Fluctuating LTV

The loan-to-value (LTV) ratio is the amount a borrower can borrow from a lender compared to the appraised value of the property that he or she wants to buy. The LTV determines the amount of a down payment a borrower has to supply from his own pocket to invest in the property.

Loan-to-Value ratio = Mortgage amount ∕Appraised value of the property.

For example, if the lender offers a loan at a 90% loan-to-value ratio, the borrower must supply 10% of the total cost of the purchase. In a fix-n-flip loan the same is true, the lender that supplies up to 90% (for example) of the home purchase price, requires the borrower to provide the other 10% of the price.

The Coronavirus pandemic has changed things rapidly including the market value of homes, thus affecting the LTV ratios lenders depend on. Please call for the most up-to-date loan-to-value ratios on our loans for your upcoming projects. 512-213-2271

Photo by Pixabay on Pexels.com

Default

If a borrower defaults on a home loan, which is more likely to happen if they do not have much of their own money in the home, the lender takes back the home and sells it to get back the money they lent. Market fluctuations can cause lenders to lose money if the value of a house goes down and the borrower defaults on the loan. The value of the home may be less the amount of the loan. The coronavirus pandemic may make home prices goes down, but that is not certain and may not be true in all locations.

Equity

If the borrower had equity in the home and defaults, then the borrower loses the equity they have in the home because the lender takes the property and sells it to recoup their investment and expenses as quickly as possible.

Equity is the amount of money that would be returned to homeowner if the asset is liquidated (sold) and all debts are paid off. It is in a home owner’s best interest to sell a home before they default on a loan and pay the loan off if possible both so they can get their equity out of the home and so that they can keep their credit history in good shape.

FICO Score Requirements

The FICO score required on loans relates to the buyer’s credit history. It reflects how often they have been late or defaulted on loans in the past. Before the coronavirus pandemic set our lives, marketplace, and economy into a spin, REI Capital Resources required a FICO score of 650 on a hard money loan with a term of up to 24 months. Many people have lost their jobs and their credit scores have suffered. Watching the unemployment rate go up, lenders across the country have tightened up their FICO requirements and these requirements are changing daily. Please call me for our latest FICO requirements. 512-213-2271.

Selling to Avoid Foreclosure

Owners in default or facing default will sometimes take less than the market value for a house to avoid foreclosure. They may settle for only getting part of their equity back, reasoning that some is better than none. None is what they will get if they go into foreclosure and the lender takes back the property and sells it for the balance owed on the loan. The borrower may even give up all their equity to sell the house before defaulting to keep their credit history intact and their FICO scores high.

Buying Opportunity

The distressed homeowner’s situation becomes the buyer’s opportunity. The homeowner needs help to retain their high FICO score and some equity, and the fix-n-flip buyer needs to purchase a property for the lowest price. It can be a win-win deal.

As a direct lender, it is my job to help you get a purchase and rehab loan as quickly and as easily as possible. The perfect fit is still out there. Call me though for the most up-to-date information.

I am working online with the rest of you. If you need funding, fill out the BLN application at   http://reicapital.blnsoftware.com/ or send me an e-mail or give me a call.

Patrick St.Cin

W – 512-213-2271

M – 505-239-3026

Patrick@REICapital.cash

www.REICapital.cash

Investing in Apartments – Commitment and Study

Even in the coronavirus pandemic crisis investing in rental apartment property can still be a good way to add thousands of dollars to your income in the long term. If you buy apartment real estate that is in a good location with growth potential, but that is not too expensive, this real estate investment will likely recover after the crisis passes according to (Brad Hunter, Forbes.com). However, the investment takes funds and commitment over the long haul.

Appreciation

There are two way to make money from rental real estate. The first, appreciation, is a rise in value over time. This profit can only be realized by reselling the property after some time has passed or after you have made upgrades that add to the value. Generally, real estate appreciates in value over time if you are in the right location. Be sure to study employment and home buying trends in your local area before purchasing rental property.

