Property Manager Can Maximize Your Investment

Remote Control RETIREMENT RICHES APRIL 2019

THREE Ways a Property Manager Can Maximize Your Investment

MARKET UPDATE OKC

by Adiel Gorel 1-Day Expo March 9th EVENT RECAP Thinking back about the ICG 1-Day the 5% barrier. Remember, investors’ specific subjects offered, as well as Expo we had last month, on Saturday rates are higher than homeowners’ special one on one “Connect For Suc- March 9th. rates). Scott also described loans cess” meetings with me to plan your available to people who can’t get the path. We enabled people to already It was a big event, with over 700 peo- FNMA loans, by virtue of owning join the membership area at a dis- ple in attendance throughout the day. more than the FNMA limit. He also counted rate, and will only count their Some of the attendees were KQED outlined loans available to foreign year subscription starting on May 1st, donors, who received tickets to our investors. 2019. For more details, email us at event as part of the Remote Control [email protected]. You can also see in- Many new investors joined our Retirement Riches Master Package. formation on our website www.icgre. QUICK LIST, to whom we send com/MEMBERS. There was a good mix between brand property sheets when we get them new investors, very experienced inves- from the various markets, as well as The attendees enjoyed the expert tors, and everything in between. event invitations and updates. We speakers: CPA Joshua Cooper talked have sent several property sets since about the Opportunity Zone and The Q&A sessions throughout the then. other tax issues. Joyce Feldman talked day were fun for me, and instructive about using insurance as the first to the audience. The questions cov- We also introduced the Membership and probably most important line of ered the whole gamut and were useful Area on our website. This will be an defense, and Lucia Ioja talked about for everyone. exciting treasure trove of information, optimizing real estate investing in the in two tiers. The membership area We had the main market teams pres- larger context of financial planning. will soon be fully populated with pod- ent, and some of the property manag- casts, blog entries, FAQ’s (Frequently Many of the attendees have registered ers were there. Scott Webster from All Asked Questions), and other useful to the next 1-Day Expo, on Saturday Western Mortgage described regular information. I am working very hard, May 18th. We will have a new mar- FNMA 30-year fixed loans (some at with other experts, to populate the ket, a new set of expert speakers, and just under 5%, which, for investors, members’ area with great content, but of course lots of updates and Q&As. is a low rate – now, in April, the rates all will be there by the end of April, went down a bit still from March, so 2019. There will also be webinars on investors with good credit can crack Downturn Sidestepped for now?

There was a sentiment that an overall This is not necessarily good or bad for us downturn was just around the corner. as investors in new single-family homes. Buying during a downturn certainly has In January, overall existing home sales in its advantages, as many markets be- January seemed to have tapered down, come buyers’ markets. If we had already increasing the sense that a downturn may bought a home and a downturn arrives, be imminent. all we have to do is nothing! Rentals are However, in February, existing home sales stronger during downturns, since many rose 11.8% from January, the largest such would-be-new-home-buyers get scared gain since 2015. This was reported ev- and shelve their plans to buy a home, thus erywhere, but I am looking at article in they stay as renters. the Wall Street Journal from April 6th , by So, the “happy news” does create a bet- Laura Kusisto, ter overall mood. However, for us, as In addition, mortgage rates for home- constant buyers, it does not make much owners are down to 4.08% in the past difference. Downturns come and so do week. In addition, the Fed has indicated booms, we are long term holders of prop- it is not likely to raise rates for the rest of erty, letting inflation erode our 30-year the year. fixed rate loans. Altogether, the sentiment is now that a We will discuss this at our next 1-Day downturn has been sidestepped. Expo on May 18th, as well as on a podcast in the membership area. THREE Ways a Property Manager Can Maximize Your Investment

