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What to Consider when Buying a Single or Multifamily Investment!

Many first time investors have the idea that their first investment should be a single family home due to the cost of entry and ease of management, however, this may not always be the best path to go down. One of the main issues that you have to consider is the fact that if the single family homes goes vacant you will have to cover the entire mortgage until you find a new renter, now if you have a duplex, triplex or fourplex that mortgage will be spread out across more units giving you some cash flow to help with the mortgage. Another reason the first time investors tend to like the single family homes is that you can put a lot less down then you can on a commercial loan and the residential loan can be amortized out over the life of the loan. Residential loans can be on properties that have 4 units or less and can be acquired with as little 5% down, however, commercial loans are on 5 units or more will require at least 25% down and you will need to show a business plan plus as well as management experience and cash flow. When shopping for a commercial loan, be prepared to answer a lot of background questions regarding the property. Some of these questions include: Who pays the utilities? What types of maintenance are required? Numerous questions regarding cash flow will also be asked. Commercial mortgage borrowers should be prepared to provide proof ......
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Top 5 Ways To Increase The Revenue On Your Rental Properties

1. Increase Occupancy (Smartly) Each month you have a vacant unit sitting you lose about 8.3% of the potential yearly revenue from that unit, which means that every month it sets vacant it starts to add up quickly. As soon as you find out that you will be having a vacant unit you need to do a market survey to confirm the current market rate on your unit. Have your lead maintenance person that does your final walkthrough prepare the list of repairs/maintenance issues (if any) as they do the walk through so they can order the needed material that day and they can be prepared to start the turn of the unit as soon as it becomes vacant. Once the unit is vacant begin placing your ads so that as soon as the crew has the unit ready for market you can show the unit immediately. Make sure your market survey is current allowing you to set the best price for your available units and know the specials (if any) that are working the best in your area, if you need to fill several units consider running an aggressive special to get your units filled but be sure you don’t give money away that you don’t need to. Always offer your residents a referral for bringing someone.   Most importantly listen to the market, if you are not getting interest in the unit, you may need to lower the price.   2. Raise Rents Smartly Know your market rents, know how you......
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Tips to Help Make Your Investment Property More Carbon Neutral

Did you know that almost forty percent of global emissions are attributed to some sort of real estate? There is a big push to get investment properties more carbon neutral and many tenants are requesting that the landlords start the process and get programs in place. To start making their properties more carbon neutral, we wanted to help create a few tips to get you on your way.  Even cities are getting in on the act, with some requiring new construction buildings to be carbon neutral within the next decade. 1)      Start with getting your LEED Certification – a popular green building certification 2)      Create incentives for your tenants to get involved:  incentives for decreasing energy consumption and create a recycling program 3)      Buy efficient A/C and heating systems, even a smart thermostat can reduce energy consumption 4)      Buy window coverings that operate efficiently 5)      Create on-site renewable energy via solar panels 6)      Post the building performance for example, state that your building utilizes thirty percent less energy than the average office building. Studies show that tenants prefer buildings that are greener and are willing to pay a little more in rent 7)      Encourage your tenants to walk or bike to work and utilize the steps. Install bike racks and work with the area metro lines. 8)      Show the tenants the results of their efforts - send an annual report showing how their usage declined 9)      Consider holding a competition for the company/resident that lowers their usage the most 10)   Communicate r......
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Are Environmental Investigations Always Necessary When Buying a Property?

