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How To Win at Real Estate Investing Despite Sky-High Interest Rates

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Asset-Based Lending Can Boost Your Borrowing Capacity

A real estate investor can get financing for an investment property through asset-based lending. This kind of loan is determined by the borrower’s liquid assets and credit score, not by their income or employment history.

When compared to dealing with institutional banks, the asset-based loan application process is typically quicker, requires less paperwork, and results in cash in hand sooner, allowing you to make larger purchases and advance as a real estate entrepreneur. Asset-based loans are a specific type of bridge loan (12-24 months) used only for investment and commercial properties.

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If you have a foreclosure on your record or poor credit and are having problems securing a loan from conventional banks, asset-based lending can be advantageous. It is particularly beneficial if your real estate investing business is expanding quickly and you need money to keep going.

How Do Asset-Based Loans Work?

Hard money lenders in asset-based lending use your collateral, in this case real estate, to assist you in getting more money to finance additional real estate projects. If your money is invested in real estate, it is not liquid, and if your business is expanding quickly, it’s likely that you need more money to keep expanding. Hard money lending can help in this situation.

Compared to traditional banking institutions, hard money lenders can provide you cash faster, with less red tape and more flexibility. A hard money lender will consider your accounts receivable, equipment, and inventory in addition to the equity in your current real estate assets to determine the amount of your loan. Hard money lenders typically charge a higher interest rate than standard banks because the real estate is not liquid and you are not borrowing against your own income.

What Are The Benefits of Asset-Based Lending?

Asset-based financing has a number of advantages, whether you’re attempting to find out how to fund a multi-family property or require a commercial loan.

These loans often close more quickly and with less paperwork than traditional loans. These loans have less stringent underwriting requirements and higher interest rates, but they also close more quickly than term loans.

The gap between expenses and incoming cash receipts for your company can be filled by cash flow asset-based lending solutions.

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The loan amount is unrestricted, so you are free to utilize it however you see fit (such as equipment purchase.)

Stratton Equities will make it simple for you to convert your collateral into cash through asset-based financing so you can fund your next big idea. Call Stratton Equities at 800-962-6613, send us an email, or fill out an application for loan pre-qualification right away if you have an investment or commercial property and would like to talk with one of our Loan Officers.

Michael Mikhail, CEO Stratton Equities

Michael Mikhail is the Founder and CEO of Stratton Equities, the nation’s leading hard money-lender to national real estate investors, with the largest variety of mortgage loans and programs nationwide.

Having launched Stratton Equities in early 2017, Michael has always been an entrepreneur and innovator in the real estate market, purchasing his first home at 19.

A serial entrepreneur with a foresight for business opportunities, Michael had a slew of small businesses prior to launching Stratton Equities. One of his most prolific ventures was a car wash connected to a gym he was affiliated with in Florida during 2001-2002 while attending college.

It wasn’t until he graduated from Florida State University with a degree in Business, that he officially joined the mortgage industry in 2003 and decided to travel to explore his options globally.

After travelling to 19 countries in 5 years, Michael knew two things; he wanted to start his own business and launch it in the United States. He knew that moving back to the states was the best place he could start something small and grow it into something infinite.

In 2017, Michael noticed how the mortgage industry had transformed after the regulations presented from 2008-2012, and knew it was time to set out something on his own, thus creating Stratton Equities.

Under Michael’s leadership, Stratton Equities has grown into one of the biggest leaders in the Mortgage and Real Estate industry across genres and platforms.

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How to Start a Property Management Company

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By Joe Arias

If you are thinking about getting into the real estate investment business, you might consider starting a property management company. A good deal of experience and knowledge is required, but it can be quite lucrative if you succeed in setting up a profitable property management company. This article will go over the necessary steps to set up a successful property management company and start making money through real estate investing.

If you’re interested in setting up a property management company, you’ll need to establish a legal entity. Many different legal entities can be used in the real estate investment business, but the most common is a limited liability company (LLC). An LLC can be a good choice because it allows you to operate an enterprise as an individual or with partners without worrying about filing forms and going through the costs of becoming an S Corporation. An LLC might not be the right choice for everyone, so it’s important to talk with your attorney to determine the best option for you. 

Obtain a License

You need to complete one more important step before you can begin your property management company. You’ll have to get a real estate license. Each state has different requirements for getting a real estate broker’s license, so you’ll have to check your state’s licensing and regulation department to determine the specific requirements. A real estate license will allow you to perform transactions on behalf of a property owner as a property manager and will enable you to handle all related paperwork. Depending on your state, you may also have to get a property management license, limiting you exclusively to property management. 

Brand Your Business

Now that you’ve established your legal entity and obtained a license, it’s time to brand your business. Decide on a company name and logo. You may even decide to hire a professional to help you determine your branding. You may not realize it, but font choices and color go a long way in establishing yourself as a reputable, trusted company. 

Separate Your Finances

It’s essential to open a bank account for your business to keep it separate from your personal expenses. This will help you keep track of your business and avoid any trouble when doing taxes. 

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Create a Website for Your Business

Once you’ve established your legal entity and obtained a real estate license, it’s time to create a website for your property management company. Many property management companies use websites to establish their brand, conduct business online, and keep records of interactions with clients. A good website will cost some money, but if you choose the right web developer, you can create a great-looking site that is optimized for Google. This will ensure that anyone looking for a property management company will come across you before your competitors.

In today’s world, it’s more important than ever to have an online presence. Your website needs to be filled with important keywords that your clients could be searching for. These will help you show up in their Google search results and will lead to more business. Knowing what you are doing online makes you appear more reputable and will help gain trust and credibility. If you don’t know where to start, consider hiring someone to take care of your digital marketing. 

