Multi-Family

Buy And Flip

February 19, 2020 by Team RE Mentor Leave a Comment

When you're starting out, you have very little time and less money.

One option, therefore, is to flip your deal for a quick profit.

When I say flip, I mean you put a property under contract, close on it, and immediately sell it to another party to realize your profits.

To flip a property, you must be buying the property under market value and you then resell it at market value to another investor.

Why would people sell a property to you below the market value?

There are many reasons:

Inherited a property they do not want
Foreclosure
Bankruptcy
Burnt Out Landlord
Profits falling
Estate sale
Trading up to bigger property
Retirement
Need cash flow
IRS tax debt

People sell below market value for these reasons and more. As you can understand by now, I want systems in place to attract these motivated sellers continuously. I discuss those systems in more detail in these videos.

Let's say you find a motivated seller of a three-family property. It's worth $375,000 but the seller needs to get out quickly and just wants what's owed on the mortgage.

(It happens.)

The mortgage amount is $311,000. You agree to purchase the property for $311,000.

You could make your profit on this property in two ways:

You could assign the property to another investor and get an assignment fee, or
You could close on the property and immediately put it back on the market to resell.

The RE Mentor Team has been successfully investing in Multi-Family Real Estate for over 22 years. Some of our experienced investors have bought, sold and/or holds over 8,000 units. RE Mentor has been teaching this system for anyone who wants to discover it's secrets to create lasting cash flow and wealth, for the last fourteen years.

Head over here and start your training immediately!

3 Ways To Determine The Value Of An Apartment Building

December 6, 2019 by Team RE Mentor 1 Comment

There are three ways to determine the value of an apartment building:

Replacement Cost Approach
Sales Comparison Approach
Income Approach

Replacement Cost Approach

The Replacement Cost Approach determines value by calculating how much it would cost to replace an existing structure. This approach is very time consuming to complete as you must obtain pricing for all materials (from 2×4’s to outlet covers) used in the construction of a property and then calculate replacement cost. Because of this, it is very rarely used.

Sales Comparison Approach

For single-family houses and 2 – 6 unit apartment buildings, the most common approach to determining value is the Sales Comparison Approach. This approach compares similar properties that have sold within the last six months, within a certain geographical radius from the subject property (usually no more than two miles, the closer the better) to determine value.

If you’re buying a 3-family apartment and a similar one on the next block oversold for $220,000, then your property will be valued around that area.

The Income Approach

For six units and more, you would use the Income Approac h to determine the value of the property. This means that you would determine how much income the property is generating and determine its value based on that number.

There are several formulas that investors use to determine value, though one is more prevalent than others; that is the Cap Rate.

You’ll hear people talk about the “Cap Rate.” It’s what most investors use when comparing one property to another.

The Capitalization Rate is the rate at which the Net Operating Income (the income that is left over after all the expenses are taken out) repays the purchase price on an annual basis. Sounds technical, doesn’t it? Don’t let it scare you.

Cap Rate = Net Operating Income/Value (selling price)

Success Is Like Planting Corn

July 17, 2019 by Team RE Mentor Leave a Comment

If you want to be successful in any endeavor, follow the lead of the Mayans. Learn the

laws of success in your “field” whether it’s a cornfield, or the outfield. Then follow

them diligently. Don’t just sit back and wish for success. That’s like waiting to win the

lottery. Enter it if you want to, but never count on it. That’s the chance world

approach. If you live with unearned wealth as you goal in life, you’ll end up with only

dreams in the bank.

How much corn do you think the Mayans would have grown each year if they had

depended on luck to give them a crop? Probably not much, and in those days, the

price of failure was your head, literally. Napoleon said luck was the ability to exploit

accidents. Very few people become successful accidentally. Try to think of one you

know right now. Can’t, huh? That should be no surprise.

You must understand that every success is governed by a set of recognized success

principles, not by chance or luck or the stars that were shining when you were born.

Master the laws that apply to the area you want to succeed in, and you never have to

depend on luck.

Failure Has Laws, Too

Even in failure people are totally predictable. The laws of failure are just as immutable

as the laws of success, and unfortunately, just as powerful. If your goal is failure, you

can discover the laws and follow them to reach that objective. It’s far more likely,

though, that you’re living those laws by default because it’s easier than working

toward success.

Success is a science and an art. Everybody has to develop their own style of attaining

it. You can’t buy it, you can’t inherit it and you can’t steal it. It knows no divine right.