Cash Flow & Coronavirus

You can also make money in the form of cash flow by collecting rents as income. The coronavirus pandemic is affecting the apartment rental real estate industry because many people, more people than we have ever seen before, have lost their income in only a few weeks, unemployment claims are up all over America, and tenants may not be able to pay their rents for the next couple of months. This will impact the ability of landlords to make money. Either the landlord forgives the rent and eats the loss for a while to keep the tenant, or the renter is evicted, and the property becomes vacant. In either case, the landlord is not receiving income on the property and may have to seek forbearance from their own lenders.

If a landlord has paid off his or her own mortgage on the property or if he or she has established an emergency fund as Dave Ramsey suggest (daveramsey.com), they will be able to weather the storm caused by the jobs lost in the pandemic shutdown.

Jobs and Renting

Either the jobs come back after the danger from the virus is past and businesses reopen, and the renters stay, or a new set of renters materialize because those people who are no longer able to afford their own homes move to apartments and construction of new homes slows because of coronavirus-driven delays caused by labor shortages, and supply shortages. More people may need to rent. In this case. It is likely the landlord’s income will return after some shaky months.

Photo by Michael (Black) Ritter on Pexels.com

Asset Rebound

Because the income potential should rebound, rental apartment property should not lose its value overtime as an asset. If the building itself remains sound, there is no reason why the property value will not increase as other investments tank and real estate once again looks solid and reliable compared to stocks. Also, if interest rates remain low, investors will be willing to take on more debt and are not restrained from purchasing property at higher prices. This will help investors who plan to sell their rental properties make a profit.

Single-Family Rentals

Investments in single-family rental homes may also benefit in the long run as more people work from home and need more room than apartments afford. Brad Hunter also suggests in his article on Forbes.com that the single-family-built-to rent-industry may benefit as people need that specially designed home office space with its own door and bathroom.

Due Diligence

Investment in rental real estate should remain attractive but be sure to do your due diligence.

Study everything from location, jobs, virus hotspots, distancing trends, supply chains, virus rebounds as they occur, and what the kids are doing now.

References:

Dave Ramsey online at https://www.daveramsey.com/blog/how-to-invest-in-real-estate

Forbes online: https://www.forbes.com/sites/bradhunter/2020/03/24/coronavirus-impacts-on-real-estate–why-you-need-to-think-short-term-and-longer-term/#6f2133345f6f

Investopedia, The Impact of Interest Rates Changes by the Federal Reserve. https://www.investopedia.com/articles/investing/010616/impact-fed-interest-rate-hike.asp

We have funds available so let us invest in something together.

I would be pleased to have you call or e-mail too.

Patrick St.Cin

W – 512-213-2271

M – 505-239-3026

Patrick@REICapital.cash

www.REICapital.cash

REI Capital Resources is in accordance with the Federal Equal Credit Opportunity Act, REI Capital Resources employs business practices that promote fair lending and will not tolerate discrimination relative to borrower race, color, religion, sex, handicap, familial status, age, national origin or ancestry. REI Capital Resources fully supports the letter and spirit of these laws and does not condone discrimination in any mortgage credit transaction.

To help the government fight the funding of terrorism and money laundering activities, Federal law requires us to obtain, verify, and record information that identifies each person who cashes checks, wire funds or engages in other financial services with this establishment. We will ask for your name, address and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

Beauty of a Hard Money Loan

Like an old tin roof and gingerbread trim, hard money loans have a beauty all there own in the right hands. Hard money loans are short-term loans secured by real estate and used by fix-n-flippers to purchase and renovate property. They have high interest rates but only for a short time. These loans usually finance the purchase of the property and the renovations.

Secured by Real Estate

REI Capital Resources hard money loans finance up to 90 percent of the purchase price of the home, up to 100% of the renovation costs, and a maximum of 70% of the after-repair value (ARV). An appraisal is required.

