APARTMENT HOUSE RAGS TO RICHES

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					Rehabbing apartment buildings and reshaping their marketplace image can
create huge investment returns… fast. Here’s how you avoid the pitfalls
and grab the greatest profits.


APARTMENT HOUSE RAGS TO RICHES
         How to turn a troubled or tired property into a tremendous asset


Ugly duckling becomes swan… Cinderella story… no matter what you call it, when real
estate investors transform an apartment building that’s an eye soar into eye candy, they
create much more than a pretty picture. The impact on the bottom line can be equally
beautiful.

Rehabbing a tired building and repositioning its image in the marketplace is a proven
way for investors to create a windfall. It takes market analysis, negotiation skill,
management savvy, construction know-how, and even a little undercover detective
work. But the financial rewards can be huge.


Dear Real Estate Investor:

      There’s just one reason for any investor to refurbish and reposition an apartment
building: to CREATE ADDED VALUE FAST. Rehab is a classic way to capture rapid
price appreciation.

      If you buy an apartment building that has been rehabbed, you do it primarily for the
cash flow. You want its sea of rental checks filling your mailbox every month providing
you with steady income. The checks keep coming rain or shine, good economy or bad.
It’s a wonderful thing.

    But when you buy an older building and rehab it, your aim is to build rapid price
appreciation. You’re taking a dusty diamond and giving it a precision polish that
enhances its value significantly. Your gains can be fast and fantastic.

      The rehabbing does not need to be extensive to earn big returns. Upgrading a “C-”
building into a “C+” building can add $1 million or more to a property’s value. This is
money that goes straight into your pocket when you sell –– and even before you sell if
you choose to refinance.

                     The Fast Lane to Big Profits
      For investors seeking sudden wealth, rehab can be their road to riches. Rehab can
be like squeezing 9 years of property appreciation into 9 months.
      This is particularly appealing to investors who don’t want to wait for long-term gains
that put them at the mercy of the economy and other uncontrollable outside forces.

     They want to make and take their profits NOW.

      You can even get back all your invested money before you sell the revitalized
building... This can happen when you refinance the property based on its significantly
higher value after it has been rehabbed and occupancy has been increased.

      You can then take your windfall and buy another building. It’s how you become a
millionaire within months. How millionaires become multi-multi millionaires.

                          Cinderella Real Estate
    So how do you go about finding an apartment building that can be reshaped into a
marketable asset –– particularly if you’ve never done this before? There can be a lot of
expected curves on the rehab road to profits.

    Don’t go it alone. If you hope to “learn on the fly,” you’ll likely crash. Rehabbing and
remarketing apartment buildings is an involved and often complicated process.


     Not everyone is on your side. The seller, current property manager, contractors
and tenants have only one person in mind... themselves.


      You may be helping a seller exit a property he no longer wants... you may be
giving contractors much needed work in slow economy... you are improving the
property manager’s working conditions... and you are giving tenants a better place to
live. But they won’t always see it that way. They won’t always be truthful and
cooperative.


    If you want straight talk, ask investors who have rehab experience. Take their
experience and make it your own.


     So how do you get the insight of experienced investors?


     Turns out that’s easy...




                                             2
            Apartment House Rehab and
              Reposition Boot Camp
                  Serious Moneymaking Process
      From duplexes to major apartment communities, I have rehabbed more than 700
buildings in the last 15 years –– investing as little as $2,000 for a quick fix and as much
as $2 million for a major overhaul.

     I am currently rehabbing a 400 unit, 256 unit, 192 unit and a 144 unit complex.
That’s just shy of 1,000 units total.

     I recently completed the rehab process on (but not yet sold) a 196 unit, 71 unit,
200 unit, 344 unit and two 147 unit properties... I’m holding these properties for the
enormous cash flow they provide.

     I created the Apartment House Rehab and Reposition Boot Camp to give you my
hard-won secrets for transforming tired properties into profitable assets.

    In 3 enriching days I’ll mold you into an apartment turnaround guru. You’ll get the
knowledge to do this the right way. You’ll be able troubleshoot the pitfalls and pinpoint
where the profits are. Plus you’ll gain the confidence to know you can do this.

    You’ll get the wealth of information from my years of experience. From the crawl
space to the roof, I’ve covered every inch of apartment buildings.

     The key to successful rehabbing is NO SURPRISES. I’ll make sure you’re aware of
every corner where a surprise could be lurking.

