REI.txt

@@@@@@@@@@@@@@@   TERMINOLOGY   @@@@@@@@@@@@@
Annual Cash-on-Cash Return: This is ratio of pre-tax cash flow to total
cash invested, expressed as %. It is often used to evaluate investment
performance.



Annual ROI:
- Property appreciation is used in calculating ROI

Net Operating Income:
Internal Rate of Return (IRR)[2]:
Cap Rate (CR)[1]:

Rent (R):
Vacancy Rate (V):
Maintanence Fee (M): RxM/100
Management Fee (M): (R-V)xM/100
Leasing Fee (L): (R/18)x(L/100) // tenants stay for 18 months on average
Tax Benefits: Annual Depreciation is used in Tax Benefits

References:
[1] http://www.investopedia.com/terms/c/capitalizationrate.asp
[2] http://www.investopedia.com/terms/i/irr.asp

@@@@@@@@@@@@@@@   REI Tools    @@@@@@@@@@@@@@@


https://www.city-data.com
https://www.deptofnumbers.com/employment/metros/

APIs:
https://api.census.gov/data/2019/pep/population?get=NAME,POP&for=place:*&in=state:06&key=YOUR_KEY
    Developers Page: https://www.census.gov/data/developers.html

https://datausa.io/api/data?drilldowns=Place&measures=Population&year=latest
https://api.api-ninjas.com/v1/city?name=San Francisco&country=US




Property Management Platform
---
- Avail.co
- Anabode.co
    * This is one property management software that charges by units (just about
      $1.5/unit). I like this one (cheap, but full featured).

- https://www.biggerpockets.com/rei/online-property-management-software-cloud/
    * Big list


Electronic Signature Options
---
Docusign

@@@@@@@@@@@@@@@   Neal Bawa (Multifamily University)    @@@@@@@@@@@@@@@

Real Focus 1: Population Growth - 10.6%
- If city is between 250K to 1M in population, you want 10.6% growth between 2011 to 2020

- 7% growth for large cities (1M-2M population)
  - Ex: Phoenix, AZ; Philadelphia, PA; San Antonio, TX; San Diego, CA

- 15% growth for micro cities (<250K population)
  - Ex: St. George, UT; Durham, NC; Fort Wayne, IN

- How to get this data?
  - Perplexity/Google etc

Real Focus 2: Median Household Income

Real Focus 3:

Real Focus 4:

Real Focus 5:


Reference:
[1] https://www.udemy.com/course/realfocus/learn/lecture/12998740#overview
Neal Bawa

@@@@@@@@@@@@@@@   Notes From Rod Khlief Multifamily Bootcamp @@@@@@@@@@@


Discussions with Dylan Marma (mentor from Rod's team)
---
1. If you were to get all of the help and guidance and support you need, what would you like to acquire in the next 12 months (size of deal, specific market, syndicated or not, A,B or C, properties, etc...)

a. JV in small commercial unit (<25 units).
b. Austin or Bay Area market.
c. Focus on B properties. Definitely not C properties.


2. Long Term Vision: Imagine your financial life was perfect in every way. How much would you be earning? What would you do with your time and money? How would your life be different from what it is now? Why are achieving these goals so important to you? Please be detailed…

2a. How much would you be earning?
- Financial goal from REI is $25K/month in gross income by Summer 2021.

2b. What would you do with your time and money? Would your life be different than what it is now?
- My life may not change much. My spouse or I may take off from work for some time.

2c. Why are achieving these goals so important to you?
- Work stress in Tech industry can get intense. In long term, this may impact physical and mental health. By acheiving these goals, I'll have freedom to take a break.


3. What do you foresee as your single biggest hurdle or challenge investing into multifamily? What types of help do you think you would benefit from in your business?

3a. What do you foresee as your single biggest hurdle or challenge investing into multifamily?
- Lack of Time. Especially to build relationship with brokers and other professionals.

3b. What types of help do you think you would benefit from in your business?
- Looking for JV who can operate the property.



@@@@@@@@@@@@@@@   NOTES FROM [1]  @@@@@@@@@@@
Ch 1
- Look at "Landlording Tasks" in Ch 1. Lots of items. We will get clarity on
  tasks involved.

