Rental Housing Journal Colorado November 2015

DENVER • COLORADO SPRINGS • BOULDER

Prof

essio

nal P

ublis

hing

Inc.

,PO

Box

624

4Be

aver

ton,

OR

9700

7PR

SRT

STD

US

Post

age

PA

ID

Soun

d Pu

blish

ing

Inc

9820

4

Monthly Circulation To More Than 7,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel

Www.rentalhousingjournal.com • Professional Publishing, Inc

Advertise in Rental Housing Journal ColoradoCirculated to over 7,000 apartment owners, on-site and

maintenance personnel monthly.

Call 503-221-1260 for more information

2. 9 Tips For Getting Started in Real Estate Investing

...continued on page 3



Rental Housing Journal Colorado November 2015 - Vol. 7 Issue 11

Long-term Hold InvestingFor Owner/Managers

The rental property investing strat-egy for a hold time of 15+ years is signifi cantly diff erent, than a

short term real estate investment strat-egy. Th is is even more critical for own-ers who plan to do their own property management. Owning and managing a property for 15-20 years is similar to raising a child, from birth through high school. Price is always important when buying any property. If you are planning to own a property for decades, do not consider purchasing a potential “prob-lem child”, because it is cheap. Bad pur-

chases are oft en made when investors feel they must purchase quickly. Adapt the motto that “I can always spend my money” and keep shopping to you fi nd the “right” deal. Investors need to seri-ously consider the location, quality of construction, target tenants and fi nanc-ing for a long term hold rental property:

Location

Properties should be located within 30 minutes of where you reside. Anything longer than an hour round trip drive will become cumbersome over time. It

is always a wise idea to geographically diversify your rental portfolio. Th ere-fore, owning properties in diff erent neighborhoods. Within 30 minutes of your home, is preferable to owning all your properties, in one neighborhood.

Target property purchases in desir-able residential neighborhoods with a low percentage of rental properties. Ini-tially, the annual cash and cash return will probably be less, than what could be bought in less desirable locations.

Are You Leaving Money on the Table?

By Cliff Hockley CCIM

President, Bluestone & Hockley Real Estate Services

Most real estate investors tend to operate their properties with a simple rule in mind: If mon-

ey appears in their checking account by

the end of the month, their property is healthy. As long as they see the same amount every month they’re happy.

However this rule inevitably leaves money on the table. Sophisticated in-vestors know that they need to plan for their properties to be successfully operated. Th ey need to buy the right

property and operate it with a vision in mind. Th at vision should include an annual focus on rent increases and tenant relations.

Rent Increases

ResidentialMultifamily or single family investors

have the opportunity to increase rent-al income at least once a year through the annual budgeting process. Th is process starts with an annual inspec-tion, followed by a local area renewal rate review (rental comparison survey). Keeping your property well maintained is the key to managing long term rental increases. Tenants will not be as hesi-

Five RealEstate

Investing FundamentalsBy – Jeff Watson

Th e Jeff ery S. Watson Law Firm LTD, General Counsel National REIA

One of my favorite movie mo-ments is when Ernest Bor-gnine, portraying the legendary

football coach Vince Lombardi, stood in front of the world champion Green Bay Packers at the beginning of training camp and held aloft an oblong object proclaiming, “Gentlemen, this is a foot-ball.” What Vince Lombardi taught the Green Bay Packers then applies to real estate investing today.

Master The Basics

Practice them over and over again. Consistently do the fundamental things that make you a successful real estate investor.

Repeat Your Successes And Keep Repeating Them

Th e vast majority of “investors” to-day suff er from what I call “squirrel or shiny-object syndrome.” Th ey have a little success in one area, but then they are suddenly distracted by something else and go to another area, and then another, and then another. Th e bottom line is they lose their focus and intensi-ty, and they don’t continue to practice the same thing over and over again. Let me remind you, slow and steady wins the race!

4. Will Your Retirement Hit Bottom if the Markets Plummet?

8. Ask the Secret Shopper

2

Rental Housing Journal Colorado

Rental Housing Journal Colorado · November 2015

9 Tips for Getting Started in Real Estate Investing

By JC Underwood, Crown Properties

Treat This As A BusinessOne of the biggest mistakes

I see new investors make is to treat real estate investing as a hobby instead of a profession. If you’re count-ing on real estate investing to provide income now and retirement income lat-er you must treat it like a business. Real estate investing is now your profession. Treat it like one.

By that I mean you have to advertise, devote time to it, show up for appoint-ments on time, act professionally, do your paperwork properly and treat your clients professionally.

Most real estate investing isn’t pas-sive. Unless you are a private lender most investing takes real work. Even a landlord using a property manager has work at the outset and should continue to remain active in oversight.

This is not a get-rich-quick scheme. It takes time to build client lists, cred-ibility, partnerships and associations. A well-grounded business is built over time unlike “overnight sensations.” It will take you 3 to 5 years to become a real success in this field.

Learn About The Business and Stay Informed

“If you think education is expensive, try ignorance.” Derek Bok

You can lose more money with a mistake than you can learning how to avoid one. Even if you have been at this business for years, you need to keep up with current trends and laws. You nev-er get to the point where you know it all or even know “enough”. Some investors honestly believe that there is nothing else that they really need to know to be successful, then a law changes, the market turns, or a new strategy begins to be used. They either miss changes coming in their community that will majorly effect their profits, put them-selves in a position of huge liability, or miss out on time and money saving tips because they just didn’t take time to stay informed.

In the real estate business, like ev-erywhere else, knowledge is power and for investors it’s profit too.