      Even if you have rehabbed houses, doing it on a major scale with an apartment
building is different.

     For one thing, you don’t usually rehab a house with someone still living in it. But
with apartment buildings come tenants and a whole slew of new challenges.

     Knowing what the new challenges will be BEFORE you take on the project is how
you avoid surprises.


           Troubled Property to Avoid Like the Plague
          Or… Biggest Hidden Profit Opportunity Ever?
                        Never Guess.

                                             3
    I’ll take you inside my approach to rehabbing buildings. It will be like doing a mind
meld.

     You’ll see how I...

      Find and analyze potential rehab buildings

      Negotiate the sale and orchestrate the rehab process

      Remake the property’s image in the marketplace

      Plan the exit strategy that gives me the most profits in hand

     Would you like to know the secret to doing all this? It’s really very simple...

     Every undertaking, no matter how enormous, is a series of steps. Break the
process down into steps and the job gets done efficiently whether you’re retooling an
18-story aircraft carrier or rehabbing an 18-unit apartment building.

    At my Apartment House Rehab and Repositioning Boot Camp we’ll break down
each stage of the rehab and remarketing process into its core steps. You’ll get a
complete plan of action, step by step.

    Lets take a look at some of the key steps and the moneymaking secrets that make
them proven wealth-builders.


      14 Insider Secrets to Making a Fortune
  Rehabbing and Repositioning Apartment Buildings


                      Secret #1
Identify the key forces that erode a property’s value,
               causing it to depreciate.
    Knowing why a potential rehab property has declined is vital to determining
whether you’ll take on that property.


      Not every property can be turned around. You want to be certain from the out-start
that you’re investing your time, money, and energy into a viable and profitable project.




                                             4
   -   If your potential rehab property is caught in grasp of a general neighborhood or
       citywide decline, run the other way. It’s not your job to turn a community around.
       That’s like repainting the staterooms on a sinking cruise ship… no matter what
       you do, bigger forces beyond your control are at work.



   -   If the property is affected by external economic depreciation, be wary. Are jobs
       leaving the area? Are the adjacent properties in neglect? Know what zoning
       changes will impact the area negatively or positively.



   -   If external forces are positive and the building has depreciation because of
       physical wear and tear… then bingo! This can be fixed. Plus it gives you
       bargaining power when negotiating your purchase price. You’re buying the
       property to fix it up, yet because it needs TLC, you can negotiate a low price. It’s
       a win win.


                         Secret #2
        Know the two main reasons why rehabbing and
                    repositioning can fail.
      The main reason an apartment building fails is lack of money. When the income
isn’t where it needs to be, the owner defers maintenance and the building slides into
neglect.

     The primary reason tenants leave a building is not because of high rent. The No. 1
reason is poor maintenance and poor response time to maintenance requests.

    Poor maintenance will ensure that your occupancy rate falls. The obvious
consequence from people moving out is even less rental income and more deferred
maintenance.

     There is little to no money to market the property. Bigger maintenance issues get
ignored. The decline snowballs.

       Lack of money is also the main reason a rehab/reposition can fail. You need
enough money to see the process through. Fortunately, it’s a predictable process with
checklists and safeguards. That means you can cover all your bases -- provided you
first know what they are.




                                             5
     The second main reason apartments fail is poor management. When you rehab,
you need a management company onboard that has gone through the process. If they
haven’t, they are no more experienced than the management team that rode the
property into decline.


      Many managers are able to run a building that’s stabilized. But they can’t handle
ongoing construction and the many challenges of rehabbing buildings and overhauling
the tenant base.




                         Secret #3
Perception is profits. Know the perception of your building
                    in the marketplace.
    There’s a saying that “perception is reality.” I’m sure you’ve heard it. It means that
whatever people believe to be true, is true.

     If you’re looking at an apartment house that has a reputation in the area for being
“a party building,” if that’s what people say it is, then it doesn’t matter if the last loud
tenant vacated 10 years ago and the building is as quiet as a cemetery on Sunday.

    The marketplace reality is that the building is party city. The perception of the
marketplace is the perception you have to deal with.

        The good news is that these perceptions can be changed.

     Even the perception of change itself is a good thing. Fact is, the belief that change
is happening can be more powerful than the actual change itself.

     So one of the first things you should do is create the perception of change. Here
are two quick ways to do that...

   -     Change the signage. This does not have to be a major undertaking. You don’t
         have to install a waterfall by the street. But you should do more than change the
         name from “The Willows” to “The Oaks.”