If you own a rental property, property management is everything. But today, top-quality property management is more complex than ever before. To create positive experienc- es for you and your tenants, you need a strong technology backend coupled with a personable and hyper-respon- sive human front end. The Realty Medics are led in part by a former NASA Space Shuttle engineer, so we know a thing or two about systems, proprietary technology and training. But we also know that the purpose of technology is to enable the human touch, not replace it. Here are the top three ways that we—and any property manager— can help you get the most out of your investment. 1. Determine the Optimal Mar- We start the tenant renewal pro- month’s rent, provide keys to the ket Value cess 120 days before lease expi- tenant and arrange the transfer ration. We re-examine the rent of funds to you. The goal with setting your rent number to see if it needs adjust- is to determine the highest 3. Coordinate Maintenance & ing. If you already have good ten- rate that will attract high-qual- Repairs ants, we work to convince them ity tenants. Set it too low, and to stay in your property, then If your property needs repairs you won’t get the cash flow you draw up a new lease agreement before the next set of tenants deserve. Set it too high, and you and send to all parties for sig- move in, our goal is to get your won’t attract enough interest natures. If your tenants decide home back on the market as to get the property leased and to vacate, we provide move-out soon as possible. We coordinate those rent checks flowing. This is instructions, initiate utilities, set the vendors, secure the esti- easier said than done. But if your up pool and lawn vendors, ac- mates and discuss any recom- property manager has the right quire tenant forwarding address- mended repairs with you so we tools, does comprehensive prop- es for the security deposit, coor- can get the property in show- erty inspections and runs the dinate how and where to retrieve ready condition and capture right comps, then they can deter- the keys, and much more. maximum market attention. mine the optimal market value During the lease period, we also for your home. (Hint: We can.) If you need new tenants, we send coordinate maintenance and a trained home inspector to doc- 2. Find & Keep Great Tenants repair requests to make sure ument your property’s condition that issues are handled quickly Great tenants are the key to a with hundreds of photos, then and thoroughly, and with min- great investment. If you can create an itemized repair list imal disruption to you or your place the right tenant in your (see #3). After repairs, our Leas- tenants. property, then you’ll experience ing Team updates the photos, fewer headaches and greater lists your property on hundreds Make no mistake: A property cash flow in both the short and of websites, takes phone calls manager does more than just long terms. and answers applicants’ ques- collect rent; they protect and tions. We then schedule each grow your investment. If you’re showing and help potential ap- in the market for a property plicants apply for each property. manager, make sure they’re not from the low-tech “mom and Once we receive an applica- pop” school of the ‘90s. Today, tion, we execute one of the property management is rocket most critical steps in protecting science, so you need someone your investment: comprehen- with the systems and people in sive nationwide background place to handle mission-critical checks. Once a tenant is ap- tasks and make sure your invest- proved through our screening ment really takes off. process (and the Home Owner Association approves the ap- Tom Weclew is the owner and plicant), we collect the security founder of The Realty Medics, deposit in secured funds, draw a property management firm in up the lease, collect the first the Orlando area.

Tom Weclew Owner of The Realty Medics in the Orlando Area market update

Before the 2008 housing crisis, Forbes at $63 a barrel, employment is rising, that Oklahoma City has the highest named Oklahoma City as the most and all levels of government are in percentage of renters in single family recession proof city. We proved that surplus due to oil and gas revenues homes at 48%. You want more than by maintaining our housing value with the strong drilling activity. scarcity, it is important to know where to the current day with consistent the renters are going. What also helps Recent news shows that Boeing is now appreciation. Recent statistics show you is a cost of living 6% below the at 3000 employees with more expected, Oklahoma City to be the 9th fastest national average combined with Amazon building a 5 million square growing metro over one million with Oklahoma City being the 20th most foot fulfillment center that should peak the population expected to exceed 1.5 affordable city in the U.S. at 6300 employees, and the main air- million in 2020. This is coupled with port just started an $80 million-dollar We have closed on more than 1300 strong job growth and an unemploy- expansion to enlarge the terminal and homes in the Oklahoma City metro ment rate of 2.8% with more jobs also add 9 more gates that will help area with an average 3% vacancy open. build corporate business here with more rate. The Oklahoma City team is Some of the largest employers in nonstop flights. growing and now consists of 5 people Oklahoma City are the state gov- dedicated to discovering the best new Housing is booming with a 65% ernment at 38,000, Tinker Air Force homes in value and location. We are owner-occupant rate. It is important Base at 45,000 base related jobs, and also connected to third party pro- to real estate investors since you want of course the oil and gas industry. viders like insurance agents, lenders, fewer rentals to choose from, scarcity Current break even cost for oil drilling home inspectors, property managers, works for you. It is also significant is $26 a barrel and with current prices and of course builders.

