Category: Management

Rehabbing a Property Long Distance

One emerging trend in the industry is long-distance property rehabbing, where investors purchase properties in different locations and oversee their rehabilitation remotely. While this approach can be highly profitable, it also presents unique challenges. 

In this blog post, we will discuss the key considerations and strategies for successfully rehabbing a property long distance as a real estate investor.

Network and Local Partnerships

Building a reliable network of local contacts and partnerships is paramount for successful long-distance property rehabbing. Seek out reputable real estate agents, property managers, contractors, and other professionals who have experience in the target market. These local connections can provide invaluable guidance, help you navigate legal and regulatory requirements, and facilitate the smooth execution of your rehab project.

Property Inspection and Assessment

When investing in a property remotely, conducting a thorough inspection becomes even more critical. Consider hiring a professional inspector or contractor to assess the property’s condition, identify potential issues, and estimate the scope of required renovations. Leverage technology by requesting detailed photos, videos, or even live video tours to gain a comprehensive understanding of the property’s current state.

Detailed Renovation Plan and Budgeting

Creating a detailed renovation plan and budget is essential to ensure that your project stays on track. Work closely with your local partners to develop a comprehensive scope of work that covers necessary repairs, upgrades, and aesthetic improvements. Consider factors such as material costs, labor expenses, and potential contingencies. Leave some room in your budget for unexpected surprises that may arise during the rehab process.

Find a Trusted Property Manager

Managing a property long distance comes with its own set of challenges, but with a reliable property management company by your side, those challenges can be overcome. From providing local expertise and market knowledge to streamlining the rehab process, tenant acquisition and screening, financial management, and property upkeep, a good property management company is an invaluable partner for real estate investors. Their expertise, experience, and dedication can ultimately lead to higher returns on your investment while giving you the freedom and peace of mind to focus on your real estate goals. 

 

Frontline Property Management has ample experience and hundreds of satisfied owners and clients. Don’t hesitate to contact us today!

Do you have a property you need help with? Contact us today!

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Good debt vs Bad debt in Real Estate

As a real estate investor, understanding the concept of good debt versus bad debt is essential for building a successful portfolio. While debt may carry a negative connotation, when used wisely, it can be a powerful tool for generating wealth in the real estate market. 

In this blog post, we will explore the difference between good debt and bad debt and discuss how investors can leverage them to their advantage.

Defining Good Debt and Bad Debt

Good Debt

Good debt, in the context of real estate investing, refers to borrowing money for investments that are likely to appreciate in value or generate a positive cash flow. The fundamental principle behind good debt is that the returns generated from the investment exceed the cost of borrowing, creating a favorable outcome for the investor.

 

Examples of good debt in real estate include:
  • Mortgage Financing: Taking out a mortgage to purchase an income-generating property with the expectation of generating rental income that covers the mortgage payments and expenses, thus building equity over time.
  • Leveraging: Using borrowed funds to acquire additional properties or make improvements on existing properties, increasing in return overall investment value and potential returns.

 

Bad Debt

Bad debt, on the other hand, refers to borrowing money for investments that are unlikely to generate a positive return or appreciate in value. This type of debt can lead to financial strain and potential losses for investors.

Examples of bad debt in real estate include:
  • High-Interest Credit Card Debt: Using credit cards to finance real estate investments, especially when carrying high-interest rates, can quickly erode profits and lead to financial instability.
  • Speculative Investments: Engaging in risky ventures without conducting proper due diligence or relying heavily on market speculation can result in substantial losses.

Differentiating Factors

Cash Flow Potential

One of the key differentiators between good debt and bad debt in real estate is the cash flow potential of the investment. Good debt allows investors to acquire properties that generate positive cash flow, meaning the rental income exceeds the mortgage payments and expenses. This positive cash flow provides a steady stream of income and enables the investor to build equity and expand their portfolio.

Long-Term Appreciation

Good debt is often associated with investments that have the potential to appreciate in value over time. Real estate assets, when carefully selected based on market analysis and due diligence, tend to increase in value over the long term. By leveraging debt to acquire such properties, investors can benefit from the compounded growth and enjoy substantial returns.

Risk Mitigation and Diversification

Good debt is commonly used to diversify an investor’s real estate portfolio. By spreading debt across multiple properties or asset classes, investors can mitigate risk and reduce the impact of market fluctuations on their investments. This strategy allows for a more balanced and resilient portfolio.

 

In the world of investing, good debt can be a powerful tool for growing your portfolio and ensuring success. By strategically utilizing debt to acquire income-generating properties, investors can leverage the cash flow potential and long-term appreciation to build equity and generate substantial returns.