   -     Put up a banner that says “Under New Management.” It’s a temporary sign that
         leaves a lasting impression.

    -    The first sign of change that tells you that your repositioning is starting to change
          the perception of the community is when someone who knows the property’s

                                               -

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       -   past reputation makes the commitment to live there. The second sign of change
           — and this is the most important — is when that person starts to tell other people
                       to move in. It’s a sure sign the turnaround is in full swing.


                               Secret #4
            Timing is not everything. But it’s darn important.
   You may think that the sooner you begin remarketing the property, the better. You’re
motivated to get the property occupancy up, and you’re thinking that leasing units during
the rehab is ideal. Wrong.

    You can actually begin to raise occupancy too soon because you’re attracting the
same class of people that you just got rid of. You want to do more than rehab the
building. You want to upgrade the tenants as well. That process has to be timed.

   -       It typically takes from one to two years for a building to decline from good to bad
           — and another one to two years to reverse the process.


                       Secret #5
 Ask a few questions where you already know the answer.

     When you’re scouting for properties, there are key questions to ask upfront.
Clearly, you want to know the price and number of units right off the bat.

     You should ask what the neighborhood is like and what is the condition of the
property. This is somewhat subjective, but your goal is to get a ballpark handle on if the
asking price aligns with the market. If it does, you move on to an initial inspection.

      You inspect more than the property. You also check out the neighborhood. Get a
feel for the community’s perception of the property. Ask local merchants in the area if
they know of the property. Is it quiet? Would they live there?

      If this is positive, your next step is to do full-blown due diligence. Learn the history
of the building. When you analyze a property, there is a mystery you need to solve: How
did the building get this way?

     Once you have the answer, ask yourself what you can do differently. For example,
the building may have declined because the owner was not setting money aside for
maintenance. Anywhere from 10% to 12% of your gross rent should go into deferred
maintenance of a property.




                                                 7
     To get a ballpark idea of what needs to be repaired and what the cost will be. Have
a property manager that you can trust, and who has experience doing repositioning,
inspect the building.

     Your property manager may report back that repairs are going to cost you $7,000
to $8,000 per unit. Yet the building seller, maintenance staff and broker may lowball the
repairs at $5,000 per unit.

     One way to measure whether you’re getting straight answers or a runaround is to
ask a few questions where you already know the answer.

   -   The “RS Means Book” will give you a price per square foot on just about any type
       of construction. Your library should have it. A lot of contractors bid off the RS
       Means. You can use it to get a handle on how expensive repairs will be (as well
       as a guide for whether contractors are trying to gouge you).

     I did a $1.3 million renovation that the RS Means estimated at $2 million. So I knew
the bids were on target. But that also gave me another advantage... Remember, we
want to change the perception of the property in the marketplace. So right out front on
the banner that says “Under New Management,” we also add “$2 million renovation.”



                        Secret #6
         Management can make or break your success.

     A building and its onsite management are two sides of the same coin. When you
evaluate a property you must also see how the management team measures up to
every challenge.

    Look at the dress and appearance of the current management staff. Do they
convey the image you want for the property? T-shirts don’t cut it.

     Neatness also spills over into their paperwork. If the files are well organized, then
typically you have a property that is being run properly.

   -   Two clues to how a property is being run are the service requests and the
       maintenance logs. Check to see when the service was requested and when the
       maintenance log says the request was acted upon. If it’s longer than 48 hours,
       you have a problem to root out. Is it because of lack of money (the owner) or lack
       of organization (the manager). Sloppy paperwork points to the manager.

   -   Take a look at the current policies. Are the policies clear and concise? Is there a
       policy manual? If yes, is it being followed?



                                             8
                       Secret #7
 You want to rehab more than just the building... you want
          to upgrade the tenant profile as well.

       You’ll want to audit as many leases as possible. You need to know the rents and
the terms, plus how many are behind on payments and how far behind. If someone is
two months behind, it’s likely they are not going to pay you, so consider that a unit
which will be vacant.

   -   For buildings with less than 100 units, complete a lease audit on every unit. For
       buildings with 100 units or more, audit at least one out of every three or four.
       Choose them randomly… do not look just at the selected units that the owners
       want you to see. It must be your choice. You want to be a diligent as possible.

