Podcast Summary
Small improvements lead to big rent increases: Buying a mobile home park and adding baseboards, repainting interiors, and installing dishwashers increased average rent from $465 to $715
Simple improvements to a property can lead to significant rent increases. The hosts of the Bigger Pockets Podcast, Brandon and Mindy, shared their experience of buying a mobile home park and increasing the average rent from $465 to $715 without making major renovations. They only added baseboards, repainted interiors, and installed dishwashers. This demonstrates that small improvements can make a big difference in rental income. Additionally, they emphasized the importance of networking and using resources like BiggerPockets to find partners and learn about new opportunities. The platform offers free and pro memberships, as well as state-specific landlord forms, making it a valuable tool for real estate investors.
Exploring Real Estate Investment Strategies: Off-Market Deals, No Money Down, and Partnerships: Discover off-market deals with DealMachine, invest with no money down through Rent to Retirement, and partner with trusted companies like BAM Capital for successful real estate investments. Listen to Mindy's BP Money Show for financial advice.
Investing in real estate comes with various opportunities and strategies, from finding off-market deals with DealMachine to investing with no money down through Rent to Retirement. Another key takeaway is partnering with trusted companies like BAM Capital for successful investments. A guest on the show, Nathan Brooks, shared valuable insights on finding deals and becoming a better property manager, offering unique tips not previously discussed on the podcast. To learn more about these opportunities and strategies, listeners are encouraged to explore DealMachine, Rent to Retirement, and BAM Capital. Additionally, Mindy's BP Money Show is recommended for financial advice. Remember to leave a rating, review, and subscribe to the podcast.
Personal experiences shaping future goals: Extreme experiences can lead to new perspectives and financial goals, inspiring individuals to pursue their dreams despite challenges
Personal experiences, even those as extreme as being kidnapped, can shape our perspectives and goals in life. For the speaker, this experience led him to a frugal mindset and a desire to build equity instead of paying rent. Upon returning home from his mission, he was determined to enter the real estate industry and eventually married to make this dream a reality. Despite the traumatic experience, he found a silver lining in the lessons learned and the opportunity to pursue his financial goals. The speaker's story is a reminder that our experiences, both good and bad, can shape our futures in meaningful ways.
Starting a career in property management and growing a real estate portfolio: Dedication, hard work, and industry knowledge are key to starting a property management career and building a real estate portfolio. Managing properties and tenants is crucial for financial success.
Starting a career in property management and building a real estate portfolio requires dedication, hard work, and a solid understanding of the industry. The speaker began managing properties in 1999 and always worked a second job while doing so. They became serious about property management in Idaho and obtained various certifications to grow their single family and multifamily businesses. They've helped put over 360 new units in the ground and have assisted owners in taking advantage of the down real estate cycle. The speaker emphasized that managing properties and tenants is just as important as buying them, as neglecting this aspect can lead to financial loss. The speaker's first investment was a duplex in Nampa, Idaho, which they bought in foreclosure during the market crash in 2008. They stressed the importance of looking at the numbers and details when buying assets and consulting with property managers for accurate revenue and expense estimates.
Researching a property manager is crucial for successful real estate investing: Thoroughly research property managers online, engage in conversation, ensure transparency and certifications, don't rush hiring, and consider visiting the property in person for long-distance investments.
The importance of a good property manager cannot be overstated in real estate investing. Neglecting to thoroughly review leases and documents, or failing to hire a competent property manager, can lead to financial losses and disputes with tenants. To build a relationship with a property manager, start by researching them online, looking for transparency and certifications. Reach out to them and engage in a conversation. Remember, a good property manager has a lot to lose and is more likely to do what's right for you. Don't rush into hiring the first property manager you find, take your time to make an informed decision. And if you're investing long distance, consider visiting the property in person to better understand the local market.
Selecting a Great Property Manager for Your Real Estate Investments: Due diligence is key when choosing a property manager. Look for certifications, meet them in person, and assess their online presence. Even poorly managed properties can yield great investment opportunities.
The role of a property manager is crucial in real estate investing, especially when building a portfolio in multiple markets. A great property manager, ideally with certifications from organizations like NARPM or IRIM, can help ensure the success of your investment. When selecting a property manager, do your due diligence by checking for certifications, meeting them in person, and assessing their online presence. In the case of larger companies, their systems and the potential consequences of any mismanagement make them a safer choice. Personal experience shows that even poorly managed properties can yield great investment opportunities. For instance, a 42-unit apartment building with a bad property manager was sold for $1.7 million in 2015 and is now worth $3 million after identifying a better opportunity in a different market.