High Interest Rates but for a Short Term

Hard money loans are intended to be paid back quickly (in 24 months) so the high interest rate does not hurt for long and is included in your budget calculations. Hard money loans usually do not have a prepayment penalty. REI Capital Resources interest rates start at 9.5%.

Lender fees, permit costs, property assessment fees, loan originating fees, loan processing fees, inspection fees, points, interest, closing costs are taken out of the loan. REI Capital Resources points are as low as 2.5%.

Payments

Monthly interest-only payments are made during the loan and the principal repayment is made at the end of the loan term when the renovated house sells.

Borrower Qualifications

REI Capital Resources hard money loans carry minimum qualifications of a credit score of a minimum of 600, debt to income ratio of 35% – 45%, and experience that includes two to three past renovation projects or a licensed contractor budgeted to help.

Photo by rawpixel.com on Pexels.com

More is Better

More experience and higher credit scores may qualify for lower rates and fees and higher borrowing limits.

REI Capital Resources

REI Capital Resources is a hard money lender and is able to help you fund your project based on your experience, the value of the property, and its after renovation value. We have money to lend, and you need money quickly. A perfect fit is out there.

We are focused on funding Your Success.

Patrick StCin

Call me at 512-213-2271

e-mail: patrick@REICapital.cash

Fourteen House Flipping Mistakes to Avoid

I decided to visit fix-n-flip websites to come up with a list of the top rooky mistakes you can make when buying, fixing, and reselling a home for profit. One of the websites I consulted while compiling this list of mistakes to avoid while fix-n-flipping houses for profit is Dave Ramsey’s website. Dave Ramsey is well known for his advice that all of us get out of debt, and that is good advice. If you have cash that you can spend to finance your fix-n-flip project, you will not feel so much pressure if the house does not sell quickly. You won’t be tempted to sell the property for a loss because loan payments and interest costs are eating away at your bottom line.  You will be able to wait out the market and sell for a profit.

However, if you need to find funding, there are private lenders and hard money lenders out there that will finance your project and I can help you find them. Calculate how much you need and give me a call.  I’ll do my best to find you the right loan for the right price quickly.

Below are 14 mistakes fix-n-flippers make in the areas of planning and budgeting, buying, renovating, and reselling properties.

  1. Planning and Budgeting: Not calculating permit costs, property assessment fees, loan originating fees, loan processing fees, inspection fees, points, or interest in your budget. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  2. Planning and Budgeting: Not knowing how much you can afford for the entire project before making a deal, including purchasing a home, making repairs, completing renovation projects, and selling the house.
  3. Buying: Buying a property sight unseen. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  4. Buying: The location you choose to buy in has a housing inventory shortage and such a high demand for houses that you become entrenched in a bidding war and end up paying above-market prices for a fix-n-flip property. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  5. Buying: You bought a house to renovate that is far away from your residence causing you to spend too much money on gas getting to and from the job site, and the repairs take longer to complete than they would if the house was nearby. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  6. Buying: Not knowing the market and not knowing if you are getting a good deal on the house you are buying. https://www.daveramsey.com/blog/how-to-flip-a-house
  7. Buying: Not looking for black mold, a bad roof, or a cracked foundation when evaluating whether to buy the house to fix and flip. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  8. Renovation: Putting in high-end upgrades while renovating the house that cause the house to cost more than the neighborhood can afford. https://www.daveramsey.com/blog/how-to-flip-a-house, https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  9. Renovation: You did not have a reliable contractor help you estimate the repairs for the house and a surprise repair broke your budget. https://www.daveramsey.com/blog/how-to-flip-a-house
  10. Renovation: You underestimated repair costs and did not add 20% to your estimated repairs. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  11. Renovation: You tried to do repairs yourself without experience and without budgeting for contractors when you need them. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/; https://www.daveramsey.com/blog/how-to-flip-a-house
  12. Reselling: Because you don’t know the market and have not done your research, you can’t accurately calculate the house’s potential value, and you don’t know how to price the house for sale. https://www.daveramsey.com/blog/how-to-flip-a-house
  13. Reselling: Failure to network with buyers and build relationships before picking a house to fix-n-flip. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/
  14. Reselling: You did not list with a real estate agent even though you hate hosting open houses. https://www.moneycrashers.com/five-tips-for-effectively-flipping-a-house/

REI Capital Resources is “focused on funding your success!”