   -   Expect your occupancy to fall when you start repositioning a property because
       you plan to evict the non-payers, slow payers, and the unlawful. Only about 25
       percent will stay through the entire rehab process. Expect 75 to 90 percent
       turnover the first year. You’re going to lose two old tenants for every three new
       tenants that you get. But the new tenants will be better and this puts you ahead.


     You need to know how the tenants are getting along. Do they like each other? Are
there problems? If they are not getting along, you should find out why. Is it something
manageable or is it a cultural issue that is beyond your control and thus cannot be
resolved?


     How you find all this out happens when you inspect the occupied units and talk off-
the-cuff with tenants.


     Ask about the condition of other apartments they have been in. Ask where the
drugs are. Drugs are actually easy to get rid of. At my Boot Camp, I tell you how it’s
done.



                         Secret #8
Banks don’t like to see expenses exceed 50% of the gross
   income, and neither should you once you own the
                         building.


                                            9
     If your expenses exceed 50% you have a problem and it’s usually for two reasons.
Number one is the income is lower than it should be. No surprise there... after all, you’re
acquiring a building that needs to be repositioned. It has high vacancies, rents are past
due, and the building’s reputation is not attracting business.

     Expenses could be exceeding 50% because staff wages are too high. You need to
know what the marketplace standard is for your area. Higher wages do not guarantee
better quality staff.

    Unproductive staff also translates to higher wages. These are the “time stealers>”
They rob a lot of business simply by doing less.

   -   Certain neighborhoods can command higher rents. Major cities like Houston,
       Memphis, and Baltimore have distinct neighborhoods and neighborhood
       boundaries. You need a firm understanding of neighborhoods to establish rents.
       This, in turn, affects your income-to-expense ratio.

     There could be less obvious reasons the expenses are high. You have to think like
a detective. For example, if you see that the costs of maintenance supplies is going up,
but nothing is getting fixed, what could that indicate?

     What’s probably happening is someone on the management staff or in the
maintenance area is taking the supplies. They could be reselling them, running a side
business with these supplies, or just fixing up their home.

     Sounds like a mess but the truth is... it can all be fixed efficiently. It’s only
confusing if you’re not prepared. My Apartment House Rehab and Repositioning Boot
Camp not only gives you a checklist for what to look for, but empowers you by showing
how to take decisive action.

    Key to diagnosing a building’s ills, is knowing the common causes for what you
observe. Like any good doctor making a diagnosis, it helps to consult with specialists.
One specialist you should have in your Rolodex is a property inspector.

     Your property inspector has to walk through every building, do a physical
inspection, and figure out what needs to be done –– and in what order.

   -   The property inspector will act as an engineer. He will check all the systems and
       make sure everything is structurally sound because that’s where a majority of the
       costs will be in addition to the cosmetic repairs.

                        Secret #9
Inspect the finances as well as the physical property. Can
     you use existing financing to your advantage?


                                            10
    At the same time you perform the physical inspection of the property, put a
magnifying glass to the current financing.

    Find out if it is assumable and whether there’s a prepayment penalty. If there is,
how much is it and how many years before it burns off?

     Assumable financing comes into play not only when you buy, but when you sell.
I’m buying a property in Texas with an assumable loan at 4.9 percent. There are three
years left on the prepayment penalty.


      I plan to hold this property for three to five years, so it doesn’t matter much. But
lets say I’m at the 2½ year mark and I see another opportunity that I want to put my
money into. So I decide to sell.


     Will I have a tough time? Absolutely not. I have an assumable loan at a low 4.9
percent that’s going to be very attractive to buyers. Lets not forget that the building has
been rehabbed and repositioned. The cash flow is solid. You’re a “cash flow doctor” and
you brought this building back to life!


   -    Be sure to know how many more times the loan is assumable, plus when the
        right to assume expires. This could be a key factor in determining your exit
        strategy for the property because selling your property with an assumable low-
        interest loan attached makes your property more attractive.


   -    You want to know if the assumable loan is recourse or non-recourse. Recourse
        means you’re NOT personally liable. Non-recourse means you are personally
        liable.




                           Secret #10
       Inspect the marketplace. External forces can and will
                      impact your success.

     When you look at the marketplace, you want to determine three things. First, will
there be demand for this type of property in this particular market?




                                             11
      For example, say the property is close to the city center and it has mostly 3-
bedroom units. There’s not going to be much demand for 3-bedroom apartments
because your demographic profile is typically two-income with no kids, or empty nesters
that are looking to move closer to the amenities of the city.

