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    Realistic Strategies for Real Estate Investing: Embrace These Ideas and Concepts to Insure Your Success in Today’S Real Estate Environment
    Realistic Strategies for Real Estate Investing: Embrace These Ideas and Concepts to Insure Your Success in Today’S Real Estate Environment
    Realistic Strategies for Real Estate Investing: Embrace These Ideas and Concepts to Insure Your Success in Today’S Real Estate Environment
    Ebook214 pages2 hours

    Realistic Strategies for Real Estate Investing: Embrace These Ideas and Concepts to Insure Your Success in Today’S Real Estate Environment

    By Jeffrey B. Moore

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    About this ebook

    Finally, some practical information on what happens after


    the property has been acquired.



    Some of the topics covered:



    Cash Flows in Both Directions


    Real Truth Behind No Money Down Deals


    Realities of Property Management Companies


    Value Added Strategies


    Maintenance & Repair A Constant Challenge


    Vacancies Can Be Expensive


    Exit Strategies What To Do If Its Not Working


    Landlord Tenant Relationships



    Special Bonus: Wisdom is shared thru out from Active Successful Investors on Critical Aspects of Owning Investment Real Estate

    LanguageEnglish
    PublisherAuthorHouse
    Release dateJun 30, 2009
    ISBN9781467846585
    Realistic Strategies for Real Estate Investing: Embrace These Ideas and Concepts to Insure Your Success in Today’S Real Estate Environment
    Author

    Jeffrey B. Moore

    Jeffrey B. Moore has specialized in the sale of investment real estate for over 25 years.  He began his career in Orange County, California during his years as a wide receiver with the Los Angeles Rams. During that time, he successfully helped many individuals acquire  multi-family properties in Orange County and the Inland Empire in southern California. He worked with investors in the acquisition of duplexes up to 100 unit apartment properties. He also developed several small apartment properties in the city of Buena Park in Orange County, California.  He returned to his hometown of Memphis, Tennessee in the early 90’s where he continued to assist individuals in the acquisition and sale of multi-family properties.  Jeff and his bride, Juliette, have owned and managed several hundred units of investment real estate.  He has acquired a unique perspective on the strategies that have worked in this arena of investment.  Jeffrey has also seen approaches to investment real estate that have not worked.  Those often resulted in individuals losing substantial sums of money in the process.  This arena of investment is not for everyone and should be approached with extreme caution. Jeffrey has witnessed numerous success stories in this arena of investment. Some of those successful investors share ideas and strategies throughout the book.  

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      Book preview

      Realistic Strategies for Real Estate Investing - Jeffrey B. Moore

      © 2009 Jeffrey B. Moore. All rights reserved.

      No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

      First published by AuthorHouse 6/29/2009

      ISBN: 978-1-4389-5006-8 (sc)

      ISBN: 978-1-4389-5007-5 (hc)

      Acknowledgements

      Heavenly Father

      Lord, I thank you for your grace and mercy. I thank you for your loving kindness. Thank you for your son, Jesus, who died for me. Thank you for your holy spirit who instructs me. Thank you for your word that teaches and empowers me. Thank you for choosing me to minister your gospel.

      My Bride

      Sweetie, thank you so much for choosing to share your life with me. I am so amazed and fascinated to witness your grace, charm, intellect and passion for life and for your family and friends. I am truly convinced that GOD smiled on me when he brought you into my world.

      Children

      Kendrick, you continue to astonish me with your intellect and your cool. Stefanie, you amaze me with your incredible talents and your capacity to love people. Toy (Latoya), I am in awe of your gift of maternal intuition. Keith, I am thrilled to see you develop into a leader that will make a major impact in whatever career that you choose to pursue.

      Parents

      Daddy, I am so grateful to have you in my life. You have been instrumental in helping me develop two of the most important aspects of my life-my role as a family man and my real estate career. One thing we do not get to choose is our parents. I am truly blessed to be your son.

      Essie, you continue to be one of the sweetest and wisest ladies I have ever known. You have a unique gift of insight that has been very helpful to me.

      Stella, you continue to be a tremendous blessing in my life. I appreciate the way you have always encouraged and loved me unconditionally.