Finding value-add investment opportunities: Identifying poorly managed properties and investing in improvements can lead to higher rents, property value, yields, and selling prices. Contact property managers, check cap rates, and join investing organizations for resources.
Identifying poorly managed properties and investing in necessary improvements can significantly increase rents and property value. This strategy, often referred to as value-add investing, can lead to higher yields and potentially higher selling prices. To find such opportunities, contacting property managers about their least desirable owners and offering to buy their properties can be an effective approach. Cap rates, which represent the return on investment for a real estate property, are an essential tool for investors to evaluate potential deals. Websites like Integra Realty Resources provide valuable information on cap rates and market trends, making it easier for investors to identify high-yield opportunities. Additionally, investing organizations like CCIM offer valuable education and resources for those looking to get into commercial and multifamily real estate. Ultimately, focusing on cash flow and high cap rates, rather than relying solely on appreciation, can lead to successful real estate investments.
Focusing on cash flow for smarter real estate investments: The CCIM designation equips investors with financial expertise for making informed real estate decisions, while multifamily properties remain popular due to demographics and market dynamics. Cash flow is the new priority, making alternative strategies like building to rent and forming property owners associations valuable.
Focusing on cash flow rather than appreciation is a crucial piece of advice when evaluating real estate investments. This can help minimize potential hurt and make for smarter investments. The Certified Commercial Investment Member (CCIM) designation, offered by the CCIM Institute, provides valuable education on the financial side of real estate, allowing investors to make informed decisions. Currently, multifamily properties are a popular investment due to demographic trends and market dynamics, but finding deals can be challenging. Building to rent and forming property owners associations for 4plex communities are alternative strategies to consider, especially if construction and land costs are right. Cash flow is now the primary concern for investors, and the scarcity of good investment opportunities outside of multifamily is driving up prices and lowering cap rates.
Building to rent 4plexes: A profitable investment despite initial challenges: Finding the right land price and infrastructure in lower-cost markets and utilizing financing options like HUD 221 D4 loans can make building to rent 4plexes a profitable investment with higher rents and lower repairs.
Building to rent properties, particularly 4plexes, can be a profitable investment despite the initial challenges in land acquisition and construction costs. Investors can find good deals in markets like the Midwest and parts of the South, where land prices are lower, and tenants love the townhome style 4plexes. To make this investment viable, it's crucial to buy land at the right price, ideally under $2.50 to $2.2 per square foot in markets like Boise, Idaho. Construction costs are higher in areas with higher rents, such as the Inland Empire, but the key is to buy land with existing infrastructure to minimize costs. Once the property is built, the rents can be significantly higher than the cost, and repairs are lower due to the new property's warranty and longer runway. Additionally, there are financing options like HUD 221 D4 loans that offer long-term, fixed-rate financing with non-recourse debt, making it an attractive investment for those who don't want to build themselves. While there are challenges, the potential rewards make building to rent an intriguing option for real estate investors.
Finding a Builder for Multi-Unit Projects: Contact local builders or property managers for recommendations, work with land hounds or MLS agents for land deals, ensure proper zoning, and include contingencies in contracts.
Finding a good builder for a multi-unit project involves reaching out to local builders or property managers for recommendations. Land deals can be found by contacting "land hounds," agents who specialize in land transactions, or by working with a local MLS agent. It's essential to ensure proper zoning before purchasing a property, and contingencies should be included in the contract to protect against potential zoning issues. Additionally, it's possible to buy and rebuild uninhabitable properties on desirable land, but the zoning process can vary greatly depending on the neighborhood and city regulations.
Redfin and 1031 Pros cater to different stages of real estate journey: Redfin helps homebuyers find dream homes with frequent updates, personalized recommendations, and low fees. 1031 Pros minimizes capital gains taxes for sellers through tax-deferred exchanges, enabling investment property purchases. Vacasa simplifies vacation home ownership with property management and higher revenues.
Redfin and 1031 Pros offer valuable solutions for different stages of the real estate journey. Redfin, with its frequent listing updates, personalized recommendations, and low fees, helps homebuyers find their dream homes and save money. Meanwhile, 1031 Pros assists home sellers in minimizing capital gains taxes through 1031 tax-deferred exchanges, enabling them to invest in new properties. Additionally, Vacasa simplifies vacation home ownership by managing properties and generating higher revenues for homeowners. For those handling multiple rentals, choosing a reliable property manager is crucial. Look for a company with a proven track record, local expertise, and a focus on customer service. Keep expanding into new markets, and consider partnering with established platforms for growth.