The short answer is no, the federal regulations do not obligate property buyers to conduct environmental investigations or in more correct terms, to perform a Phase I Environmental Site Assessment (ESA) in every case that there is a commercial real estate transaction. However, there’s more to this than a simple yes or no answer, which is why we will have to go deeper into this important topic. What Are Environmental Investigations or Environmental Site Assessments? A Phase I ESA is a report made for real estate that suspects potential for existing environmental contamination liabilities. These assessments are performed on both the land and the improvements made upon it. In most cases, these assessments are there to mitigate the environmental concern any side has when a real estate transaction is involved. The fear may be from the seller, the buyer, or even the bank. In rare cases, a Phase I ESA report will find problems that will create cause for another study – Phase II ESA that looks to perform chemical analysis of any hazardous substances that were found in Phase I. As these cases are rare, we are here to look only at Phase I ESA. When Are Phase I ESAs performed? As we previously mentioned, Phase I ESA is performed when there’s worry that an environmental risk might exist in connection to the property. Let’s take a look at the reasons which prompt the initiation of Phase I ESA: If any hazardous material such as gasoline, heating oil, fuel, etc. has or ......
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Are Environmental Investigations Always Necessary When Buying a Property?

The short answer is no, the federal regulations do not obligate property buyers to conduct environmental investigations or in more correct terms, to perform a Phase I Environmental Site Assessment (ESA) in every case that there is a commercial real estate transaction. However, there’s more to this than a simple yes or no answer, which is why we will have to go deeper into this important topic. What Are Environmental Investigations or Environmental Site Assessments? A Phase I ESA is a report made for real estate that suspects potential for existing environmental contamination liabilities. These assessments are performed on both the land and the improvements made upon it. In most cases, these assessments are there to mitigate the environmental concern any side has when a real estate transaction is involved. The fear may be from the seller, the buyer, or even the bank. In rare cases, a Phase I ESA report will find problems that will create cause for another study – Phase II ESA that looks to perform chemical analysis of any hazardous substances that were found in Phase I. As these cases are rare, we are here to look only at Phase I ESA. When Are Phase I ESAs performed? As we previously mentioned, Phase I ESA is performed when there’s worry that an environmental risk might exist in connection to the property. Let’s take a look at the reasons which prompt the initiation of Phase I ESA: If any hazardous material such as gasoline, heating oil, fuel, etc. has or ......
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Should You Invest in an Opportunity Zone?

Let’s start by defining what an opportunity zone is -   Opportunity Zones are census tracts generally composed of economically distressed communities that qualify for the Opportunity Zone program, according to criteria outlined in 2017’s Tax Cuts and Jobs Act.    These zones were designed to promote economic development by providing tax benefits for investors. Up to 25% of low-income neighborhoods that meet the income qualifications of the program (and up to 5% of non-low income tracts that meet other income and geographic requirements) in each state, district, or territory can be designated as Opportunity Zones. In states, territories, and districts with fewer than 100 census tracts, up to 25 census tracts can be designated as Opportunity Zones. Areas certified as Opportunity Zones retain their designation for ten years. Essentially, an Opportunity Zone works as follows:  A provision of the Tax Cuts and Jobs Act of 2017 allows investors to enjoy preferential tax treatment when investing in economically-distressed communities. The opportunity zone program allows individuals and businesses to liquidate a wide variety of appreciated capital assets and to reinvest all or a portion of the gain into qualified opportunity funds within 180 days of triggering the gain. “The gain can then be deferred up until Dec. 31, 2026.” This investment will also allow for deferring capital gains tax during the investment period as well as excluding some of the deferred gain depending on how long the investment is held.  Essentially, there is a 10% exclusion of the deferred gain if the Qualifi......
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5 Inexpensive Makeover Tips to Put Your Leasing Space on Top of the List

image9.jpgHaving property is a good way of having an excellent income for the long-run, but sometimes that same leasing space won’t get you much unless you renovate from time to time. Properties that don’t receive a makeover regularly will be less attractive and will be more difficult to lease, and you’ll thus lose money. You can avoid this by doing some renovations or making changes that will cause the space to become more desirable. However, this can be quite costly, which is why we have prepared a list of tips for you to avoid unnecessary costs, and manage to make some effective makeovers for very little money. Clean Everything Cleaning is always the best way to make anything look good and appealing. Besides, it’s probably the cheapest option as well. You can easily do it yourself, or hire someone at a small expense. What you must remember though is that cleaning both the interior and exterior is essential – all of it together will have a significant effect on the desirability of your property. Give it a Paint Job A simple paint job is always a necessary makeover if you want your leasing space to be at the top of the list. It’s inexpensive and easy as the previous tip, and it’s sometimes enough to merely paint the areas that look bad and the areas where people will spend most of their time. Don’t forget the front door as that’s the first thing most people will see before entering the place. Improve the......
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Pros and Cons of Leasing a Fully Furnished Flat