Success is “non transferable.” It can only be acquired by the personal mastery of its

rules by each person individually. And most important of all, it can never be acquired

by wishing and hoping. Wishing and hoping are the currency of fools, and the first

laws of failure.

Success Is Predictable Through Education

Human nature is very complex, but in many ways very predictable. People who let

chance pervade their lives can never make predictions about the most important thing

in their lives—their own future. They just go along and hope for the best, and often

their best is another failure in a long line of failures. Life does not have to be that

way.

People go to school for years to study medicine so they can be healthy, both physically

and mentally. They study science to find out what makes the world work. They study

history to learn from the mistakes of the past. And some study religion to gain

spiritual health. Is it so difficult, then, to understand that studying success is just like

studying anything else? Having a faculty of coaches who are experts in different niches of real estate is a significant competitive advantage to growing your business.

But people get in a rut. It’s easy to do. There are lots of places where ruts block the

road to success. And if you’re not careful, that rut in front of you can turn into a grave

with openings at each end. Education is the key to avoiding those ruts. With

education, you can learn to be predictable with them. By being predictable with

predictable laws, you will always achieve predictable results. It’s really quite simple.

Think about a brand new compass for a moment. All compasses start with no

predictability. Their needles point in any direction until they are magnetized. When

they’re magnetized they point only to the north. That’s one of those natural laws

we’ve talked about.

Another magnet, or a piece of metal may affect a compass for a few seconds, but the

magnetized needle always returns to face north. People can become magnetized in a

similar way—magnetized by the purpose that they have chosen in life. To be

predictable, you must magnetize your conscience, your brain, and your muscles so

that they constantly revert to the direction of success, no matter the distractions.

When you focus yourself this way and fully support your focus with physical and

spiritual powers, nothing on Earth can stop you from becoming successful.

Magnetic Power

Just imagine what can happen when your life is magnetized by a firm conviction in

what you’re doing. Think how a strong conviction about your goals enhances the

functions of your mind and stimulates all of the other functions of your body. When

you really dedicate your life to its mission, distractions lose their power. Nothing and

no one will have the power to distract you from the north your compass is set on.

But what about those people who have no magnetism? Every little problem causes

their compass needle to spin. Their success, if they have any, is determined by

whoever talked to them in the last five minutes, by whatever they had for breakfast,

or by whichever program they watched on television last night.

Learn The Laws

The power of the laws of success will be lost in your life if you don’t learn which laws

will work for you and then use them accordingly. The golden rule, “do unto others

what you would have them do unto you,” is meaningless if you don’t use it as a

foundation of the laws of success. Your compass will lead you nowhere if you don’t

have the proper direction to begin with.

You must learn all the laws of success—and they are all here in this material. But you

also need to learn the governing laws. If you don’t know that water freezes at 32

degrees, you’re likely to have pipes bursting under your house this winter. Likewise,

even though we keep all the other laws of the universe, we may bring serious

consequences upon ourselves if we do not seek to understand the laws of our own

being.

The most basic of these laws, applicable both in personal development and in business

success, is the law of the harvest. It says that, “as you soweth so also shall you

reap.” All the other laws rest on this single premise. If you keep all the laws of

success and then sow greed, hatred, envy, and dishonestly, you will reap nothing but

the same. It’s as predictable as gravity: If you jump off that chair, you hit the floor;

if you sow misery, you reap misery.

Learn to Sow Success

The law of the harvest is a lot more than that to a person who seeks success. In

essence, the law says, “If you sow success, you shall reap success.” Now that sounds

silly, doesn’t it? If you already have success to sow, you don’t need to sow something

to reap it. If you had your first million dollars already, you wouldn’t need to do

anything to earn it.

Luckily, we can sow success without actually having it first. You see, when you sow

corn, you don’t sow whole ears, you just sow the seeds. And where do you get the

seeds? From somebody who has already had a successful crop, that’s where.

Success seeds work just like corn, and you’ve got a whole batch of good seeds right in front of you. Sow them to reap your success. That’s your first law of success.

Every law of success is a seed that will sprout until you have a whole field full of it.

Then you can reap your harvest and continue the process, because now—guess what?

You’ve got your own seeds, and you can help others plant their crops, and replant

your own for another yield.

When you’ve helped others to succeed in their lives and

their ambitions, that is when you know you have truly succeeded in your life. Nothing

is more satisfying than that feeling of success.

There is no finer vindication of your

efforts than someone else succeeding with your help using your seeds of success, and

that is what we strive for at RE Mentor.