Finding the Right Property Manager and Diversifying are Key to Successful Real Estate Investing: Choose a property manager who understands investment goals and aligns with them, diversify in both asset classes and locations, and analyze local market for potential rent increases based on demographics and median income.
When investing in real estate, it's essential to find a property manager who not only handles the day-to-day operations but also understands the investment side of property management and aligns with your investment goals. This partnership can significantly impact your returns. Additionally, diversifying not only in asset classes but also in locations is recommended to mitigate risks. To determine the potential rent increase for a property, consider the median income and demographic profile of the area. A thorough analysis of the local market can help you understand the top rents the area can sustain. Remember, even with improvements, the rental income may not justify the increase if the demographic profile does not support it.
Understanding local market dynamics is crucial for real estate investment: Thorough research, local market knowledge, and consistent tenant management are essential for successful real estate investments.
Making an informed real estate investment decision goes beyond just considering the physical appearance of a property. It's crucial to understand the local market dynamics, including median income levels, demographics, and job market. These factors will help determine if the area justifies the rents and if the investment makes financial sense. Additionally, understanding the local eviction policies and having a consistent approach to tenant issues are essential. Treating all tenants equally and following the lease agreement are key to avoiding potential HUD violations. In summary, a successful real estate investment requires thorough research, understanding of the local market, and a consistent approach to tenant management.
Maintaining Professional Distance for Effective Lease Enforcement: Hiring a family member to handle tenant communications allows property managers to maintain professional distance and make consistent, rational decisions based on lease terms. Implementing online rent collection methods also minimizes delinquencies.
Maintaining professional distance as a property manager is crucial for effective and efficient lease enforcement. The speaker shared his personal experience of getting emotionally involved with tenants, leading to inconsistent decision-making. To overcome this, he hired a family member to handle tenant communications, allowing him to make rational decisions based on the lease terms. The importance of having a property manager who can implement online rent collection methods was also emphasized to minimize delinquencies. By maintaining a professional distance and focusing on lease terms, property managers can ensure a smooth and profitable rental business.
Streamline accounting and communication for effective property management: Implement online rent payments, understand local landlord-tenant laws, and prioritize clear communication to maximize returns and minimize headaches.
Effective property management involves streamlining the accounting process and implementing technologies that make rent collection easier and more efficient. By requiring tenants to pay online or use cash pay options, property managers can significantly reduce delinquencies and save time and stress. Additionally, it's crucial to understand the specific landlord-tenant laws in the location of your investment properties, as these laws can greatly impact the eviction process and your ability to manage your properties effectively. In Colorado, for example, rent is typically due on the first, with a three-day notice to pay or quit if rent is not received by the fifth. However, the specific laws and procedures can vary greatly from state to state, so it's essential to research and follow the guidelines set forth in your lease agreements and local legislation. Overall, prioritizing clear communication, efficient accounting, and a solid understanding of landlord-tenant laws can help property managers maximize their returns and minimize headaches.
Following lease agreement helps prevent evictions: Strictly adhering to lease agreements can lead to fewer evictions and fewer problems with tenants, despite potential irony. Being lenient may seem helpful but can train tenants to be irresponsible and lead to larger issues later.
Following the lease agreement strictly as a landlord can lead to fewer evictions and fewer problems with tenants, despite the potential irony. Being lenient and making exceptions may seem helpful in the short term, but it can ultimately train tenants to be irresponsible and lead to larger issues down the line. If landlords encounter issues with unresponsive property managers or tenants, they may consider contacting their state's Real Estate Commission or Secretary of State for assistance. Regarding evictions with service animals, the process is generally the same as for any other eviction, but landlords should ensure they follow proper procedures and document any violations of the lease agreement. The service animal itself is not a valid reason to evict a tenant, and landlords should avoid evicting tenants for reasons other than nonpayment of rent whenever possible.
Equal treatment for tenants with pets or service animals: Landlords must enforce lease agreements equally for tenants with pets or service animals, but may provide reasonable accommodations for those with disabilities. Clear pet policies and consistent enforcement are key.
