Archive for real estate investment
The Best Investment Advice …. “know What the #$%@ You are Doing….”
Posted by: | CommentsThere are so many opinions on what the best investment vehicle is….there are so many cliches on how to invest …..there are so many books on investing strategies ……and on and on. Why? Well….because almost everyone is asking the same question and everyone has a different opinion. The real dilemma is that there is not one answer….although any guru will want you to believe that there is…. and they do their best to convince you they have the answer. Seen any ads on gold lately?
Sitting in the audience not too long ago, I heard a speaker/guru that I respected very much say the stupidest thing. I heard him say “….investing in the stock market is a dumb thing to do because there is so much risk.” Granted he was selling his “silver bullet” program but….what a dumb thing to say. I know so many people that have done so well in the stock market in good times and in bad that I know the stock market is a great place to invest…..I say what with caution…keep reading.
I have also heard people say that real estate is a bad investment. When we all know people that have done well in real estate as well…whether the market is good or bad….again…I say that with caution….keep reading.
Of course there are horror stories for any investment vehicle…whether real etate, stocks, businesses, etc. BUT….there is one very clear statement that makes all the sense in the world in whatever investment vehicle you are investing in:
“Know what the hell you are doing…understand what it is that you investing in.” – me
In other words, have a good understanding of how your investment vehicle works. If you don’t understand it, don’t do it unless you are willing to lose. Then…if you lose….don’t #$%@!$ about it.
What I am saying is a knowledgeable investor will understand the risk, do what he or she can to mitigate it and roll with the punches of the investment. A savvy investor will do all this while taking advantage of the cycles that ALL INVESTMENTS go through.
Savvy investors know that losing money is the cost of doing business….but the key is making more than you lose. The way great investors do this is by spending the time educating themselves, seeking advice from successful investors and professionals, and mitigating risk.
Investing with little or no knowledge of what you are doing is what I call “Vegas Style Investing.”
So…then next time someone on stage or TV tells you their opinion on investing….take it with a grain of salt. Remember there are success stories with almost every type of investment vehicle as well as horror stories. The key is to understand the investment and know what the heck you are doing.
Until next time…..rob
Apartment Investing – Closing in on Another One
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Who is on your team?
Greetings from the metropolis of Cedar Crest, NM….
Just got off the phone with my mentor, Wes Roberts, and a feeling of “simple direction” has come upon me. It is good to have a mentor. Wes is what I would call a “life coach.” We are all willing to have coaches and mentors for different areas of our life….except for our “core”…why is that? Well…I am thankful for Wes.
By the way….
You can find out more about Wes @ www.WesRoberts.com
Anyway….
So…we are honing in on our next asset acquisition. A small multi-unit apartment complex in Texas. I can’t reveal a whole lot about the deal. But the earnest money goes hard in the next few days and there is not much in the way at this point. But you never now in this game. I guess I am trying to put a hex on the deal by writing about it….. 
So…..
Buying and managing commercial real estate is a team effort. I am not talking about partners although the usually make up part of the team. The post today focuses on key players that are a big part of the transaction. From you mortgage lender to your property manager….to commercial real estate consultants. So….here is my team…..no holding back.
Commercial Mortgage Lender:
Terry Painter @ www.businessloanstore.com is by far the man I go to to my real estate needs. I have had good friends that own mortgage businesses that tell me “straight up” they cannot beat his terms. I do challenge his rates and 9 out of 10 times….Terry is right on the money. Plus I love working with Terry. He is just a great guy….
Honerable mentions:
Karla and Scott @ www.lyngvarfinancial.com are a great team. Karla handles the residential mortgage side and Scott deals with the commercial side of things. I love these two….great people.
Property Management Companies:
Jaxon Texas Property Management – www.JaxonTexas.com: yes…I am bias. I use Jaxon for all my property management in West Texas all the way to Albuquerque, NM. Ask me why I am biased and i will tell you the truth…lol.
Wigland Omega @ www.weigandomega.com. By far the best multi-unit property management company I have ever dealt with. A couple of years ago we were coming off a horrible experience with a property management company that costs us hundreds of thousands of dollars. Weigand Omega, with the help of our asset management company and our consultant (talk about him later), turned the property around and the investment has recovered and doing well. A bad property management company can put you out of business. Be sure to check out our free while paper on how to choose to property management company by registering. Also…If you are getting ready to hire a property management company in Dallas….there is one to stay away from….comment on this post and I will tell you who it is.
Asset Management…and the bookkeeping:
Yes…there is a difference between Property Management and Asset Management. What is the difference? I will take another post to explain…but Rachel Cornella from True North Asset Management is my asset manager. Basically….she manages the property managers and the bookkeepers. Making sure they are hitting their goals and making sure they are doing what they are supposed to do…..as well as reviewing the books for each property. True North offers both asset management and bookkeeping services.
