Tools and Resources to Grow Your Empire!
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Article by, Brent Virkus of Find the Capital and TRiTON Capital Advisory As you may know I’ve spent over 20 years in the real estate and investment business managing stock portfolios, flipping houses and developing commercial real estate. All in all I’ve been directly involved in a little north of $1 billion in real estate transactions. Needless to say I’ve learned a lot over the years…both good AND bad. A recent article posted on Market Watch highlighted Detroit MI as one of the 10 fastest growing residential markets in the country. In fact, we came in at number 7. The growth Detroit is experiencing offers incredible opportunity in the house flipping business. We’ve even seen a study that indicates their is demand for another 10,000 residential units over the next five years. One of the questions we get most frequently is what is the best way to make money flipping houses. So in this article I thought I would highlight the two strategies we use to produce consistent results. First you need to make sure you are buying a property at a significant discount to market value. Most importantly you need to make sure you have the ability to add value to that property. A good article to read is Find the Capital’s 7 Keys to Flipping Houses. In this article we outline exactly how we underwrite and structure our deals. So at this point I’m going assume you know how to acquire the house and add value to it and are at the point you want to know exactly how to make money on the Flip. There are really two simple exit strategies you should consider: Sell the house to an home owner looking for a turn key property. This is the simplest way to make money. You take a house that needs significant renovation work. Then buy it at the right price, fix the problems and sell it to a home owner looking for a turn key property to move into. This is your classic flip home scenario. Sell the house to an investor. In this situation, you buy the house, add value to it (i.e. fix it up) and then put a renter into it. At this point the house is prepped perfectly for an investor looking for a cash flowing investment as the house has been fully renovated and has a renter in place paying rent. You can also even stay on to manage the property for the investor. It’s a win win for both parties. There you have it. It’s just that simple… Obviously we all wish it was JUST that simple! If you’d like to learn more about how Find the Capital can help you get into the house flipping business simply click here and let us know. We’d enjoy the opportunity to help! “It’s Official…The REAL ESTATE recovery has begun!” So how does the every day investor take advantage of one of the greatest investment opportunities of a lifetime? Check out this FREE Video on The Individual Investors Guide to Investing in Commercial Real Estate! Don’t Be Left Behind…..! ...
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Article by, Brent Virkus of FInd the Capital and TRiTON Capital Advisory Since Detroit was allowed to file bankruptcy, there has been a lot of attention from the country on the city’s future and how it will impact the residential real estate market in Detroit. As a local to Detroit and a lifetime Michigan native, I thought I would share what has been happening in the city and how it is impacting residential real estate. The biggest impact on the city has been Dan Gilbert’s focus on buying up Detroit based real estate and relocating his various companies to the city. This has also drawn other companies to relocate to the city bringing even more young people to the city. Some of the most noteworthy companies located in the city are: General Motors Quicken Loans Compuware Chrysler DTE Energy Wayne State University The recent increase in companies moving to he city has caused an incredible rise in demand for residential units. In fact, Occupancy levels in the city are close to 100% and according to Market Watch residential prices have increase over 30% in the past 12 months! Market Watch even ranked us the 7th fastest growing city in the country. We’ve even seen studies that highlight there is demand for another 10,000 residential units over the next 5 years in the city of Detroit. Things are so strong in the rental markets that higher end apartment buildings are getting close to $2 per foot, which is significantly higher than the suburbs. As a real estate investor, this brings great opportunity for both developers of multifamily and people looking to renovate and flip houses. The following is a summary of the hottest areas: The Woodward strip from downtown to mid-town. This strip basically starts at the General Motors and Quicken Loans headquarters through the entertainment district which includes Tigers Stadium, Ford Field and where they will be building the new Red Wings stadium. The strip then continues to Wayne State University. Corktown. This is the oldest village in the city of Detroit where the old Tigers Stadium was located. Corktown has a very unique character to it as it is made up of mainly historical single family residences. Rivertown. This area is located just to the east of the city where the old Strohs Brewery was located. It is mainly made up of loft style apartments close the Detroit River. Some other areas to consider are the micro-neighborhoods where the top Automotive Executives build incredible homes just outside of the city. Some of these areas include: Historical Indian Village – Occupied by primarily doctors, lawyers and business owners, Indian Village is a Historic area that offers family friendly, upscale living with an urban twist. This tight knit community is filled with quaint coffee shops and other stores where residents can find all they need. Among these are the Indian Village Market, and the Food Express Market. Historical Sherwood Forest – The Sherwood Forest community was established in 1917 and contains 437 beautiful, architecturally stunning homes. Touted as one of the safest neighborhoods in Detroit, association fees include allocation for paid private security patrols. Boston Edison District – The Historic Boston Edison district is located just a few miles away from Downtown and features some of the city’s most magnificent homes. The neighborhood is situated near several charter...