      Siblings

      Regina (Monica), Terry (Terrena), Vince, Chuck, Jock, Randy and Teddy, it is a joy to be your brother. I look forward to continuing to celebrate our lives and families together.

      Lifelong Friends

      Archie, Crow (David), Fred Alvin, I appreciate having you in my life since kindergarten and high school. You have been a source of strength and joy for me.

      UT Friends

      JB (Jesse), Wilbert, Steve, Chris, Kelsey, Frank, Larry, Russ, Bow (Jessie), Junior, Brian, Breeze (Marcus), Mike, Stanley, Nate, Dennis, Ray, Reggie (Johnson), Reggie (Harper), I appreciate the opportunity to have played alongside you and it’s a joy to see your families grow and to witness the great fathers and role models that you all have become.

      Spiritual Father

      Bishop (Edward I. Stephens, Jr.), I am tremendously blessed to be a part of the Golden Gate family. I appreciate you and Sister Beverly for your love and commitment to excellence in ministry.

      Mentors

      Ron Jackson, Pat Jackson, Harold Crye, Dick Leike, William Mitchell, Roy Adams, Bob Walz, Jan Withee, Coach Hewitt, Coach Ross, Coach Kuntzman, Coach Majors, Coach Taylor, I appreciate your guidance and encouragement through the years.

      Crye-Leike Family

      Dan, Karl, Charlie, Tucker, Cathy, Mack, Eric, Will, Scott, Jeff, Carrick, Gary, Nate and Bud, it is a tremendous honor and privilege to work alongside such an outstanding group of professionals in our industry.

      Masters Men

      Glenn, Herman, AJ, Kim, Larry, James, Derrick, Dan, I am so thankful for your commitment to impacting the lives of men. The 7 a.m. Saturday morning sessions continue to be relevant and powerful and your dedication has been a tremendous blessing to me and many other brothers. May God continue to bless you!

      Book Production Team

      Jessica, thank you for your diligent work on this book. I appreciate your cooperative spirit and quick turnaround time. Jeremy, I appreciate the creative edge you brought to this book Roni, you are indeed a most valuable player. I appreciate very much your multiple gifts and talents.

      Introduction

      Over the last several years, there have been a large number of individuals that have rushed into the arena of real estate investments. These new investors in many cases were taking advantage of increases in the value of their personal residences. Home equity lines of credit were being made and in many cases, the homeowners were able to get up to 100% of the home’s value. These new investors were then looking across the country to invest this newfound wealth and capital. Those parts of the country where properties were going up dramatically in value such as California, Florida, and New York for example were too expensive for those investors to invest in. In many cases , an investor could put as much as 35% down and still experience huge negative cash flows. Therefore, these investors needed to find other places across the country to invest. This phenomenon created a unique opportunity for individuals who could put together a means for the investors to access real estate investment properties across the country. Investment clubs and groups began to spring up across the country. These were places where an investor could go to a weekly or monthly meeting and get access to information on properties available across the country. Brokers from across the country would attend those meetings with information on properties available in their particular markets. Investors would make offers and in effect buy those properties. In many cases the investors would buy the properties sight unseen. This was not necessarily a bad thing. However, the rush was to buy property for cash flow. Cash flow investing was the buzzword in this investment frenzy. On paper, it appeared that these properties would produce cash flow. In a perfect world, those properties could produce cash flow. However, one of the most important and harsh realities of real estate investing is that there are major challenges that must be managed to create cash flow in any real estate investment in any market in the country. Many investors have lost substantial amounts of money and their good credit because they were unprepared to manage those challenges. Many of them were dependent on other parties, in some cases management companies to handle those challenges. This book is designed to enable the investor to look at some realistic strategies of real estate investment before they put their hard earned money to work. It raises the questions that every investor must be able to answer before they buy a particular property to determine if it really works for their situation. This book also gives numerous examples of individuals that have made real estate investment work for them. These individuals have achieved wealth beyond their wildest dreams and they share their wisdom on what it took to make real estate investment work successfully. They also share mistakes they made along the way. Real estate investing is not for everyone. It has some unique dynamics that lead to problems that one must be prepared to handle. I hope this book assists you in making the determination as to whether real estate is the best vehicle for you to reach your financial goals and dreams. May God continue to richly bless you.

      Contents

      Chapter 1 Cash Flows in Both Directions

      Chapter 2 Still the Best Vehicle for Creating Wealth

      Chapter 3 Revelations of No Money Down

      Chapter 4 Real Acquisition Costs

      Chapter 5 Property Management Essentials

      Chapter 6 Maintenance & Repairs-A Constant Challenge

      Chapter 7 It Takes A Good Team

      Chapter 8 Landlords & Tenants Need Each Other

      Chapter 9 Vacancies Can Be Expensive

      Chapter 10 Realities of Property Management Companies

      Chapter 11 Location Dictates Future Benefits

      Chapter 12 Due Diligence-The Inspection Process

      Chapter 13 Negotiating the Deal

      Chapter 14 Financing Sources for Today’s Deal

      Chapter 15 Value Added Strategies

      Chapter 16 Properties Impact Communities

      Chapter 17 Reality of Cash At RISK

      Chapter 18 Psychologies Of Ownership

      Chapter 19 Exit Strategies-If It’s Not Working For You

      Chapter 20 Effective Actions Produce Positive Results

      Chapter 1

      Cash Flows in Both Directions

      Positive cash flow and wealth creation through equity build up are the primary reasons individuals buy investment real estate properties. They believe real estate will put them on a path of developing wealth. Income that supplements those earnings from a job or business is a fundamental component of wealth.

      Cash flow is the tool when properly developed that provides the basis for wealth. It is the number one reason most individuals invest in real estate. Cash flow is defined as the cash that remains after the rental income from the property has been collected and the expenses of the property have been paid out of that income. The ideal is when the income exceeds the expenses after a given period of time. When that happens you have positive cash flow. What if the expenses of the property exceed the income from the rent? You have cash flow when that happens. It’s called negative cash flow. Far too often in my experience investors acquire properties with the goal of having positive cash flow, but end up with negative cash flow. This creates disenchantment, disappointment, and financial difficulty. This leads to individual wanting to do anything they can to rid themselves of their property. Most of the time, this result could have been avoided. However, it requires a different approach to this idea of real estate investment.

      Income appears to exceed expenses whenever an investor evaluates an investment property that is fully leased and priced reasonably. However, at some point in the ownership process, usually sooner than later, the new owner finds that all too often the expenses are exceeding the income. A strategy must be employed up front to minimize this from happening. Income is determined by the rents that are collected. Expenses are the cost associated with the ownership of the property.

      Occupancy is one of the biggest components that contributes to cash flow. To maximize income, there has to be as many ready, willing, and able to pay tenants living in the property. Collections are the second most critical component. The residents must pay the rent, which is the life blood of the operation. The expenses of the property are deducted from those collections and thus cash flow is determined. Expenses will include utilities, property taxes, insurance, maintenance and/or repairs, and supplies as the major categories. Most expenses of a property are going to be related to one of those main categories. In addition, property management and administration are other categories to consider for the operation of a property. The strategy that must be employed is one in which the income the property generates is maximized without sacrificing the overall long-term maintenance and condition of the property. Occupancy and collections are directly impacted by the residents of the property.

      Analysis of the property being considered should include a determination of how the property can be improved. The status of the current occupancy and how these occupants pay the rent will also be critical to your analysis. Lease agreements will reveal how long a resident has occupied the property. The cost incurred for legal eviction should indicate how well the occupants have paid the rent. Proper evaluation of the property should include an inspection of the property that would indicate if there are any repair items that need to be addressed right away. If the income and expense of the property after the analysis appear to result in a positive cash flow, then one can expect a positive cash flow immediately upon acquiring the property. If there are any issues that affect the operating of the property that need to be addressed right away then cash flow should happen shortly after those issues have been addressed. Results of the operation of a property are usually more reasonable to the owner, when a strategy is adopted that entails making improvements to the property immediately upon acquisition.

      Pride of ownership is a phrase used to describe a property that is owned by someone who takes pride in the way it looks. In our industry it is indeed a positive adjective and property that shows pride of ownership are the ones that sell the fastest and get the higher prices. They are also the properties that impress potential residents the most and are the ones to draw the

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