Hire a Real Estate Team

Any good real estate investor knows that you’re only as good as the team you work with. As a property management company, you will want to create a solid real estate team to help you succeed. Starting off, the three most important professionals you will need are an accountant, a real estate lawyer, and a trustworthy contractor. An accountant will be necessary to manage the day-to-day accounting related to your company’s operations. A real estate lawyer will play a key role in handling any legal issues that might come up. And a contractor will be necessary for everything from mowing lawns to painting houses. Each of these professionals can represent you at public meetings, so you don’t have to attend them all the time personally.

Set Up Property Management Technology

When you’re running a property management company, it’s crucial to have a good system for keeping track of everything that’s going on. A few years ago, this would have been much harder to do, but you can set up an entire system just using the internet with today’s technology. There are specially designed services for companies looking to increase efficiency and cut down on expenses through technology. From customer and vendor management tools to marketing solutions, you can find what you need through an online service. If you plan to manage short-term rentals, you will need management software that helps you keep track of all check-ins and check-outs, as they will be more frequent and hard to keep track of on your own. 

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Establish a Pricing Structure

Once you have the basic nuts and bolts of your business taken care of, it’s time to establish pricing. Your pricing structure will differ based on the type of real estate that you’re managing. For instance, if you manage properties in a city where there is a lot of demand for affordable housing, you may be able to charge less than if you were managing high-end condos in a neighborhood with very little retail space. An excellent first step if you are just starting off is checking and seeing what competitors are charging in your area. Some fees to consider when creating your pricing structure are:

– Setup Fee: This is a one-time fee that is charged to new clients as soon as you take the job.

– Property Management Fee: This is the monthly amount that you charge for managing each property on your list.

– Real Estate Commissions: This is the percentage of your client’s total rent that goes directly to you. Technically, it’s called a ”total real estate charge,” but most property managers call it a “fee.

– Ongoing Management Fee: This is a percentage of the total rent that you charge each month to have you manage your client’s property.

– Maintenance Fee: This is an hourly fee that you charge your clients for any maintenance or repairs that need to be done at their property.

– Multiple Management Fee: If a client is also using another property management company, then you can charge the rental amount of one of the properties as a multiple management fee for your services.

– Leasing Fee: This is a fee that occurs when there is a vacancy that you need to fill. It covers the cost of staging, listing, showing, and eventually renting the unit. It typically comes out to about one month’s rent. 

– Insurance Fee: If you take on a bigger job that requires higher insurance coverage, then you can charge an additional fee per month to cover the extra cost of the insurance.

– Renewal Fee: If there are any fees associated with renewing a rental agreement, then you can charge your client an additional renewal fee as part of your monthly management fee.

– Eviction Fee: If you need to evict a tenant for violation of the lease, then the landlord can charge the tenant an additional fee as part of your management fee.

– Deposits: If your clients are required to pay a deposit when they sign their property management contract, then you can collect a monthly percentage of that deposit.

– Pet Fee: If the property is set up for pets and has pet deposits, then you can collect an additional fee from those who choose to rent with pets.

Pursue a Marketing Strategy

Regardless of what marketing strategies you choose, you need to make sure they are appropriate for your business. For instance, if you’re just starting out, you might want to focus on word-of-mouth referrals from existing clients. If you already have several clients or a steady number of people coming into your business, then it might be best to focus on local advertising through classifieds. 

If you’re just starting out, you’ll need to work a lot harder than the more established property management companies. The best time to start marketing your business is when you are still very new and unsure of the business. Don’t ever take on too much at the same time. Let your current clients know what your services are and how this will benefit their rental property. Then start new accounts by providing referrals from other potential clients in your area.

For a more modern marketing approach, take advantage of social media and digital ads. Create a Facebook page and an Instagram and update it often. Since the same parent company owns the two social networks, you can run ads across both platforms for a reasonable amount of money. Facebook ads can be adjusted to target specific demographics, locations, and niche interests. You will also want to either learn how to run Google ads or hire a company specializing in them. Investing a few dollars per day into some high-ranking keywords in your field may help you pull in leads and get your first few clients. 

Network

Many people find the most effective way to market their business is to get to know their potential customers simply. This means going out and meeting them, but it also means making a personal connection through social media. Once you’ve established a rapport with someone, you might be able to refer them to your business later.

Summary

Once you learn how to start a real estate property management company, the next step is to make it successful. Even the best business plan doesn’t mean much if you can’t market it correctly. It’s essential to understand your target audience and have some marketing strategies in place before you set out on meeting people and renting out properties. Moving forward, be sure to track your progress. Keep a log of all important numbers, such as contact information for people who expressed interest in your business, how many units you rented out, etc. Keeping tabs on your company’s progress might help you if you decide to apply for bank loans or seek investors in the future. If you have trouble getting started, find a mentor who already runs a property management company and learn through them before you are ready to get started on your own.

To learn more about a career in real estate investment, make sure to sign up for our investment seminars.

Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors. 

RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.

Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.

“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”

From a young latino immigrant  to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.

RealSuccess Website

www.ourrealsuccess.com

Personal Instagram: 

https://www.instagram.com/joeariasinvestor/

Real Estate Investment- Instagram: 

Instagram: https://www.instagram.com/realsuccesseducation/

Video For Finding Money from All Day Training (10 Hour Seminar)

https://vimeo.com/manage/videos/528446162

1 Hour Webinar

https://vimeo.com/manage/videos/530996751

Amazon Book#1:

Amazon Book#2

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Have Home Prices Peaked Yet?