There Are Many Profitable Strate-gies In Real Estate

Most new investors get into real es-tate investing after hearing about one specific strategy. They have a friend or family member that has participated in real estate, they saw a TV show or infomercial or they went to their first REIA meeting and heard a charismatic speaker that made them want to pursue a specific investing strategy. They begin to invest using that strategy because they are drawn to the certainty and

proven success of the individual that is in front of them. After the new inves-tor has any success with one strategy they often develop the idea that other strategies are less profitable, more dif-ficult to execute, and generally inferior to the one they are using. Suddenly they develop a certainty that their particu-lar strategy is the supreme strategy so there is no earthly reason to even con-sider anything else.

Following a one particular strategy as a beginning investor can be extremely valuable for the overwhelmed new in-vestor since it allows him to really, re-ally learn how a particular technique works. The downside of being so nar-rowly focused is that it limits the new investor’s opportunities. If you believe that your investing strategy is the only strategy worth pursing, to the exclusion of all others, you will have a narrow viewpoint of what a “good” deal is, and pass up a lot of opportunities to profit with another strategy.

Don’t get so stuck in a mindset that you can’t even see good deals if they are out of your comfort zone. That being said. You can’t try to partici-pate in a dozen strategies at once…see number 4.

Have A PlanAll businesses need a game plan.

You can’t just wander aimlessly hop-

ing to find a deal. You also can’t rent an office, decorate it and then sit behind your desk waiting for the phone to ring. It just doesn’t happen that way. You need to decide upon a strategy, learn what you need to do, set your goals and make it happen! Have a plan. Pass out 50 business card a week (or whatever goal you decide is appropriate for the amount of business you want to gener-ate). Talk to 50 people by phone. Make 10 offers a week, spend $100 a month on advertising – whatever your goal is, make it happen every single week – day in and day out – work the market. Eventually you will start to see results.

Surround Yourself With Like-Minded People

Real estate investing can be “cre-ative” and a bit non-traditional, which means that this profession won’t ap-pear on the Forbes top 100 profes-sions. Because those participating in real estate often do so by working for a corporation or as a realtor, investing as an independent isn’t a main stream career choice. Thus, most people you speak with will tell you it won’t work. Some of your friends might even ask if you bought a course from a late-night television “guru.” They may even laugh and call you “gullible.” Attor-


PROFESSIONAL PROPERTY MANAGEMENT SUPPORT

COMPANIES

Licensed, Bonded and Fully Insured

National Coverage for Most Services

PO Box 33950 Northglenn CO 80233 (303) 993-4871

Rental Applicant Screening

Pre and Post Move Out Inspection

Video Taped Reports

Eviction Support

Special Events Vacation and Emergency

Coverage for Staff Security

Evening and Weekend Patrol

ATTRACT & RETAIN QUALITY TENANTS!

Innovative Solutions to Update Your Units(For Much Less $$ Than You Think)

REFRESH the cabinets with a 1 Day Tune-Up.

REDOOR for 40-60% less than a new kitchen.

REFACE the cabinets while keeping the existing boxes

Our exclusive process repairs & restores existing cabinets.

A modern new look in 1-2 days - perfect for painted cabinets.

Transform the space without the expense of new cabinets.

New Cabinets, Countertops, Accessories & Much More

303.721.1393 kitchentuneup.comEach Kitchen Tune-Up franchise independently owned & operated.

[email protected]

Free Consultations!

Before After Redooring

3



Are You Leaving Money ...continued from page 1

tant to pay more if you treat them with respect and keep the property look-ing well maintained. A clean property with great looking landscaping, a cur-rent paint job without any mold or a refi nished roof will net you more rent. Yes, it will cost more to maintain, but in my opinion the payback will be in the form of higher rent, longer tenan-cies and lower turnover costs. Don’t forget, tenants want to be appreciated just like you do. If you have a proper-ty manager you work with, have them help you draft an annual budget and forecast the annual increases. Th ink into the future; plan your rent increas-es and capital expenses two to three years ahead so you can better control your long term destiny.

CommercialOwners of offi ce, retail or industrial

buildings need to think through the same process. Th ey need to develop a plan that lasts through the initial lease term and includes details regarding the tenant’s options to renew, (since commercial tenants tends to stay for 3-10 years, even more planning is in-volved in controlling the costs and the rental increases). Annually, property owners need to review the compara-tive position of their property. Th ey need to be realistic regarding the value of their real estate. Just as with resi-dential investments, they must con-sider the condition and location of their investment. Commercial land-lords need to have a long term plan in place that keeps rent increasing on an annual basis.

If you make a concession regarding a starting rent to get a tenant in, plan to step it up to market value within three years. Aim for a minimum of 21/2 % to 3% in annual increases based off the pre-negotiated step increase or per-centages that increase on the basis of a business’ success (typically used by retail businesses). I am not a huge fan of CPI (consumer price index) increas-es because the government has too much control of those numbers. Don’t permit expense caps unless you can stay ahead of the expenses, regardless of the caps.

Landlords and their property man-agers should not automatically cave into very low or zero rent increases at lease renewal time, even if the tenant threatens to move out. Run realistic scenarios regarding the cost of re-ten-

anting. Include vacancy rates, leasing commissions and tenant improve-ments in these calculated scenarios. Consider also, the moving costs an existing tenant will face. Understand their business and business goals, their staffi ng and their success at your location.

Most importantly while they are renting from you, fi x repairs that are required by your lease, and fi x them quickly. Show your tenants you appre-ciate them by treating them how you would want to be treated, otherwise they will blame you and possibly hold back rental payments, do the repairs themselves or, worse yet, move out.