    Next, you need to determine the market rent level. What level of rent will the
market uphold? Through the market rents you can predict what’s going to happen.

     When you buy a building that needs no rehab, you’re buying it for cash flow and
future price appreciation. It’s a pure momentum play and you’re buying based on
today’s actual numbers –– and you’re only going to make your offer based on actual
numbers. But you can’t do that in a repositioning.

     At the start of a rehab and repositioning you must forecast what the numbers will
be after you’ve rehabbed and repositioned the property. Not only what the numbers will
be, but WHEN those numbers will be realized.

     You’re going to project what your financial reward will be for rehabbing and
repositioning the property. A lot rides on this. You want every confidence you’ve
considered all relevant factors.

       A sound forecast needs to take into consideration what the market will bare.

   -    You want to be sure there is a buyer profile that is going to allow you to lease up
        the property.

   -    Determine the future rent level by conducting a market survey of the five or six
        closest competitors to what your rehabbed property will be: buildings that were
        built around the same time as yours, have comparable amenities, and are
        approximately the same square footage.

      The third variable you need to determine is the overall quality, quantity and
durability of the net operating income. That may sound a bit daunting, but it isn’t.
Basically, what you’re determining is whether people are migrating in or out of this
particular area, or whether growth is stagnant.

      One place you can get stats is www.census.gov. Look for forecasted job growth. At
the Bureau of Labor Statistics you’ll find forecasts for where job growth is going to be
over the next five years. Even better, you see where job growth was last year: which
cities had the highest increases.

     Call the Chamber of Commerce in these markets. Find out what type of jobs are
moving in. White collar jobs are the best type because they create the highest multiplier
effect of other people moving in behind them.




                                             12
      Look at the economic base of the area. What type of businesses are in your central
business district? Are the surrounding businesses low end or high end? Knowing what
types of businesses are leaving and what businesses that are replacing them will tell
you if the demographic profile of that area is starting to drop.

     You also want to look at infrastructure including fire and police departments, roads
and highways, recreational areas, and transportation.

   -   Your property should be close to shopping, particularly food, entertainment and
       clothing. Those are the three amenities that people look for when scouting a
       particular area to live.

   -   The property should be on the bus line. If your demographic profile is for a dual
       adult household with one car, public transportation is essential.

     When analyzing demographics, look for a sharp increase or decrease between age
groups. If you don’t see any movement it means the population is static. This is an
indication that the housing needs are already being met. Thus, you may not have the
market you need in order to be successful in the repositioning of the property.

     School districts are always a factor. Look for a neighborhood where the
kindergarten through age six enrollment is growing faster than any other area. This is a
good indication that your property is located in the path of progress.

      At my Apartment House Rehab and Repositioning Boot Camp you’ll see how to
find all this data and quickly interpret it. You’ll see how easy it is to find trends that lead
to profits. For example, the higher the average home prices in an area, the higher the
demand for apartments. That’s because people are priced out of the homebuyer’s
segment of the market.

     Home prices can determine rent levels. Pricey neighborhoods simply cost more
whether you’re renting or buying. The advantage you have is that by doing your
homework, you can identify turnaround markets on the upswing and get into areas that
are affordable today but are trending toward pricey.

   -   Determine the market’s breakeven point. This is when rents are equal to or
       greater than the mortgage payment for the average home in the area. When
       rents are on a par with mortgage payments, a lot of people will be leaving
       apartments and buying homes. Rents for a two bedroom apartment must be 75%
       of the average mortgage payment.

 At any given time a neighborhood is growing, maturing, or declining. Your best chance
 to reposition is during the growth and maturity phases. If the market is declining, don’t
                                        move in.




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                       Secret #11
Analyze the rental market at least one year out. Predicting
future demand is key whether you should enter a market.

     For tenants, “rent” is a four-letter word. But for you, it’s the center of your rehab
and repositioning universe because apartment investing is all about cash flow. Rents, of
course, are the source of your cash flow.

      When it comes time to sell your repositioned building, rental income is what buyers
will be looking at. When you’re considering purchasing a building to rehab, you’ll also
analyze the rental market.

     You want to know:

      How many vacancies are at the property?

      Is there a dominant unit type (one bedroom, two bedroom) or rent level, and if so,
     what is it?

      What do competing properties charge and how does it compare to your building?

      How does your rent compare to the larger market as a whole?

       Can the property command higher rents and occupancy if rehabbed and
     repositioned?