Landlords must treat all tenants, including those with service animals or pets, the same when it comes to enforcing lease agreements. This includes charging the same rent and following the same eviction process for non-payment of rent. However, tenants with disabilities and service animals are entitled to reasonable accommodations, such as not being charged a pet deposit. In the case of hidden pets, landlords should have clear pet policies in their leases and enforce them consistently. If tenants are found to be in violation, landlords may choose to charge them for the cost of the pet or even evict them, depending on the severity of the violation and local laws. Regular inspections of the property can help uncover hidden pets or service animals. It's important for landlords to consult with local attorneys for specific advice on handling these situations.
Consistency in property management application processes: Property managers should have a clear, written process for application screening and stick to it to ensure fairness, compliance, and avoid legal issues.
Consistency is key in property management when it comes to application processes and screening policies. Property managers should have a clear and written process in place and stick to it without exceptions. This helps ensure compliance with fair housing laws and avoid potential legal issues. Applicants should be informed of the process and criteria upfront, and applications should include the screening criteria as well. Avoid making subjective decisions or assumptions about applicants based on personal biases. It's also important to stay informed about local and federal laws regarding marijuana and other substances, as regulations can vary.
Navigating tenant screening complexities, especially disabilities: Landlords can focus on income or employment status for legal grounds for discrimination instead of disabilities. Consider options like cosigners or additional deposits for tenants who fall short in one area.
Navigating the complexities of tenant screening, particularly regarding disabilities, can be a challenging aspect of property management. Landlords must tread carefully to avoid potential legal issues. Instead, they can focus on other legal grounds for discrimination, such as income or employment status. If a potential tenant meets all other requirements but falls short in one area, landlords can consider options like cosigners or additional deposits. In terms of recommendations, Andy's favorite real estate-related book is the "Commercial Investment Real Estate" (CI 101) by the CCIM Institute, which provides valuable insights into understanding real estate investments through numbers. For non-real estate business books, Andy suggests "Drive" by Daniel Pink for understanding what motivates people and creating a great company culture. In his free time, Andy enjoys the mental clarity and focus gained from stand-up whitewater paddleboarding.
The Importance of Knowledge in Real Estate Investments: Successful real estate investors prioritize knowledge to navigate any market. Andy Hirschfeld, Chairman of HomeRiver Group, emphasizes this importance and shares his passion for water sports.
Having the right knowledge and understanding of real estate investments sets successful investors apart from those who fail or never get started. Andy Hirschfeld, the Chairman of HomeRiver Group, emphasized the importance of knowledge in making real estate work in any market. He also shared his passion for water sports, particularly stand-up paddle boarding and surfing, which he finds helps clear his mind and focus. Andy's company, HomeRiver Group, aims to create a national property management presence, and people can learn more about him and the company on their website, www.homeriver.com. In a surprising twist, Andy also owns a bowling alley, despite not initially being a fan, and his average score has improved since purchasing it. The interview concluded with Andy's humorous take on his bowling skills and a recommendation to read an article about his bowling alley's history. Overall, the conversation highlighted Andy's expertise in real estate and his diverse interests outside of business.
Emphasizing the importance of professionalism in rental property management: Follow rules, have processes, treat it as a business, learn from experiences, and continually seek knowledge to succeed in rental property management.
Having proper processes, following rules, and treating rental property management as a business, rather than a hobby, are crucial for success. This was emphasized during a conversation about a man's harrowing experience being kidnapped in a foreign country, despite his professional background as a property manager. The discussion underscored the importance of adhering to best practices, which can be learned from the man's experiences and through resources like "The Book on Managing Rental Properties" by Brandon and Heather Turner. The books provide comprehensive guidance on managing tenants and running a rental property business effectively. The conversation also touched upon the importance of staying informed and being open to learning from various sources, including movies like "Zoolander," which can provide entertainment and valuable insights. Overall, the conversation reinforced the significance of taking a professional approach to rental property management and continually seeking knowledge to improve and grow.
Maximizing tax write-offs and running a business from home: Learn personal experiences and tips from the hosts for maximizing tax write-offs and running a successful business from home on The Bigger Pockets Money Show episode 7.
The Bigger Pockets Money Show episode 7 offers valuable insights for those looking to run a business from home and maximize tax write-offs. The hosts share their personal experiences and tips, making it an informative and entertaining listen. I apologize for the earlier confusion regarding the show number. Despite my mistake, I strongly recommend checking out the episode at biggerpockets.com/moneyshow7. Additionally, the podcast as a whole provides practical advice and knowledge for real estate investors, focusing on the importance of time in the market and finding an investor-friendly agent to help navigate the process. Remember, investing in real estate involves risk, so be sure to consult with qualified advisors before making any decisions.