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By Rick Tobin

Since 2019, the median price of a U.S. home has increased by more than $100,000. Last month, the median home price nationwide reached an all-time record high in spite of skyrocketing mortgage rates. How is this possible?

Inflation-adjusted home prices are now 85% above their historical average dating all the way back to 1890. Additionally, inflation-adjusted home prices are now 20% above the 2008 peak, according to Case-Shiller and Reventure. The 2008 peak highs for home values were followed by almost five years of home price declines through 2013 in many regions.

Even after accounting for inflation which has severely weakened the purchasing power of one dollar ($1) from back when the Federal Reserve opened for business in 1913 to just 2 or 3 cents today, home prices have never been this unaffordable.

Home Payment-to-Median Income Rates

The home payment as a percentage of median income calculation is used to quickly determine how affordable or unaffordable the monthly payments are for each homeowner. Many years ago, it was quite common for owners to pay just 25% to 35% of their monthly gross income towards their monthly mortgage payment. Now, it’s almost double those numbers (50% to 70% of the gross income) as home prices and mortgage rates continue to rise together.

The median home payment as a percentage of median income ratio nationwide is now near 49% or 50%. This is gross or pre-tax income, so the home price-to-net income after taxes paid is much higher. This is especially true in areas with high state income tax rates like those found in California, Hawaii, New Jersey, Oregon, Minnesota, New York, Vermont, Iowa, and Wisconsin.

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Home Payment as Percentage of Median Income by State:

1. Hawaii: 68%
2. California: 67%
3. Montana: 57%
4. Oregon: 55%
5. Washington: 54%
6. Massachusetts: 53%
7. Idaho: 52%
8. New York: 51%
9. New Jersey: 50%
10. Vermont: 50%
11. Maine: 50%
12. Colorado: 49%
13. Florida: 49%
14. Rhode Island: 49%
15. Arizona: 48%

To simplify these calculations using $10,000 gross income for a household (married couple earning $5,000 each before federal or state income tax), a 68% home payment as a percentage of median income in the priciest state of Hawaii would mean that the total monthly mortgage payment (principal, interest, property taxes, homeowners insurance, and homeowners association payments if applicable) would equal $6,800 per month ($6,800 monthly mortgage payment/$10,000 household income = 68%).

Unsustainable Home Price-to-Household Income Ratios

The home price-to-household income ratio (P/E) is a quick mathematical formula that we can closely look at to determine how affordable average prices homes are for one or more metropolitan regions. Because home values in California are the highest in the nation, our homes tend to have double-digit P/E ratios compared with other states with much lower P/E ratios somewhere within the 4x to 7x range (or home prices are 4 to 7 times the household income). 5.3x is the latest median home price-to-household income ratio calculation.

Let’s put these P/E ratios to work for us to better understand how unaffordable homes have become across the nation. A newly married couple earns $80,000 per year with their combined salaries. As per the national average of 5.3x, this couple would likely pay close to $424,000 (5.3 times the applicants’ household income = the average home price or $80,000 household income x 5.3 = $424,000).

By comparison, the P/E ratios for California metropolitan regions are as follows:

* Riverside: 10.5x (or times)
* Los Angeles: 14.0x
* Santa Rosa: 14.0x
* San Diego: 14.3x
* San Francisco: 14.6x
* San Jose: 16.2x
* San Luis Obispo: 17.6x
* Santa Cruz: 20.0x

Now, let’s look at Santa Cruz, California where the home price-to-earnings ratio is 20 times the household income. If we used the same $80,000 household income as before, the average home price there would be 20 times the household income average ($80,000 household income x 20 = $1,600,000 home price).

Key points: Homeowners are paying almost double the national home price-to-household income average in Riverside, California region (10.5x vs. 5.3x) and almost four times the national P/E average in Santa Cruz, California (20.0x vs. 5.3x).

A 99% Unaffordable Rate for Homes

The typical American individual or family today cannot afford to purchase a new or older home, according to the most common mortgage lending standards such as FICO credit scores, debt-to-income (DTI) ratios, and cash reserves for loan qualification purposes.

In fact, a recently published report shared by the ATTOM real estate data company named the U.S. Home Affordability Report for the third-quarter of 2023 found median-priced single-family homes and condominiums are less affordable in 99% of counties across the nation compared to historical averages. The analysis found that the home prices were beyond the reach of the vast majority of average income earners who earned just over $71,200 per year.

With average and median home prices reaching all-time record highs in possibly 99% of regions and mortgage rates hitting 23-year highs, this combination has made home purchases less affordable than ever before.

A Shaky Small Business Sector

Historically, consumer spending has represented upwards of 70% of the total GDP (Gross Domestic Product) for the US economy. With credit card balances recently surpassing $1 trillion dollars and average annual rates hitting 28.1% per Forbes, it will directly impact both in-person and online shopping.

A whopping 53% of an estimated 40,000 surveyed small business owners responded that they are only making half or less of what they were earning prior to the pandemic declaration back in March 2020, as per Alignable. For businesses that are one to three years old, 60% of respondents said that they were earning half or less of what they were earning just one year ago.

The same Alignable survey also found that 40% of small business owners could not pay their rent in full or on time for September.

Some of the factors mentioned for declining business income were as follows:

  • 50% of the small business owners surveyed said that the 18 months of rising interest rates have cut into their profit margins. Many small business owners are paying high double-digit rates for their business operations that make today’s 30-year fixed mortgage rates seem much more affordable by comparison.
  • 52% of surveyed business owners said that they were paying more for rent now than just six months ago, with 14% of respondents claiming that their rent jumped by 20% or higher.
  • 46% of business owners said that the higher-than-usual gas prices have slowed down their business growth as an increasing number of people are buying products online partly to save gas money.

