by Dr. Teresa Martin, Esq.
When most people think of investing in real estate, homes, mini-malls, or apartment buildings may come to mind first. However, that’s only the tip of the real estate investment iceberg. Consider the following offbeat real estate investing opportunities. These investments can provide a significant return in the long run and may very well alter your financial future.
Believe it or not, RV rentals and sales is a very big market. With baby boomers leaning into retirement and young families seeking a way to lessen their vacation costs, many people are willing to buy or rent an RV.
Self-storage is a big industry. The shaky state of the economy may be partially to blame, as the number of multi-generation homes and families downsizing their living quarters are increasing.
Online real estate, otherwise known as websites, requires very little investment and can typically generate a good ROI over time. Traditionally real estate is thought of as tangible, but don’t disregard the earning power of online property. When you consider that Candy.com sold for over $5 million dollars, online real estate has the potential for astronomical returns.
There you have it — three markets where the competition isn’t very fierce and the bar of entry is relatively low. By investing in any one of the three offbeat investments mentioned, you’ll have the opportunity to maximize your investment dollar. And over time, you may be able to transform your investment into a fully expanded business.
MEET YOUR REIA NYC LEADER
Teresa R Martin, Esq – Founder/Counsel
Dr. Teresa R. Martin, Esq. is a sought-after attorney, real estate broker, real estate and financial health coach, keynote speaker, author, consultant, and a Dave Ramsey Master Coach. As principal of her own practice, she has honed her skills in the areas of residential & commercial real estate transactions, foreclosure defense litigation and credit restoration services.
In addition to being an attorney, Teresa wears the hat of a seasoned real estate investor with a focus on creative acquisition strategies. Strategies that she developed, implemented and taught to others through her role as Counsel/Founder of Real Estate Investors Association NYC (“REIA NYC”) and as Director and past President of the New York Chapter of Better Investing, the nation’s largest non-profit organization dedicated to investment education.
Her legal experience, coupled with her passion for financial ministry and consumer education, led her to join and complete her Group Leader training with Fellowship of Companies for Christ International (“FCCI”) in 2005. She continues to use her God-given gifts to encourage, equip and help others understand sound financial biblical principles through Generational Wealth Zone, a conduit for the everyday person to achieve financial freedom through tutelage in the areas of financial literacy, business ownership, real estate and stock market investing.
Teresa has appeared as a legal and real estate expert on Voice of America, Real Estate Straight Talk and numerous radio programs. She has been featured in such publications as Money magazine and Diva Zone magazine and more.
Email: [email protected]
By Isaac Newkirk III
Notes provide multiple benefits for investors, the key is you can buy non-performing notes for pennies on the dollar. In addition, Tony Martinez, president of Asset Ventures LLC, says notes offer many more options to create a positive return.
“We want to make sure our investors are protected,” says the founder and president who has over 18 years in the industry.
He adds: “We have multiple avenues for a successful investment. That’s one of the advantages of investing in notes as opposed to investing in properties. When you invest in properties, you’re limited to the options of the marketplace. With notes, you have exit strategies.”
Martinez entered the industry as a builder back in 1989. During his early years in the profession (dealing with a lot of REOs and short sales) he became particularly aware of the banking industry’s desire to rid itself of delinquent properties through the short sales arena. As he became more knowledgeable of the process, principally by acquiring short sales notes (non-performing or delinquent notes) directly from banks, he also came to realize how he could help people retain their properties, at the same time.
Asset Ventures are negotiating about 400 notes and have an additional 700 notes in the pipeline. Their goal is to acquire about 100 notes a month and Martinez says they’re on pace to meet or exceed that goal for the current year.
Based in Redondo Beach, Calif., Asset Ventures has three primary responsibilities: resolution (helping owners stay in their house); acquisitions (helping investors make a positive cash flow return on their investments); and teaching and mentoring in the industry.
The notes that Asset Ventures selects go through rigourous research. “What we do in the research phase is we have contact with the banks and lenders and they’ll give us a pool of notes that’s limited to address, the amount of the loan, the fair market value, and just a limited amount of information,” Martinez explains. “Then we have to do our due diligence, our data mining. Every note is then researched against a one hundred point checklist to see if we want to purchase it and move on to the next level.”
