8/25/13: Build to Rent Investing – Healing America with New Homes

Are you looking for a win-win-win-win investing scenario?  Sure!  Why wouldn’t you?

But does such a thing exist in today’s U.S. real estate market?

That’s what we try to find out in this episode of The Real Estate Guys™ Radio Show!

In the studio for this holistic discussion:

  • Your host and Doctor of Discussion, Robert Helms
  • Regular contributor, the Godfather of Real Estate, Bob Helms
  • Returning guest, Texas investor and broker, Ron Black

What is one thing a tenant, landlord and property manager all have in common?

They all love a BRAND NEW PROPERTY!

Think about.  Obviously, the tenant would rather be the first person to walk on the carpet, cook in the kitchen and sit on the toilet.  (Okay, that was a little much, but you get the idea).

And once the tenant is in, as long as the rent makes sense, don’t you think she’d rather stay in their nice, new home longer?  Sure!

Of course, the property manager would rather not be hassled with a bunch of fix-it calls.  And obviously, a brand new property – especially one with a builder’s home warranty – is likely to have less maintenance than a much older home, right?  Duh.

Do low maintenance expenses make the landlord happy?  To quote Sarah Palin, “You betcha!”.  (We know some of you might not like Sarah Palin, but can you think of a more famous person who says “You betcha”?  We couldn’t either.)

We could go on and on, but you get the idea.  If the numbers make sense, new is better than used.

BUT…and yes, it’s a big one…when you can buy a used home for below replacement cost in so many markets, can the numbers make sense to build new?

Yes it can.  But not in every market.

So, as we often preach, the property isn’t the big deal.  It’s the market.  And though there are lots of great markets in the U.S. right now, there’s one that is at the TOP of the list when it comes to creating jobs.  Do you know which one? (Drum roll, please)  It’s….

Houston, Texas!

So when we saw Houston at the top of the jobs creation list (we already knew that 4 of the top 10 fastest growing cities in the U.S. were in Texas, including Houston), we got out our list finder (if you’re under 50, you have NO idea what a list finder is) and looked up our buddy from Texas Investor Homes, Ron Black.

Ron was kind enough to drop by the studio and share the latest and greatest on the Houston market and why the Build to Rent program he’s been developing is working so well.

It isn’t rocket science, but it’s easy to overlook if you’re not paying attention.  But that’s why you have us.  Our full time job (and a little bit more) is to pay attention, then bring nifty (another throwback word) ideas to your attention.

And we think this Build to Rent concept is one of the niftiness ideas.  We think you’ll agree.

So listen in to this discussion with Ron Black and if you dig it (yet another throw back phrase), at the end you’ll be rewarded with the secret key to accessing a special webinar Ron prepared for inquiring minds who want to know more.  Sound groovy?  (Oh, be-have. baby…)

Listen Now:

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!

Crowd Funding Boot Camp October 14-16, 2013 in Las Vegas

Discover the latest laws, trends, tips and techniques to raise money for your business or investment opportunity at the 2nd Annual Global Crowdfunding Convention and Bootcamp in Las Vegas, Nevada.

Co-host of The Real Estate Guys™ radio show, Russell Gray, will be there and invites YOU to join him and learn more about this exciting concept.  Click here to register now.

crowdfunding-bootcamp

Crowdfunding is one of the most promising developments in fundraising.  Though it’s been used for decades to help fund things like movies, political campaigns, research, civic projects and the occasional startup business, there are two recent changes that are bringing crowdfunding more into the main stream.

In 2012, the U.S. government passed the Jumpstart Our Business Startups or JOBS Act.  One of the purposes of the JOBS Act  is to make it easier for individual investors invest in start-up businesses by eliminating some of the red tape entrepreneurs face when raising money.  Yes, we know it’s ironic that MORE legislation is intended to REDUCE the red tape, but what else would you expect from government?

And not surprisingly, despite all the hope and hoopla, the actual implementation of the JOBS Act with respect to crowdfunding has been a slow trek.

However, on July 10th of this year, the Securities and Exchange Commission (SEC) issued regulations which has given the market hope that progress is being made.  We’re sure one of the highlights of this years Crowdfunding Bootcamp will be updates and advice on how to take advantage of these new changes.

What is Crowdfunding?

Simply stated, crowdfunding is a process by which individuals and small companies can take their offering directly to the public without the expense and hassle of going public.  In their purported efforts to protect Mom & Pop investors from “risky” investments, the SEC has imposed strict rules about selling securities (stocks and bonds of entities) that are not publicly registered (as if publicly traded securities are “safe”!).

The net effect of this SEC “protection” is that small, private companies and start-up businesses have had a very difficult time raising money outside of friends and family.  And, as Robert Kiyosaki points out in Rich Dad’s Guide to Investing, it’s also prevented non-millionaire investors from enjoying access to many attractive private deals.

The JOBS Act and the July 10th SEC decision look to lower the hurdles entrepreneurs and investors face when raising money from the general public.

