investing tips

Are You Ready to Invest in a Volatile Real Estate Market?

June 8, 2023 by Realty411 Team

By Jimmy King, Founder, Contrarian RE Fund 1, LLC

The recent announcement by Blackstone the final close of its latest global real estate fund, Blackstone Real Estate Partners X (“BREP X”) with $30.4 billion of total capital commitments (the largest real estate or private equity drawdown fund ever raised), reflects confidence for investing in real estate during periods characterized by market volatility. In a news release announcing the fund, a Blackstone executive stated that the company has made some of their best investments in periods characterized by market volatility and dislocation.

The market is certainly volatile at this time, and plentiful opportunities exist to invest in distressed real estate.

Being successful at these types of investments requires the ability to identify and acquire real estate properties that are being sold at steep discounts. Many of these opportunities exist in multifamily and manufactured home communities that are suddenly being made available for well under the original asking price as owners struggle with increased debt and/or escalating fees. Some are even selling for as little as 60 percent of their original value (2019 highs vs today) . And while opportunities exist, being a successful investor requires a great deal of insight, information and investigation before a purchase is made.

The Contrarian RE Fund 1, LLC, actively researches and identifies distressed real estate assets and reviewing if they are viable options for the fund’s “Value-Add” business model. If they are, the team of experts make purchase decisions regarding the properties by investigating the level of enhancements and improvements that need to be made for each property.

The “Value-Add” business model has realized significant profits since it was first implemented in 2009. By purchasing properties with low rental rates and making substantial physical and operational enhancements that improve both the property and resident experience, the model has been proven to be able to consistently achieve higher rental rates and refinance initial capital investment.

Some of the key factors to consider when making the decision to join a fund that invests in distressed real estate includes:

Size of the Fund

Are you interested in investing in a massive fund, like the $30.4 billion fund structured by Blackstone, or a fund that is less than $50 million? The key differences between massive and smaller investment funds are (JIMMY, WHY WOULD A PERSON CHOOSE A SMALLER FUND? FOR EXAMPLE, DOES A SMALLER FUND PROVIDE A FASTER RETURN ON AN INVESTMENT? ARE THERE FEWER PENALTIES/RISKS? ETC)

Personal Interaction

A smaller fund will provide you with the opportunity to interact on a personal level with the management team, whereas a larger fund won’t go beyond the standard paperwork to update you on your investment. You’ll also have the opportunity to meet members of the team (the craftspeople and contractors who are working on a real estate renovation that you’ve invested in, for example). It’s highly unlikely that the management team at Blackstone is sharing their cell phone numbers with investors in that fund.

Decision Making Process

As an outcome of the personal interaction with the management team of a small fund, you’ll have the opportunity to contribute to the decision making process. While the team for a smaller fund brings strong real estate market knowledge on a local level, they will also likely be willing to accept input and ideas from knowledgeable investors. Opportunities will present themselves that the management team may not be aware of, but that investors can bring to the table, for the good of everyone.

Intangibles

While the opportunity to invest in distressed real estate is intended to show a profitable return, there are some intangible outcomes as well. For example, renovating properties will help to improve neighborhoods and communities by eliminating blighted real estate. This type of contribution goes far beyond the initial investment, especially when investors are personally familiar with the property and can visit it and feel pride in what they’ve accomplished.

As more and more opportunities to invest in distressed properties present themselves, the time to act is now. If this seems like an appealing investment option to you, be sure to take the time to research what’s available and which type of fund is the best fit for you.

James King is the Founder of the Contrarian RE Fund 1, LLC, and along with his team of professionals has successfully owned and operated more than 2,000 units across the United States. He can be reached at KingCommunities.com ([email protected]) or 562-208-7649.

How to Make Profits with Note Purchases, Secured by Real Estate

April 13, 2023 by Realty411 Team

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New Book: How to Profit from International Real Estate Investing

March 23, 2023 by Realty411 Team

‘…While some housing markets are crashing, others will likely be booming’

Cabo San Lucas, Mexico – After more than 25 years of investing in global real estate markets in seven countries on three continents, including Panama, Portugal, Mexico and Brazil, Ronan McMahon, founder of Real Estate Trend Alert, is sharing the best secrets for success that he’s learned by taking part in well over $2 billion in real estate transactions. Written for ordinary people looking to make extraordinary moves, the new book is titled Ronan McMahon’s Big Book of Profitable Real Estate Investing and is published by International Living Publishing Ltd., a division of International Living, the leading source for the world’s best places to live, travel and retire since 1979.

Based on decades of real world experience and know-how, this book is a practical guide to help aspiring real estate investors – and anyone looking to strategically purchase a home overseas – to understand the why, where, and how of international real estate.

“With soaring inflation and sky-high prices right now, the secrets of successful real estate investing can help regular people around the world secure their financial freedom,” said McMahon from Cabo San Lucas, Mexico. “This book holds every useful method, and sometimes little known insights, to make serious money from real estate. In more than 25 years of investing, probably the biggest thing I’ve learned is that it’s surprisingly simple to become a successful real estate investor.”

The Irish property bubble that lasted from 2000-2007 was the original catalyst that compelled McMahon to look overseas for better opportunities. Along the way, he had some interesting adventures. In Brazil, he almost died in a dune buggy crash, and in Panama he flew over the Panama Canal in a billionaire’s helicopter, all in search of the world’s best real estate investments. It was by traveling the globe he discovered that, while some housing markets are crashing, others will likely be booming.