Each pool of notes obtained by Asset Ventures from their network of banks involves anywhere from 50 to 500 notes. The pool would be packaged with very similar types of notes and an initial assessment would be done on a small sample (say, 25 to 50 out of 500) to get a feel for that particular pool. Asset Ventures has specialized researchers who perform this task. Tony says that “Researchers don’t do any analyzing, they just gather the information pursuant to the checklist. Then it goes to the next level where management analyzes the data. They go through about 500 files in a week.”
We asked Martinez to show us the inside mechanics of one of his recent deals. Our case study involves the Arrezo Deal. Begun in February of this year, the Arrezo Deal was completed in mid-August. Martinez says “Once we completed the research phase of the deal, we began the acquisition process. We looked at the numbers on the Arrezo Deal; we bought it for 19 cents on the dollar. It was a non-performing second mortgage. The biggest positive, when we bought this was – combined with the first [mortgage] – we had equity in it. The Arrezo Deal had a second lien with an unpaid balance of $86,000. We paid $9,600 for it. When the owner stops paying on the loan, the bank has delinquent debt. They benefit from selling it off. As a non-performing or toxic debt, the bank would package it up and sell it to someone like myself for pennies on the dollar because it doesn’t have face value to them anymore.”
Of utmost importance, Martinez believes that it must be understood that “In the acquisition phase, we don’t buy the property, we buy the paper. So we’re the bank now. What we do is, we’re buying the collateral paper, which is a bank note. So, if it was owned by Chase or GMAC or Wells Fargo for example, it’s now owned by us and we’re the bank. We don’t necessarily need to take ownership of the property but we’re still going to make money because they’re obligated to pay us. So we’ll go to the borrower and create options for them to get back on their feet. This is how we help people while creating positive returns for our investors. Where they may have paid $500 a month before, they may now pay us $200 a month. In the Arrezo Deal we actually settled the note for the homeowner at $22,000. So they paid us $22,500 and we wiped away $80,000 worth of debt. The investor just made $13,000 profit, which equates to 235 percent return on their money. Everybody wins.”
And that is the main goal for Asset Ventures — that the investor and also the homeowner are successful.
For information, visit Asset Ventures
online at: www.assetventuresllc.com
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By Kathy Fettke
We’ve heard a lot about millennials pouring into to city centers as they chase after jobs, social connections, luxury apartments and condos, and the benefits of the sharing economy. But a new report shows that the biggest U.S. metros are experiencing a renter “boom” in the suburbs — and Rent- Cafe says suburban Atlanta is at the top of that list.
That’s creating new opportunities for investors looking for single-family rentals with low prices and high returns, and Atlanta is a great place to find them. Atlanta was a superhot market for the single-family investor just a few years ago, but popular neighborhoods got a little too popular and prices rose. Other neighborhoods hadn’t recovered enough to draw interest. As the wheel turns for real estate hot spots, neighborhoods that were shunned before, are looking better now and many of those great locations are in the suburbs.
What’s Happening in the Suburbs?
The RentCafe report says it looks at Census data for a 5-year period, from 2011 through 2015. And, it found that urban centers have not gained as many renters as we’ve come to believe. It says the numbers show that suburban areas gained substantially more renter households than their urban counterparts in 19 out of the 20 metros it reviewed. In Atlanta, the data shows a net gain of 52,300 suburban renter households during that time frame. That’s a 26% increase in those households. That’s a huge number of additional renters in just a 5-year-period. Atlanta’s urban area only gained 15,100 renters which reflects a 10% increase.
Suburban rent growth was so strong in Atlanta, St. Louis, Riverside County California, and Boston, it was “three” times that of their more urban counterparts. RentCafe says of the 20 metros areas it studied, suburban areas gained about 700,000 new renter households in that 5-year period. City centers in those same areas gained about 600,000. In Riverside County the percentage of suburban renter growth was lower than Atlanta but the overall number of new renter households was much higher, at 60,500. Just 18,500 renter households were added in urban areas. Chicago also saw substantial suburban renter growth, along with Miami, and Dallas.
RentCafe says the main reason for the shift is “cheaper rents”. Renters are also getting more family-friendly neighborhoods with garden-style apartment communities. They are also finding that schools are usually better in the suburbs, neighborhoods are quieter, and their living expenses take a smaller bite out of their paycheck. RentCafe says that an analysis of the Yardi Matrix database shows that renters save about 11% or a month’s worth of rent if they move to the suburbs, based on average rents in the 20 areas studied.