We once had a client who took two months to repair the air conditioning units on a newly leased space. It was wintertime and it was raining; the

tenant was livid and hired an attorney to preserve their rights under their lease. Th e landlord wanted absolutely the lowest price for the repairs and get-ting the lowest price took over 30 days of negotiating with vendors. Th e tenant almost moved out because it took so long, and alternative cooling systems needed to be provided. Th e experience drove them to become a hostile tenant. Th ese bad feelings could have been prevented and we could have agreed on rent increases and lease renewals with this tenant if the landlord would have allowed the property manager to be more proactive. Note: Typically property managers have vendors they work with that are reasonably priced who respond quickly, but they may not be the absolute – lowest, period.

ConclusionInevitably, attention to detail, future

planning, a current understanding of the marketplace, and a fair and real-istic approach to taking care of your properties will yield higher returns for real estate investors. A key com-ponent to profi tability is a focus on current and future rental incomes. Sticking to the basics with an annual planning process and taking care of your tenants will increase your annu-al yield and keep reliable tenants in your properties.

Color

PublisherWill Johnson – [email protected]

Designer/EditorKristin Flores – [email protected]

Advertising SalesWill Johnson – [email protected]

Terry Hokenson – [email protected] Surratt – [email protected]

Rental Housing Journal Colorado is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in

Investing & Real Estate Investor Quarterly

w w w . r e n t a l h o u s i n g j o u r n a l . c o m

The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. To request a reprint or reprint rights contact Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2015 All rights reserved.

PublisherWill Johnson – [email protected]

Designer/EditorKristin Flores – [email protected]

Advertising SalesWill Johnson – [email protected]

Terry Hokenson – [email protected] Surratt – [email protected]

Rental Housing Journal Colorado is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in

Investing & Real Estate Investor Quarterly

w w w . r e n t a l h o u s i n g j o u r n a l . c o m

The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. To request a reprint or reprint rights contact Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2015 All rights reserved.

Enroll In Online Classes And Start On Your PathTo Real Estate Education With National REIAU Today

NATIONAL REIAU IS HERETEST DRIVE IT NOW!

Visit Us Today at www.NationalREIAU.com

ABOUT US

Imagine real estate investing training that is fast, easy and convenient! National REIAU delivers great low cost, high quality investor training on exactly the subject you want, exactly when you want it. It is all available right here, right now with www.NationalREIAU.com.

We provide comprehensive course material through videos and provide the professional education that will set you apart from your competitors. Our ever-expanding selection of courses is timely, accessible and cost effective. REIAU will be the leading online resource for real estate investors, both beginners and advanced. The National REIA University is the most comprehensive educational program available for real estate investors.

OUR GOAL

National REIA’s goal is to put you in control of your education and training so you can learn more and earn more – on your schedule! From the “Quick Tips” clips, to on-demand videos to regularly scheduled webinars, National REIA brings you the information you need to manage your real estate investing business more effectively. We help you boost your bottom line, while reducing your stress and worry.

USER EXPERIENCE

“Fingertip Technology” – education brought to you on your desktop, laptop, tablet or phone

Cost Efficient Learning – education without travel costs or scheduling issues

Accessible – 24 hours a day, 7 days a week

Convenient – flexible and easy to use

Engaging – education brought to you by highly qualified instructors with easy to follow presentations

Personalized – work at your pace and in a location of your choice

Real-time - information following best practices to keep you up to date.

Visit Us Today and Start on Your Path to Real Estate Education At www.NationalREIAU.com

7265 Kenwood Rd Ste 110Cincinnati, OH, 45236

Toll Free: 888-762-7342Email: [email protected]

4



Will Your Retirement Hit Bottom

“A portfolio done right should shield retirees from tumultuous ups and downs”, Financial Planner Says

Wall Street hasn’t been for the faint of heart lately.

Jittery investors saw the volatile market play havoc with invest-ment portfolios. But while the ups and downs may have created anguish for some, fi nancial planner Bryan S. Slo-von says he fi elded few if any calls from nervous clients.

And that’s the way it should be when your clients are retirees or people near-ing retirement, he says.

“Retirees really shouldn’t be seeing major changes in the values of their portfolios every time the market takes a huge dip,” says Slovon, founder and CEO of Stuart Financial Group (www.Stuartfg.com). “A well-constructed portfolio for a retiree should shield them from much of the volatility that happens with the stock market.”

If their portfolio changed as much as the market did, he says, they need to re-visit their allocation plan before some-thing really signifi cant happens.

He says portfolios that have an appro-priate level of risk – with a percentage of the money in such areas as real estate or fi xed annuities – allow retirees to avoid signifi cant losses when the stock mar-ket takes a drastic turn for the worse.

“It defi nitely relieves stress for people when they know they have an invest-ment strategy that matches their stage of life,” he says.

Any retirees who felt queasy over the recent swings in the market prob-ably have their money invested in the wrong areas, Slovon says. He suggests options that retirees, or those nearing retirement, should look for as they try to fi gure out how much investment risk is right for them:

• Rule of 100. In trying to ascertain an acceptable level of risk, people should look at the rule of 100, Slovon says. For those unfamiliar with this rule, here is how it works: Start with 100 and subtract your age (or, in the case of married couples, the average of both your ages). Th e result is the ap-proximate percentage of your invest-ments that you should have in riskier investments, such as stocks.

“Th e rule of 100 is not the end all, but it’s a good long-term fi nancial planning tool that’s stood the test of time,” Slo-von says. For example, if you are 60, 100 minus 60 comes to 40 percent risk. “Th at can vary depending on each per-son’s situation, but it’s a good place to start,” Slovon says. “Unfortunately, one

of the things that can happen is you work with people who off er nothing but risk. Th ey off er only risk because they are part of Wall Street.”

• Annuities. If you want a steady stream of income during retirement, an an-nuity can be a good choice, Slovon says. Essentially, an annuity is an in-surance product that pays income. You buy the annuity, and then it pays money to you on a regular basis for life. You can have either a fi xed annu-ity or a variable annuity.

