Make Money with Small Income Properties

MAKE MONEY with SMALL INCOME PROPERTIES......Page 3
CONTENTS......Page 7
Develop Your Analytical Abilities......Page 15
Develop an Entrepreneurial Spirit......Page 16
Uncommon, Yet Essential......Page 17
Market Savvy: Systematic Strategic Thinking......Page 19
Advantages of Multi-Unit Properties......Page 21
Lower Cost of Acquisition......Page 24
Higher Cash Flows......Page 25
Less Search Time......Page 30
Increased Tax-Free Trade-Up Potential......Page 31
Enhanced Possibilities for Creating Value......Page 35
Summing Up......Page 37
2. Craft Your Entrepreneurial Strategy......Page 38
A Strategy of Your Own......Page 39
PVP:The One Constant Rule......Page 40
The Dust Strategic Framework: A Quick Overview......Page 41
Entrepreneur Objectives: Know Thyself......Page 43
Talents, Inclinations, and Resources......Page 44
Assess Your Finances......Page 45
Identify and Fully Describe the Physical Property......Page 48
Understand Your Bundle of Rights and Restrictions......Page 54
Where Should You Invest?......Page 66
Time Period......Page 67
3. Where’s the Local Economy Headed?......Page 68
Four Lessons......Page 69
Alamo, California (San Francisco Bay Area) versus Terre Haute, Indiana......Page 70
Authors Neglect Economic Base......Page 71
Benefit from the Lessons Learned......Page 72
Where to Get Data......Page 73
Find Out the Actual Numbers......Page 74
Is the Number of Jobs Increasing?......Page 75
What Was the San Diego Connection?......Page 77
Forecasting Recovery......Page 78
Businesses and Employment Migrate to Lower-Cost Cities, States, and Countries......Page 79
Quality of Life (QOL)......Page 80
Community Attitudes and Actions......Page 82
Summing Up......Page 84
The Competitive Battle......Page 86
Where to Invest......Page 87
Market Information Gives You Negotiating Power and Confidence......Page 89
Searching for a Preferred Value Proposition (PVP)......Page 90
Constructing Your Financial Pro Formas......Page 91
Quickly Adapt to Change......Page 92
When Markets Tighten......Page 93
What to Look For: The Location......Page 94
Aesthetics......Page 95
Property Taxes and Services......Page 96
Crime Rates......Page 97
Public Transportation......Page 98
Who Are the Residents and Recent Homebuyers and Tenants?......Page 99
The Exterior of the Building......Page 100
Inspecting the Interiors of Competing Rental Units......Page 101
Aesthetics: How Does the Unit Look, Feel, and Sound?......Page 102
Livability: Unit Size, Room Count, and Floor Plan......Page 103
Utility Bills......Page 104
The Rental Process......Page 105
How to Create a PVP......Page 107
Diversity Rules......Page 108
Demographic Differences......Page 109
Psychographic Differences......Page 115
Avoid Standard Labels, Picture Your Actual Renters......Page 117
Find Unique and Intense Needs......Page 119
Throw Away Standard Operating Procedures......Page 120
Informal Conversations......Page 121
Pay Attention......Page 122
Use Questionnaires......Page 123
Focus Groups......Page 124
The Age Wave......Page 125
Echo Boomers......Page 126
Local Trends and Changes......Page 127
6. Is the Property a Good Deal?......Page 128
The Construction Cycle......Page 129
Implications for Investors......Page 130
Local (Regional) Recessions......Page 132
Per Apartment Unit......Page 133
Per Square Foot (P.S.F.) Measures......Page 135
Price Per Front Foot......Page 137
Gross Rent Multipliers (GRMs)......Page 138
Capitalized Value......Page 139
Estimate Market Value......Page 142
Anticipate the Future; Pay for the Present......Page 144
Cash-on-Cash Return......Page 145
Growth in Equity......Page 148
Don’t Settle for Low Rates of Appreciation......Page 150
7. Collect More Rents......Page 151
Never Accept Average......Page 152
A Strategy of Your Own......Page 153
Verify Current Rent Collections......Page 154
Examine All Leases and Rental Applications......Page 155
Rent Collections, Not Rental Rates......Page 156
Talk with Tenants......Page 157
Set Your Rents with Market Savvy......Page 159
The Myth of “Market” Rent Levels......Page 160
The Myth of the “Market” Vacancy Rate......Page 162
Think Rent Range, Not Rent Rate......Page 163
Confirm Your Suspicions......Page 164
Why Owners Underprice Their Units......Page 165
Investor Opportunities with Stage-of-Life Sellers......Page 166
How High Can You Go?......Page 168
Selective Increases......Page 169
Dealing with Current Tenants......Page 170
An Extreme Example of Overpricing and Market Ignorance (or Fanciful Dreaming)......Page 172
A Purchase Opportunity......Page 173
Time-Sensitive Rental Markets......Page 174
The Entrepreneurial Imperative......Page 175
Too Few Sellers......Page 176
Not Words of Discouragement......Page 177
Visualize Your Tenants......Page 178
Your Suggestion Box......Page 179
Fast Buck versus the Last Buck......Page 180
Setting Your Budget for Improvements......Page 181
The Sum Effect......Page 182
Sharpen the Aesthetics......Page 183
Special Touches......Page 185
Safety, Security, and Functionality......Page 186
Rightsizing Room Count/Room Size......Page 187
Create More Storage......Page 190
Overall Livability of the Unit......Page 192
Your Building Is Your Best Advertisement......Page 194
Yard Care and Landscaping......Page 195
Sidewalks, Walkways, and Parking Areas......Page 196
The Exterior of the Building......Page 197
Name Your Building......Page 202
Curb Appeal: Summing Up......Page 205
Parking......Page 207
Build Storage Lockers......Page 208
Cable/Satellite......Page 209
Add Other Amenities or Services......Page 210
Tailor Your Lease Agreements......Page 211
Competitive Advantage......Page 212
What Terms Might You Negotiate?......Page 215
Should You Furnish Your Apartments?......Page 222
High Payback......Page 223
Warning: Don’t Pay a Premium Price for Furnished Apartment Buildings......Page 225
Become a Neighborhood Entrepreneur......Page 227
The Huge Payback......Page 229
Conclusion: Investing in Action: The Bayside Apartments......Page 231
Enterpreneurial Strategy......Page 237
Only Investors Perform......Page 238
Entrepreneurial Real Estate Investors Perform Best of All......Page 239
Index......Page 241