Contact me at 
Patrick@REICapital.cash
512-213-2271 Grid Table 7

Depreciation: Causes of the Fall?

What Can Make Real Estate Depreciate?

Depreciation is a decrease in the value of an asset overtime. When doing your due diligence research before making an investment in real estate, be sure to look around and consider those lurking circumstances that might decrease a property’s value.  

Although location affects the value of property most because real estate is by its nature real and tangible, supply is also a critical factor in how real estate is valued.

Supply

Overabundance means there is more of an item or resource than is needed or can be afforded by buyers, so it’s value goes down because no one buys it at the current price. The value will continue to go down until it reaches a point where buyers decide it is worth the price to store, use, and maintain the asset until the value goes up again. One example of this is the overabundance of condos that were launched in Miami right as demand fell because of a shortage of foreign buyers that was reported in the wsj article, “In Miami, There Are too Many Condos and Not Enough Foreign Buyers,” by Candace Taylor.

Location

New businesses and a new reputation may also impact the value of properties. For example a related article in the wsj reported recently that visitors to Miami’s South Beach has doubled in 10 years. The article “Wealthy Buyers Say So Long to South Beach,” by Candace Taylor, points out that the construction of new hotels on Miami Beach has made it a hot spot for spring breakers and the masses of students who come to party but not to buy has caused traffic congestion, litter, loud parties, and more danger in the neighborhood. As a result, the properties are not so attractive to wealthier buyers and the prices of upscale condo sales have tumbled in the first quarter of 2019.

Other natural changes near a property can affect its value. Some obvious ones are wildfires, sink holes, and earth quakes. Another is global warming. One reason Miami beach prices are falling according the same wsj article by Taylor is because of fears that sea levels will rise. Homes and condos at lower elevations have lost some value because of these fears.

Neglect and Lack of Maintenance

Abandoned homes tend to lose value because they are not lived in or cared for. They slowly fall into disrepair.

Global Investors

The value of houses can also go down because of events that affect buyers from other parts of the world.  The wsj article mentioned previously explains that severe economic and civil disruption caused by socialist and totalitarian regimes in countries like Venezuela, Argentina, and Brazil can affect the ability of their once-wealthy citizens to purchase property abroad as the value of their currency falls compared to the dollar.

In the commercial real estate arena, as Jeff Levin pointed out in the Forbes Community Voice, trade wars between the United States and China has reduced funding for new building projects because China is decreasing its investments in U.S. commercial real estate and selling its assets, which brings down prices.

Competition for inexpensive properties to invest in and improve or to rent out for income is usually pretty stiff. As a broker and a direct lender, it is my job to help you get a hard money loan easily and quickly. Private Lenders, not banks, are willing to help you fund your project based on the value of the property and its after renovation value. We have money to lend and you need money quickly. A perfect fit is out there.

Give me a call or send an e-mail to the contacts below.

Patrick StCin, 512-213-2271

e-mail: patrick@REICapital.cash

Appreciation: Causes of the Rise?

What Can Make Real Estate Appreciate?

Appreciation is an increase in the value of an asset overtime. Depreciation is the opposite, a decrease in the value of the asset overtime. When doing your due diligence research before making an investment in real estate, be sure to look around and consider those circumstances that increase a property’s value. Tomorrow, we will talk about those circumstances that might cause a property to depreciate. 