Property owners usually face a dilemma – to lease a fully furnished suite or an unfurnished one? Which one is better? There’s no easy answer here. We’ve found that it’s best to consider the merits of one of the two – the fully furnished one. It’s always best to decide whether something is good or not by making a list of its good and bad sides. We will give you all the pros and cons of leasing a fully furnished residence, so you can get a clearer picture and decide if that’s the way you should go. The Price Some might think that the price is a negative for fully furnished apartments – as it’s expensive to equip an entire rental for your tenants. However, they are not looking at the bigger picture: fully furnished rooms will yield a higher rent making it a better long-term investment. Naturally, the price will differ from city to city, but the overall picture is clear – fully furnished always bring higher rent. Changing Tenants More Often Furnished units are usually rented by people who are only looking to stay somewhere temporarily. It usually means that your tenant turnover will be high. However, this is not necessarily the case. Some people are looking for long-term furnished rentals. Although, changing your tenants often is good for some landlords, as they get the chance to make upgrades to modify the price before getting a new tenant. Higher Deposits It depends on the state, but based on whether or not an apartment......
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7 Common Code Violations that You Don't Want to Overlook

Maintaining your building can be difficult to say the least, here are 7 common items that are usually overlooked but can usually, be fixed in minutes. These tips may seem easy but they get overlooked often. 1) Missing & Broken Smoke Alarms and Carbon Monoxide Detectors - Every bedroom in the home is required to have a hard-wired smoke alarm in the room, and in the hallway outside of all sleeping areas.  Many municipalities also now require carbon monoxide detectors.  You not only need to make sure your smoke alarms are installed correctly, but also that they’re working properly.  One of the most common issues are dead batteries. New smoke and carbon monoxide detectors are tamper proof and come with a 10-year battery. 2) Hazardous Windows - Some homeowners look at windows as an added bonus, but fail to consider their condition, location, and type of glass. Your first order-of-business should be to replace windows near stairs and in bathrooms with tempered or safety-glazed glass. In fact, building codes require safety glass in new homes with windows that are near stairs and doorways, in showers, or pretty much any place where someone could slip and fall into the glass. Experts recommend that any single-pane windows be traded in for double-pane versions. Here are a few additional questions and tips to keep in mind. a) Do the frames have wind load labels?b) Is the glazing double or triple glazed to provide insulation and to resist impact? c) Are there visible fasteners to a......
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Should Your Apartment Community Get Involved with Local Crime Watch or Neighborhood Watch Programs?

I am a big believer in being involved with your local crime watch or neighborhood watch programs. I’ve seen firsthand how it has positively impacted investments with apartment communities that we’re involved with. Here are just a few reasons to get involved: Deters criminal activity Many of the attendees will communicate issues they are having in their community, some of which may not have been reported or available in any other form, and that will in turn allow you to keep an eye out for such activity. Creates a greater sense of security If your residents know you have their interest in mind they will tend to feel more like it’s also their community and a great place to call home.  Many crime watch or neighborhood watch programs have flyers and stickers that you can place in your office, or on the building that shows you are an active member. Builds bonds with neighbors. People look out for one another. When your residents know you are taking steps to improve the community, other residents will also do their part to help.  A program gives them an opportunity to voice their concerns and to be heard. Stimulates neighborhood awareness Your residents become more aware of what’s happening in your community and will usually “step up” and help keep you informed. Reduces the risk of becoming a crime victim and in turn reduces the physical, financial and psychological costs of crime Helps to create awareness, and potential criminals may avoid your community if they know y......
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