_________________________________________________

Like us → https://www.facebook.com/rementor

Follow us → https://twitter.com/Real_REmentor

Instagram → https://www.instagram.com/re.mentor

Website → rementor.com

Listen to real insights for real estate investors from real estate professionals on this week’s Real Insight’s Podcast

Connections Make Money

July 10, 2019 by Team RE Mentor 1 Comment

Networking is about connecting. If you want to end up with new business, new connections, and new deals after attending networking events, you need to fully understand the right and wrong way to make strong, lasting business connections. You need to network to connect.

The worst mistake you could possibly make is assuming that you are the highest priority, and your highest priority is also the highest priority of the person you’re trying to do business with. This networking strategy will leave you with little more than a lot of useless business cards.

Of course, networking is extremely important in the real estate business. In fact, networking is pivotal for starting and building working relationships.

But when you get right down to it, networking can seem almost too self-serving—one person tries to make as many contacts as possible just so those contacts can do something for him or her.

Of course, this is why we network—we all have business needs to fulfill. But it is important to remember that other people are networking too, and we need to be aware of others’ needs too.

We need to connect with the people we meet. When we connect with them, we should develop at least some understanding of what they are all about.

Rather than thinking solely about what others can do for me, think about what we can do for each other and for each others' businesses. This helps form the connection.

I stick to this rule of thumb every time, and guess what– deals follow.

Making a true two-way connection might require a little more work than simply shoving your business card at a potential client. But the extra money you can make and the new opportunities you can open up for your business are well worth the effort.

To make real, lasting connections that lead to potential deals, just put yourself out there, be genuine and live your business’ mission. You will see– people will come to you for deals and business.

Check out these tips to create lasting and profitable connections through networking.

1. Cultivate your connections to make money:

You need to project an image of approach-ability, understanding and knowledge. Be genuine and be yourself. Express interest in everyone you meet; remember names; and listen attentively as people speak with you. Try to understand their needs and determine how you could assist each other. Building trust is a vital component of relationship building (i.e., connecting!).

2. Make small talk:

Having the ability to talk to anyone about anything is a valuable skill. It is also crucial for making lasting, profitable connections. If you can initiate a conversation, you are more likely to meet people who will turn out to be lasting, profitable contacts. Small talk can sometimes be difficult to muster up, so try to always have a few small talk ideas at the ready to use in any kind of situation (examples: Where are you from? or How did you get started?).

3. Be an active listener:

Networking to connect is not just about selling yourself or your business. It is also about listening to the other person and showing him or her that you are truly interested. Allow others to open up and talk freely. Give them your undivided attention even if it is just for a few minutes. Show interest in what is being said by nodding or agreeing. Try to use positive body language—face the person you are speaking with, and make eye contact.

4. Be a giver:

When you focus on helping others, you too will receive. Do you like people who just seem to take take take, but never give? I don’t. When you are generous, people will notice and respect you. And, most people would rather do business with people they respect, trust, and like. I know I do. Being a giver is not that hard. Try some simple things like acting as a host at events you attend. Do this is by connecting others. Either introduce two people to each other (very easy) or provide a testimonial about a person you admire to the entire group (easy). These acts allow you to focus on others while also building solid equity among your peers. Be a giver and everyone wins.

5. Stay positive:

Try to have a happy, congenial demeanor upon walking in the door. People tend to flock toward those who appear energetic, positive, and outgoing. Remember– people enjoy doing business with people they like, so be a person who others like. Also, leave your problems at the door. Whatever you do, don’t talk about your problems. People have enough problems of their own. Focus on the positive and strive to make people forget their own troubles while in your presence.

6. Don't sell:

Remember what I said earlier about listening? Connecting is not about trying to push your agenda. It is about building relationships with people. Once you've made a connection, those people will likely be happy to tell others about you and what you do. Word of mouth and the words of others are so much more valuable than you talking about your own accomplishments. Take every chance you possibly can to let others know what you do and who you are. Try it and see—it’s definitely more powerful than giving a new contact your standard elevator speech or sales pitch.

7. Get creative with your follow up:

Most people send an email to follow-up with new connections. It’s definitely the easiest and quickest way to follow up. But why not stand out after the event by hand-writing a thank you card or note. Whichever method you choose, make sure to mention something from your conversation.

RE Mentor offers a different point of view on real estate investing by showing you, through education and coaching, how to start making money from right where you are.

Go HERE to discover how to unleash your real estate profits through networking.