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The implosion of the retail sector continues onward, sadly. The previous six years in a row (2017, 2018, 2019, 202, 2021, and 2022) each shattered the all-time retail space closings per square foot in US history. Please note that e-commerce (online retail sales for Amazon, Walmart, and thousands of other small, medium, or larger online sites) only represented the following percentages as compared to total retail sales nationwide as per Statista:

  • 10.4% of total annual retail sales were online in 2017;
  • 12.2% of total annual retail sales were online in 2018;
  • 13.8% of total annual retail sales were online in 2019;
  • 17.8% of total annual retail sales were ecommerce in 2020;
  • 18.9% of total annual retail sales were ecommerce in 2021; and
  • 18.9% of total annual retail sales were ecommerce in 2022.

According to the U.S. Small Business Association (SBA) and the U.S. Chamber of Commerce, small businesses of 500 employees or fewer make up over 99% of all U.S. businesses. For many Americans, they think that Walmart, Amazon, and Target are the primary business operators who employ a very high percentage of Americans. While it is true that their size and market dominance continues to rapidly increase, the small business sector is the “heart and soul” of the U.S. economy.

Any loss of income for employers and their current or former employees who were laid off will eventually have a significant impact on home values for purchase and for lease. Loss of income is usually the #1 reason why a homeowner is in a distressed mortgage payment situation (forbearance, loan modification, foreclosure, or short sale). It doesn’t matter too much if the homeowner has a 2% or 3% fixed rate mortgage in place if they don’t have any income to make the payments.

Underwater Cars & All-Time Record Payments

The average car loan balance in the U.S. as of the 1st quarter of 2023 was 125% loan-to-value (LTV), as per TransUnion. Many of us remember underwater or upside-down homes following the previous economic bubble burst during the 2008 to 2013 years when the mortgage debt exceeded the current home value. Now, it’s becoming increasingly common to see underwater cars with increasingly unaffordable payments.

The average new car price today is about $48,000. The average new car payment is $750 per month and the average used car payment is $551 per month. The average new car rate is 9.48% and the average used car rate reached an all-time record high of 14%.

  • 1 out of every 3 cars are 30+ days late
  • 1 out of every 5 cars are 60+ days late
  • 1 out of every 7 cars are 90+ days late
  • Moody’s forecasts 10% auto loan delinquencies by 2024.
  • Upwards of 20,000 cars are being repossessed for nonpayment every single day nationwide.

A former Ford CEO recently said that a borrower may need to earn $100,000/yr. to qualify for a new car. The United Auto Workers union just went on strike demanding more pay and fewer work week hours as the auto sector is imploding.

The 7-Year to 10-Year Housing Bubble

The common link between less affordable payment options for homes, cars, and business operations is due to the Federal Reserve’s aggressive interest rate hike campaign which began in early 2022. Things may improve for the overall economy if and when the Federal Reserve suddenly pivots or changes direction and starts slashing rates again to stimulate the economy.

Historically, our housing and economic cycles tend to last somewhere between seven and 10 years. Almost all housing boom and bust cycles are directly related to the available supply of money that’s either affordable or not. When rates are near historic lows like we’ve seen for most of the past 10 years, then home prices are more likely to rise.

Conversely, rising rates eventually may cause home prices to stagnate or fall. Yet, we may not see home prices fall for months or years depending upon the available supply of homes and the demand for housing.

In past housing cycles when the Federal Reserve promoted aggressive rate hikes like the 17 rate increases between June 2004 and June 2006, there was a one to two year lag effect before home prices suddenly started to fall. It still took about five years for the home prices to bottom out before the Fed’s aggressive rate cuts down near 0% acted like the fuel for the biggest home appreciation cycle in U.S. history.

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Our previous housing bubble burst lasted about five years between 2008 and 2013. Today, we’re 10 years past the previous housing bottom here in 2023.

If you’re thinking about selling or refinancing (cash-out or reverse mortgages) at the potential peak of the latest housing cycle, then you might be seeing the highest peak prices sooner rather than later. If you’re thinking about buying near the bottom of the next housing downturn, then keep a close eye on unemployment numbers, home listing inventory supplies, days on market averages for home listings, distressed mortgage or foreclosure numbers, and mortgage rate directional trends.

The key to success with buying and selling real estate is partly tied to a combination of basic economics, good or bad luck, personal financial and family situations, and timing. Please keep researching as many data trends as possible so that you make the most informed decision as either a buyer, seller, landlord, or tenant to minimize your downside risks and to maximize your potential gains at the same time.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

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Navigating NYC’s Changing Airbnb Law: A Guide for Seasoned and Newbie Real Estate Investors

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By Hugh Zaretsky

*Introduction:*

The world of real estate investing is ever-evolving, and staying ahead of the curve can mean the difference between success and challenges. In the bustling city of New York, one recent change has sent ripples through the real estate and short-term rental markets – the new Airbnb law. As seasoned investors who have seen it all and newcomers eager to get started, you must understand how to adapt to this shifting landscape. In this article, we’ll explore the recent changes to the Airbnb law in NYC and how to not just survive but thrive within the new regulations.

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**Understanding the New Airbnb Regulations**

The new regulations are crystal clear – you cannot rent out an entire apartment or home for less than 30 days, even if you own or live in the building. This rule applies across the board to all permanent residential buildings in NYC. Furthermore, hosts are only permitted to offer short-term rentals if they remain in the same apartment or unit with their guests. There’s also a strict limitation on the number of paying guests – no more than two are allowed at a time. Violating these regulations can result in a hefty $5,000 fine.