“When you look everywhere there is always a big opportunity somewhere,” said McMahon, who also posts regular insights and opportunities at Real Estate Trend Alert. “That goes not just for real estate investing, but for living as well. That’s why I split my time between Portugal, my home base, winter in sunny locales like Los Cabos and the Caribbean, and summer in Europe, with trips to my home country, Ireland. I never have to face any cold weather, which is just my preference. Lots of people no doubt prefer chilly weather, but we should all have a choice.”

Packed with the most up-to-date information, the book operates as a how-to guide for anybody thinking about buying real estate overseas and how they can afford it. Some of the topics McMahon opines on include:

The top real estate investment trends to consider.
Where buyers can make double-digit rental yields this year (or any year).
The what and how of crisis investing.
Real estate investing pitfalls to avoid.
Navigating overseas markets without getting burned.
How to fund your overseas investment.

The book is now available on Amazon and from Real Estate Trend Alert.

About Real Estate Trend Alert

Real Estate Trend Alert is a real estate investment newsletter founded and written by Ronan McMahon. Since 2008, Ronan has helped thousands of Real Estate Trend Alert members benefit from real estate opportunities all-over the world.

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6 Things to Keep in Mind When Selling Your Home

March 15, 2023 by Realty411 Team

By Stephanie Mojica

During the first two years of the COVID-19 pandemic, investors and traditional homeowners enjoyed a true seller’s market. But as COVID-19 slowly fades from the news and global financial challenges persist, sellers no longer have the same advantages.

The good news is that the majority of homeowners can still get more than they paid for their property, but the bad news is that more planning is required. To that end, here are six things to keep in mind when selling your home, per REALTOR.com.

1. Set the right selling price from the get-go.

Pricing your property above market value is a recipe for disappointment. Also, don’t count on the bidding wars that were everyday occurrences at the height of the pandemic.

2. Do not try to sell your property “as is”.

People just aren’t buying homes in need of TLC nowadays. While it may feel unfamiliar and even irritating, repairing your house before it hits the market will heighten your chances of making a quick sale.

3. Help your buyer as much as possible.

Interest rates are at historic highs, causing lenders to offer their customers less buying power. As a result, concessions such as sellers helping their buyers with closing costs are now a bigger part of the game.

4. Don’t expect any property to sell quickly.

The times of a home only sitting on the market for a few days seem to be gone; the current national average is 50 days. The good news is that this is still less time than the pre-pandemic average of 68 days.

5. Invest time and money into home staging.

An empty house doesn’t appeal to buyers the way it once did. In fact, homes that are tidy and staged sell 88% faster (and at 20% higher prices) than non-staged properties.

6. Consider when to sell your home.

During the peak of the pandemic, it was okay to list a home anytime. But nowadays, spring and summer are the best buying seasons.

Stephanie Mojica

Stephanie Mojica, writer of How One Writer Shifted From Settling for $12 an Hour to Prospering at Over $90 an Hour and shorter books such as Quick Answers to Frequently Asked Credit Questions, is an award-winning journalist with publications such as USA Today, The Philadelphia Inquirer, San Francisco Chronicle, and The Virginian-Pilot, among many others. She helps executive coaches, business consultants, business owners, attorneys, and other decision makers generate more money online and become the go-to expert in their field by guiding them step by step through the process of writing and publishing a book.

San Francisco Home Prices Are Dropping — Could This Happen in L.A.?

March 3, 2023 by Realty411 Team

By Stephanie Mojica

Homes are selling for less than the asking price in San Francisco, and some experts speculate that the same thing could happen in Southern California, per the Los Angeles Times.

The report stopped short of calling the San Francisco Bay Area a buyer’s market, but labeled it a buyer-friendly market.

Before the challenges of the COVID-19 pandemic, massive tech industry layoffs, and high mortgage interest rates, homes in the Bay Area sold for 113% of the asking price.

As of December 2022, the sale-to-list ratio was 99.8% — the lowest it had been in nearly six years.

The usual figure is 105% in Los Angeles, but that has dipped to 98.5% for the first time in over four years.

Experts interviewed by the Los Angeles Times believe that this trend will continue in both San Francisco and Los Angeles. The stock benefits that tech employees often use for down payments have significantly less value now. Also, the increased trend of remote work is leading people in multiple industries to seek cheaper housing options in cities such as San Diego, Sacramento, and Phoenix.

Contrarian RE Fund 1, LLC Introduced as Investment Opportunity in Distressed Real Estate Assets

February 28, 2023 by Realty411 Team

Real estate veteran and turnaround specialist James King has introduced a real estate investment fund, providing people with the opportunity to invest in distressed real estate assets. The Contrarian RE Fund 1, LLC, researches, identifies and acquires multifamily and manufactured home communities that are being sold at steep discounts.

“These opportunities are beginning to present themselves as more distressed assets are coming online and property owners are struggling with increased debt,” said King, who along with his team of professionals has successfully owned and operated more than 2,000 units across the United States. “We are actively identifying distressed real estate assets and reviewing if they are viable options for our “Value-Add” business model. If they are, we are making purchase decisions regarding the properties and investigating the level of enhancements and improvements that need to be made for each property.”

The Contrarian RE Fund 1’s “Value-Add” business model has realized significant profits since King first started implementing it in 2009. By purchasing properties with low rental rates and making substantial physical and operational enhancements that improve both the property and resident experience, King has been able to consistently achieve higher rental rates and refinance initial capital investment.

More information regarding the Contrarian RE Fund is available by contacting James King at KingCommunities.com ([email protected]).