Th e fi xed version pays a set amount, so market performance isn’t a factor, Slovon says. With the variable version, though, you choose from a list of in-vestments and the payout depends on how well those investments do.

• Bond alternatives. Bonds can be a handy part of your portfolio, shield-ing you somewhat when the stock market takes a dramatic tumble. Bonds tend to lose their value when interest rates rise, though, so it’s not a bad idea to consider some alterna-tives, Slovon says. One possibility is mutual funds because with a mutual fund you are investing in a collection of stocks, bonds or other securities. Th at gives instant diversity to your

portfolio. Another alternative is real estate investment trusts, which are companies that own and usually op-erate income-producing real estate. Th ese could be offi ce buildings, apart-ment buildings, shopping centers or other types of property.

“Whether you are a few years away from retirement, or already retired,” Slovon says, “you want to make sure your money is properly situated for steady cash fl ow, for health care costs or for that proverbial rainy day. It should look very diff erent from when you were still saving for retirement.”

About Bryan SlovonBryan Slovon is the founder and CEO of Stuart Financial Group (www.Stuartfg.com), a boutique fi nancial planning fi rm exclusively serving retirees and soon-to-be retirees in the District of Columbia metro area. He is a fi nancial planner specializing in retirement planning and wealth preser-vation to a select group of clients. He cur-rently holds his Series 65 license and is a Registered Financial Consultant as well as a Comprehensive Wealth Manager off ering investment advisory services through Glob-al Financial Private Capital, an SEC regis-tered investment advisor.

if the Markets Plummet?

Color

How muchSHOULD

it pay?

www.RHJsalary.com

How much does the job pay?

Help us � nd the answer!Take our 4 minute salary study survey

Advertise inRental Housing

Journal Colorado

Circulated to over 7,000 apartment owners, on-site

and maintenance personnel monthly.

Call503-221-1260

for more information

5



Long-term Hold Investing ...continued from page 1

Rental properties in more desirable locations usually are priced at a lower capitalization rate, than rental proper-ties in less desirable areas. Over time, the quality of tenant, ease of leasing, and appreciation potential will com-pensate for the initial lower return. Buying in a neighborhood, that you feel may decline, is a big mistake. You can change many things about a property, but you cannot change its location.

Quality of ConstructionProperties that are built in quality

materials and workmanship tolerate the abuse of tenants, time and the elements much better, than marginally construct-ed properties. Tile, metal or shin-

gle roofs last longer and require less maintenance than fl at roofs. Copper plumbing is preferred to galvanized plumbing. Tenants damage them-selves, rather than interior walls, when they punch a plaster wall. Solid wood cabinets will last decades longer than press-board or veneer cabinets. Even if you intend to remodel a property, choose one that has good “bones”.

Target TenantWhen you preview properties, form a

realistic mental picture of who would be a potential tenant(s) for that property.Is it located near a college or a senior center? Is there a major employer or a

hospital nearby? Does the rental have a private outdoor patio? Covered or en-closed parking for a newer car?

With the number and size of bed-rooms, how many people could real-istically live in the space long term? What does the property lack, that the potential tenant might desire?

Now that you have formulated a mental picture of your tenant(s), think how it would be interacting with that tenant(s), or a succession or variation of that tenant(s), for the next 18 years. If the mental picture you are formulat-ing is not pleasant, keep shopping for the right property.

FinancingInvestor loans are fi xed rate amor-

tized loans, up to 30 years, for 1-4 family properties. When you purchase 5 unit or larger properties, it is considered a commercial loan. Institutional lend-ers fi x the interest rate for 3-10 years, and then it is variable or renegotiable, on commercial loans. Sometimes you can fi nd a fi xed 15 year fully amortized commercial loan. If you are going to hold a property long term with a com-mercial loan, develop a game plan for dealing with interest rate adjustments or renegotiation, before purchasing.

Formulating a long term rental property real estate investment strat-egy involves more than analyzing the numbers on paper. Location will be a huge factor in future appreciation and convenience of management. Quality of construction will determine long term maintenance and capital expen-ditures. If you self manage your prop-erties, the tenants you choose and your relationship with those tenants, will contribute or detract from your qual-ity of life, for decades. Securing stable long term fi nancing, while interest rates are historically low, will insure strong cash fl ows until the properties are paid off . Incorporate the impor-tance of location, quality of construc-tion, target tenants and fi nancing strategy into your long term invest portfolio strategy.

Jade Bossert is a licensed Real Estate Broker in Tucson, Arizona that spe-cializes in multifamily property sales. She has been successfully selling real estate in Arizona for over 35 years. She can be contacted at 520-797-6900 or [email protected].

1/8 Page4 7/8” x 3 5/8” bwOn-Site4

ON-SITE-NW SEATTLEVALLEY, METRO, ARIZONA APT. NEWSSalsbury IndustriesFeb, Apr, Jun, Aug, Oct, Dec

1010 East 62nd Street, Los Angeles, CA 90001-1598Phone: 1-800-624-5269 • Fax: 1-800-624-5299

1/8 Page4 7/8” x 3 5/8” bwOn-Site3a

ON-SITEVALLEY, METRO, ARIZONA APT. NEWSSalsbury Industries

Jan, Mar, May, Jul, Sep, Nov,

The Industry Leader in Quality

Order Factory Direct!Contact Us Today for a Free Catalog!

1010 East 62nd Street, Los Angeles, CA 90001-1598Phone: 1-800-624-5269 • Fax: 1-800-624-5299

Octoberp September

p

6



9 Tips For Getting Started in ...continued from page 2

neys and other professionals may de-nounce it because it sounds unusual. Keep in mind that these people are either threatened by their own lack of success or are looking to protect their own butts.