The second exciting change that is enhancing the opportunity for entrepreneurs to use crowdfunding isn’t legislative and it isn’t a secret.  Obviously, the internet has profoundly changed the way the world does business and crowdfunding is just one more beneficiary.  How?

The value of stock brokers and investment advisers to entrepreneurs has always been their control of the distribution channel for securities.  If a corporation wants to raise money by selling equity (stock) or debt (bonds), the most cost effective way to do so was to issue the offering through Wall Street.  Wall Street had all the often exclusive connections to the investors.

Today, people are more directly connected than ever before though the internet.  In retail, buyers can shop the world today and even a small business with one physical location (or NO physical location) can have a global presence!  The Real Estate Guys™ radio show is a great example of this.  In real estate, buyers and sellers can find each other much more easily without depending upon the exclusive databases of the local real estate agents.  This has forced agents to focus on adding value to the transaction by way of their marketing and negotiating skill, and not merely as the gatekeeper of inventory.  We think that’s a very good thing.

More recently, social media has accelerated inter-connectivity of both businesses and private individuals. Even children have thousands of connections all over the world!  So today, entrepreneurs often have or can quickly build a large “crowd” they can go to for funding. And as the aforementioned regulatory hurdles are lowered, crowdfunding has the potential to be a major source of investment capital.  Now, even a relatively small time real estate investor can quickly leverage his or her expertise and efforts by raising money from private investors and building a profitable real estate portfolio.  And that’s just one of MANY potential applications for crowdfunding.

So, if you want to build a business or investment portfolio and need investment capital, crowdfunding is a concept you will want to become immediately familiar with.  A great place to get up to speed quickly, while meeting all of the major players and service providers, is at the upcoming 2nd Annual Crowdfunding Conference and Boot Camp in Las Vegas on October 14-16. 2013.   Click here to register.

Check out this video from last year’s Crowdfunding Conference and Boot Camp:

When you consider the value of just one great idea or connection (plus how fun it is to visit Las Vegas!), the Crowdfunding Conference and Boot Camp seems like a great way to explore the opportunities awaiting YOU through crowdfunding.

So make your plans today to join The Real Estate Guys™ radio show co-host Russell Gray and hundreds of other crowdfunding enthusiasts in Las Vegas October 14-16, 2013.  Click here here to register now.

 

 

8/4/13: From the Archives – Your Next Real Estate Market and Conducting Market Analysis in a Changing Economy

Sometimes you need to take a step back to see the big picture moving forward.

Sometimes the hosts just need a week off.

So for this week’s broadcast, we sent Walter into the vault to rummage up an interesting episode from The Real Estate Guys™ Radio Show Archives.

In time machine and behind the microphones for this encore performance:

  • Your timeless host, Robert Helms
  • His aging co-host, Russell Gray
  • The ageless icon of investing and Godfather of real estate, Bob Helms

Back in 2009, many real estate investors were still taking inventory of the damage caused by the implosion of the mortgage-backed securities (MBS) markets.  MBS derivatives were providing a lot of the high-octane fuel feeding the red hot real estate market of 2002-2006.

Staring at the rubble, it became clear that there is no “real estate market” the way most talking heads define markets.

Think about it.  With gold, a barrell of oil,  a share of Apple stock, or a U.S. Treasury, each is it’s own market.  That is the price for any one of those items is exactly the same anywhere in the world at any given time.  And what you would received as the buyer is EXACTLY the same, no matter where the order was placed or you took delivery.

That is NOT true with real estate.  Even if you drill down to single-family homes and call that a market, it’s not precise enough to generalize about “the single family home market”.  After all, there are 5 bedroom 3 bath spacious luxury homes and 2 bedroom 1 bath starter homes.  And just as their is huge disparity in the product, there is a huge disparity in the price, stability, trends, etc.

Of course, that doesn’t even take into account the geographic market in which the property is located!  Even if you had two houses down the landscaping, paint and nails, the one located in San Francisco will be priced far differently than the one in Detroit.

So real estate isn’t a “market”, it’s a collection of markets so small, they can literally contain only one very unique property.  This is the WONDERFUL thing about real estate.  It’s also why it confounds a lot of Wall Street types.  Their “mass marketing” systems don’t know how to deal with the peculiarity of real estate.

But this is also why you, dear real estate investor, have such a fabulous advantage.  If you’re willing to learn a local market, you will find very limited competition and all kinds of market inefficiencies that can permit you to get bargains.

So all this to say that market analysis isn’t macro, it’s micro.  You may start in the clouds to understand the migration patterns of people and money.  And you’ll want to watch interest rates and value of the dollar.  But when it comes down to deal time, you better know your neighborhood.

It was true in 2009 when this episode was first recorded and real estate was the pariah of investment vehicles.  And it’s true in 2013 when mainstream media pundits are proclaiming that real estate is back.

So tune out the noise, and tune into the conversation as Robert, Russ and the Godfather talk about conducting real estate market analysis in a changing economy.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter
  • Don’t miss an episode of The Real Estate Guys™ radio show! Subscribe to the free podcast
  •  Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!