Engraved in every real estate investor’s memory is the fact that location affects the value of the property most because real estate is by its nature real and tangible, a building, land, flora, fauna, and natural resources.

Using our imaginations and our memory, let’s review several things that can increase the value of an asset

Supply

Scarcity means there is a limited amount of some item or resource, so it becomes harder to find and worth more when you do find it due to competition for the limited resource. One example of a shortage creating a rise in value is the situation with single-family starter homes in the United States and the world. Although lower in price, single-family starter homes have become more valuable because there are not enough of them.   

Location

Some changes in a vicinity that increase home values may not be due to a physical change nearby, for example the employment rate goes up, the local economy improves, and/or the crime rates go down. These changes may be due to a new business coming in, but also may be due to regulatory changes that lower taxes or technological changes that allow people to work at home.

A physical change near the property can affect its value. Sometimes the value of a house goes up because of something that moves into the neighborhood or nearby, for example a water park or amenity that brings tourism or a research facility or fulfillment center that brings jobs and workers. Sometimes something that was there all along is discovered or becomes more appreciated than it was before, for example mountains and foothills with a view or the solace of desert spaces. Sometimes, a land use regulation may change causing a mini land rush.

Photo by Alexander Wendt on Pexels.com

Development

Development causes appreciation of houses. Let’s say that you buy bare land on the edge of a community and build on it. The value of the property will appreciate at least the value of the house.  If you buy in what is already known as the best district, you will most likely pay a premium price for that reputation and it will not go up over time because it is at the top already. If you buy in a place with a poorer reputation, such as a school district, and better management, government programs, or community involvement begins to improve the school district’s reputation, the homes in the area will likely appreciate.

Additions or Updates

Additions, enlargements, or updates of a home itself will appreciate its value depending on what is added and the quality of the materials and workmanship. These additions to quality might include finishing the basement, adding a screened-in porch, updating the bathroom or kitchen.

Global Investors

The value of houses can also go up because of things that happen in another part of the world that affects buyers or sellers.  Economic disruption or lack of opportunity in one country can cause people to invest in another country and move there, increasing the value of the property in that area. Wars and trade wars can also affect property value in a global economy. The wsj explains in a recent article that after housing prices fell in the United States, Latin Americans bought up luxury homes and condos in Miami.

Tomorrow, we will talk about what circumstances might make a property depreciate.

Competition for inexpensive properties to invest in and improve is usually pretty stiff. As a broker and a direct lender, it is my job to help you get a hard money loan easily and quickly. Private Lenders, not banks, are willing to help you fund your project based on the value of the property and its after renovation value. We have money to lend and you need money quickly. A perfect fit is out there.

Give me a call or send an e-mail to the contacts below.

Patrick StCin, 512-213-2271

e-mail: patrick@REICapital.cash

Hurricanes and REI: It’s all about Timing

Alert: Harvey, Irma, Rita, Katrina

Hurricane season is here, and there are things you need to know now, before the storms approach.

Natural disasters are a cause of financial loss for a real-estate investor in fix-n-flip projects or for vacation rental property deals on a coastline. After reading several articles and searching the real estate websites, I ran into tips for real estate investors facing an approaching natural disaster at yourflipcoach.com, Your Virtual Real Estate Coach. Be sure to visit Ryan’s site if you have a minute. Here are the key points in the article.

Insurance Binding
First, as a practical matter, it is very important to know that insurance companies will not bind a new policy or add additional coverage to an existing policy if a hurricane or large storm is headed for Texas. This is important for you to know if you are planning to invest in a property in Texas.

Make sure a hurricane is not on its way. Buy insurance that covers flood and wind damage and replacement costs, and don’t buy the property or the insurance if you can’t bind an insurance policy. Both you and your lender will want insurance on the property. Buy flood and wind insurance on your new property and make sure insurance binders are active well before the next storm.