The first thing you should do is join a local real estate association connect-ed to National REIA. These associa-tions will help you keep your thoughts in the right place and prove to you that investing with a plan really does work. You will be connected to investors that have had great successes, those that can share what they learned from their not so successful deals, and to those who are just starting in the business just like you.

Be PersistentAnyone who’s ever been in sales will

tell you that being persistent is the key to success. Just because a person says “No” to an offer the first time doesn’t mean that’s the final answer. Waiting a couple of weeks and checking back to see if the situation has changed can make all the difference, or chang-ing the terms of the offer slightly to accommodate the seller can jump start negotiations.

Have a good follow-up system for tracking contacts, leads and conversa-tions you’ve had with both buyers and sellers. You’ll get to the point where you’re so busy you can’t possibly re-member all the conversations you’ve had with everyone – it’s important to be able to pull up that information so you know where you are in the nego-tiation process. Anyone who has ever been in sales will tell you that few deals are ever made on the first try. Use a system that allows you to schedule follow ups and keep a running history of calls and conversations. One of the National REIA benefits is a huge dis-count on Realeflow, but you could also use ACT by Sage, an Outlook or Gmail plug-in or one of hundreds of apps for your phone or iPad. It doesn’t matter what software you use as long as you actually use it.

Have a Team On Your SideDon’t wait until you have a big deal

pending and need to ask questions be-fore assembling a team you can turn to. You need to go out and cultivate relationships with reliable profession-als you can depend on. Here’s who you need on your team:

• Attorney – preferably someone who’s familiar with the needs of a real estate professional. Make sure they understand the specific real es-tate strategy that you are using and that they’ve had some experience in that specific strategy. You don’t need to know all of the real estate laws that will affect your business but you need an advisor who does.

• Insurance Agent – you need one that also understands your strategy and investors in general. Make sure the insurance products they sell are right for investors. We have needs that are far different than your aver-age home owner.

• CPA or Accountant – find one that’s a real estate investor – they’ll know the ins and outs of the business and when to be aggressive. You can lose $1,000s in deductions and tax breaks without a professional that knows the most up to date tax law as it ap-plies specifically for investors.

• Contractor – you need a reliable professional that shows up on time, completes the job within budget and knows how to make suggestions that will save you money. Free estimates don’t hurt either.

• Mortgage broker, private money lender, hard money lender or oth-er money professional – find one that’s experienced with investors, knowledgeable and creative. You can never have too many people who are willing to fund your deals.

• Mentor – someone who’s been there and done that.

• Title or Escrow Company – find one that caters to investors. Make sure they understand double clos-ings, land contracts, etc. Your local REIA group has local

and national providers to use to build your team. These professionals work daily with investors and understand their special needs and requirements. It is a beautiful day when you realize that you can find people to add to your team that can do all of the things in your business that you hate.

Don’t Waste Time With Unmotivated Sellers

This is possibly the most common mistake new investors make. Some be-

ginning investors waste time talking to sellers who are only marginally mo-tivated. Even worse, they drive by the house and look for comps without even talking to the seller first. There’s a dif-ference between being persistent with a seller or buyer who hasn’t yet made up their mind about what they want to do and dealing with a seller who really has no intention of selling anytime in the near future. Don’t waste your time if the seller falls into the latter group.

Never Forget That Real Estate Is Really About People

In the end real estate isn’t about the land, the house, or even the money. On a practical note and an altruistic note, it really is all about the people.

Many people go through their first years of real estate investing making all their offers based on the properties. This is a huge mistake. These investors worry about making really low offers because they are concerned that it will make them a “bad” person to “take advantage” of a seller, especially one in a tough situation. What they don’t understand is that many people will happily forgo profits if other benefits are more important to them. Some people need speed, some need ease of exit, some need someone else to blame. I’ve heard more than one investor tell a story about a seller who happily sold below market because their son, sister, nephew – pick a relation – wouldn’t pay rent or move and they honestly just wanted to sell the house and let you deal with the situation!

There is a scale of client motivations, the Hustead Scale, that concisely de-scribes the level of motivation a seller has. The most motivated sellers will pay to get out of a house. Something in their life makes being out of that prop-erty so important that they will pay you to take the property.

Many investors make offer after offer, receiving rejection after rejec-tion, never bothering to ask the sell-er what they want, assuming they already know. Making offers on the properties because you think you un-derstand the value is far less effective and far less profitable than making an offer that provides the seller an option they didn’t know existed, a solution to their problem.

The moral of the story here is that if you listen, and I mean REALLY lis-ten, and try to solve the seller’s prob-lem you will always make more money than if you try to just apply your cook-ie cutter approach. Zig Ziglar used to say “You will get all you want in life, if you help enough other people get what they want.” He’s right. This busi-ness, at its core, is about people. We provide housing, we provide solutions, and sometimes most importantly, we provide options they didn’t know were available.

There you have it. Follow these nine simple steps and before you know it, you’ll be an outstanding real estate investor.

Advertise inRental Housing Journal Colorado

Circulated to over 7,000 apartment owners,on-site and maintenance personnel monthly.

Call 503-221-1260 for more informationw w w. r e n t a l h o u s i n g j o u r n a l . co m

7



Five Real Estate Investing ...continued from page 1

Establish Your Parameters

In addition to becoming good at the basics, I urge real estate investors to es-tablish their investment parameters.

• What kind of investments or deals do you want to do? Are you going to do loans? Are you going to use options? Are you going to buy rentals or tax liens? Are you going to invest in com-mercial properties? Pick two or three (no more than that) of these things and get very good at doing them. Do them over and over again.

• Determine what you are looking for in each of your potential investments.

• How much capital per investment are you willing to put at risk?