     If demand for apartments is greater than the supply, you’re in a good market. But
how do you know if this is the case? More importantly, how do you know it will still be
the case six months or a year from now?

      Knowing future demand is key to your decision to enter a market. You determine
this by figuring out the market absorption rate. It gives you a good idea of how quickly
you’ll lease up your building.

     At Apartment House Rehab and Repositioning Boot Camp I’ll give you my
foolproof formula for figuring the absorption rate of any market.



                        Secret #12
 Smaller contractors are generally best because they’ll be
                    more responsive.


                                            14
   When you rehab and reposition, you have a management team onsite. You know
  exactly what is going on with the day-to-day reconstruction process. Of course, you
   know what is NOT happening as well. You can watch the contractor like a hawk.

     You’ve done your due diligence on hiring a reputable contractor, so you’re not
expecting major problems. But on large projects of $2 million and above, you’ll want to
take an extra protective measure and get a bond. The following bonds can cost
anywhere from $500 to $5,000 depending on the size of the job.

     BID BOND
     A bid bond, as its name suggests, is taken out during the bidding process for a
     project. It ensures that the company with the winning bid fulfills the contract at the
     price agreed to. It also ensures that the bidder meets any other terms agreed to in
     the bidding process. This is often done to protect public interest such as projects
     bid on at the state, local and federal levels, but private investors can benefit from
     their protection as well.

     Contractors may bid several jobs at once. If two or three hit at the same time and
     the contractor cannot handle them all, then the contractor will back out on some
     projects. If your project happens to be the one that the contractor drops, that puts
     you behind the eight ball. Protecting yourself from this is one reason why you take
     out a Bid Bond.

     PAYMENT BOND
     Insures the contractor pays for all labor, materials, equipment, supplies, and
     subcontractors. Protects you from any claims and leans. If you pay the contractor
     but he does not in turn pay the subcontractors and suppliers, then the suppliers
     and subcontractors can demand payment from you. The Payment Bond protects
     you from this.

     PERFORMANCE BOND
     Assures that the contractor performs and completes the contract. My contract is
     eight pages with four addendums. The complete scope of the job is covered, from
     requiring that the contractor must pull the permits, to stipulating that the job site
     must be cleaned up at the end of the workday. It’s based on my years of
     experience rehabbing small and large projects and it’s one of the most important
     advantages you can have as a real estate investor. You’ll get this contract when
     you attend my Boot Camp.


     SUPPLY BOND
     This assures the contractor will supply the quantity and quality of materials
     according to the contract. It protects the contractor as well as you. Suppliers can
     try to substitute materials and you don’t want that happening. Inferior materials will
     lead to maintenance issues down the road.




                                            15
   -    Require your subcontractors to sign a lien waiver. This basically states that they
        can’t put a lien on the property if the contractor doesn’t pay them. If the
        subcontractors won’t sign a lien waver, this is signal that they don’t trust the
        contractor — and that’s a red flag.

     You have bonds to protect yourself from shoddy materials and workmanship, but
the best protection is to work with a reputable contractor who does quality work. So how
do you find one?

     Get referrals. If you’ve fixed and flipped houses, your network is in place. Many
residential contractors have divisions that handle commercial work.

       Property managers and brokers are good sources of referrals.

     Check out an apartment building where the contractor has already worked. If the
current onsite building manager went through the rehab, ask about the contractor’s
strengths and weaknesses.

     Was the work done on time and on budget? Did the contractor stay on top of the
job and supervise the subcontractors? Did the contractor keep the lines of
communication open, or were you left guessing when things would get done.

     Ask if there is something they’d sub out to a difference contractor if they could do it
over again. This leads you to even more referrals.

   -    You may have two or more contractors on site: one for exterior and one for
        interior. If one falls behind, they impact everybody else’s schedule. Thus your
        contractor should have a reputation for getting the job done.

   -    Your contract should have a penalty clause. For jobs less than $100,000 the
        penalty may be $100 per day. For jobs above $100,000 it may start at $1,000 per
        day.

     Locally based contractors (including management companies) have advantages
over larger regional


     contractors. Number one is they usually run on a quicker timeframe. They can start
faster and answer callbacks quicker. They likely have other crews in the area and this
gives them more maneuverability in allocating their manpower.

     If you hire a large firm to do a small job, the large firm may push you to the back
burner when another job comes along. Large firms typically take on small jobs when
they are between major jobs. They may have a lot of other bids out, and if one hits, they
could lose focus on you.