Why the First Multi-Family You Buy is So Important

November 25, 2015 by Dave Lindahl Leave a Comment

52Your first multi-family property is a critical move in your real estate investing career. You’re moving past wrong information and psychological barriers on into new territory to achieve your financial goals. Well, you made the right decision. Multi-family properties open a huge door of profits for the new and experienced investor to achieve their financial goals.

Your first building block of wealth

Multi-family homes are an easy way to get into investing for first time homebuyers. There are loans for owner-occupant home buyers who want to purchase a multi-family home of up to four units which allows home owners the ability to borrow more because they can use the rental income for loan qualification purposes. They’ll also receive owner-occupant financing with little down and lower interest rates as compared to commercial property loans.

There’s less competition

Multifamily investing is still shrouded in myth and misunderstanding. For that very reason, there’s less competition which means more opportunities for you and I to profit! People in general avoid commercial property because they believe that it is too far out of their reach. They see the price tag. They see the work involved and then they run back to working their plan of buying one house at a time. What they’re really missing is the opportunity to learn a new way to profit from real estate – a new system of buying right. Your first multi-family property will take you through the process of putting a tested and proven system to structure the deals the right way.

Significant cash flow can be created

Your first multi-family property will outperform in profits what your single family investments can do. There’s no doubt that you can become wealthy with single family homes, but you’ll have to do multiple deals quickly just achieve the same amount of money. When you start getting those monthly checks in the mail, you’ll have a reminder of why multi-family investing is the way to go.

Lower risk involved

Multi-family properties provide a cushion of income for unexpected events. If you lost a tenant in a single family property, you’ve also lost all your income for that month. With multi-family properties, the mortgage expense can be covered with rents from other tenants and from your cash flow. If there are repairs or maintenance that needs to be done on the property, the cash flow you generate from the property can help to pay those expenses. In order to do that with a single family property, your cash flow needs to be really high to be able to offset the costs.

Start as big or as small as you want

Commercial property is the path that will help you achieve your financial dreams and goals. The idea here is to just start. You can start off with small properties and still see a remarkable cash flow as compared to single family properties.

Successful Apartment Ownership Requires Efficient and Quality Maintenance

November 24, 2015 by Dave Lindahl Leave a Comment

Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to wrap up this article series on how to use these team members in a little more detail.

Just to recap, some of the essential team members that you’ll want to have in place include:

· Bird dogs
· A real estate agent or agents
· A commercial mortgage broker
· A banker (one or more)
· A title company or closing attorney
· A real estate attorney
· Private lenders
· An SEC attorney (if part of your business includes securing private funding)
· An asset protection attorney
· An accountant or CPA
· Property management companies
· Contractors

Contractors are the behind the scenes magicians that can really aid your overall cash flow in the long run as an apartment owner. Units that are in need of complete renovation or simply a few updates do nothing for you if they are unrentable. A good contractor (or collection of them) can minimize the time that units in need of some fixing stay vacant, thus optimizing your income from your properties.

Finding contractors who both do good work and do so in a timely manner can sometimes be challenging but remember that it is a tougher economy out there right now and people are looking for work. Make sure your contractors are necessarily bonded and insured and don’t be afraid to move on if someone does poor work or, worse yet, shows up late or not at all. It is your business and you have every right to expect quality and timely work.

I suggest having a variety of contractors at your disposal. You won’t need all of them all of the time (at least you hope not) but there is something to be said for specialization. Maybe you’re replacing carpet in your units as they turn over from one tenant to another. A professional carpet installer might be a perfect fit for getting a couple of units done at a time. You could make similar arguments for plumbing, electrical work, painting, etc.

Some contractors will claim they can do it all but you rarely need it all when managing apartment units. For assorted odd jobs, a good handyman is always a good bet and they can be great allies when tenants call with fix it items. It is both easy and practical to have budgetary limits set with your property management company so they can coordinate with contractors as needed for small jobs and avoid you getting bombarded with calls for ‘nickel and dime’ issues’.

Remember, this is a business and, as a business owner, it is both reasonable and advisable to delegate as much as you can so you can actually enjoy the fruits of your labor. As we conclude this more detailed article series on your professional team, remember that just about all highly successful business share a common mindset. Success is a state of mind that is shared by few but for which principles are more freely shared than you might think. Make the acquaintance of wealthy people and pattern your own business after what they have done. This is one of the most basic secrets of becoming wealthy beyond your wildest imagination. Now that you have heard what I have to say about building a team, the next step is to find the deals that will help you build the fortune that is out there for the taking!