When Is Next Investment Property?

Auto Date Wednesday, February 14th, 2007

Question:  Chris, I think the articles you are giving us are very helpful and this article especially helps to understand a little better why not to purchase certain types of investments. I would like to know though when is the next investment property is coming as time goes by and I have some money now that would like to spend it with you guys instead of somewhere else. I am waiting for you because I think you guys have a lot of integrity and I know you will have something good coming. Thank you.

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Rental Cash Flow - Positive Or Negative

Auto Date Tuesday, February 13th, 2007

“So please tell me…. what is so hard about getting me positive rental cash flow on a property that your group sponsors” asks the new investor.  “I mean, all I want is simply a property in a great appreciating area, with strong rental cash flow, and with minimum amount down”.   “What is so hard about that for a bulk buying group like you guys?”

Depending upon what this investor is willing to accept as a purchase price relative to the market price, they may be right… This could be very easy to create this positive rental cashflow picture for them.  In this case, you see developers doing 4 year with no mortgage payments to cater to their desires.  Of course, this may or may not be in the investor’s best interest to create such a scenario.

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How To Evaluate Investment Properties:

Auto Date Tuesday, February 6th, 2007

 

“Have I gotta deal for you baby……   I have a 3 bdrm, 2 bath home in preconstruction that has an equity of $75,000 and all you need to do is put down $1,000.  How many do you want?”

Unfortunately, this is the basic approach in marketing “wholesale” investment properties on the Internet today.  Don’t get me wrong, pursuing these types of properties can be VERY lucrative but you have to know what you are doing.

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Becoming A Real Estate Investor

Auto Date Monday, February 5th, 2007

One of the common questions that we get is if we can provide insight into the best way towards becoming a real estate investor.  Quite frankly, in our opinion, much of the common “guru” approaches to becoming a real estate investor do not work.  Why?  Because most of the approaches are designed for those with very little money but assume that you have tons of time.

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A Wholesale Property - How To Get A Fair Appraisal

Auto Date Saturday, February 3rd, 2007

Question: You had a recent article focused on buying a legitimate wholesale property. This article talked about the legitimacy of developer appraisals. If a project is brought to the Mastermind Group, does that mean you believe the developer appraisals to be fair and accurate? This seems to be a very important part of the equation.

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Is Florida An Emerging Real Estate Market?

Auto Date Thursday, February 1st, 2007

QuestionIs Florida considered an emerging real estate market? To me, it looks like an overkill of properties. Have you conducted a segment devoted to OPM and/or OPC? I’m trying to figure out this whole strategy and how to approach people and win their trust to invest with me (OPM & OPC).

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Condo Hotels - A Good Investment?

Auto Date Wednesday, January 31st, 2007

Question:  How do you feel about condo hotels. Seems to be a more popular approach with developers. Hotels are basically selling there rooms and the investor gets a portion of the earnings while the hotel manages the property and unit. I was looking at a project in Orlando near Disney and the developer has a lot of nice kick backs like your article mentions. I am holding back for now. Thanks
 

Answer: As you described, condo hotels are where you buy a condo unit and then someone manages the property like a hotel.  These are very popular in areas like Orlando, Myrtle Beach, and Las Vegas.  What you have to remember about a condo hotel is that it is an INCOME producing property.  What does this mean to the investor?
 

1.  It should be judged by income producing standards… that is, you should really look at that CAP rate for the property (I will discuss this in a different post);
 

2.  You must realize that nobody wants to live in your condo hotel unit…. only rent it.  That means that you will need to resell to an investor and not an end user.
 

3.  Management and upkeep can be substantial.
 

The most important thing to determine in my opinion is what you believe the net income at the time of resell.  Using standard CAP rates, then you should be able to decide if you are being offered a good deal on the condo hotel.

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Wholesale Real Estate Investment Groups– The Relationship Of All Players

Auto Date Tuesday, January 30th, 2007

Wholesale Real Estate Investment Groups– The Relationship Of All Players
By Chris Anderson, Ph.D.

In last week’s article on insider secrets for wholesale properties, we started to explore the realities in the world of development and what that means to you as part of real estate investment groups looking for wholesale properties.  Before we start digging deeper this week, let’s summarize our findings:Key Results For Real Estate Investment Groups:

• There is a SPREAD between actual development costs and market value; this is the amount of money available to share between developer and  the real estate investment groups;
• Quality developers and real estate investment groups will find ways to share the SPREAD to the benefit of the individual investors;
• Other developers and investment groups may try to inflate the spread to make a deal sound better but at the detriment of the individual investor; and
• Any incentives offered to the real estate investor, including prepaid mortgages, leasebacks, discounts, etc., must come out of the spread…. There is no magical sources of money.

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Bulk Buying Group — And How They Factor Into The Equation

Auto Date Tuesday, January 30th, 2007

Question:
If you are buying in bulk before the project is given to a realtor, why would you still have a extra line for selling expense? I would think the project could be offered to a bulk buying group without the 6% commission if 25% of the units (50) were not given to the retail trade but truly wholesaled in order to jump start the project. Thanks.

Answer:
Simply put, the bulk buying group uses that as its compensation.  Many of the bulk buying groups in the industry simply play a role as the broker in these deals.  That is, they work like crazy to go out and locate projects that make since, negotiate with the developer, perform due diligence on the market, and then educate their investors.

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Property Appraisal — How Do You Get The “Right Answer”

Auto Date Tuesday, January 30th, 2007

 

Question:  Just curious. What measures are available to make sure appraisers are not improperly influenced by developers to dramatically inflate their results?

Answer: Always remember that property appraisals are simply opinions of value.  Hopefully, the opinions in the appraisal are well supported by facts but you should always try to determine this yourself.

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