                                             16
     One way to know if your property management contractor is continuing to perform
up to expectation is to check your work orders. Has the turnaround time increased? You
want a 24-hour turnaround.

     Remember, the primary reason tenants leave is maintenance. Your highest cost is
tenant turnover. So maintenance is a deal breaker for both you and the tenants.

                         Secret #13
  Learn before you leap. Seek the guidance of those who
  are experienced in the process. Know how and why it is
             different than rehabbing houses.
     Even if you have rehabbed houses, tackling an apartment building is different.
Know upfront what to expect and what to look for. This in turn ensures fewer surprises
down the road. (Surprises really should begin with a big “$” because that’s what they
cost you.)

     There’s an art and a science to successfully rehabbing and repositioning a
property. The art comes into play when dealing with tenants. A newly rehabbed and
upgraded “B” building with “C” tenants will quickly revert back to a “C” property
regardless of how much money, time and effort you throw at it. You want to keep the
good tenants, get rid of the bad, and attract a new “B” level tenant that matches the
upgrade in your building.

      The “science” is in the property evaluation and physical construction phases. There
are certain questions to ask, all of which lead to specific answers. When you know what
to ask and have thorough checklists in hand for determining costs and timelines, your
profits can be readily predictable.

     At the Apartment House Rehab and Repositioning Boot Camp, you’ll get those
checklists, plus see how they can be efficiently managed with software. The process
can be automated with expenses and estimates tallied almost instantly.

     You’ll get the guidelines that real estate investors use to evaluate properties and
determine the strength of the cash flow.

      You’ll quickly know if a property is overstaffed because you’ll have key staff-to-unit
ratios, including how many units a property should have to...

       support an onsite manager

       support an assistant manager




                                             17
         support one maintenance person (This ratio will change depending on the age of
       the property, condition, tenant profile, and more.)

         support a porter (It is the porter’s responsibility to clean up the property, pick up
       the litter, clean out units, care for the pool, etc.)

    Plus you’ll know how many leasing agents you’ll need. (This is also based on the
number of units in the property.)

     There are dozens and dozens of factors to consider. The good news is that these
factors are all known. They can all be identified and managed effectively. I’ll show you
how.
     At my upcoming Apartment House Rehab and Repositioning Boot Camp you’ll
learn evaluate, monitor, and manage every aspect including expenses.

     Typically, operating expenses will be 45 percent of gross collected rent. But there
are core exceptions that you need to know about.

   -    Do not mix your rehab expenses with your operating costs. They are two different
        types of expenses. Your capital expenses are written off; they are depreciated.


                           Secret #14
        Know your exit strategy. You either want to sell or
                            refinance.
     Even before you officially buy a property to rehab you need a plan for how you’ll
take your profits.

     There are two exit strategies that you’re going to consider with a rehab. Either you
are going to sell the newly repositioned property quickly or you are going to refinance it
and keep it.

     When you sell, you take the profits and buy a bigger property. You can do it
anywhere in the country because the process is the same coast to coast. You don’t
have to be close to home. You can cherry-pick the best emerging real estate markets in
the U.S. My Boot Camp will reveal where they are.

     Refinancing is also popular with investors. The property is worth considerably more
now that it has been rehabbed and repositioned. Thus, you get all your money back
when you refinance... every dime you put down to purchase the property, every nickel
spent to rehab... it all comes back to you.




                                               18
      You now hold onto the property because you have a cash cow that provides you
with income month after month.

      Plus you have all your original money (and more) back... so now you can go out
and buy another property. Repeat the process. It’s how you can ultimately own multiple
buildings worth millions and millions of dollars without it costing you a penny.

               Apartment House Rehab and Repositioning Boot Camp.
  How to find, analyze, negotiate, buy, rehab, reposition, and sell apartment houses.
    Your complete A to Z training for turning around tired properties for top dollar.

      Register Today. Call the office at 781-878-7114
If you’ve ever flipped a house in the right market at the right time, you already know how
profitable it can be to make repairs and cosmetic changes. Just a couple gallons of
paint can give you a $5,000 or more boost in equity. I’ve seen this over and over with
the houses I’ve flipped.

But now, I want you to imagine this ON STERIODS.

Not just a $5,000 return… but $50,000… even $500,000 and more.

This explosion in gains is possible when you rehab APARTMENT BUILDINGS. Instead
of sprucing up one house, it is like turning an entire neighborhood around. Your return
on investment can be a windfall. Of course, the windfall goes straight into your wallet.