Ch 2
- 8 steps to Landlording like a business
    1 Implement systems and repeatable processes
    2 Strive for continuous improvement
    3 Firm but Fair
    4 Outsource and Delegate
    5 Keep Strict Financial Control (Incoming cash, Outflow, Bookkeeping etc)
    6 Focus on Customer Service
    7 Understand Rules and Laws That Govern The Business
        * Fair Housing Laws:
          Can deny housing to
            (a) Past evictions
            (b) Drug charges/addicts
          CANNOT deny housing to 7 protected classes:
            + race, color, religion, sex, handicap, familial status, and
              national origin
            + Some states have sexual orientation, Section 8 included
        * Landlord/Tenant Laws
        * Local Laws/Codes
    8 Ask for Help

Ch 3
- 7 Things to do Before Signing Your First Lease
    1 Consider Asset Protection
        * Must buy property on own name. Can transfer it to LLC later, but
          banks have "due on sale" clause.
    2 Get Insurance
        Two Types: (a) Full Replacement Coverage (b) Actual Cash Value
    3 Setup Bank Account: Checkings and Savings
    4 Gather all Documents Before Leasing
    5 Create a Policy Binder
    6 Get to Know the Neighbors
    7 Setup Bookkeeping

- Inheriting a Tenant
    - Review Existing Lease
    - Get Estoppel Agreement in place



[1] The Book on Managing Rental Properties: A Proven System for Finding,
Screening, and Managing Tenants with Fewer Headaches and Maximum Profit
--- Brandon and Heather Turner

[2] How To Rent Your House:
https://www.biggerpockets.com/renewsblog/2013/01/04/how-to-rent-your-house/

===================   NOTES     FROM    =========================
======  CRUSHING IT IN APARTMENT AND COMMERCIAL RE   =============

Ch 4:
- Best investment property for small investor tend to be: multifamily (10-75
  units), multitenant retail, multitenant office and self-storage with strong
  cash flow.

- Small investors are better off choosing a market that avoids direct
  competition with big investors.

- Large investors look for Class A properties. Class C are sometimes
  overlooked and offer attractive opportunities.

Ch 5: Finding the right property

- Using Broker relationships
- Directly approaching property owners, using tax records etc
- Through contacts in property management companies
- Word of mouth from RE attorneys, accountants, lenders, contractors, fellow
  investors etc
- Auctions:
    * Risky to get financing (have to put lot of down payment)
    * Short window for closing
    * Use lot of caution

Ch 6: Analyzing properties
- NOI and cap rates give accurate picture on value of property
- Seller's Proforma's are _future_ potential and not _current_ income
- Always ask for following:
    * rent roll (actually, ask for bank deposits of the rent, which is even
      more accurate)
    * lease info (start and end dates)
    * Look at past 2-3 years income

- For commercial property, you may have following
    * Common Area Maintenance (CAM),
        + Parking lot maintenance
        + Snow removal
        + Landscaping
        + Utility bills (lighting, cooling etc)

- Expenses must be looked over a long period of time. Consider seasonal costs
  too.
    * Property Mgmt fees
    * Common utilities
    * Landscaping
    * Snow removal
    * Insurance
    * Property taxes
    * Repairs and maintenance
    * Legal fees
    * Advertising fees




Resources:
www.hubzu.com - Auction website

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Notes from Bigger Pockets Podcast (BPP)
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#342, Kris Benson
Title: From Duplexes to a 64-Unit and Self-Storage Millions

Keywords:

Notes:
- "Big deals and small deals are same amount of work. Small deals make less
  amount of money"
- First commercial property was a 64-Unit ground up construction
- Built 64-Unit in 4 phases (16-Unit). In a town (Rome, New York) that was once
  Air Force base but town is abandoned. Slowly started developing.
- Providing luxury housing in economically down town. But tech was coming up
  there and they were "first to market" with luxury housing.
- "Deals create deals". Keep taking action and things may or may not work, but
  other things will present itself if you take action.
- The guy operates at a different level than I'm right now. Can't relate to lot
  of things he's saying, but maybe I'll do those one day. Not interested now.

Resources:

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#340, Whitney Hutten
Title: How a Mom with a Full-Time Job Bought 10 Houses Her First Year

Keywords: 401K, BRRRR, Property Managers

Notes:
- Used 401K funds for REI.
- Purchased houses in $60K range and BRRRR strategy. Pulled money out and repeat.
- Kansas City, Missouri is her main area of focus.
- Property Managers were her main funnel for her REI.
- Invested in couple of turnkey projects initially. She interviewd with 40
  turnkey project providers.
- Property Managers Interview Tips:
    * Have they evicted anyone?
    * How's their network? Can it be leveraged later?
- If a loan is rejected, keep asking questions and look for reversing decision
  or alternatives.

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#339, Frank Rolfe
Title: 60,000 Tenants?! How Frank Rolfe Built a Mobile Home Empire

Keywords:

Notes:

Resources:

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