Creative Approach to FREE Property Management

I met an investor that has a unique approach to RE investing. He has very little headache with renters because of this win-win philosophy. He looks for people in his community that have a down payment and want to buy a home but cannot qualify for a loan . He offers them a 25% stake in a multi-family that he buys. He puts in his own money for the rest and moves them into one unit in the building. They pay whatever rent is the standard for that unit. They get their share (25%) of revenue from the building later. This way, the building gets taken care of automatically. Since they live in a building they own, they keep an eye on the other renters, no surprises, no trashing. One unit (that they occupy) is permanently rented, no need to pay a property manager. Everyone is happy. This person has several such units he co-owns. Never paid a penny for property management.

I see a few flaws in this concept. But overall, I think it's brilliant. This is why I love real estate investing. There's so much room for creativity!

LLC - Should I form one or not?

Post by Attorney Deidra Hubenak
(The attorney in me needs to take over for a second.) I don't believe in LLC's for the average single family investor. There I said it. Why you ask?

• If you just have one or two houses, it is not cost effective. It costs about $300 just to form an LLC in Texas. This is the fee payable to the Secretary of State. Attorneys fees will run several hundred to a few thousand on top of this depending on the complexity of the documents.
• You can achieve liability protection through an umbrella policy much cheaper. (You should have this coverage regardless of whether you have a LLC).
• It is difficult for a LLC to get financing before it has established credit. (If you are going to utilize a LLC you should oftentimes finance the property first and drop it into the LLC after closing.)

So when would you want to use a LLC?

• If you have a partner other than your spouse.
• If you are investing in larger multifamily properties.
• If you own 100 single family houses, it may make sense to drop a few into one or more LLC's to protect the equity in each LLC from a lawsuit from a property in a different LLC.

Moral of the story - Don't knock on my door (or any other attorney's door) to form a LLC for you unless you really need it.

HUD List Price to Sales Ratio (Hartford County)

Have you thought about buying a HUD Foreclosure? The chart below will be pretty helpful for you. I looked at 90 HUD single family properties that sold in Hartford County between 1/1/14 - 5/31/14. I wanted to know if there was a magic number that they would accept when considering offers on properties.

 

 

As you can see in this chart, HUD gave the greatest discount off of the list price between 61-90 days on the market. This should make it a little easier for you when considering making offers on HUD properties. Just make your offer at about 88.79% of the list price and it should get accepted. Of course if you're making this purchase as an investment, make sure that these numbers line up with your acquisition strategy.

 

If you'd like a detailed analysis on your local market, email me here.

9 Unit Mixed Use Property (MOTIVATED SELLER)

9 unit mixed use property listed for sale in Meriden, CT for $389,900. Seller is extremely motivated and just wants to unload it. How motivated? So motivated that he's willing to list it at this price giving you a whopping 12% Cap Rate. Unit Mix comes with 6-two bedroom units and 3 commercial store fronts.

• Annual Operating Income:             $84,600  
• Annual Operating Expenses:         $35,973
• Annual Net Operating Income:      $48,267
• Monthly Net Operation Income:    $4,052

Click here to go to property website and see more photos & full financial disclosures!!

Connecticut Investor Meet-up

Network ~ Network ~ Network

This NO PITCH Real Estate Networking Event is coming back to Fairfield! The first event had approximately 20+ folks join during the last meet-up and the feedback was very positive.

The event will run from7pm - 9pm on Wednesday, June 25 at Anna Liffeys in Fairfield. Around 7:45pm/8pm everyone will briefly introduce themselves to the group. Anna Liffey's is located @ 1494 Post Road, Fairfield CT 06824 (http://annaliffeys.com/), and the back room is reserved for us.
FYI: ANNA LIFFEY'S IS ACROSS THE STREET FROM VICTORIA'S SECRET, AND THERE IS A FREE PUBLIC PARKING ACROSS THE STREET AFTER 7PM.

Connecticut Foreclosure Auction List (6-14-14)

The following is a list of foreclosure auctions taking place through out Connecticut this Saturday, June 14, 2014. If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

Connecticut Foreclosure Auction List

74 Wright Drive, Avon, CT (No Photo)
73 Woodlawn Road, Berlin, CT (No Photo)
116 Rockwell Road, Bethel, CT (No Photo)
1077-1 Blue Hills Avenue, Bloomfield, CT (No Photo)
32 MILO DRIVE, BRANFORD, CT (No Photo)

80 Sixth Street, Bridgeport, CT


3245 Main Street, Unit #203, Bridgeport, CT (No Photo)
23 Birch Drive, Cheshire, CT (No Photo)
326 Colebrook River Road, Colebrook, CT (No Photo)
12 COUNTRY RIDGE ROAD, DANBURY, CT (No Photo) 
10 Martin Circle, East Hartford, CT (No Photo)

48 ANDREW DRIVE, EAST HARTFORD, CT


47 Ridgeline Road, Easton, CT (No Photo)
289 Ridgefield Street, Hartford, CT (No Photo)

54 Scenic Road, Madison CT


185 McKee Street, Manchester CT


31 Blackledge Drive, Marlborough, CT


6 Barwill Drive, Meriden, CT (No Photo)
664 West Main Street, Meriden CT (No Photo)
41 Carriage Crossing, Unit 8101, Middletown, CT (No Photo)

260 Fowler Ave. Middletown, CT


42 Fairview Street, Milford, CT (No Photo)

109 Harkness Drive, Milford, CT


167 Maplewood Avenue, Milford, CT


61 Cambridge Street, New Britain, CT

Click Here to learn more about investing in foreclosures

 

If you're interested in purchasing Short Sale or Bank Owned properties in Connecticut, please click here to let me know exactly what you're looking for.