**A Success Story in Compliance**

In the midst of these changes, one seasoned investor, Hugh Zaretsky, has not only navigated the new regulations successfully but has thrived within them. Hugh, who was approved by New York City as one of the few hosts to continue offering Airbnb stays, has a track record of investing in cash-flowing properties, businesses, and training entrepreneurs. His story is a testament to the power of adaptation and compliance.

Hugh’s experience shows that compliance is not just about following the rules; it’s about maximizing your return on investment. By adhering to the new Airbnb regulations, you protect your investment from costly fines and legal troubles. It’s a strategy that pays off in the long run.

**Impact on the NYC Airbnb Market**

The repercussions of the new law have been significant. The number of available Airbnb listings in NYC has dropped dramatically, from over 15,000 or 9,000 units (depending on the data source) to a mere 300 options as of now. This shift is expected to bring the number closer to 3,500 available units. For investors who comply with the law, this reduced competition could translate into higher nightly rates, potentially making legal hosting even more profitable.

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**The Importance of Compliance**

Compliance with the new Airbnb law is not just about avoiding fines; it’s about safeguarding your investment and ensuring the longevity of your real estate endeavors. Hugh Zaretsky, with his background in real estate and entrepreneurship, is a prime example of how considering the law when making investment decisions can lead to success.

Hugh has also taken his expertise and experience in the field to teach other real estate investors how to operate Airbnb and short-term rentals legally. This highlights the need for education and mentorship, especially in times of change.

**Adapting to the Changing Landscape**

Hugh’s journey into the world of Airbnb investing began in 2012, and his adaptability and willingness to embrace emerging trends have been instrumental in his success. As seasoned and newbie real estate investors, it’s crucial to recognize the value of staying one step ahead. Tech expertise, mentorship, and a willingness to adapt can make all the difference in thriving in evolving markets.

In conclusion, the changing Airbnb law in NYC may have presented challenges, but it has also created opportunities for those who are willing to adapt and comply. By understanding the regulations, prioritizing compliance, and seeking mentorship, both seasoned and newbie real estate investors can find success in this evolving landscape. Hugh Zaretsky’s success story is proof that with the right approach, you can not only survive but thrive in the ever-changing world of real estate investing.

Thank you,
Hugh

646 584-5818

By Hugh Zaretsky
Real Estate Investor, Agent, Speaker, Training and Amazon Best Selling Author in 4 Categories

www.hughzaretsky.com

www.thelaunchbutton.net

www.eframily.com

[email protected]

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Short-Term Equity Financing

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By Tod Snodgrass

Due to rising interest rates, conventional funding from banks, hard money sources, etc. is becoming increasingly problematic for many Real Estate Investor Professionals (REI Pros). For example, say a REI Pro needs capital to plug a temporary financial hole—say $50,00 or $100,000 or $250,000 for a very short period of time, say just one day? Virtually no lender will provide funds for such a short period of time.

This is where a Short-Term Equity Financing (STEF) source can come in handy. STEF’s are not brokers; they are direct equity funders using their own private capital. They write the checks. The buck stops with them when it comes to final decision-making.

STEFs do not provide loans. Instead, a temporary Joint Venture Agreement (JVA) is created—a form of equity–with the REI Pro. The STEFs profit normally comes from a share of the REI Pro’s profit. Typical markup is 50% of the amount funded. If the STEF provides $100,000, they receive $150,000 in return. Obviously, all the paperwork involved has to be carefully crafted to offer maximum protection to all parties, with appropriate security and collateral issues spoken to successfully, which is why STEFs normally require that doc prep, title and escrow functions all be assigned to service vendors chosen by the STEF.

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4 STEF Case Studies

CASE STUDY NO. 1

Situation: A homeowner has fallen way behind with his monthly mortgage payments due to the fact that he lost his job. The bank recently sent him a NOD (Notice of Default) and the property is now in pre-foreclosure status. With insufficient time to fix up the place and subsequently sell it for top dollar, the homeowner has come to realize that he needs to prepare to move away from the residence, sooner rather than later. He reaches out to a local real estate broker who in turn puts him in contact with a cash buyer investor who is interested in purchasing the property—at a discounted price—via a double close (involving two separate escrows).

Problem: In addition to the overdue first position mortgage on the property, it is also encumbered with several liens: mechanics, HOA, property tax, as well as a lawsuit, including a lis pendens filing. The seller has no money to clear up the title, so it remains clouded, and the property remains unsold. Due to the high-risk factors involved, everyone (including the cash buyer) is reluctant to front the money to pay off the liens beforehand. The homeowner is stuck.

Solution: Seeking a way out of his client’s deteriorating financial situation, the broker reaches out to a Short-Term Equity Financing source for help with paying off the liens which created the clouded title logjam in the first place. Once all the pieces of the financial puzzle are properly in place (agreements and contracts signed, proper escrow instructions prepared, all monies needed for the deal are sent into both escrows), both closings can occur pretty quickly.

Result: The property owner came out OK via a cash-for-keys/deed-in-lieu arrangement with the cash buyer; the buyer got the property at a good discount from FMV; the STEF was amply rewarded for its involvement; and last but not least, the broker earned a 5% referral fee from the STEF (based on the amount that the STEF funded) for their time, trouble and expertise.

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CASE STUDY NO. 2

Situation: A General Contractor Investor (GCI) owns two acres of prime residential real estate, free and clear, with no loans or liens against the property. The land had already been successfully subdivided, entitlements are all in place, architectural drawings and plans are 100% complete for all the SFRs. Further, the GCI has already arranged a construction loan with a major bank for all the new houses, to be built one-after-another, in a series. The only thing left to do, prior to starting work, is to pay for the permits on the first few houses.

