These sort of things are our bread and butter, when working with small businesses tax pro.

Do you need help?

Financial metrics are often common to all businesses. Some examples include:
* Average transaction value.
* Gross profit margin.
* A measurement of a company's efficiency during the production process.
* How much is left over after COGS.
* Gross Profit divided by Total Revenue.
* Net profit percentage.
* The amount of profit for every $1 of revenue generated.
* Net Profit divided by Total Revenue multiplied by 100.
* Debtor days or receivable turn days.
* How long your customers take to pay you. (The sooner your customers pay, the sooner you can get that cash working for you.)
* 365 (days in the year) divided by (Sales on credit or invoice divided by Average Accounts Receivable).

More industry-specific KPI's might include:
* Table turns per night.
The number of times a restaurant is able to sit customers at a table.
* Utilization.
The number of hour ... Read More…

 John Wires and James Gregg chat with Dave Green from Accurate Title in Episode 004 of the MAREI PartnerCast. Covering a ton of issues that Real Estate Investors: Title, Liens, Foreclosure Sales, Tax, Sales, Title Insurance, Virtual Closings, Online Earnest Money and More. Did you enjoy our PartnerCast? Be sure to give us a like and to make sure you don't miss a future PartnerCast, subscribe to our Channel.

 John Wires and James Gregg chat with Kevin Woltkamp with Oasis Construction and Design in Episode 3 of the MAREI PartnerCast. What's happening in the contractor world right now and a look at the contractor's perspective when it comes to working with real estate investors plus some great tips on best practices for working with your contractor and developing a scope of work. Did you enjoy our PartnerCast? Be sure to give us a like and to make sure you don't miss a future PartnerCast, subscribe to our Channel.

If you’ve tried to buy a house during this time, you may be surprised at how quickly viable homes are being snatched up. Despite the pandemic, housing demand continues to rise. Some experts indicate it is 25% above pre-pandemic levels.

Homes are selling at higher prices in part due to new listings being down by an average of approximately 27.1% from a year ago, as Zillow reported. The following chart shows the decreased percentage of listings for key cities in each state. With more buyers than sellers, this low inventory has obviously maintained an optimal seller’s market.

While the quantity of stock is lower than last year, there are different predictions for how the second half of 2020 will pan out as well as the beginning of 2021. For buyers, there may still be heavy competition for a home, but the upside is the low mortgage rates that are likely to remain. For sellers, the low stock should continue to create low competition, setting the homeowner up for a higher likelihood of finding the right buyer. Throughout this selling season, and in the foreseeable future, people are adapting to key methods like 3D home tours, video vignettes and better photography. Taking advantage of those tools can help make the process successful.

Having a network like FFREIA on your side during an unpredictable market is important. Not only will you have educational resources available, but it connects you to the experts needed for every step of your real estate investing journey.

Make ... Read More…

"A man should always consider how much he has more than he wants." -Joseph Addison 

The financial picture for the various states in our nation is a mishmash of various revenue sources (and expenses). 

Unlike, say, the federal government, the states cannot print money. So, they are forced to go hunting for it. And they get it from a few primary sources: sales tax (based on purchases/consumption), income tax (individual and business taxes based on income), property tax and "other" taxes like the tax on fishing licenses, driver's licenses and a lot of other smaller items.  

And the most volatile -- and COVID-affected -- of these sources is ye olde income tax. Sales tax has obviously taken a hit as well (but people still need to buy stuff) and property taxes, well ... more about that next week. 

So which states will be hunting for more revenue? This article will give you a good picture -- it's a breakdown for which states are the most reliant upon income tax revenue: 

https://taxfoundation.org/state-individual-income-tax-reliance-2020/ 

Oregon and Maryland stand out (especially Oregon, which has no sales tax) -- but MANY states will be on the hunt for that sweet, sweet green. 

You are your state's "economic stimulus plan". Make no mistake ... the next couple years will find MOST states finding ways to grab revenue from you. 

This will take the form of increased property taxes (which you can fight), increased scrutiny of business operations that cross state lines (for ... Read More…