• How much time will you put into this investment?

• What is the length of time you want your capital to be out working?

• What is the projected rate of return you are seeking?

• What is the minimum rate of re-turn you want from your cash and/or time in each of your investments? When I say “rate of return,” I’m not just talking about an interest rate.

• Do you want your investments to result in your receiving monthly in-come payments, either interest only or something else, so each invest-ment is generating a monthly cash fl ow to you?Th ese are just some of the parame-

ters you need to establish for yourself. Th ere is no one book, manual or class where you can learn all this informa-tion. No, it requires your spending some time working on what you think is best for you. Th at means you may have to do one of those activities in which investors should engage on a regular basis but oft en don’t – think and plan. As you think and plan, you will be able to clearly defi ne your in-vestment parameters in a way that you can clearly communicate with others who may want to do business with you.

Do Your Essential Due DiligenceAnother key component of real estate

investing involves your due diligence process. Th ere are two very crucial questions to be asked at the beginning:

• Who is involved?

• How are they involved?

Allow me to explain why these questions are so important. It doesn’t matter how papered-up or how care-ful your lawyer is when draft ing the agreements. If the person on the other side is a person of weak or poor char-acter whom you know has a tendency not to honor their word, it will not be a good deal.

You want to be in a situation where someone you know who has very high character and is a capable investor is involved in the transaction. You still need to know HOW they are involved. Are they going to be in-volved in a way that will make sure the deal goes well, or are they just on the periphery and their name is just being “borrowed” for marketing or window-dressing purposes?

Once those key questions have been answered and you understand who is involved and how, and you have done some basic due diligence on them, then you are able to determine if you want to proceed with further due dili-gence on the deal or investment.

Even though you may have a long, successful track record of doing mul-tiple deals with individuals, it never hurts to check up on them again to see if things have been going well in other aspects of their lives. Allow me to share a brief story to illustrate this point.

A client of mine indicated that he had made a series of large-dollar, hard-money loans to a rehabber who always got the properties fi nished in great condition, and they sold for top dollar. Aft er doing several of these

deals, he began to feel very comfort-able with this borrower.

Unbeknownst to him, this borrower was having marital problems. Once those problems grew to the point where domestic relations court and lawyers became involved, this indi-vidual’s rehabbing business fell apart, and one of my client’s loans was put in a great deal of jeopardy. Fortunately, things worked out and full payment was made, but it was late and destroyed my client’s belief that this rehabber could be counted on to perform and pay on time.

Make sure you develop the type of relationship with the individual with whom you are doing business that al-lows you to look them in the eye and ask them how they are doing and what else is going on in their life so you can pick up on what issues may be on the horizon that could aff ect the way you are doing business with them.

Organize Your Deal PaperworkTh ere is one last fundamental prin-

ciple that investors need to understand that I want to share with you. You need to organize your paperwork. You need to have all your baseline transaction-al documents saved in Word format so you can easily do your own word processing and create nearly-com-pleted draft s of your documents to be reviewed by the appropriate outside professionals and other parties to the transaction (yes, get a professional re-view each time).

By always working from a base-line document, you have a template in place so you aren’t reinventing the wheel every time. You are also able to maintain a greater degree of priva-

cy and security over what you’ve done with other deals. I oft en see individ-uals who grab the last document they used (last lease, last trust agreement, last operating agreement, etc.), and they begin making edits to that one for the next deal, not realizing that there may be holdovers, both digitally and facially, in that document. Has that ever happened to me? Embarrassing-ly, yes. I have taken steps, however, to prevent it from happening again in the future. Th at’s why I’m sharing this concept with you.

Whatever the type of document, whether promissory note, mortgage, deed of trust, option agreement, due diligence checklist, or borrower ques-tionnaire and loan application, have them saved in a baseline format that you can quickly modify it for the par-ticular deal on which you are work-ing. Th is will allow you to be much more organized as you prepare these documents on your own to be sent to your lawyer or other licensed pro-fessional for review and then used in the transaction.

Remember, it’s all about getting good at the basics. Make sure you master the basics of real estate investing, establish your parameters, do thorough due dil-igence regarding those with whom you are working, and work from the same, consistent set of documents so you can continue to repeat your successes.

Color

48-HOUR NOTICE OF ENTRYTENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ STATE: __________ ZIP: _________48-HOUR NOTICE OF ENTRYPursuant to RCW 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)______________________________________________________________________________on between the hours of and . (Date) (Time) (Time)The entry will occur for the following purpose:______________________________________________________________________________

______________________________________________________________________________ Phone

Method of Service: Personal Service: Post and Mail: *Add one additional day for compliance if served by post and mail.

WA-RTG-40 Washington

©2009 NO PORTION of this form may be reproduced without written permission.

48-HOUR NOTICE OTENANT(S): ____________________________________________________ DADDRESS: ____________________________________________________ UNI

: _________________________________________ S

48-HOUR NOTICE OTENANT(S): ____________________________________________________ DADDRESS: ____________________________________________________ UNI

: _________________________________________ S

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor

In Out In OutLIVING KITCHEN BEDROOM 3Walls Walls WallsWindows Stove/Racks WindowsBlinds/Drapes Refrigerator Blinds/DrapesRods Ice Trays RodsFloor Shelves/Drawer FloorCarpet/ DisposalLight Fixtures DishwasherDoors/ Counter TopsLocks CabinetsCeilings SinkElectrical Outlets FloorGarbage Cans WindowsTV Antenna/Cable Blinds/DrapesFireplace

Cleanliness

BEDROOM 1 BEDROOM 2Walls WallsWindows WindowsBlinds/Drapes Blinds/DrapesRods RodsFloor FloorLight Fixtures Light Fixtures Essential ServicesEssential ServicesDoors/Woodwork Doors/Woodwork PlumbingLocks Locks HeatingCeilings Ceilings ElectricityElectrical Outlets Electric Outlets Hot Water