Problem: The wife of the GCI recently filed for divorce, tying up all the CGI’s assets, including the funds he had previously put aside to pay for the permits.

Solution: A STEF was brought in to provide funds for the permits. The STEF was provided with collateral via liens against the lots the CGI owned free and clear. Based on that, the STEF fronted the money for the permits, which had already been previously approved. By prearrangement, the bank providing the construction loan had agreed to “overfund” the construction loan in order to provide payback to the STEF for the funding they provided + the STEF’s markup.

Result: That same day, the loan got funded and the permits were issued. Construction soon got underway. It all turned out OK at the end for all parties.

CASE STUDY NO. 3

Situation: A property was part of an estate. The owner died and the property went into Probate. While the property had a lot of equity in it, there was still an outstanding first mortgage with a modest amount still due, which the court ruled in this case had to be paid off completely before Probate could close. Once probate closed, then the four beneficiaries could each receive their respective six-figure proceeds.

Problem: To say that the four heirs to the estate did not get along well would be an understatement. There was apparently long-standing bad blood between several different family members. The result is that, because of a total lack of trust, none of them could or would agree to pay off the amount due on the mortgage. It was a financial standoff.

Solution: A STEF was referred into the situation by an attorney. The STEF provided sufficient capital to pay off the one remaining encumbrance: the first loan, so the property could be sold a ready buyer.

Result: Probate was able to close; the property sold; the heirs got their money and STEF was paid off for its investment + standard markup. All parties walked away with a smile on their respective faces.

CASE STUDY NO. 4

Situation: A successful REI Pro owned several commercial and industrial properties free and clear. He recently identified an investment property he wanted to buy from a distressed seller. The REI Pro calculated that he could turn right around and immediately sell the property for a handsome profit, since it came with an extraordinary amount of equity. The REI Pro had the property under contract. Further, the REI Pro had already lined up a cash buyer to purchase the property. The buy and sell would only take one day to successfully accomplish.

Problem: The REI Pro, at that time, was “asset rich and cash poor”. He had no ready cash to use to buy the investment property he wanted to immediately flip. To further complicate things, he had recently defaulted on a bank loan, which had caused his FICO score to plummet. Due to the hit on his credit score, no banks in the area were willing to loan him the money he needed to buy the equity-rich property he had his eye on.

Solution: A STEF was brought into the picture who fronted the purchase price, once the REI Pro pledged several properties he owned in order to cross-collateralize the deal.

Result: It all wrapped up to everyone’s satisfaction.

NOW AVAILABLE:

A. We currently offer two different funding programs for professional real estate investors: Short-Term Equity Financing & Down Payment Assistance Funding.

1. We help make deals happen that might not otherwise close, absent our funding.

2. We are happy to pay you a 5% referral fee, based on the amount we fund. For example, if you send us a lead and we fund $100,000, we send you a check for $5,000 at closing.

B. Short-Term Equity Financing: As described above.

C. Down Payment Assistance Funding Program. For more information, see https://creativetransactionfunding.com

1. Are you a Real Estate Investor Pro (REI Pro) who has a property you want to buy, with a 70% LTV or better, but you lack some of the Down Payment (DP) money needed to close the deal? You need say, 25% DP, but can only come up with 10% and need 15% more (DP money?

2. The good news is if your deal meets our standard criteria (70% LTV or better = 30% or more equity in the deal, etc.), CTF can provide the missing 15% in DP funding. By not having to put out all your own capital into DPs–especially if you are low on cash–you’ll be able to do more deals. With your DP source already in place, it will shorten your time for getting positive confirmation from your primary lender, and for getting more deals successfully closed.

D. If you would like to receive free information about our funding programs, please send an email to: [email protected], with the following three lines of (your) info:

1. Full Name
2. Phone number
3. Email address

Any questions, please advise.

Sincerely,

Tod Snodgrass
President
Creative Transaction Funding LLC
Providing Down Payment Assistance & Short-Term Equity Financing to investors, nationwide.
[email protected]

Learn more about Tod Snodgrass, President of Creative Transaction Funding LLC, visit https://creativetransactionfunding.com

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

4th Annual Los Angeles Real Estate GRAND Expo

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Hello Real Estate Investors,

We just returned from our Lone Star Investor Wealth Summit in Texas. What a fantastic time we had meeting our readers from throughout the area. Thank you to all those who participated.

Now, we would like to invite everyone in our national and international network to join us for the 4th Annual Los Angeles Real Estate GRAND Expo. This event, which is a collaboration with two of our long-term associates and friends, is the largest real estate event we host every year!

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You simply don’t want to miss the opportunity to network with active real estate investors from throughout the Golden State, the nation and world, in sunny Southern California.

The GRAND Expo is conveniently located in West Los Angeles and is a short driving distance from top tourist attractions, shopping, restaurants and nightlife in Beverly Hills, Santa Monica, Malibu, Marina del Rey and Venice Beach.

Make your California vacation a reality by joining us at the 4th Annual Los Angeles Real Estate GRAND Expo. Meet us for just one day and make connections for life. For additional details, please read below.

4th Annual Los Angeles Real Estate Grand Expo

We are very excited to announce our 4th Annual Los Angeles Real Estate Grand Expo. The Grand Expo returns on Saturday, October 21, 2023, 9:00 am to 6:00 pm. We’re taking over the entire Iman Cultural Center for the day – it’s all ours!

The North Hall (vendor exhibition area), the South Hall (workshops), and the middle parking lot (loaded with workshop tents and food trucks). The theme of this year’s Grand Expo will be “Hedge Inflation – Buy Real Estate”.