I highly recommend Rachel Cornell @ www.TrueNorthAssetManagement.com
I use YARDI. Yes…there are others….but….YARDI is basically an industry standard. Specifically….I use YARDI voyager. A web-based software which means…I do not have to host it on my own servers. I log on and roll. Yes…it is expensive…but worth it. At least for now.
Real Estate Investment Consulting….
Roger Maupin and I have been partners for a while. One of the things Roger loves, other than sailing and his family, is digging into the details of a real estate asset. I have never met some one who can uncover extra ways to generate cash flow as well as hidden problems with an asset. I also have seen Roger in action when it comes to turning a property around. A couple of years ago, Roger Maupin jumped into the trenches with Rachel of True North and Weigand Omega to turn around a multi-unit investment in North Texas. It was amazing. So….obviously, I highly recommend Roger for your commercial real estate consulting needs. Especially if you are buying or trying to turn your property around.
You can reach Roger at:
roger@rogermaupin.com.
Investment Analysis
Investment analysis is probably the most important skill to have. But most people don’t have the knack for it. But Steve is one of the best. Overall Steve is a solid investor….but his gift is investment analysis. I use Steve every time I am about to buy a property. And every time, he finds something I missed. Steve is great at identifying the real value of an asset based on passed financials as well as uncovering those small items that sellers try to cover up.
You can reach Steve at: steve_maxwell@comcast.com
Due Diligence Company
Per the strong suggestion of a friend of mine, I used Red Advisors (www.RedAdvisors.com) to do some preliminary due diligence on a 400 unit complex I was working on. Not only did the preliminary work blow me away….but also verified Steve Maxwell’s analysis on the property. A one-two punch and that deal died on the table. If you are interested in buying a 4oo unit apartment complex in Dallas Texas….contact me so I can give you the details and prevent you from becoming a victim…..Yes….I am serious.
Well….I will have more recommendations in the future. If, by some chance any of the above let you down…I want to hear about it…but I am sure you will be happy with the service you get from my teammates above.
Until next time……rob
Commercial Real Estate Property Spotlight: Industrial Space
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Industrial Space? That is like big buildings and stuff right?
“Down in the West Texas’ town of El Paso….I fell in love with a Mexican girl…..” – Marty Robbins.
Greeting from the great city of El Paso, Texas. I grew up in El Paso….and have family here….so I come back a least a couple times a year. It is good to be here. I am here to visit family and friends as well as check up on my commercial real estate investments. A good size of my portfolio is in El Paso…not only because I am familiar this multi-cultural city…but because it is growing like crazy! Fort Bliss is benefiting from the base closures so the consolidation is making Fort Bliss a “mega” military base with over thirty thousand additional troops funneling in (not including their families) and government money to boot! But I digress.
So….today’s post is on the basics of industrial space. As most of us know, industrial real estate is getting “kicked in the teeth” as the market continues to drown in it’s own blood. This means we are seeing industrial prices at historic lows in some areas across the USA. A time to buy? Yes…but with strong caution. I my opinion….we have not seen anything yet….forget the “shoe falling off”….the whole foot is infected. I hope I am wrong…but it is going to get a lot uglier before we see some light.
Anyway…..
This is the fourth post in a series that will highlight the different types of properties available to investors. The posts are an overview of general information. As with all investments, you should properly research the opportunities to determine whether they fit your portfolio.
What are Industrial Spaces?
Industrial spaces are properties rented to tenants for the purposes of manufacturing, distribution, warehousing inventory ore 
research and development. The spaces can be either within an “industrial park” or a freestanding building. Like most commercial property, industrial spaces can be leased to a single tenant or multiple companies.
What Do I Need to Know About Investing In Industrial Spaces?
Industrial spaces can be a very efficient way to build your wealth, but you need to do your research to find the right opportunity for you.
• Many investors were snatching up industrial real estate as late as 2005, but like all sectors, this too has decreased. According to allbusiness.com, the industrial real estate sector has not experienced nearly the decline that other sectors have. It does point to the “credit crunch” as putting a hold on industrial space expansion.
• Industrial real estate usually is rented as “shell” space without walls or further cosmetic uses that are necessary for office space. This results in lower initial investments.
• Industrial buildings are generally located in an industrial-zoned section of the city. This generally means less insurance (expense).
• Most industrial tenants are long-term tenants that would prefer to stay in the same location because they may have large, costly equipment that is logistically difficult to move. This means that you have locked in tenants who will not move just based on a better rent structure four blocks down, which translates to continuous steady income.
What are the cons of industrial spaces?
Again, with any property, location is important. If the market is oversaturated or does not have the demand to support 
industrial property, it is not a wise investment. Financing can be difficult to obtain for certain investors, which means you may have to work harder to find creative ways to finance your acquisition.
In Conclusion
Industrial spaces are a common addition to many investment portfolios. If you are considering investing in an industrial space, take the time to tour other properties in the market and look at each building’s performance. And, as always, if you have questions, contact the experts at The Real Wealth Company.
Until next time……..rob