Monday, June 30, 2014

There’s Money In Commercial Real Estate

For so long we’ve focused primarily on residential real estate investing. This week we’re going to start digging into the possibilities of investing in commercial real estate. There are so many different types of commercial investments and each has it’s own particular skill set to own and operate in a profitable manor.

Commercial real estate typically includes things such as large multifamily, office, industrial, warehouse, retail, etc. Each of which has it’s own special ground rules to be a successful investor.

Our member and good friend, Frank Martin, will be leading a discussion on commercial investing and he promised to bring some numbers to the table including things such as what you would expect to pay for various types of commercial property and what rents you would expect to get on these properties.

We all know it takes allot longer typically to rent a commercial property but these commercial tenants most often stay much longer. You also don’t have the headaches of tenants calling and complaining about this or that being broken as commercial leases typically require the tenant to fix all maintenance issues with exception maybe of the exterior walls and or roof.

There are some downfalls to commercial landlording, however, there are many benefits that make up for it. The path that I have seen many successful investors take is they get started in residential investing and at some point in time or another they end up switching over to commercial investing due to it being much easier to manage. Then somewhere further down the road their pockets are fat and they own an empire.

That’s where I’m going. My wallet is already full…  Now I need a clear and concise, risk free roadmap from point A where I’m standing directly to point B.

Come on out to the meeting this week to get your toes wet in commercial investing. Over the next year we are going to continue to dig deeper in these areas of investing. REI of Virginia plans on giving you the expertise so if a commercial investing opportunity presents itself in the future you will be armed with education to make a wise financial decision.

See you there!!!

Monday, June 23, 2014

Becoming Your Own Banker At REI This Tuesday!

There are many benefits of using a bank to finance deals that will in turn over years make you very wealthy. Believe it or not, the less money you have in a deal, the higher your ROI or cash on cash return will be. Sounds strange but it’s true and I can prove it.

However no one with a minimum of two brain cells to rub together would over leverage themselves as that is always a house of cards that will in time fall. I’ve seen it happen many times.

In the process of making yourself wealthy via the bank loans you are also making the bank very wealthy as “compounded” interest averages to be quite a bit higher than it initially sounds.

Our CEO, Dan Cullather and I have been talking about a book he has been reading regarding being your own banker. He introduced some very interesting concepts to me that he will be sharing with the group.

Cancel your plans if you have any because you don’t want to miss this meeting. Hopefully it will be in the big room so people aren’t turned away from a lack of adequate seating like last week.

Be there or be square…

Thursday, June 19, 2014

Chronic Complainers - An Adequate Representation Of The Neighborhood?

Every neighborhood has one. A chronic complainer.

It can be very tempting to ignore a complainer as they eventually become irritating and it's human nature at that point to withdraw from an irritant.  But believe me, you ignore complainers at your own peril. That's because complainers really are suffering. They're not suffering from the superficial stuff about which they're whining. They're deeply deeply wretched human beings who, when ignored, will feel driven to clamor even more for attention, because they're feeling misunderstood.

People who complain a lot generally are not the kind of self-starting, take-care-of-business, solve-the-problem-pronto people with whom we want to work. Expecting them to be that would be an exercise in futility. It's best to appreciate them for what they do well, and know that they won't ever be a truly supportive team player.

Unfortunately I am incapable of doing so. When I get nasty abusive voicemails on my phone about my tenants or properties, I most often block the caller from contacting me. Next time they call they hear the "do, dooo, dooo, this number you have called is not in service" message from Google Voice.
I prefer to talk to people in an educated positive manor as that is what motivates me to work together for a good solution.

Know also that chronic complainers can bring down the atmosphere in an entire neighborhood. The negative atmosphere leads to blight as it leads to people keeping their property at a substandard level and not caring about what happens in the surrounding area. It's very important for neighborhoods to understand that this type of negative behavior creates an undesirable outcome and neighborhoods should consider stifling the complainers who are speaking on behalf of their organization and replacing them with positive proactive speakers who understand how to move a neighborhood forward.

A quick background on myself. I served a 3 year term on Roanoke Neighborhood Advocates because I do have a passion for owning properties in up and coming neighborhoods as that leads to high sales prices in the end game. I buy in neighborhoods that have made that first turn that I can see positive progress in the future.

I specialize in boarded up houses. I like to make the most radical difference to a neighborhood that I can bringing a F grade property up to a B. I don't take a property to an A flip grade. That's not my forte and there is no economic advantage of doing so until the neighborhood has taken a full swing which takes years. At that point it makes since to fix a property up to flip quality to sell it and buy 4 more in the next up and coming neighborhood.

My B quality property is far and above most owner occupied property in the neighborhoods that I buy in until the point where they have finished the final turn into a grade A neighborhood. The Mountain View Neighborhood is still a ways off from being a B grade neighborhood.

All of my properties have a valid rental exemption certificate as they are kept in good working order. They also pass Section 8 inspections and insurance inspections. All properties are "fully in compliance" with the law. Landlords have very rigid requirements in Virginia that owner occupied property is not subject to. All of my properties are well "above minimum standards."

I'm posting a voicemail that I received from one of these fringe complainers that got blocked from calling my phone due to an inability to speak to me in a professional manor.