Last year, the Grand Expo was the largest real estate event in Southern California. We had over 800 investors, 64 vendors, and 12 national speakers…this year will be even BIGGER! An entire day celebrating real estate investing and you can be involved. Best of all, the Grand Expo will be FREE to attend.

This Expo is going to be big, really BIG! We are hosting investors from around the nation once again.

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EDUCATORS. There will be national guest speakers (in three breakout rooms). Here is a partial list of our top educators:

1. Jonah Dew – “The Money Multiplier”
2. Eddie Speed – “Buying Discounted notes”
3. Rusty Tweed – “1031 Tax-Deferred Exchanges”
4. Joe Arias – “How to Get Started Investing”
5. Christopher Meza – “Developing Raw Land”
6. Tony Watson – “Tax Advantages for R.E. Investors”
7. Dani & Flip Robison – “Fixing & Flipping Houses”
8. Abbas Mohammed – “Investing in Multi-Residential Properties”
9. Marco Kozlowski – “How to Buy Lots and Lots of Houses”
10. Amanda Brown – “Invest in Commercial Real Estate”
11. Shawn Tiberio – “Marketing for Real Estate Investors”
12. Joseph V. Scorese – “How to Finance Your Next Deal”
13. Jeremy Rubin — “From Employee to $100M in Flips”
14. Steve Price (Keynote) – Vice President at Auction.com

INVESTMENT EDUCATION. An all-day in-depth educational extravaganza celebrating real estate investing. Most importantly, this will NOT be a sales pitch. So regardless of whether you are a new investor, already own properties, or are very experienced, our Grand Expo is for you!

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Update on Events in PA, CA and More!

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Please review this important post. Thank you.

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Dear Readers,

We are thankful to all of our subscribers, friends, and sponsors who are helping us host and/or co-produce many LIVE events around the country! We hope to reach many of you in person in the next few months.

We have more LIVE events in CA and PA coming up this year. Plus, we are already promoting The Great Mile High Real Estate Investors Summit in beautiful Colorado next year, too!

Be sure to scroll down and review information about each unique event. Even if you are not in the area, perhaps you can refer a friend, associate or family member to join us. We would certainly appreciate your support.

Don’t miss the opportunity to connect in Philadelphia, Pennsylvania once again for an insightful educational boot camp. At this event, guests will have the opportunity to learn directly with top business and real estate leaders.

Experienced educators will share their knowledge and strategies for guests to have a better understanding of the current real estate market. Join us and gain the insight to implement a game plan for success. This boot camp will include top-level industry information and fantastic networking.

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4th Annual Los Angeles Real Estate Grand Expo

We are very excited to announce our 4th Annual Los Angeles Real Estate Grand Expo. The Grand Expo returns on Saturday, October 21, 2023, 9:00 am to 6:00 pm. We’re taking over the entire Iman Cultural Center for the day – it’s all ours! The North Hall (vendor exhibition area), the South Hall (workshops), and the middle parking lot (loaded with workshop tents and food trucks). The theme of this year’s Grand Expo will be “Hedge Inflation – Buy Real Estate”

Last year, the Grand Expo was the largest real estate event in Southern California. We had over 800 investors, 64 vendors, and 12 national speakers…this year will be even BIGGER! An entire day celebrating real estate investing and you can be involved. Best of all, the Grand Expo will be FREE to attend. This Expo is going to be big, really BIG!

SPEAKERS. There will be national guest speakers (in three breakout rooms). Here is a partial list of our top educators:

1. Jonah Dew – “The Money Multiplier”
2. Eddie Speed – “Buying Discounted notes”
3. Rusty Tweed – “1031 Tax-Deferred Exchanges”
4. Joe Arias – “How to Get Started Investing”
5. Christopher Meza – “Developing Raw Land”
6. Tony Watson – “Tax Advantages for R.E. Investors”
7. Dani & Flip Robison – “Fixing & Flipping Houses”
8. Abbas Mohammed – “Investing in Multi-Residential Properties”
9. Marco Kozlowski – “How to Buy Lots and Lots of Houses”
10. Amanda Brown – “Invest in Commercial Real Estate”
11. Shawn Tiberio – “Marketing for Real Estate Investors”
12. Joeseph Scorese – “How to Finance Your Next Deal”
13. Jeremy Rubin — “From Corporate Employee to $100M in Flips”
14. Steve Price (Keynote) – VP at Auction.com.

INVESTMENT EDUCATION. An all-day in-depth educational extravaganza celebrating real estate investing. Most importantly, this will NOT be a sales pitch. So regardless of whether you are a new investor, already own properties, or are very experienced, our Grand Expo is for you!

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NEW MAGAZINE!

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Lease Protector – Inspections Made Easy

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Please review this important sponsored post, thank you.

Inspections Made Easy

Lease Protector is proud to announce our simple Inspection App!

Move Inspector provides a simple but extremely powerful tool that allows landlords to do inspections. Save time and money and protect your assets.

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Landlords can lose up to 2-3 months worth of rent on unforeseen damages

Landlords are responsible for covering the cost of wear and tear and keeping the property in good shape. And Tenants are responsible to keep the property in good condition and pay for damages they cause. Everyone agrees with this but how do you determine what each party is responsible for?

The solution is an accurate report with photos shared with both parties.

Inspections are simple and can be customized to fit your needs. As many areas as needed can be added to the report. Areas can be assigned to rooms, parts of rooms or even the whole property!

Inspections can be done using the mobile app to take pictures or on the web browser by uploading photos.

After completing the inspection, a report is created that provides all photos and notes. The report is saved as long as you need and can be downloaded or shared to any email needed.

Perfect for documenting the property, security deposit deductions or even insurance claims!

