Make Money with Affordable Apartment Buildings and Commercial Properties shows readers how they can build wealth faster with affordable multi-unit residential and commercial buildings. Investors discover why lower-priced income properties can yield higher returns than single-family houses--especially in today's high-priced housing markets.
Gary Eldred shows investors how to find and negotiate good deals and then use strategic and operational property management to boost property cash flows and lift property values. Topics include how to obtain financing, evaluate locations, assess property and market potential, and calculate and compare profits among alternative investments. By detailing the possibilities of apartments, retail offices, self-storage, and other little-written about investment alternatives, this new Second Edition guides investors to their next level of real estate investment success.
Table of Contents:
Introduction: How to Start.
Develop Your Analytical Abilities.
Develop an Entrepreneurial Spirit.
Uncommon, Yet Essential.
Entrepreneurs Create Value for Themselves and Their Customers (a.k.a. Tenants).
Market Savvy: Systematic Strategic Thinking.
1. Profit with Commercial and Multifamily Properties.
Advantages of Commercial and Multifamily Properties.
Cost of Acquisition.
Cash Flows Relative to Price.
Trade Up Tax Free.
Owner Will Carry Financing (OWC).
2. Craft Your Market Strategy.
It All Depends.
A Strategy of Your Own.
PVP: The One Constant Rule.
The DUST Strategic Framework: Questions to Answer.
Entrepreneur Objectives: Know Thyself.
Talents, Inclinations, and Resources.
Assess Your Finances.
Frame Your Due Diligence.
Identify and Fully Describe the Physical Property.
Understand Your Bundle of Rights and Restrictions.
Where Should You Invest?
3. Where's the Local Economy Headed?
Economic Base Matters Greatly
Alamo, California (San Francisco Bay Area) versus Terre Haute, Indiana.
Authors Neglect Economic Base.
Benefit from the Lessons Learned.
Where to Get Data.
Will the Population Grow?
Enclaves of Existing and Potential Growth.
Find Out the Actual Numbers.
Beware of False Negatives.
Is the Number of Jobs Increasing?
What Was the San Diego Connection?
Cost of Running a Business.
Businesses and Employment Migrate to Lower-Cost Cities, States, and Countries.
Cost of Living for Employees.
Quality of Life (QOL).
Quality of Life Also Attracts Wealth.
Community Attitudes and Actions.
4. Outperform the Competition.
The Competitive Battle.
Four Good Reasons to Inventory, Inspect, and Critically Review Competitors.
Where to Invest
Market Information Gives You Negotiating Power and Confidence.
Searching for a Preferred Value Proposition (PVP).
Constructing Your Financial Pro Forma’s.
Identify Your Competitors.
Quickly Adapt to Change.
When Markets Tighten.
More Practical Implications.
What to Look For: The Location.
Property Taxes and Services.
Who Are the Residents and Recent Homebuyers and Tenants?
The Exterior of the Building.
“Play the Tenant”.
Inspect the Interiors of Competing Units.
Aesthetics: How Does the Unit Look, Feel, and Sound?
Liveability: Unit Size, Room Count, and Floor Plan.
The Rental Process.
5. Choose the Best Target Market.
How to Create a PVP.
Avoid Standard Labels, Picture Your Actual Renters.
Hitting the Bull's Eye.
Find Unique and Intense Needs.
Bull's Eye Lease Assessment.
Throw Away Standard Operating Procedures.
How Do You Identify the Wow (PVP) Features for Your Tenants?
Talk with Insiders and Experts.
Anticipate and Adapt to Change.
The Age Wave.
Local Trends and Changes.
6. Is the Property a Good Deal?
How Much Would It Cost to Construct the Property Today?
The Construction Cycle.
Implications for Investors.
Local (Regional) Recessions.
Per Unit Measures.
Per Apartment Unit.
Per Square Foot (P.S.F.) Measures.
Price Per Front Foot.
Gross Rent Multipliers (GRMs).
Estimate Market Value.
Anticipate the Future; Pay for the Present.
Growth in Equity.
Don't Settle for Low Rates of Appreciation.
7. Collect More Rents.
Never Accept Average.
Stand Out and Stand Above.
A Strategy of Your Own.
Verify Current Rent Collections.
Examine All Leases and Rental Applications.
Interpreting the Rental Information.
Rent Collections, Not Rental Rates.
Talk with Tenants.
Your Competitive Market Analysis.
Set Your Rents with Market Savvy.
The Myth of “Market” Rent Levels.
Rent Levels and Vacancy Rates.
The Myth of the “Market” Vacancy Rate.
Think Rent Range, Not Rent Rate.
Raise Rents without Substantially Improving the Building.
Confirm Your Suspicions.
Why Owners Underprice Their Units.
Investor Opportunities with Stage-of-Life Sellers.
How High Can You Go?
Dealing with Current Tenants.
Can You Boost Your Rent Collections by Lowering Rents?
An Extreme Example of Overpricing and Market Ignorance (or Fanciful Dreaming).
A Purchase Opportunity.
Time-Sensitive Rental Markets.
8. Build Equity Fast with Sharp Interiors.
The Entrepreneurial. Imperative.
Too Many Investors.
Too Few Sellers.
Not Words of Discouragement.
Your Target Market.
Visualize Your Tenants.
Your Suggestion Box.
Fast Buck versus the Last Buck.
Set Your Budget for Improvements.
The Sum Effect.
The Interior of the Units.
Sharpen the Aesthetics.
Safety, Security, and Functionality.
Rightsizing Room Count/Room Size.
Create More Storage.
Check Noise Levels.
Overall Liveability of the Unit.
9. Generate More Income.
Your Building Sends an Advertising Message.
Clean Up the Grounds.
Yard Care and Landscaping.
Sidewalks, Walkways, and Parking Areas.
Fences, Lampposts, and Mailboxes.
The Exterior of the Building.
Name Your Building.
Curb Appeal: Summing Up.
Collect More than Rent.
Build Storage Lockers.
Add Other Amenities or Services.
10. More Creative Ways to Make Money.
Tailor Your Lease Agreements.
What Terms Might You Negotiate?
Should You Furnish Your Apartments?
All Price Levels.
Warning: Don't Pay a Premium Price for Furnished Apartment Buildings.
Improve the Neighbourhood.
Become a Neighbourhood Entrepreneur.
The Huge Payback.
Conclusion: Investing in Action: The Bay side Apartments.
Real Estate Entrepreneurs Outperform All Other Investors.
Only Investors Perform.
Entrepreneurial Real Estate Investors Perform Best of All.