Smoke Detectors

OR-RTG-20 Oregon

TENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNITE: ________ ZIP: ____________

F)FaiF)FaiF)Fair (P)Poor (P)PoorOut

BEDROOM 3

TENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNITE: ________ ZIP: ____________

F)FaiF)FaiOut

PET AGREEMENTTENANT INFORMATION

TENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ ST TE: __________ ZIP: _________

DESCRIPTION OF PET(S)

1) Type _______________ Breed _______________ Size ______ Age __ eight ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________



Additional Security Deposit Required:$

AGREEMENTTenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives tenant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions:

1) The pet(s) shall be on a leash or otherwise under tenant s control when it is outside the tenant’s dwelling unit. 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly. 3) Tenant(s) are responsible for the conduct of their pet(s) at all times. 4) Tenant(s) are liable for all damages caused by their pet(s). 5) Tenant(s) shall pay the additional security deposit listed above and/or their rental agreement as a condition to keeping the pet(s) listed above. 6) Tenant(s) shall not allow their pets to cause any sort of disturbance or injury to the other tenants, guests, landlord or any other persons lawfully on the premises. 7) Tenant(s) shall immediately report to landlord any type of damage or injury caused by their pet. 8) This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement shall constitute a material breach of the rental agreement.

_____________________________ ______________________________Landlord Tenant ______________________________ Tenant

nogerO 42-GTR-RO

©2011 NO PORTION of this form may be reproduced without written permission.

TE: __________ ZIP: _________48-HOUR NOTICE OF ENTF ENTF RYRYR 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)______________________________________________________________________________

______________________________________________________________________________

___________________________________________________________________________ between the hours of and .ime) (Time)

____________________________________________________________________________________________________________________________________________________________

______________________________________________________________________________

___________________________________________________________________________

Phone

Post and Mail: * compliance if served by post and mail.

48-HOUR NOTICE O 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)___________________________________________________________________________ between the hours of (Time

The entry will occur for the following purpose:_________________________________________________________________________________________________________________________________________________________

Post and Mail: compliance if served by post and mail

BEDROOM 3alls

Windows

Blinds/Drapes

Rods

Floor

Essential ServicesEssential ServicesPlumbing

48-HOUR NOTICE O 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)___________________________________________________________________________ between the hours of

The entry will occur for the following purpose:_________________________________________________________________________________________________________________________________________________________

compliance if served by post and mail

BEDROOM 3Walls

Windows

Blinds/Drapes

Rods

Floor

Essential ServicesPlumbing

TENANT(S): ____________________________________________________ DATE:________ATE:________AADDRESS: ____________________________________________________ UNIT: _________

TE: __________ ZIP: _________

eight ___ Color ____ Name ________



enant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) Tenant(s) Tunderstands that the additional pet(s) are not permitted unless the landlord gives ten

enant(s) agree to keep the above-listed pets in the premises

The pet(s) shall be on a leash or otherwise under tenant s control when it is outside the

enant(s) shall promptly pick up all pet waste from the premises promptly.enant(s) are responsible for the conduct of their pet(s) at all times.enant(s) are liable for all damages caused by their pet(s).enant(s) shall pay the additional security deposit listed above and/or their rental

agreement as a condition to keeping the pet(s) listed above.enant(s) shall not allow their pets to cause any sort of disturbance or injury to the

other tenants, guests, landlord or any other persons lawfully on the premises.enant(s) shall immediately report to landlord any type of damage or injury caused by

This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement shall constitute a material breach of the rental agreement.

______________________________enant

______________________________enant

TION of this form may be reproduced without written permission.

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor

Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor







Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor IN Out In Out In OutLIVING AREAS

KITCHENBEDROOM 3

WallsWalls

WallsWindowsStove/Racks

WindowsBlinds/Drapes

RefrigeratorBlinds/Drapes

RodsIce Trays

RodsFloorShelves/Drawer

FloorCarpet/Vinyl/WoodDisposal

Light FixturesLight Fixtures

DishwasherDoors/Woodwork

Doors/WoodworkCounter Tops

LocksLocksCabinets

CeilingsCeilings

SinkElectric Outlets

Electrical OutletsFloor

Smoke DetectorsGarbage Cans

WindowsTV Antenna/CableBlinds/Drapes

BATH ROOMFireplace

Towel BarsCleanliness

Sink & Vanity

ToiletBEDROOM 1BEDROOM 2

Tub/ShowerWalls

WallsWindows

WA-RTG-20 Washington

5 REASONS TO USE RENTEGRATIONColor Standards for National Tenant Network Logo

• Logos are provided on the CD in all three forms: all black, reversed to white, or in PMS 280 Blue/PMS 7543 Gray spot or 4/color applications. Please see below for speci�c use examples.

• No other colors are acceptable for use for the logo.

• No altering of the logo is allowed. If you have a special circumstance that requires something not provided on the CD, please call NTN NA TIO NAL HEADQUAR TERS 1.800.228.0989 for assistance.

• Logos should not be put over a busy background.

BLACK WHITE (with 40% gray circle)

PMS 280/PMS 7543 over colorBlue PMS 280/Gray PMS 7543

1. Access - Rentegration.com is a web based,

access to forms generation, archives, prop-erty management database, basic account-ing, vendor ordering and other services.

2. Rental and Lease Forms - Unlimited use

forms. All Rentegration.com forms are cre-ated by attorneys and/or local rental hous-ing associations.

- Owners and managers can track income and expense for each unit, property and company. Per-fect for mid and small size property manag-ers and independent rental owners, who neither have the need or budget for larger, more expensive software.