ON ECONOMICS 30 yr fixed rate loans: Here to Stay

In a recent blog, we discussed how One of the first thing everyone was administration. the White House is seeking to reform quick to mention is that whether a Since we absolutely love the 30-year the secondary market for mortgages, reform happens or not, the 30-year fixed rate loan, and think it’s one of overseen by FNMA and Freddie Mac. loan will not be touched. the best and surest way to strengthen The intent is to make the entities The 30-year fixed rate loan has your financial future (when used to controlling the mortgage secondary become such an ingrained part of finance new single-family homes, in market, more private rather than gov- American life, it is hard to see any- good markets, that were bought with ernment-owned. one dislodging it, and the political a down payment around 20% or so), costs will likely be harsh for any such this can only be good news Retirement Riches Testimonials Brent and Grace L. Peter K. Tony B. The expo was a very useful and It had been our intention to, one I am 61 years old now, and the homes likely profitable experience for us. day, donate to a public broadcasting I had bought with you are now Thank you for making it happen. station. When we saw your program, free and clear. I have four homes in And many thanks for “holding our it was an opportunity for us to Phoenix and one in Dallas. These five hand”. I’m amazed at your energy, accomplish a win-win situation: make free and clear homes are enabling me intelligence and ability to give so our first time donation to a public to be very flexible as to my next move. much personal attention. service we believe in, and in turn, In fact, between my other retirement In Gratitude, receive your master package as a funds, and the upcoming social gift. My wife and I thought your security, I am already set and don’t program was too good to be true, but have to work again if I don’t choose we believed we owed it to ourselves to. to check it out. We are very glad we attended our first ICG’s 1-Day Real Estate Expo. We look forward to seeing you again at the May 18th Expo. EXPERT ARTICLE FOR MAY:

“How the new Reverse Mortgage operates now” by Mary Joe Lafaye (hint, it’s very different than you might have thought), and how it can give you much flexibility for your retirement future

Q: Are you looking at Reno, NV? this time, especially with the enor- in a 1031 exchange, 1) The 3-property mous TX property taxes). rule allows you to buy up to and in- A: One of our basic premises is to cluding three properties but no more. buy in large metropolitan areas To make a point, San Francisco just This is a rule that most applies in in the Sunbelt States. Reno is not had Google, Salesforce, Facebook California due to the high cost of a large city. In fact, the only large and other giants, expand like mad homes. 2) The 200% rule - does not metro area in the state of Nevada, is these past few months. Clearly that’s limit the number of properties you corner Las Vegas. However, another of our impressive. However, that does not can buy, as long as their aggregate basic criteria is: a market where the make San Francisco a good market value does not exceed 200% of the numbers work. The numbers, as to buy rentals at this time. That is net sales price of the property you of April 2019, do NOT work either easy to see since the prices in SF are sold 3) The 95% rule (some exchange in Las Vegas or in Reno. These two so high. The investor coming from intermediates are not familiar with markets have already gone up a lot, expensive states think that Reno, Ve- it), stipulates that you can buy prop- and the rents have not kept pace (as gas, Austin, Phoenix etc. are “cheap” erties with no limit, but you have to is common). Vegas is a good place to since they are low cost relative to LA actually CLOSE on at least 95% of be a seller these days (and we have or SF. However, these are not good the aggregate value of the properties investors selling in Vegas and doing places to buy at this time. As I said L’S ADI E L’S you had identified within the identifi- 1031 tax deferred exchanges into sev- Reno has the additional drawback of cation period. eral brand-new homes in markets not being large enough, where large where the numbers do work). usually means diversity of industry I just interviewed Weiming Peng for and employment. our expert Podcast series, being posted People get enamored by the “Giga in the premium area of our member- Factory” near Reno, as well as other Q: How many homes can I exchange ship are on our website. He goes into such factories. It’s the same as how into in a 1031 tax deferred exchange? more detail. In addition, Weiming people get excited about the Apple A: There are three “identification has been invited to speak at our 1-Day new plant in Austin (where the num- rules” for the replacement properties Expo on Saturday May 18th. bers also are not buyers’ friendly at