A few points to make:

1. A boyfriend, not husband, of a tenant of mine that was drinking and hit his girlfriend. He is not on my lease and the female tenant let him come over. After he hit his girlfriend which was in front of another one of my tenants, he refused to let either of them leave the house because he didn't want them to call the cops on him. Yes, stupid guy. His charges were abduct by force / intimidation. The complainer has all of the details wrong saying the "White" girl was locked in a closet. What's up with the "White" thing anyway, is he racist? What does the color matter for? Is there a reason for that bit of information? The "white" girl was drinking with both of them as they are friends.

2. The female tenant on the lease had a background check from us, as all tenants do. And she is fine. I have not "chosen" to make the neighborhood suffer as the caller says.

3. Those tenants are not new to the neighborhood, they have been living in another house over there for years.

4. I support all neighborhoods and never "try" in any way to harm them by moving in people I don't completely think are good for the neighborhood.

5. Does this ******* think I live in South Roanoke or something? I also live in a bad neighborhood. As a matter of fact mine is much worse. I live behind the rescue mission. The caller states that I would never allow this to happen in my neighborhood. As a matter of fact, the house right next door to me just got shut down as it was found to be a crystal meth lab and the police were at it every day for months. The landlord that owns it is one of our members. No way would I think that he was TRYING to ruin my neighborhood. It's not easy to get these losers out once you have found that they turned a new page to crime.

6. I WILL NOT be evicting the female tenant from the house. She was the victim of a crime. She WILL NOT be going anywhere. Complainer is trying to get me to break the law. Maybe he will read up a little regarding the rights of a victim in a domestic violence situation and what a landlord can and can't do. Corbin, I'm calling you out right now. I WILL NOT break the law for you. She is a victim not a criminal.  I DEMAND that you go back in your hole...

7. Listen to his tone and choice of words. It starts out good and gets really nasty as it goes on. I'll bet he didn't know that my voicemails are public information. The house in the picture is my supposed substandard housing that he can't get rented. Don't bother anymore man. I've been told that you are known for stealing deposit money anyway.

Corbin Prydwen - VP representative of the Mountain View Neighborhood Association: Let me make myself clear. I do not think the rest of this neighborhood association (Other than the Jim guy who works at Lowes) backs Corbin in his unprofessional attitude. I know many of them and they are good people. Corbin just became the VP and is now drunk with power. Guess what buddy? I could care less what you are!

Monday, June 16, 2014

Landlord Tenant Expert Attorney Ross Hart On New Legislation You Need To Be Aware Of

This week at REI we have one of our favorite entertaining speakers, Ross Hart. Ross is an expert at landlord tenant issues and he will be talking about new legislation that will be coming around the corner this July.

There are some changes that have been made to the landlord tenant act that you need to be aware of. Ross will cover these topics so you understand what is required and keep yourself out of hot water.

Below are some of the topics of discussion:

1. If you have 3 or more properties our politicians have decided unanimously that you are now subject to the landlord tenant act.

2. You now can get a fine if the tenant pays off a judgement and you don’t notify the court.

3. New boarding house laws that could allow you to rent a single family house of up to 8 people under certain conditions. Currently the city says no more than 4 unrelated adults or a family plus 2 unrelated adults.

4. You can now amend your unlawful detainer if the tenant doesn’t show up to court to add more damages, more rent, etc.

5. You can now bill a tenant for local government fees if you have it in your lease. So when the government sends you the rain tax you can have that tax added to their rent. Or when they send you a bill for the tenants trash etc, it gets billed as rent. We really need to talk to Ross about this one. Lots of possibilities here.

6. Now, if you didn’t take the tenant to court, and they still owe you money, it is now legally owed to you without the judge saying so. So it is now OK for a collection agency to go after them without a judgement from the way I read that bill.

7. Now the estate of a dead tenant owes any damages to the unit or back rent, etc. 

Good stuff people!!! I’ll see you there…

Monday, June 9, 2014

Learn All About Prepaid Legal Services From Legal Shield This Week At REI


This Week our special guest speaker will be member and friend, Eliane Niemann. Elaine works with Legal Shield which is a prepaid legal service.

They have small business services which include:
* Legal Consultation on unlimited matters
* Business law expertise
* Contract and document review
* Debt collection assistance
* Legal correspondence &
* Trial defense services

I am interested to see what limitations there are with the service. Especially in our industry considering the fact that we use legal services frequently.

Come on out to our weekly meeting and spend some time with good like minded people.

See you there!

Monday, June 2, 2014

Roanoke City Treasurer Evelyn Powers At REI of Virginia This Week

This week our guest speaker will be the Roanoke City Treasurer, Evelyn Powers. Evelyn is concerned with some of the things that have been going on in the city and offered to come and speak with our group.

Her job as treasurer is to maintain the highest accountability of local and state revenue collections. Unfortunately their have been a number of shady things that the city has been doing lately with the management of their finances.

It is commonplace these days for the city to hide the fact that a property is destroyed or has to be converted to a single family house and novice investors unknowingly fall into their trap. Or to sell million dollar tax payer owned buildings and land to friends for $10 bucks. Corruption has reached a shocking level within Roanoke City government.

They have developed a hostile environment that attacks small business and drives them out of the city to invest in the surrounding areas which lowers property values due to a lack of supply of people wanting to invest their money in the city’s blighted areas. All citizens in Roanoke City suffer as a result of the policies of the city leaders.

Evelyn will be attending our meeting to give us her ear and work together with us to hopefully resolve some of these issues. 

She is there on our side. Not against.

Come on down, it will be a fun meeting!

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