At my Apartment House Rehab and Repositioning Boot Camp you’ll go step-by-step
through the rehab (fixing up) and repositioning (marketing) process. You’ll get my time-
tested and hard-won moneymaking strategies that built my $240 million real estate
portfolio one apartment house at a time.

      4 key steps to identifying ideal properties to rehab and reposition.

      My ironclad formula for increasing property value.

      3 reasons why properties decline and how to turn each around.

      3 insider sources on zoning changes that will impact your property for better or
      worse.

      The fastest way to improve the marketplace perception of your property.

      2 major components of risk. (You don’t have to fear them, but you got to know
      them.)



                                           19
       3 reasons repositions fail (and how to avoid them).

       What repairs need to done — and in what order.

       The bible that gives you honest construction costs.

       How to ensure contractors get your work done on time, on budget.

       3 simple words that attract new tenants and keep old ones from moving.

       The most important signal that your building has turned around.

       The biggest change you can make to improve your property from the street in
       one day.

       How to identify “emerging” real estate markets poised for sharp gains in property
       value.

       What banks and funding sources look for.

All this is just the opening session of your 3 days of comprehensive training.

We’ll drill down on what to ask the seller, property manager, maintenance crews,
tenants, and others with inside knowledge of the property. Know why their answers can
lead you to profits (and steer you clear of pitfalls).

You’ll know how to audit leases, inspect properties, and ferret out any hidden
minefields. You’ll get secrets for managing the property during both the pre-sale and
post-sale period.

We’ll look at the 5 critical factors in repositioning a property. Use them together and
you’ll create wealth. (But skip just one and that’s like making concrete without water.)

You’ll see how you can ferret out any hidden minefields. You’ll know how to manage the
property during both the pre-sale and post-sale period.

Most importantly, you’ll know how and why this is one of the richest ways to make
money with real estate.

Fasten your seatbelts for 3 days of comprehensive training that leaves no moneymaking
stone unturned. Everything I will show you is ultimately designed to do one thing: make
you money. That’s why we’re investors. But it’s also terrific that you’ll be beautifying
buildings, improving the lives of tenants, adding value to neighborhoods and helping
keep the planet green by refurbishing existing resources.




                                            20
To register, Call the office today at 781-878-7114


                         Who Should Attend
REAL ESTATE INVESTORS

    Get proven formulas and secrets for optimum cash flow, occupancy, and more
    Find out what rehabbing changes will bring you the biggest returns.
    See how to finance properties.

APARTMENT BUILDING OWNERS

    Thinking of selling your building? Know what potential buyers will be looking at.
    Want to get higher rents and increase your property’s market value? Find out
    what changes can make your property worth 20% more in 90 days.

APARTMENT MANAGERS

    If the building you manage is for sale… know what buyers will be asking you and
    how they’ll measure your performance.
    If you’re taking over the management… know what will make the most significant
    improvements quickest.

REAL ESTATE BROKERS

    If you represent sellers… know how to anticipate questions from experienced
    rehabber investors.
    If you represent buyers… know how to quickly find properties that have workable
    numbers.


CONSTRUCTION PROFESSIONALS

    You bid the jobs. You do the work. Now find out how you can take an ownership role
    in the properties and get maximum return for your efforts.


                 This Is The Only Training of its Kind,
 Call the office today at 781-878-7114 to register for the next event.



                                        21
About Dave Lindahl


DAVE LINDAHL takes you step-by-step through the process of finding apartment
buildings in need of TLC, rehabbing them, and giving them a rich new image in the
marketplace. This can be one of the most profitable transformations in commercial real
estate if done right. Now you can know the exact strategies and steps that Dave takes
to turn properties around and turn in high returns.


Dave is one of America’s most active private real estate investors. He currently has
more than 7,200 rental units in his portfolio and has rehabbed more than 1,000 units in
the last decade. His Boot Camps attract wealthy investors, entrepreneurs, industry
professionals, and newbie investors alike and are legendary for their inside information
and networking connections.


Dave is the host of the Creative Success Alliance radio show on the Voice America
Variety Channel, and is the author of 3 top-selling books, Multi-Family Millions: How
Anyone Can Reposition Apartments for Big Profits, Emerging Real Estate Markets: How
to Find and Profit from Up-and-Coming Areas, and Commercial Real Estate Investing
101, written with Donald Trump for Trump University.




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