Closings Disrupted
Second, when you have found a buyer and a storm is approaching, time the closing of the deal so that closing is complete well before the storm event. The storm can get in the way of your closing in so many ways. Following a storm, roads and properties may be damaged and inaccessible. Even if you are dry, routes in and out of your area might be blocked or flooded. You could lose your buyer because they cannot get to you or to the property, or because the property is damaged.

A study performed by the Federal Reserve Bank of Dallas concludes that the “typical hurricane raises real house prices and, to a lesser extent, reduces real incomes for a few years.”

New Business Opportunity 5 Years Out
Third, be ready for new business opportunities following a storm. Damaging natural disasters and the insurance money that comes into the market after they pass can create new opportunities for real estate investors. Some property owners may want to sell, particularly if they did not have insurance. Even if they are insured, many home owners will take their insurance check and sell the property for whatever they can get. Some lots are sold at land value after the home was removed; but once a house is rebuilt, it can be resold again at near the same price in future years (about 5 years).

aerial view atmosphere clouds cold front

Residential Prices Rise Because Housing is Needed
The value of property that is high and dry after a hurricane will increase because homes are lost or uninhabitable. Housing will be needed. And, buyers and investors will be seeking solutions.

An article in Forbes by Jordan Lulich points out that right after a storm, home sales go down because property owners are too busy cleaning up. According to his article, two months after Hurricane Harvey, 31% of residential neighborhoods saw an increase in median house prices here in Texas.

It is still smart to invest in real estate in hurricane prone areas because residential property values increase over time. Repair costs associated with storms are certainly worrisome. Just be sure to buy insurance that covers wind and water damage to protect your asset.

Please give me a call when you find that perfect investment, and I can help you fund the project.

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash

 
References
Ryan Kuhlman, January 8, 2018, Natural Disasters and Real Estate Investing, https://yourflipcoach.com/natural-disasters-and-real-estate-investing/

Jordan Lulich, June 28, 2018, Does Hurricane Damage Negatively Impact Your Real Estate Value/
Forbes https://www.forbes.com/sites/jordanlulich/2018/06/25/does-hurricane-damage-negatively-impact-your-real-estate-value/#381ca6d5107b

Murphy, Anthony and Stroble, Eric, October 2010, The Impact of Hurricanes on Housing Prices: Evidence from US Coastal Cities. Federal Reserve Bank of Dallas, Research Department, Working Paper 1009, https://www.dallasfed.org/

Numbers: Prices, Percentages, Points

Despite the volatility of the stock markets and the Texas weather, no matter if it is raining, blowing, or baking, even if I have to walk uphill both coming and going, in a “snownado,” I am here to help you find ways to put your money and your time to good use making more money in big or small, short-term or long term, real estate investment adventures.

I have several loan programs to offer.

 

 

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Patrick@reicapital.cash

512-213-2271

 

 

 

 

 

 

Old Malls: Transformed in Texas

While studying what is being done with abandoned malls around the country, I ran into the April 2, article in Dallas News by Steve Brown about plans for the struggling, not dead, Collin Creek Mall in Plano, along Highway 75. The mall is being redeveloped into a mixed-use village centered around a crystal lagoon.  The plans support dense property usage in the area with office space, multi-family apartments, single-family homes, senior-living units, a hotel, restaurants, retail space, a park and hiking trails with all the parking underground sharing the location where the mall is now. The developer, Centurion American, will begin construction in July 2019. Entertainment will be a big component of the project.


Crystal Lagoon & Real Estate Strategy

Wondering what a crystal lagoon is, I visited their website, crystal-lagoons.com, and found that the crystal lagoon is a water amenity that will increase the value of the surrounding real estate and allow higher rents to be charged for office space, hotels, and apartments because it actually brings the beach or water-front to the neighborhood, no matter where the neighborhood is in the world. Although it was developed first for private use, the public access lagoon model allows communities to be developed around the water feature. According to crystal-lagoons.com, the technology claims to make an unviable project viable. Remaking the land where old malls are located, in the middle of suburbs, into new communities for a long time has been a potentially unviable project. It is good to see that this concept can reform and reuse these massive abandoned spaces in our cities.

