Oct, 2023

Real Estate Deal Acquisition – 30 Thousand Foot Fly-By

Successful entrepreneur Rob Rowsell is here to discus real estate deal acquisition from a 30 Thousand Foot view. Read this article and watch along in order to examine the big picture of a rental property deal with Rob. You can never go wrong when you are learning from a proven multifamily investor and business coach.

What Does Real Estate Deal Acquisition from 30,000 Feet Look Like?

Networking To For The Right Real Estate Deal

In the first part of this deal flow discussion, Rob lists a few of the real estate websites he frequents. Specifically, Loopnet and Crexi are favorites. He does not search these sites for the purpose of finding his preferred property deals. Rather, he uses them as a real estate networking tool. He builds relationships with the brokers who are selling properties in the specific locations that he is interested in. Rob requests that they put him on their email lists. Then, he offers to meet them for lunch to talk business when he is in their town. Eventually, these may just lead to the property deals that Rob likes to fill his buy box with.

Underwriting The Property Offer

Congratulations! You are now ready to make an offer for the property. Underwriting the property offer is the first step. This can be a very tedious and time consuming process. However, it is a necessary task for you to check off your list. Next, after you can make the offer to the seller, you can move on to the LOI (letter of intent) phase. This phase also includes the back and forth negotiation, which takes place between the real estate buyer and the seller.

Get excited, because after that, it will be time for the lawyers to get involved. Each party’s attorneys will work together in order to draft the PSA, or Purchase and Sale Agreement. Once the PSA is complete, then the real estate buyer will work with a Transaction Coordinator. The Transaction Coordinator is there in order to help open an Escrow account for the property. A Critical Dates Document will then be drawn up. This document outlines when each specific payment will be due for the property.

What Are Lawyers’ Duties In Real Estate Deal Acquisition?

Are you ready to close on your new (to you) rental property yet? Nope, not quite yet! Next, your lawyer will be tasked to do their financial due diligence. This will prove that the property’s value and income are 100% correct. It will also make sure that the billing accounts are all paid up. Nobody wants to buy a run down property that still owes a bundle in delinquent utility bills. Here is a pro tip from Rob: No income statement from a seller will match up 100%. As long at it is close, then you are good to go. Your broker and your attorney should have access to all the records that you requested in your spreadsheet.

The Importance Of Physical Inspections In Property Deals

Often, your chosen property management company will need to walk through the doors for a thorough inspection. The company will physically inspect everything with you before the sale. You should expect to pay them a reasonable fee for the walk through service. After all, you will get what you pay for. Make sure that you take the initiative to hire some third party specialists to inspect the roof, the plumbing, and the HVAC. Often times, the person who is selling the property is unaware of the existing problems in these areas.

Rob usually likes to purchase rental properties which will require a few renovations. One of the most important parts of his standard real estate business plan includes setting a schedule for these much needed renovations to take place. Once the property renovations are through with, then it can command a much higher amount in rent payments. Make sure you inform the potential new tenants of the fact that these improvements will be worth the extra charges on their rent.

The Final Steps of Real Estate Deal Acquisition – Engage With Your Power Team and Investors

Does everything check out with your new real estate deal acquisition? Then you will need to make sure that you keep engaging regularly with your Power Team. This team will include your lawyers, your lender, and your property management company, as well as your insurance company. You should also preferably assemble a team of reliable investors who have pledged capital to your venture. Keep them in the loop through each and every step of the buying process. This is mission critical in order to ensure good faith with them.

Now, take over the property and celebrate! Wow, that real estate deal acquisition sure was a whole lot of work! There are plenty of tasks yet to come though, for you, new multifamily property investor. You should take a break and reward yourself now!

Join Our Real Estate Investing Community

Do you own multifamily rental properties? If not, do you aspire to do so one day? Then you should definitely consider joining our online discussion group, the ATL Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!

Sep, 2023

Kinds of Real Estate Deals Explained by a Successful Investor

Wouldn’t it be great if someone explained the kinds of real estate deals in easy to understand language? In this video, successful multi-family property investor Rob Rowsell does just that. Are you a cash flow investor? Perhaps are you looking for back end equity instead? Either way, you will learn the nuts and bolts of these investment deals in this video.

What Kinds of Real Estate Deals Are There? How Do They Work?

Rob starts the discussion off on the kinds of real estate deals. He explains that a cash flow investor puts his or her money into an investment and receives a regular return on it quickly. A back end deal, however, works differently. An extreme example of a back end equity play involves injecting capital into a new construction project. You may have to wait a long time in order to get a return on your investment. Some factors in that deal include waiting on the land purchase to go through, hiring contractors, and building inspections before getting paid. Depending on the specifics of your deal, your payout could come at different times during the life of the building. Many times, a balloon payment is made to catch investors up when the building is sold.

Other factors to consider is turnover of tenants and renovations to an existing property. If you are in a position to wait these out, you could conceivably make a greater return than you could over the life of a cash flow deal.

Join Our Community

Now you know about the kinds of real estate deals. Why not consider joining our online discussion group, the Addicted To Life Community? Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!

Jul, 2023

Retrading and Insurance

Rob Rowsell explains to the group the process of property retrading. Namely, he mentions the example of a multi-family real estate investment he is doing due diligence on now. Unfortunately, the rental property value is looking to be a lot less than what the seller expected. Namely, the HVAC and electrical will need costly replacements, numbering in the six figures. Sometimes you have to retrade, or negotiate, with the seller. Do not get emotionally attached to a property, especially before the sale goes through!

Property Retrading Explained

Rob began by updating the Community on a 168-unit property that he was looking into. The prospects of this multi-family complex were looking bleak. Specifically, Rob’s team found through their walkthrough that it was was worth about a half million dollars less than the seller’s asking price in its current state. Yikes! Imagine having to break that news to someone.

In that instance, Rob had to go through the process of property retrading. That means asking the seller for a price reduction, because of issues you have found with the property. If you retrade often, it could hurt your reputation as a real estate investor. Make sure you identify property issues as soon as you can in the process.

The Insurance Cost Downside

Not only that, if you find a lot of issues with multi-family home complex during discovery, the insurance costs could skyrocket once you take over. The property in question needed a $175,000 upgrade in electrical boxes alone, or Rob’s company couldn’t even take out a new policy on it. The seller won’t lose his existing insurance policy due to the outdated equipment, but there’s no way he can sell the property in the state it is in. We can all learn from this situation not to slack off on keeping our properties up to code. When we go to sell in the future, we could be in the same position as this seller.

In addition to the electrical issues, half of the HVAC units were well past their expected lifespans. Rob predicts none of them will survive the heat of this year’s summer in Texas. Most of the cap ex budget Rob’s team planned for consisted of interior renovations. None of them foresaw $500,000 in necessary upgrades.

Rob’s team did not expect the seller to accept a property retrade proposal of subtracting the full 500k, but they were hopeful he would meet them halfway. Thus far, he is not playing ball at all. Sometimes, you put a ton of sweat equity into property discovery and writing up a deal, just for it to fall through in the end. It’s easy for Rob to say, but don’t get emotionally attached! It’s just business after all, so put it in God’s hands and move on to the next deal.

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the Addicted To Life Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Enroll today!

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