1247E East Street, New Britain, CT


7 Pleasant View Road, New Fairfield, CT (No Photo)
9 Lyman Street, New Haven, CT (No Photo)
2 Old Lantern Lane New Milford, CT (No Photo)
18 Hinckley Road, New Preston (Washington), CT (No Photo)

65 Summit Street, Newington, CT


172 CURRITUCK ROAD, NEWTOWN, CT (No Photo)
34 Alpine Drive, Newtown, CT (No Photo)

5 Skiff Parkway, North Haven, CT


54 Brookfield Drive, Northford, CT (No Photo)

123 - 125 Broadway Norwich, CT


100 Broad Street, #103, Norwich, CT


13 Baltic Street, Norwich, CT


67 MAXINE ROAD, PLAINVILLE, CT


17 FINCH DRIVE, RIDGEFIELD, CT


360 Roosevelt Drive, Seymour, CT (No Photo)
71 Kyles Way, Unit 52, Shelton, CT (No Photo)
113 Low Bridge Road, Southbury, CT (No Photo)

163 Weed Hill Avenue, Stamford, CT


136 WEST BROAD STREET, STONINGTON, CT


1411 South Avenue, Stratford, CT (No Photo)

70 Mountain View Manor, Torrington, CT


36 KING STREET, WALLINGFORD, CT (No Photo)
106 Manor Ave., Waterbury, CT (No Photo)
302 Lakewood Road, Waterbury, CT (No Photo)
1461 Bunker Hill Road, Watertown, CT (No Photo)

244 Ridgewood Rd., West Hartford, CT


117 Chase Lane, West Haven, CT (No Photo)
24 Norfolk Street, West Haven, CT (No Photo)

41 Booth Avenue, Wethersfield, CT


6 Pine Street, Wolcott CT (No Photo)


If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

The best way to pet proof a rental (Q&A)

 

Click Here to email me your real estate investing question

Question: I am currently looking for more investment property in my town, and in doing my research on the local buy/sell pages it seems like there is an incredibly high demand for rentals that accept pets. I, like most landlords, don't really like the 4 legged friends to be in my units, but this might be a market here to make some money if I can find a way to keep my turnover costs low by "pet proofing" any new units that I buy. Just wondering what are the best ways to "pet proof" a rental?

Answer:  Hi Ken, You definitely want to get rid of any carpet in the unit. Also think about removing screen doors and adding doggy doors. Good exterior fencing will attract responsible pet owners. I feel that the little dogs do a lot of urine damage, so I'd rather have the mid size dogs. Meet, photograph, and pre-approve each dog. Do inspections and act on damage quickly. Charge a higher deposit and maybe even add $25/month extra for each dog.

Click Here to email me your real estate investing question

If you have a different opinion or just something that you'd like to add, please feel free to leave a comment below.

This is not legal advice. Please contact an attorney for professional legal advice.

How to Raise Money for Your Real Estate Investing

“It is natural to indulge in the illusions of hope. We are apt to shut our eyes to that siren until she allures us to our death.” – Gertrude Stein.

For many real estate investors, the thought of raising capital to increase their purchasing power is an irresistible allure.  However, how one goes about this business can have serious long-term ramifications for the uninformed. 
When you’re dealing with other people’s money, you need to make sure you are setup correctly. In the post Madoff climate, we now find ourselves with state and federal agencies that are pursuing a take no prisoners attitude when it comes to investors who raise money.   Failure to comply with the securities laws increases an investor’s risk of lawsuits by other investors – and can even lead to criminal prosecution.  Remember, ignorance of the law is no excuse and even an innocent mistake can lead to court and likely jail. 
If you are not deterred by these warnings . . .

Here are a few things to consider if you plan on raising money for your real estate investments:

• If you plan on raising money with an LLC, start by registering your LLC in the state where you will be working.  A mistake made by many investors is raising money through a Nevada entity without proper registration. This is a path to jail where you will not pass “go” if things turn south for your investors.
• Draft an operating agreement that details how the funds will be invested, distributed, managed and any fees paid for management.  This is a crucial step for any investor because the operating agreement puts everyone on notice as to how the funds will be handled i.e., it’s a point of agreement between you and your investors about how the LLC will operate.