Sustainability

The crystal lagoons advertise that they are sustainable, using less chemicals, less energy than conventional pool filtration systems, and less water than parks and golf course, yet providing water as crystalline as swimming pools and tropical lagoons. They use any type of water, salt, fresh, or brackish and control evaporation with a film cover system and by capturing rainwater that falls.

Safe, Smooth, and Clean Water

Even along the coast of an ocean, the crystal lagoon concept offers a safe and controlled environment for water sports and beach activities.

Master-Planned Communities around Lagoons

Here in Texas, there are a couple of communities that include a crystal lagoon as part of their planned amenities. Like the Collins Creek Mall replacement project, these are master-planned communities where entertainment, shopping, and employment can be found within minutes of home.

One of these communities is Windsong Ranch in Prosper, Texas.  Another community, Lago Mar, is a 2,033-acre master planned community located along Interstate 45 in Texas City. The 12-acre Lago Mar crystal lagoon is opening in 2020. The entertainment district features multiple beaches, a floating obstacle course, a swim bar, a 10,000-square-foot beach club, and restaurants on the boardwalk. 

Balmoral in Houston is a 750-acre new home community in the West Lake area of Houston that offers Texas’ first crystal clear lagoon surrounded by glistening white sand beaches. The lagoon encompassed 2 acres of sparkling blue water that is 8 feet at its deepest and 3 feet in the swimming areas.

As you are considering investing in real estate, think about amenities like these. Are there any crystal lagoons, walking trails, fishing lakes, or theatres, near the property you are considering. These entertainment amenities affect the value of property and the amount of rent you can charge.

Focused on Funding Your Success

I can be reached at
Patrick@REICapital.cash
512-213-2271
Austin, Texas

Image credit: Azwar Thaufeeq [CC BY 3.0 (https://creativecommons.org/licenses/by/3.0)%5D

Multi-Family Rentals Are Real

As the stock market dips and dives and quivers and stock market investors peer into the fog of the future trying to see where tariffs will take the economy, real estate stands firm, on a block, in a neighborhood, around the corner from this school or that office park, providing shelter to human beings.

toon-3615

An investment is not safe though if you do not do your research and match the facts of the property and area situation with your needs, expectations, and goals. You might end up holding on to a property you would like to fix and sell quickly or find yourself with a rental that is more outgo than income. When considering investing in multi-family properties, be sure to pay close attention to these things:

  • the parking situation,
  • the safety of the neighborhood,
  • the quality of property management,
  • and to the location.

Multi – Family Property Class A
Properties are above average in terms of design, construction and finish; command the highest rental rates; have a superior location, in terms of desirability and / or accessibility; generally are professionally managed by national or large regional management companies.

You will pay more up front and have less to fix, but have income potential right away.

Multi – Family Property Class B
Properties that do not possess design and finish reflective of current standards and preferences; construction is adequate; commands average rental rates; generally are well maintained by national or regional management companies; unit sizes are usually larger than current standards.

Be prepared to make some repairs, do some remodeling and updating as tenants move out to keep the apartments occupied.

Multi – Family Property Class C
Properties that provide functional housing; exhibit some level of deferred maintenance; commands below average rental rates; usually located in less desirable areas; generally managed by smaller, local property management companies; tenants provide a less stable income stream to property owners than Class A and B tenants.

You will have to do more hands-on work with this class of property to handle the repairs and tenant turnover; but if you like hands-on involvement, there will be plenty of opportunities to employ your carpentry, plumbing, electrical, social, and bookkeeping skills. You might find some great deals.

Let me know if you have found any deals this month that you know you can turn around and resell or rent. I hope that I can be of help to you this month.
I can be reached at

Patrick@REICapital.cash
512-213-2271
Austin, Texas