What’s Going on in “Hotlanta”?
It’s bustling with life, people are finding jobs, and the city is making some big quality-of-life improvements. Atlanta is undergoing a big redevelopment plan. That’s contributing to those jobs and making the city a more attractive place to be.
Just to give you an idea of the kinds of things Atlanta is doing, there’s a huge project underway called the “Atlanta Beltline”. It’s a project that will connect 45 city neighborhoods with a 22-mile loop of multi-use trails, streetcars, and parks. The Beltline website says it has received several awards as for its visionary approach to making the city more walkable, bikeable, and oriented toward public transit. The project is making use of long forgotten rail lines that circled the city.
There’s also the former Bellwood Quarry that is being turned into a huge park and reservoir. You may have seen the stunning granite quarry walls and bright blue tint of the water in scenes for “The Hunger Games”, “The Walking Dead”, and “Stranger Things”. The city is investing at least $300 million dollars to turn the water-filled quarry into a 2.4 billion gallon reservoir. When it’s done, it’s expected to hold a 30-day supply of drinking water for 1.2 million people. Once the reservoir is finished, the city will develop the surrounding 300 acres as the city’s largest park. The new Westside Reservoir Park will also be connected to the city via the Beltline.
There’s also the conversion of the former Fort McPherson Army base into a huge movie studio complex. African American filmmaker Tyler Perry bought the historic 330-acre piece of real estate in 2015 and is turning it into the latest version of his Tyler Perry Studio. The L.A. Times reports that when it’s done later this year, it will be one of the largest studios in the country. The paper also says that Tyler hopes to create 3 to 4,000 news jobs at the studio, and recruit people from low-income parts of Atlanta.
Major upgrades are also coming to one of Martin Luther King Junior Drive which runs right through the city center — past the state capital, the historic Atlanta University Center, and the Georgia Dome. It’s a 12-mile stretch that has become an eyesore with old or abandoned buildings in need of repair. The city plans to convert the 4-lane road into two traffic lanes, and two for bicycles. There will also be new roundabouts, plant-filled medians, small parks, and new pedestrian crosswalks.
And then there are two new sports stadiums in the making. Both the Falcons and the Braves are building new stadiums. That’s expected to bring tens of thousands of new jobs to the city. And the city is already experiencing job growth that’s higher than the nation’s average.
The latest report from the U.S. Department of Labor shows that Atlanta experienced a 3.6% growth rate for non-farm jobs in the last year. Jobs for the professional and business services industry grew the most at 4.6%. That’s well above the 3% growth rate for that sector nationally.
Percentage of Suburban Renter Growth
These are just a few things going on in “Hotlanta”. As for the percentage of suburban rent growth for the other areas, Phoenix and Riverside County came in with a 23% increase. Tampa, Dallas, and Minneapolis range from 18% down to 15% growth in suburban renters.
Detroit, Miami, and Denver experienced a 14% renter growth rate in the suburbs. Houston, Washington, D.C., and Seattle were all at 13%. Chicago was at 12%. San Francisco at 10%. San Diego and St. Louis were at 9%. Los Angeles, Boston, New York, and Philadelphia were at the bottom of the list with a 7% to 3% suburban rental growth.
The Real Wealth Network offers opportunities for investors to own single-family rentals in several of those suburban markets. We will be talking about opportunities in suburban Atlanta at some of our upcoming live events. For information about our calander, visit Realwealthnetwork.com and just click on the “learn” tab and then the “live events” tab.
Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life. With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row. Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.
By Tom Wilson
Let me tell you about two great real estate deals for the busy professional. Both are single family homes that have been renovated and are offered as turnkey rental investments. Investor Special #1 is priced at $100,000 and rents for $1,200—a 1.2% rent ratio. Investor Special #2 is priced at $100,000 and rents for $1,050—a 1.05% rent ratio. Which property do you choose?
One really is a better deal than the other and I’ll let you know why later. However, if instead of choosing, you thought, “I can’t make a decision based on such limited information,” then you’re in the top 50% of real estate investors. In a moment, I’ll help you get to the top of the class by understanding the crucial data required to properly analyze a turnkey deal. Your test will be to use this information going forward to make investment decisions based on information gathered, not on the slickest presentation or the personalities involved.