Many real estate investors will not proceed past this point in their fund raising activities.  In other words, I have my LLC so let’s start making money.  Unfortunately, to stay completely legal (out of jail) you must also be mindful of state and federal securities laws. 
When one or more people buy into your LLC, you are selling what the government calls "securities" and there is an extremely complicated set of laws that govern this activity.  For example, most real estate investors are not aware that borrowing money from outside investors can be construed as a security.  It’s sad but true and I have read of a few situations where the SEC put promoters in orange jump suits for their borrowing activities.
It sounds scary, but if you follow the rules from the beginning, it’s not that bad. Generally, when raising money your fund will fall under "Regulation D," which gives several exemptions. Here are some general guidelines, but as I tell everyone with this idea – CONSULT A SECURITIES  ATTORNEY IN YOUR STATE: 

• Try to Partner only with Accredited Investors who meet one of the following criteria:
  • An individual with annual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
  • An individual who has a net worth exceeding $1 million, either individually or jointly with his or her spouse excluding the personal residence.
  • An individual who is a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
• Keep your offering private, never blatantly advertising to the public.  On the other hand, you can provide general information about what activities and why you need money.
• Raise no more than $5 million
• Require your investors to sign a Subscription Agreement
• Do not guarantee a rate of return or refer to performance of past offerings

These are just some of the concerns you should address prior to raising money for your investing. Remember, it is better to spend a few thousand with an attorney on the front end of your business rather than tens of thousands if things go wrong.

Article by Attorney Clint Coons

Connecticut Foreclosure Auction List (6-7-14)

The following is a list of foreclosure auctions taking place through out Connecticut this Saturday, June 7, 2014. If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

Connecticut Foreclosure Auction List

6 Broad Oak Drive, Ashford, CT (No Photo)

48 Wintonbury Avenue, Bloomfield, CT


11 Hillcrest Avenue, Bloomfield, CT


356 Monticello Drive, Branford, CT (No Photo)
198 PENNSYLVANIA AVENUE, BRIDGEPORT, CT (No Photo)
1144 Huntington Turnpike, Bridgeport, CT (No Photo)
54 Marcy Road, Bridgeport, CT (No Photo)
 2625 Park Avenue, Unit 7-P, Bridgeport, CT (No Photo)
72 Bancroft Avenue, Bridgeport, CT (No Photo)

199 Parish Hill Road, Chaplin CT


7 Marine Avenue, Clinton, CT


3 Holly Court Unit B Building 36, Cromwell, CT (No Photo)
3 Lovers Lane, Danbury, CT (No Photo)
61 Lawrence Avenue, Unit 2405, Danbury, CT (No Photo)

  10 North Cobblers Court, Niantic, CT


23 Connecticut Avenue, Enfield, CT


598 South Benson Road Fairfield, CT (No Photo)

110 Farmington Avenue, Fairfield, CT

140 Water Street, Guilford, CT (No Photo)

103 Shore Drive, Guilford, CT 


74-76 Thomaston Street Hartford, CT


186-188 Putnam Street, Hartford, CT 


19 Beechwood Drive, Harwinton, CT  (No Photo)

127 Country Club Road, Killingly (Dayville) CT


3 Goldfield Road, Killingworth, CT (No Photo)
66 Goodwill Avenue, Meriden, CT (No Photo)
43 Algonquin Road, Middlefield, CT (No Photo)

18 Bridge Street, Unit 3C Naugatuck, CT


70 Lawlor Street, New Britain, CT


25 Harvard Street, New Britain, CT (No Photo)
40 Donna Drive, Unit B-4, New Haven, CT (No Photo)
76 Filmore Street, New Haven, CT (No Photo)

737 Dixwell Avenue, New Haven, CT


3 Riverview Court, New Milford, CT


6 Wendover Road, Newtown CT

Click Here to learn more about investing in foreclosures

 

If you're interested in purchasing Short Sale or Bank Owned properties in Connecticut, please click here to let me know exactly what you're looking for.

4 Glenwood Avenue, Unit B-4, Norwalk, CT



12 LINCOLN AVENUE, NORWALK, CT


66 Hamilton Avenue, Norwich, CT


68 Mathewson Mill Road, Preston, CT


324 South Main Street, Putnam, CT


20 Angell Avenue, Shelton, CT


481 Old Long Ridge Road, Stamford, CT


23 Garden Street, (Pawcatuck) Stonington, CT


456 Barnum Terrace Extension, Stratford, CT (No Photo)
85 Floral Way, Stratford, CT (No Photo)

2370 Stratford Avenue, Stratford, CT

65 Marsh Way, Stratford, CT (No Photo)

430-432 High Street Torrington, CT


Unit 9, Bldng 1, Elm Garden Condominium, 317 S. Elm Street, Wallingford, CT (No Photo)
60 Bee Brook Rd Washington, CT (No Photo)
254 Horseshoe Drive, Waterbury, CT (No Photo)
245 Montoe Road, Waterbury, CT (No Photo)

60 Old Norwich Road, Waterford, CT 


16 Spring Lane, West Hartford, CT


440 Ocean Avenue, West Haven, CT (No Photo)
1014-1016 Ocean Avenue, West Haven, CT (No Photo)

8 Wildwood Dr. Wilton, CT


23 Coolidge Street Windsor Locks, CT (No Photo)


If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.