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Article by, Mike Hassing of Automotive Subprime Don’t punish your sales team for following the special finance process. With the right compensation plan in place, everybody wins. Once again I find myself sending a dispatch from the road. We have had a very busy year so far, and it’s encouraging to see so many dealers enjoying the fruits of their special finance labors. Setting up a process to handle subprime customers is no easy task. It takes a serious commitment, and that commitment starts with the dealer and extends all the way through the store. Before long, however, commitment can begin to wane. You can usually chalk that up to one of two main causes: The first is a growing stack of contracts in transit, an issue I tackled here last month. The second is a compensation plan that creates winners and losers among the staff. More often than not, the “loser” is an experienced salesperson or F&I manager who is being underpaid for working subprime deals. That discourages the whole sales team from sending customers to the special finance desk and causes the finance office to try to wedge them into a prime structure. I am loath to tell dealers to change their compensation plans. I know how precious those plans are to their staff and how demoralizing it can be to suddenly be asked to play by a new set of rules. That’s why it’s so important to have the right one in place to begin with. But if the existing plan is unworkable, you must be willing to change it. Let’s take a look at four potential sources of conflict between prime and subprime: 1. Playing the Numbers Game Many dealers who are new to subprime will decree that any customer with a “low” credit score must be sent to the special finance manager. This approach is problematic for several reasons. First, where exactly do you draw the line? There’s no magic number that divides prime from subprime. A Chevrolet dealer might say that anything under 450 is special finance. The Jaguar dealer next door might say it’s more like 700. Second, even if there were a clear dividing line, it wouldn’t help you decide how to work the deal. Credit scores don’t get deals bought; it’s all the other factors that make up each customer’s profile and determine their creditworthiness. Finally, if the prime finance manager thinks he can get the deal bought, he’s going to work it to death. He will pull multiple bureaus to find the highest score. He won’t structure it properly. He will push the funder’s patience to the breaking point. A week later, he’ll be no closer to getting it approved. And that’s not necessarily his fault. After all, he might just be… 2. The Right Manager in the Wrong Department Another common mistake is to take a talented F&I manager — and their compensation plan — and put them in charge of special finance. Of course, their performance was judged based on profit per retail unit (PRU), which depends upon penetration rates for back-end products such as extended warranties and service contracts, credit life and GAP. Now, they find themselves working with Tier 3 and Tier 4 finance companies that are not in the business of leaving room for F&I products....
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Article by, Dynamic Advisory Solutions 10 YEARS LATER : HOW REMOTE BUSINESS CONSULTING IS CHANGING BUSINESS, Article by Ren Carlton I own a car. In fact, I own two. But I don’t tinker with my own vehicles. Mostly because I can’t afford the tools, the time or the brain-power to know what is needed across two Makes and Models. Not only that, but I am so used to my own vehicles, and the way they run, that I overlook glaring issues any new observer might easily recognize. That is why I take my cars to a mechanic. Now, you probably think that everything is running smoothly in your small business. You might be right. But even a well-oiled machine still needs a mechanic to run diagnostics, check levels and red line it for good measure. After all: how do you know that you’re headed in the right direction for the fiscal report? And are you sure the Six Sigma launch you had that potluck around has really made a difference? No matter how well you think you’re doing: you need a check-up. That is why you need a business consultant. Business Consulting is like car maintenance. For over ten years business consulting has been a staple in any company worth its weight. The Consultant is your mechanic. There to fix and prevent process issues. But more than that: they should make you more money. A good mechan—er, consultant will bring changes that translate into a fatter bottom line… But don’t go hiring any old Schmuck in a suit. Read on. Despite a good run since ‘03, there was a plateau in business consulting about 4 years ago, mostly due to costs and office politics (It seems businesses don’t like tinkering on themselves). Internal consultants and managers are too close to the problems to effect real change. This produced lack-luster results, causing business consulting to level out in 2009 (along with everyone’s 401k…) when companies were scrutinizing every penny. Another thing that makes having an internal business consultant a gamble is that there is no way to quantify their profitability. Another person on payroll can easily get lost in the shuffle come payday. Not to mention: certain companies were nothing but consultants. And we all know how that crooked E made everyone a little wiser if not a little more fearful. By now you’re probably saying: “but I thought you said business consulting was a good thing?!” And it is. Only; not in the form it has been in the past. After 2009 internal consultants thinned out. But the ever-present need for checking under the hood brought the next wave in consulting: The Remote Business Consultant. Having a remote business consultant is like having a dealership mechanic come to your garage. The consultant from outside can see things that you and your team can’t. He or she is above the cultural radar; so corporate politics and office issues won’t skew the results of their work. A remote consultant can bring change management assistance, they can better implement new technology, bring a host of new methodologies and a fresh perspective all to help your business become more efficient and profitable. And best of all: as with most contractors you can tell where they have earned their keep. If you want to learn more about business consulting or get your engine checked out;...
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5 Benefits to Using a Mortgage Broker Article by John Csaszar of Global Capital Funding Group Are you thinking about buying a new commercial property, multi-family property or looking to refinance your existing loan? Have you started exploring your financing options for the project? There are many different types of loans available to select from, but one of the first things you will need to determine is whether you want to work with a Commercial Mortgage Broker or with a bank or a single lender. Here’s a look at some of the benefits associated with working with a Broker rather than a bank. Benefit #1: A Broker Works for You One of the greatest benefits to working with a Commercial Mortgage Broker rather than a bank is the fact that the Broker works for you. When you go to a bank or a lender to secure a mortgage loan, the bank specialist is solely concerned with the interest of the financial institution. The Mortgage Broker, on the other hand, is looking out for your best interest and can provide hundreds of different, creative options for you to use in financing a property. You truly benefit because Mortgage Brokers are not employees of a particular bank or lender, but instead have a working relationship with dozens of these institutions. Benefit #2: Choose from a Wider Variety of Institutions When you go to a bank to inquire about a mortgage loan, the bank specialist is only representing one financial institution. When you work with a Mortgage Broker, he or she works with a wide variety of different institutions. As a result, you have a broader range of loan options to select from. Not only can this help you to get the best rates, but it also increases your chances of obtaining approval even if you have poor credit. Benefit #3:Brokers are Highly Trained When looking for funding, it is vital to secure the best financing available. Every borrower is unique and every lender has its own rules and programs. The difficulty most people have in shopping for their own loan is they don’t know all the right questions to ask. Adding to that difficulty is the fact that most lenders have only two or three programs to offer so their job is to sell you what they have rather than find the program that fits your needs. Many times clients go to banks and they get offered one rate but get re-traded down the road and the program changes. A good Mortgage Broker will do their best to make sure the quotes you are getting are the most current and aggressive the market has to offer and they will get quotes from the lenders directly to insure accurate quotes. They will underwrite the deal up front and make sure the lenders have a full package. The more information they receive and put together, the more accurate the quote can be deliver. It is the brokers business to know the financing market and call their lending sources daily to make sure the rates and programs they offer the client are the most accurate and aggressive in the industry. Be sure to find a broker that does not charge up-front fees. Paying any upfront fee to a broker or to list your business-financing request...
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Article by, Brent Virkus All indications are that the residential real estate market hit bottom in 2011 and has started a significant recovery. This offers a great opportunity to make solid investment returns while limiting risk through flipping houses. In our opinion we’ve got about a 3-5 year period of time from today to take advantage of this once in a generation opportunity. Most of your best opportunities will exist in the foreclosure market through bank owned properties, Fannie Mae and others. The good news is there is still a significant volume of foreclosures headed our way so if you are disciplined in the way you go about things, you have a great opportunity ahead of you! Find the Capital is very active in helping investors get into the real estate market. To help you take advantage of this once in a lifetime event, we thought we would highlight our Seven Keys to Flipping Houses: 1. You make your money on the Buy not the Sell. This is probably the most important thing to understand about flipping houses. Make sure you completely understand the market you are investing in and what comparable properties are trading for. So rule number one is to always buy at a significant discount to market. This way you are not banking on the market needing to rise to make your money. Be patient. The right opportunities will come your way if you are disciplined. 2. Make sure you have the ability to “Add Value” to the home you purchase. The great news is most foreclosure homes or homes trading at a significant discount to market are vacant and in need of moderate to significant renovation. Focus most of your energy on the kitchen, bathrooms and master bedroom. These are the areas that ultimately “Sell” the house. 3. Properly underwrite your Purchase Price When establishing your purchase price it is imperative to properly underwrite the deal and your potential profit. We do this by starting with what we think we can ultimately sell the house for once it is completely renovated or repositioned. We then take this number and multiply it by what profit margin we are looking to make, which is typically 20%. Then reduce the amount you think you can sell the house for by this amount. This gives you your “all in” cost basis (i.e. what you can pay for the house including all renovation costs, etc.). 4. Have the home properly inspected by a Home Inspection Company. There are so many things that can be wrong within a home that you cannot see, such as foundation issues, electrical issues, plumbing issues, etc. Make sure you spend the extra money to have the home inspected. It will save you thousands in un-foreseen repairs. 5. Always include a “Contingency” number in your Renovation Budget When putting your renovation budget together understand you will always find things wrong or encounter issues you were not planning on. To protect yourself from going over budget, always include at least a 10% contingency number in your budget for potential cost overruns. Hence, if your budget is $35,000 add another $3,500 to the budget for contingency making your overall renovation budget $38,500. This is the number you use when underwriting your purchase price as noted in Key #3....
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Video by Entrepreneur If your business still doesn’t have an account on Google+ then you’re most likely missing a big opportunity when it comes to improving how your site appears in Google search results, according to Search Engine Land editor Danny Sullivan. The search engine tracks what happens on Google+, so the number of shares and +1’s your content receives are now appearing in Google’s search results. Also, the more pages you are “friends” with or conntected to, the more likely your business is to show up as a recommended search, Sullivan...
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In this video, popular blogger Chris Brogan shares examples of successful ways business owners are using Google+. “What Google+ is turning into is a place where people connect on [common] interests, and anything you share in Google+ to the public domain immediately gets picked up in Google the search engine,” says Brogan, president of Human Business Works, a small-business education and growth company.
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Video by Entrepreneur Magazine Success leaves clues and Steve Case says there are common characteristics among the winners in the startup world. The AOL co-founder says looking at a business owner’s track record or how they’ve dealt with different challenges can indicate how they’ll succeed in the future. Failure is helpful, he says. So is the ability to listen and take in what is happening in every aspect of your business. “You have to make sure your people are focused on the right direction. You have to be paying attention to what the market’s telling you, what customers are telling you, and what competitors are telling you,” Case says, “and having that listening gene is important.” What’s more, strong instincts and a clear vision are also crucial, as well as execution. “One of my favorite entrepreneurship quotes is from Thomas Edison, ‘Vision without execution is hallucination,'” Case says. Case is chairman and CEO of venture-capital firm Revolution LLC and a member of President Obama’s Council on Jobs and Competiveness. He also serves on the board of UP Global, an umbrella organization for the Startup America Partnership, a nonprofit that Case created to jumpstart entrepreneurship across the country, and Seattle-based nonprofit Startup...
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Article by CoStar It looks like new construction of commercial real estate is really picking up, which means the banks are freeing up new construction financing! This is an interesting article put out by CoStar we thought you would find interesting. Architecture Billings Index Posts Strong Monthly Showing in September A leading indicator of future nonresidential construction spending hit a seven-month high in September, lending weight to construction forecasts calling for a greater-than-expected 17% boost in commercial construction next year. The Architecture Billings Index (ABI) produced by the American Institute of Architects continued to accelerate in September, reaching its highest level since February and second-highest mark of the year. Meanwhile, McGraw Hill Construction’s 2014 Dodge Construction Outlook projects that warehouse and hotel construction will again lead commercial building activity in 2014 as improving market fundamentals and more readily available construction and development lending should fund more commercial development activity next year. The projected 17% gain in commercial construction for 2014 is a slightly faster clip than the 15% gain estimated for this year, although next year’s activity will still be 28% below the 2007 peak measured in terms of dollars. “The bank lending environment is showing improvement in terms of both lending standards and the volume of loans and the improving fiscal posture of states and localities will help to offset some of the negative impact from decreased federal funding,” said Robert Murray, McGraw Hill Construction’s vice president of economic affairs. The ABI, compiled monthly by the American Institute of Architects (AIA), reflects the lead time of about nine to 12 months between design firm billings and hard construction spending. The September ABI score was 54.3, up from 53.8 in August, while the inquiry index for new projects was 58.6, down from the reading of 63 the previous month. The commercial / industrial sectored posted the strongest growth at 57.9, followed by multifamily residential, 55.6; mixed practice, 55.4 and institutional, 50.4. McGraw Hill’s Dodge report predicts that total U.S. construction starts for 2014 will rise 9% to $555.3 billion, higher than the 5% increase to $508 billion previously estimated for 2013. Multifamily housing, accounted for separately from commercial construction in McGraw Hill’s report, will rise 11% in dollars and 9% in units. Apartment and condominium percentage gains will be smaller than the previous four years, reflecting the completed recovery and maturing market. Institutional building is projected to rise by a modest 2% after five years of decline, and should no longer serve as a drag on nonresidential building and total construction numbers. Health care construction is expected to remain flat given the continued industry emphasis on containing costs. ...