First, why turnkey investments are not created equal. To the top tier turnkey property providers, turnkey means that all the elements of the investment are in place so that all the investor has to do is “turn the key” on their bank vault and watch the money flow in. Clearly there is more to it than that, but not all that much more. By our (and I mean the top providers) definition, a turnkey investment property has ALL of the following attributes: 1. The provider is in possession of the deed, 2. The property has been carefully selected and renovated with renters in mind, 3. The property has been leased, 4. A property management company is actively engaged in managing the property. After the investor purchases the property, the property manager simply redirects the rent checks to the investor.
Some providers call their offerings turnkey, but are missing some or all of the four essential elements. If the company selling you the property does not possess the deed, it is not a turnkey. If the seller has yet to complete renovations, the property is not turnkey. If the property does not have rent paying tenants, the property is not turnkey. If the seller offers to “look after” the property until you find a property manager, the property is not turnkey.
Now that you understand the four essential elements that define a turnkey property, how do you evaluate the myriad opportunities available to you and get to the top of the class? By analyzing how each deal rates in four major categories: Location, Property Condition, Provider, and Property Management.
Analyze the Location
Location will make or break a deal, and we’re not just talking about corner lot or cul-de-sac. Understand what is going on in the region as well as the neighborhood. The best long-term holds have the following in common:
Understand the Property Condition
Make sure you are getting what you pay for. Really nice properties attract really stable renters. Pay close attention to the quality of the renovation. High quality equals less maintenance and more money in your pocket. Great properties share these common traits-
Reference Check the Seller
Do you really know who is providing this turnkey? Handshakes make me feel good, but a reference check makes me feel better. Do not hesitate to ask for references, to check the provider’s on-line reputation, and to screen for lawsuits and bankruptcies. A reputable provider will happily answer all your questions and has dozens of happy customers ready to sing their praises. If you come across any of the following, beware!
Interview the Property Manager
Do you really want to question whether you’re being overcharged to fix a leak? Do you want to worry about a lease not being renewed because the property manager did not respond to your tenants? It is maintenance costs and occupancy that will make or break positive cash-flow. This is why competent property management is essential. Just as when selecting a provider, check the references of the property manager. Look for the following-
Yes, there’s a lot that goes into analyzing a turnkey property, but it is YOUR money. Ask questions until you are satisfied, and by all means, visit the property before you buy.
Back to the Beginning
Back to the two investor specials at the beginning of this article, which are real case studies. (Names have been changed to protect the duped!)
Investor Special #1 priced at $100,000 and rents for $1,200, purchased by “Sam.” During the loan process the appraisal for the property came in short and Sam shells out another $5K to close the deal. After closing, Sam finds out that the rent was a “market estimate” and after waiting for 3 months and dropping the price twice, he finally gets it rented for $1,000/mo.
Within 6 months Sam is notified that the 50 year old house has exterior trim that needs replacing because the seller painted over rotten wood, the hot water heater needs replacing (and there is no warranty), and the HVAC needs repair. His bill is greater than the net income that was predicted for the first year. The city he purchased in has only one industry, and within a year, the one new UK manufacturing plant that was scheduled to come to town and employ 2,000 people gets postponed indefinitely because of economic uncertainty in Europe. Adding salt to the wound, Sam’s tenant fails to renew his lease. Sam experiences another 3 month vacancy and he has to drop the rent to $900 because of the now weaker rental market. Sam is very sorry he didn’t do his homework.
Investor Special #2 is purchased by “Mary” for $100,000 and rents for $1,050. The house is only 10 years old, comes with a premium home warranty, is already leased and the appraisal came in at value. The employment in the state is the highest in the country, the city has 25 Fortune 500 companies with diverse economies, the population is growing, rents and values are appreciating. Mary’s first tenant leased for three years. When it did turn over, the property required minimal make-ready. It was leased again at $1,125 before the current tenant moved out. The cash flow exceeds Mary’s expectations. Mary earns an A+ because she purchased in a top, low-risk, metro and from a reputable provider.
For more information about Tom Wilson,
be sure to visit his website at: