Multi-Family Millions

Acknowledgments xiii Chapter 1 A Different Approach that Creates Huge Real Estate Profits 1 How This Book is Different 2 Chapter 2 Why Invest in Apartments? 9 Apartments Set You Free 10 Let’s Explode the No-Money-Down Myth 13 More Myths about Apartment Investing 14 This is Not a Myth, This is Reality: They’ll Laugh First, and You’ll Laugh Last 18 Opportunity is Everywhere 20 A Brief Overview of the Different Kinds of Multi-Family Housing 21 Burned-Out Landlords are Great Sources for Deals 23 In the Next Chapter 24 Chapter 3 An Overview of How to Get Your First Deal 25 The 14 Steps to Acquiring a Property 26 1. Decide What Size Buildings You Want to Start Investing In 26 2. Decide Where You Want to Invest 27 3. Determine What Types of Multi-Family Properties You’ll Buy 29 4. Put Your Team in Place 30 5. Market to Get Your Deal 31 6. Analyze the Deals 31 7. Create the Offer or Letter of Intent 32 8. Negotiate the Deal 33 9. Create and Sign the Purchase-and-Sale Agreement 33 10. Do Your Due Diligence 35 11. Renegotiate the Deal 37 12. Start Your Financing 38 13. Choose a Management Company 40 14. Close the Deal 41 Option 1: Buy and Flip 42 Option 2: Buy and Hold 46 Option 3: Buy, Reposition, and Sell 47 In the Next Chapter 53 Chapter 4 Where to Find Enormous Profits from Repositioning 55 It’s All about Raising the NOI 57 Problems to Look For 58 Making a Change 60 Then there’s the Perception 61 Send the Message that Change is Happening 62 The Property Cycle 64 A Common Repositioning Mistake 67 The Two Main Reasons Why Repositions Fail 68 The City Cycle 69 Revitalization Zones 70 In the Next Chapter 73 Chapter 5 How to Attract Deals to You with a Minimum of Time and Money 75 Principle #1: Make It Easy to Do Business with You 75 Principle #2: Do What You Say You Will Do 77 Principle #3: Don’t Be a Pain in the Butt 78 Inexpensive Deal-Attraction Techniques 79 Go Directly to the Owners 84 Other Techniques that Cost Little but Bring Big Results 88 Go After the Don’t Wanters 90 Cruising for Dollars 91 Another Way to Cruise 92 Oh So Many Ways to Get Deals 93 Don’t Make These Three Mistakes 93 In the Next Chapter 95 Chapter 6 Separating the Gold Mines from the Land Mines 97 The Power of Negative Thinking 97 Profiting from Value Plays 98 How to Find—and Profit from—Burned-Out Landlords 99 Profiting from Management Nightmares 100 Properties that Need Repair: Where the Gold is 101 Avoid Certain Repairs 102 Solving High-Vacancy Problems—Once and for All 104 How I Filled 400 Units 105 How to Raise Rents at Takeover and Not Lose Your Tenants 106 How to Raise Rents Steadily While Keeping Your Tenants 107 When It Makes Sense to Clean House 109 In the Next Chapter 111 Chapter 7 How to Analyze a Property Using the Fewest Numbers for the Most Profit 113 Back to the Cap Rate 114 Analyzing Your First Deal 116 How Do We Know It Really is a Deal? 118 Current Management: When to Hold ’Em and When to Fold ’Em 119 What Matters the Very Most to Tenants 122 Is Someone Putting Lipstick on a Pig? 123 Let’s Look Inside 125 Market Area Inspection 126 The Sidewalk Tells the Story 128 But What If My Numbers are Off ? 129 Don’t Get Depressed on Me! 129 In the Next Chapter 130 Chapter 8 Where to Get the Money for All Your Deals 131 Why Banks Like Apartments 132 Three Flavors of Lenders 133 Conduits 136 When to Use a Mortgage Broker 136 Putting Your Package Together 137 How to Get Partners to Fund Your Deals 138 The Big, Profitable World of Private Money 139 Debt versus Equity Deals 143 In the Next Chapter 145 Chapter 9 Twelve Negotiating Secrets of the Pros 147 1. Be Prepared 147 2. Understand the Other Party’s Needs 149 3. Set Your Goals and Rank Them in Order of Priority 150 4. Decide What Your Strike Price is and Don’t Exceed It 152 5. Anticipate the Next Move and Don’t Avoid Haggling 153 6. Remain Calm and Unemotional 154 7. Build Rapport and Trust 155 8. Create a Win/Win Environment 155 9. Remain Flexible and Open to Options 156 10. When the Seller Speaks, Listen Closely and Delay Your Response 157 11. Demonstrate Empathy 158 12. Silence is Golden 158 In the Next Chapter 160 Chapter 10 The 80/20 Rule of Rehabbing 161 Exterior Improvements 162 Interior Improvements 166 How to Get the Most from Insurance Claims 170 Dealing with Contractors 171 In the Next Chapter 176 Chapter 11 How to Avoid Being a Landlord: Secrets to Hiring Great Property Managers 177 How to Find the Best Managers 179 What You Should Expect to Pay 182 Repositioning Managers: A Special Breed 187 How to Get Contractors to Beg You for Business 190 Managing the Manager: Reports You Should Get Regularly 191 You’re an Asset Manager 194 In the Next Chapter 194 Chapter 12 Reselling for Huge Profits 195 Return on Equity 196 Is Your Property Stabilized? 198 Get Your Financial House in Order 199 Get Your Physical House in Order 201 Time to Tell the World 202 Your Obligations as a Seller 205 In the Next Chapter 205 Chapter 13 The 10 Biggest Mistakes Repositioners Make, and How to Avoid Them 207 Mistake #1: Running Out of Money During a Repositioning 207 Mistake #2: Leasing Up Too Soon 210 Mistake #3: Not Using Licensed Contractors 211 Mistake #4: Not Getting Three Bids 212 Mistake #5: Assuming the Lowest Bid is the Best Bid 213 Mistake #6: Not Going after Private Money Sooner 214 Mistake #7: Not Marketing Consistently 215 Mistake #8: Discriminating 215 Mistake #9: Not Having Signing Authority on Bank Accounts 216 Mistake #10: Buying a Property with Environmental Issues 217 Mistake #11: Inspecting the Property Yourself 218 Mistake #12: Managing the Property Yourself 219 Mistake #13: Using Fill-in-the-Blank Legal Forms 219 Mistake #14: Dealing with Tenants 220 Mistake #15: Thinking You Know It All 221 In the Next Chapter 222 Chapter 14 Creating Your Success Team 223 Real Estate Brokers 224 The Property Manager 225 Attorneys 227 Property Inspector 229 Appraisers 229 Lender 230 Contractors 230 Insurance Agent 231 Demographer 232 1031 Specialists 233 Accountant 235 In the Next Chapter 236 Chapter 15 Next Steps on Your Road to Wealth 237 How Impatient are You? 239 The Absolute Shortest Shortcut to Real Estate Wealth 240 Free Bonus Materials for You 241 Index 243