Understanding the distinction between good debt and bad debt empowers Real Estate investors to make informed decisions and optimize their investment strategies.

Do you have a property you need help with? Contact us today!

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How to sell an unsellable house

Selling a home can be a stressful and challenging experience, particularly if the property has been on the market for an extended period. You may feel like you’ve tried everything, but the property still won’t sell.

However, with a few strategies and some creative thinking, even an unsellable home can be sold. 

Identify the problem

Before trying to sell an unsellable home, you need to identify the problem. There are several reasons why a property may be difficult to sell, including an unfavorable location, structural issues, outdated fixtures, or a high asking price. Once you identify the problem, you can work on developing a plan to address it.

Update the property

One of the most common reasons why a property may be difficult to sell is that it’s outdated. You can update the property by giving it a fresh coat of paint, replacing outdated fixtures, and making other cosmetic improvements. These updates can help make the property more appealing to potential buyers and increase its overall value.

You can check our blog post on cheap ways to upgrade your property here.

Consider a price reduction

If the property has been on the market for a long time, it may be time to consider a price reduction. A high asking price may be turning off potential buyers. Lowering the price can make the property more attractive to potential buyers and help generate more interest.

Hire a professional stager

It may be difficult for potential buyers to envision themselves living in the space if the space is cluttered or poorly staged.  Consider hiring a professional stager to help make the property more appealing to potential buyers. A stager can help you make everything look organized, rearrange the furniture, and create a more inviting atmosphere.

Target the right audience

If the property is located in an unfavorable location, consider targeting a specific audience. For example, if the property is located near a university, you can market it to college students and their families. If the property is located near a retirement community, you can market it to retirees. Targeting the right audience will make it more likely to find the right buyer in a short time.

Work with a real estate investor

If all else fails, consider working with a real estate investor. Some real estate investors specialize in buying unsellable homes and can offer you a fair price for the property. Selling to an investor like that can be a fast and easy way to get the property off your hands and move on to other investments.

 

You can always approach us and our professional realtors will work together to figure out the best strategy to sell your property and can even help you rent it out in the meantime so you are making a profit while waiting for it to sell!

Do you need help with a property? Contact us today!

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November – Read and research

You have established the niche you want to concentrate on, now it’s time to focus on becoming an expert. A great way to do this is to read and research on the subjects to really get into the inner workings and specifics of the industry.

Remember that the more you learn, the more you will likely earn!

Some benefits of continuing your real estate education by reading include:

Staying updated

Even if you have been in the business for a long time, it is really important that you can continue educating yourself since the real estate industry is always in constant flux and change. 

If you dig a little, you can discover a lot of blogs and books written recently, and constantly, by successful people that can provide some insight and can help you know where the market is headed which will make it easier for you to flourish as an investor.

 

You can find our recommendation on what to read if you are interested in investing in multifamily here and single family here.

Helping you make better decisions

As you may be aware, each part of real estate investing is different and you need to educate yourself on how to handle each part so you can make the most out of your investments.

Reading diligently and researching constantly, not only in the kind of investments you want to take on but also in the market and the area you’re looking at, will make it easier for you to make great decisions and veer towards a great future.

Finding new opportunities

If you are constantly reading news and blogs with information on the real estate market, you can be on the lookout and learn to  find telltale signs of a good investment opportunity, whether you want to keep investing in your own state or if you are looking to expand your portfolio to other places.

 

Don’t forget to check out the other articles in our blog and subscribe  to our monthly newsletter if you want to read on a wide variety of real estate topics!

 

Do you have a property and are feeling lost on where to start? Contact us today!

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Investor’s Basics Series: The details on buying off market

You have the timeline to plan for your next property purchase, now you can decide if it’s worth it to try and get properties that are off market.

Keep reading to get the details on how to find properties off the market and the pros and cons of doing so. 

There are many reasons sellers will look to sell off the market, including privacy, flexibility, speed and tenants, so there are many options for you to choose a good property from. Of course, with it may come some good and some bad things:

Pros

  • You get access to an inventory that other investors haven’t seen – Less competition means more chance of getting the property you have your eyes on.
  • The process may be faster – Some owners will look to sell off-market because they need a speedy exit, so everything will most likely go faster than usual.
  • Negotiations may be more flexible – Without the pressure of a normal bidding war you may have more room to negotiate to get the deal you want.

Cons

  • The cost of repairs may be high – Some properties are sold this way because they are not in the best conditions, so getting it ready to rent may be more expensive.
  • Determining fair market value may be tricky – Since they are available to less buyers, these properties may be more difficult to appraise. You can do a Comparative Market Analysis (CMA) to help you out.

 

Some ways you can find off the market properties are:

Use marketing tools to find potential sellers

We have said it before, marketing is a great tool for real estate investors. From direct mail marketing campaigns to offline strategies, you just need to work out the strategy that works for you and let it help you grow your portfolio!

Connect with local vendors

Don’t underestimate the power of having good rapport with your local vendor community. Consider making a good relationship with maintenance professionals, gardeners, home inspectors, etc, they may be able to notice distressed or abandoned properties, and could help you make connections with different owners.

Remember you can always enlist the help of an experienced property management professional in case you have bought a house off-market and are looking to get it ready and rent it out quickly!

Do you have a property you need help with? Contact us!

Anything you would like to ask us so that we can get ready for our call?

October –  Find your niche

Now that you are great at finding new opportunities everywhere you can, it is time to learn how to find your perfect niche.

Having a niche is really important when you are looking to grow your portfolio and become an expert in a particular area of real estate. Doing so will give you an edge in this fast-paced, competitive industry. 

Here are a few things to consider when working to discover your niche:

Location

A geography-based niche is the most commonly practiced and it can be specific to a neighborhood, county, zip code or city. 

You can also try to be hyperlocal, looking for properties in one very limited location, making the area you are selecting as small as possible to be able to completely specialize in it and look for the best opportunities there. The market can vary drastically from city to city and, in some cases, even from neighborhood to neighborhood. So make sure to do your research when looking for your geographical niche!

Property Type

Find what property type interests you the most and research as much as you can about it. Some property types are:

  • Single Family – Single residential structure.
  • Multi Family – A building with multiple units for several families.
  • Condo – An individually owned unit in a building with other units.
  • Co-Ops – A property owned by a corporation formed by several different owners.
  • Commercial – Buildings used for commercial use like office buildings, warehouses and retail.
  • Historical – Properties over 50 years old with certain historical and cultural characteristics.
  • Luxury – Usually defined as the top 5% of the market.

By taking on only one type of property, you can make sure you get the process of getting it ready down to a T. Each type has pros and cons so it is important to weight your options before deciding!

Find your passion

Try thinking about what you like from real estate and make sure you take it into consideration when choosing your niche.

It may sound cheesy but, working in something you love will make it easier for you to really get into it. Passion goes a long way when it comes to motivation and success!

After you have found your niche, you may want to find a good property management company that complements the niche you have chose and can help you take care of your investments so you can focus on growing your portfolio! 

Do you need help with a property? Contact us today!

Anything you would like to ask us so that we can get ready for our call?

September – Keep an eye out for opportunities

Another big part of being a Real Estate Investor, after you have kept up to date with new laws and regulations, is learning to recognise a good opportunity when it shows up and being able to take it. 

Keep reading to find our best tips on how to find and seize great real estate opportunities.

Networking

A great way to find opportunities on and off the market is to network as much as you can. Attending real estate events, both online and offline, and being part of a community with other real estate investors and other people in the business will make it easier for you to get access to opportunities that you would otherwise not have heard about.

Remember that most times other investors are not your competition, but they could be a great asset that could help you grow and bloom in the industry since they could have expertise in areas where you are lacking.

 See how you can become a networking pro here.

Consider attending auctions

If you know how to navigate through auctions, they can be a great way to find off the market properties at a great price! 

Auctions can be tricky, but if you are willing to do your research–and try attending an auction or two to see if you are up for the challenge–they could really help you grow your investment portfolio and gain more knowledge on difficult properties. 

Online and Offline Marketing

Remember one of the most powerful tools for an investor it’s their ability to work with marketing to be able to find great deals. 

A widely unknown method to find motivated sellers is to search eviction records to find for owners that may be tired of their responsibilities and may be looking to find someone to take their properties off of their hands. 

If you have an area you are interested in, you can also take your time to scout it out and look for telltale signs of a property selling and then use marketing tools like Bandit Signs to search for owners willing to sell. 

You can read our article on marketing here.

 

A great opportunity could be right around the corner for you, it is just a matter of keeping your eyes wide open and learning how to spot them. 

Do you have a property you need help with? Contact us today!

Anything you would like to ask us so that we can get ready for our call?

How appraisers determine how much a property is worth

Whether you want to buy or sell a property, the appraisal process can determine what decision you make. 

In Texas, each County Appraisal district is required to do an appraisal of the properties within their district every 3 years.

It is also important to remember that the value of your property determines the amount of property taxes you will pay each year, so you really want to make sure that you get a fair appraisal, and being aware of how the process works and what techniques appraisers use can be really helpful.
You can find more information on how appraisal works and appraisal experts in your county in this link.

There are three main ways appraisers calculate the value of your property.

Market Approach

This approach evaluates the market in the area where the property is located and makes tweaks taking into account the differences between the properties. This means, they look at properties recently sold and based on a Comparative Market Analysis (CMA), they make their appraisal after making adjustments depending on determining factors. 

Income Approach

In this method, appraisers look at income and expense data to calculate the present worth of future benefits. Doing this, they try to determine how much a future investor would pay today for the possible revenue the property will generate in the future.

Cost Approach

This last method calculates how much it would cost to replace the building on the property with another building of equal utility with certain improvements. Depreciation, which is the process used to deduct the costs of buying and improving a rental property, is factored in and it is added to the value of the land.

 

Some other factors

Appraisers do take other things into account. This includes:

  • The condition of the property both of the exterior and interior.
  • The size of the property.
  • The home improvements made. 

 

If you feel overwhelmed and need guidance through the process, you can reach out to our experienced realtors and property managers that will happily help you through every step of the way!

Need help managing a property? Contact us today!

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May – Improve your ROI strategy 

After you have created the perfect strategy to find properties, now you will need to find ways to get the best out of them. 

If you are not sure how, don’t worry! See below our tips for getting the most out of your properties by maximizing the Return of Investment on them:

Boost the value

One of the best ways to make sure you increase the value of your property, is to make improvements to it. Making home renovations or adding technological features can make the occupancy rate higher and more attractive to high-paying tenants which will help you get more money, faster.

You can check out our newsletter on home improvements that give the best ROI here.

Automate

If you have more than one rental property, you can automate the process of renovating them. Use the same paint color, the same fixtures, the same flooring and even the same design if possible. This will help you not only perfect the way you do the home improvements, but will also help you know the price of the renovations beforehand and can even help you save money if there is an option to buy the products needed in bulk. 

Trust the experts

Get a dream team that can advise you. Getting a good agent and a good property manager can save you a lot of headaches and a lot of money. These experts in your area have done the work and understand the dynamics of the market, so you can be sure that they will know the best way to make the best out of your investment and will make it easier on you when it comes to things like picking out the right tenant for your property or what the best way to move forward is. 

When it comes to choosing the right one for you, make sure you look at someone who you are comfortable with and with whom you have the right chemistry.

Crunch the numbers

Always be aware of the market trends, inflation and the overall real estate market before making any decisions, this will save you from wasting money unnecessarily and making any mistakes that could impact your investment negatively. Be aware of how much rental rates are in the area of your property to improve the tenant retention rate. 

 

You need to keep in mind that the real estate market always has its ups and downs, so don’t get frustrated and remember it may take a little to get the ROI you were hoping for, but slow and steady wins the race!

 

Don't know how to improve your ROI? We can help!

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April – Rethink your strategy for finding new properties

Now that you have created the perfect routine, what is the next step? One of the keys to being successful in any industry is to keep innovating, and Real Estate isn’t the exception. To grow and prosper, it is important to find new ways to do business and to hunt for the best opportunities. 

In today’s housing market, having a great offer is crucial. Here are our tips for finding the best properties to invest in:

Do a thorough inspection

Make sure the property is in the condition you need it to be, whether it is a fixer-upper or a turnkey property in prime condition. Take your time and do as many visits as you need to really be able to inspect every nook and cranny of the property. Some things to look out for are the HVAC system, the plumbing and the roof. 

Don’t forget to also do some research on the area, do some rounds around the block to see local restaurants, attractions, schools, and ask questions about crime statistics, flooding risk and any other pertinent information.

Have patience

Don’t rush into buying a property just because you think you’ve spent too much time looking. Patience is really important when it comes to finding a property. See as many properties as you need to, but make sure it is the perfect option for you.

Do the math

Be really thorough when it comes to how much you can invest. Don’t get in over your head with a property you can’t afford or a property that will drown you with the repair or upgrade costs. Be decisive when you choose the property, but don’t jump into it before you are 100% confident about the property.

You may need to adjust your expectations as you go along through the process, but don’t lose hope! You will find the best property that fits perfectly with your needs and finances.

Have a clear purpose

Do you want to buy the property to lease? Do you want a vacation property? How long do you want to spend fixing it up? Have a clear idea about what you want and don’t stray from it. Stay within the range of what you can afford, how big of a project you want to take on and what you want to do with the property.

If you are thinking of investing long distance, you can see our suggestions on it here.

Not sure of how to start building an investment strategy? No problem! Reach out to us and we can help you get started.

Have a property you need help with? Contact us today!

Anything you would like to ask us so that we can get ready for our call?