4. Management Database - Rentegration.com is an easy to use, database driven soft-

from the database. The modules are all in-tegrated and work together. For example, a customer can use the rent-roll function to identify all delinquencies, apply fees, and create eviction forms with a few simple clicks of the mouse.

5. Value - Large property management companies that use Rentegration.com for only forms generation will save time and money over other methods. Mid and small size property managers and independent rental owners can manage their entire busi-ness at a fraction of the cost of other soft-ware and forms.

www.Rentegration.com

Exclusive Industry Partner of:

ARIZONA, ALASKA, CALIFORNIA, COLORADO, DELAWARE, FLORIDA, GEORGIA, ILLINOIS, INDIANA, KANSAS, KENTUCKY, MASSACHUSETTS, NEVADA, NEW JERSEY, NEW YORK, NORTH CAROLINA, OHIO, OREGON, PENNSYLVANIA, TEXAS, UTAH, WASHINGTON, WASHINGTON D.C., WEST VIRGINIA & MORE.

[email protected] 7346-339-305 8



SK THE SECRET SHOPPER

Available for a limited time! Only one of its kind! Off er expires at midnight! Th ese and sim-

ilar phrases are used to make people “spring boldly into action.” Th ey con-jure up images of people rushing into department stores and retail outlets to take advantage of incredible off ers on quality merchandise, especially during the holiday season. Th e advertisers and merchandisers are trying to create a sense of urgency in the minds of their customers; which will motivate them to take immediate action. Th ey are in the “sales” business and want the customer to immediately purchase a product and part with some of their money!

You may not have to meet monthly or quarterly sales “quotas,” but undoubt-edly you have specifi c occupancy stan-dards which must be met and main-tained. Th erefore, you need to rent a certain number of apartments each day, week or month to achieve the goals set for your community. It’s no secret that in the Pacifi c Northwest, many pro-spective renters decide to hibernate for the winter and dig in their heels until aft er the holidays. Th e phone isn’t ring-ing off the hook like it was in July, and the few people who are moving, may or may not make it to your community be-fore they decide to rent somewhere else fi rst. A vacant apartment today, could be “ringing in the New Year” with you on January 1st.

Th e Secret Shopper phoned three communities, looking for immediate availability. Each leasing person seemed

interested in helping me, but only one motivated me to visit.

My fi rst call was answered promptly by a friendly voice. I stated that I was new to the area and needed to fi nd a place right away. Th e consultant asked where I was moving from and what was bringing me to the area. She then asked for my name and began to inquire about the specifi c needs and requirements I had. It was a pleasant exchange that went on for several minutes. Once the consultant learned what was important to me, she began to talk about various openings. She said that I had called at a good time because there were a couple of great apartments to choose from. Th e consultant invited me to visit and told me the offi ce hours. She said, “If I’m not here, anyone in the offi ce can help you.” She gave me directions and closed with, “I hope to see you soon.”

Th e next call I made was answered with a great deal of enthusiasm. Th e consultant asked for my name right away, and I could hear the smile in her voice as she spoke and off ered her as-sistance. I explained that I was new to the area and needed to fi nd a place to live right away. Th e consultant asked questions to determine my needs and fi nd out what was important to me. She told me there were only two apartments available, and briefl y described the pos-itive attributes of each one. She asked when I would like to come by, and we discussed the driving distance and the fact that it was raining. Th e consul-tant said, “It’s been kind of slow today

because of the weather. If you want to wait and come by tomorrow, I’m sure the apartments will still be available.” I said, “I think I’ll do that.” Th e consul-tant said, “Great! I’ll see you tomorrow!”

My fi nal call was met with an ener-getic greeting and an immediate off er of help. When the consultant learned that I needed an apartment immediate-ly, she said, “Well, you better get right over here because I only have one left !” I laughed and asked if she could tell me a little bit about it fi rst. Th e consultant described the apartment interior, as well as the view. She explained that the “view apartments” don’t open up very oft en, and said this one was especially nice be-cause of its southwestern exposure.

Th e consultant said she had a mod-el to show, and she could take me by the location of the apartment for rent. She told me they were still getting it ready, but that I could move into it by the week-end. Th e consultant asked if I had time to come over right now. She said she had another appointment in an hour and if I waited, the upcoming apartment would probably be gone. I agreed to come over within the next twenty minutes. Th e consultant then gave directions carefully, since I had stated I was new to the area, and said, “Call me if you get lost.” Before we hung up, she asked for my number to be able to check back with me if I didn’t make it by. Th e consultant thanked me for calling and ended with, “I look for-ward to meeting you. I’ll see you when you get here.”

What are you doing to create UR-GENCY when the telephone rings at your community? How do you con-vince the caller that what you have to off er is worth their time and consid-eration? Your community may be just one of a dozen competing for their at-tention. Why should they visit YOUR place, and why should they DO IT NOW? Is there something about your apartments or community that stands out from all the rest? Could it be a unique fl oor plan or desirable location? What about the easy access to area con-veniences or your sensational staff ? Whatever it is, use it to create urgency to get your callers to visit TODAY! To-morrow is TOO LATE! By then, they will have already rented from the leas-ing consultant who invited them to visit YESTERDAY!

If you are interested in leasing train-ing or have a question or concern that you would like to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employ-ee evaluation needs: www.jancyn.com

Ask Th e Secret Shopper

Provided by: Joyce (Kirby) Bica

Former owner of Shoptalk Service Evaluations

Consultant to Jancyn Evaluation Shops

E-mail: [email protected]

Copyright © Joyce (Kirby) Bica

Rental Housing Journal Colorado November 2015

Documents

Transcript of Rental Housing Journal Colorado November 2015