The Competitive Advantages of the Inner City
Revisiting the June 1995 Article by Professor Michael E. Porter in the Harvard Business Review In 1995 professor Michael Porter argued that inner city businesses could be profitable and positioned to compete by exploiting competitive advantages unique to the inner city. Porter argued there were 4 main advantages to the Inner City: Strategic Location Inner […]
Read MoreWhat is Real Estate Syndication?
A syndicate is formed when a group of individuals pool resources (time or money) to transact specific business or to promote a shared interest. in real estate, a syndicate involves a promoter who finds a property to acquire for the group. The syndicate itself is usually a joint venture Limited Liability Company (LLC) with multiple […]
Read MoreHow to Underwrite Expenses on Multifamily Properties (from the Multifamily Millionaire)
First Evaluate Actual, Historical Expenses Examine trailing T-12 expenses side by side from two previous years if possible. Analyzing longer periods of time more important for expenses than income, since expenses more easy to manipulate. 2. Separate the Expenses into the Following Categories. Payroll Property Taxes Insurance Utilities and Trash Property Management General and Administrative […]
Read More2. Underwriting Income of a Potential Multifamily Property (From the Multifamily Millionaire)
Underwriting income is the process of verifying: How much a property is currently earning. How much that property could potentially generate with certain changes to management or facility upgrades. Underwriting income involves analyzing the information included in the rent roll and identifying comparable properties and market rents, followed by calculating gross potential rent and effective […]
Read MoreThe Four Stages to Underwriting a Multifamily Property (Taken from the Multifamily Millionaire by Brian Murray and Brandon Turner)
Underwriting is the process where an investor or banking institution verifies the income, assets, debt and property details in order to issue final approval to proceed with an investment or issue a loan for that investment. There are four stages to the underwriting process. The next four blog posts will explore each stage in detail. […]
Read MoreHow to Calculate a Multifamily Commercial Property’s Value
There are Seven major methods used to determine a commercial mult-family’s property value. These are buildings with 5 or more units. The Direct Capitalization Approach The capitalization rate (CAP RATE) is an estimate of what other investors in the specific market that the property is located are likely to pay for the Net Operating Income […]
Read MoreLack of Affordability is the Major Reason people move. Case Study: California
(The statistics cited below are drawn from an article that first appeared in The Daily Beast by Joel Kotkin and Wendall Cox Dec 31, 3021) No other state in America is as blessed with as many diverse natural resources, with better weather, and with better economic opportunities than California. For the last 100 years it […]
Read MoreAnalyzing a Rental Property using Brandon Turner’s Four Square Method
A short summary of a method popularized by the cohost of The Bigger Pockets podcast. A. Divide your page into quadrants. B. Title the first quadrant RENTAL INCOME. In this quadrant list all sources of rental income, including tenant rents, laundromat fees, parking, storage,etc. C.Title the second quadrant EXPENSES. INCLUDE: TAXES INSURANCE UTILITIES (Electric,water,sewer,gas) HOA […]
Read MoreThe 7 Next Real Estate Boomtowns. (For those who missed out on Austin and Denver)
In the last ten years, Austin, Texas has been the urban superstar. It has had the fastest population growth of any large city, has consistently topped the ranks of the best places to live in America on a variety of Best Cities to Live lists, and has had incredible price growth appreciation. Homes that averaged […]
Read MoreWhy invest in the Inner City?
Portraying the inner city as an investment opportunity given the popular perceptions of crime, poverty, and social dysfunction seems counterintuitive at first. But over the last two decades the urban core has become tremendously attractive for those seeking significant profits and wealth creation for three reasons: Favorable population trends as people migrate back to the […]
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