Copyright 2023 Lease Protector©, All rights reserved. https://leaseprotector.com

SOAR Energy Partners with Gryphon Roofing to Reduce Energy Bills of Arizona Residents

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Homeowners in Phoenix, Glendale, Scottsdale, Gilbert and Chandler can securely install rooftop solar systems that decrease utility costs by up to 40 percent

PHOENIX, Arizona — SOAR Energy, the #1 fastest growing solar company powered by Better Earth, today announced its partnership with Gryphon Roofing, a leading residential and commercial roofing contractor servicing Arizona, which holds the second highest solar potential in the nation according to the U.S. Energy Information Administration. SOAR has also named Gryphon Roofing its Preferred Roofing Partner within the state, operating in Phoenix, Glendale, Scottsdale, Gilbert, and Chandler markets.  

The move comes as utility rates continue to skyrocket across Arizona, with Arizona Public Service (APS) charging nearly 30 cents per unit of energy during summer’s peak season. Residents can turn to renewable energy alternatives and reduce their energy bills by up to 40 percent. Both Gryphon Roofing and SOAR Energy share a mission of making rooftop solar energy easy and comfortable with little to no consumption changes necessary by the homeowner.

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“Facing the wrath of high utility costs, homeowners in many of Arizona’s largest markets are choosing to make their homes more energy efficient through solar,” said Brian Decker, CEO of SOAR Energy.

“By partnering with the Gryphon Roofing team, who is highly recognized across Arizona and serves as the preferred roofer for some of the country’s largest hedge funds, residents will be able to confidently make the shift and take power back into their own hands without having to pay out of pocket for their solar system.”

According to the U.S. EIA, Arizona also ranks among the top five states in total solar-powered generating capacity from utility and small-scale installations, with nearly 5,500 megawatts. Further, Arizona’s residential sector consumes more electricity than 75 percent of states and more per capita than 70 percent of states. Residents can receive a federal tax credit of up to 30 percent if their roof needs to be replaced while installing their system, as well as be reimbursed by APS for excess power that is produced and not used.

“Leveraging both Gryphon Roofing and SOAR Energy’s unmatched rooftop capabilities, we’re looking forward to installing reliable solar systems for homeowners across major Arizona markets and getting them on track to saving money,” said Russel Hyman, CEO and President at Gryphon Roofing.

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“Our crews specialize in seamless installation and repair, so through this partnership, homeowners can be confident in their solar systems.”

The partnership will be in effect immediately and homeowners interested in renewable energy for their homes can find more information at www.soarenergy.com/.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Unlock the Path to Business Success: 10 Tips for a Thriving Future

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By Kris Miller

Are you ready to take your business to new heights? The journey to success is filled with twists and turns, but fear not! We’ve got the ultimate guide to steer you towards triumph and prosperity. These 10 business tips will ignite your entrepreneurial spirit and pave the way for a brighter future. Get ready to level up!

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  1. Use It or Lose It – Maximize Your Annual Exclusion: Tap into the power of the annual gift tax exclusion. Gift to your heart’s content without tax consequences. Share the joy of giving while saving big!
  2. Harness Your Gift Tax Exemption – Unlock your lifetime gift tax exclusion of $1,000,000! It’s time to make your mark and leave a legacy with strategic gifting.
  3. Pay It Forward – Tuition and Medical Expenses: Seize the opportunity to pay tuition and medical expenses without worry. These generous gestures won’t come with taxable gift strings attached.
  4. Preserve Your Estate Tax Exemptions – Plan Ahead: Take charge of your estate’s future. Prepare for the unknown with a robust estate plan. Expect the best, but plan for the worst.
  5. Fund a 529 Plan – Empower Future Scholars: Invest in education with a 529 plan. Watch your savings grow tax-free while supporting the next generation of bright minds.
  6. Choose a Guardian – Secure Your Kids’ Future: Family comes first! Ensure your kids are protected by choosing a trusted guardian. Rest easy knowing they’re in caring hands.
  7. Create a Will or Living Trust – Shape Your Legacy: Shape your legacy with a carefully crafted will or living trust. Don’t let your estate fall into the wrong hands. Take control of your future now.
  8. Power Up – Secure Your Financial and Health Decisions: Be the captain of your ship. Get a Power of Attorney for Financial & Health decisions, empowering you to navigate life’s challenges.
  9. Secure Your Retirement – A Plan That Lasts: Don’t leave your retirement to chance. Review your IRAs and 401(k)s to ensure a secure financial future. Take control and plan for the long haul.
  10. Protect Your Future – Long-Term Care Coverage: Prepare for the unexpected. Secure coverage for long-term care and catastrophic nursing home needs. Your peace of mind is worth it.

Don’t Wait – Embrace Your Journey Now!

Success and prosperity await, but it’s up to you to seize the opportunity. Don’t let time slip away. Take charge of your business, estate, and health. Safeguard your assets and pave the way for a remarkable future.

No one plans for misfortune, but planning for it is the key to financial freedom. Embrace the power of giving, reduce taxes, and step confidently into the realm of success. The time is now, get started on your path to triumph today!

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Schedule a Free Financial Fitness Strategy Session with Kris Miller, LDA

Legacy Wealth Strategist #1 Bestselling Author, Speaker & Educator

Use the Calendar Below to Schedule Your One-On-One Session with Kris

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30+ years of experience assisting others in growing & protecting their wealth. Helped more than 6,000 families avoid financial disaster by strategically planning for their futures. Not one person has lost a single dime on her watch. Her clients learn how to change their families’ financial realities and create incomes they will never outlive

For more Healthy Money Tips:

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[email protected]

Phone (951) 926-4158

Kris Miller

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LDA Document Services
https://calendly.com/krismiller

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Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.