00:02

Welcome to Episode 6 of Season 6 of the Growing Empire Show. Today is our trailer for Season 7. So stay tuned.

00:10

Welcome to Growing Empires hosted by real estate entrepreneur and trusted investment advisor Jennifer de Jesus. Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.

00:29

So I hope you enjoyed all that season six has to offer. We had some great special guests, and I can’t thank them enough for all of their input and experience. We talked to Dave Rowan and Jeremy Moyer, regarding creative financing structures, as well as setup of new deals. We talked about partnership agreements and how to figure out whether or not you want to invest solely or with some advisors or partners. Then we talked to Jefferson Lily about his creative investing ventures in mobile home park investing, and how he set up his Corporation and became a very successful investor in this arena. We had our question and answer segment, and I hope you got a lot out of that. So today, we’re going to go through a high level step by step overview of purchasing investment properties. And we’re going to touch on purchasing as a new investor and purchasing properties as a seasoned investor. And then we’re going to take a quick sneak peek into what to expect for season seven. So high level step by step overview of the process. If you’re a brand new investor, the most important thing to do first is to make sure that you get all of your ducks in a row. And you want to make sure that financially you are in a very stable position to invest in real estate investments. Not every real estate investment is lucrative from day one. So you have to prepare for the onset of expenses in order to turn the property around and stabilize a property. Now, of course, if you’re buying a class A quality building, that is fully rehabbed and or potentially even brand new and fully stabilized, you would expect that your cash flow would continue from day one. However, my suggestion is, you might want to caution yourself on that type of investment because it certainly is a risky proposition. For today’s topic, though, we’re going to talk about the assumption that you’re buying either flip properties or you’re buying buy and hold strategies. So a high level step by step overview of the process is just this. First, you set up all of your financial goals and you talk with your investment advisors. Which could be your real estate broker, your attorney, your CPA, and you’ve determined what cash you have to invest in your real estate investments. And when you seek out properties, you’re going to want to make sure that they fall into this category of what is affordable for you. You do not want to get yourself in a position where you’re constantly pulling your personal cash out of your savings account or from other resources. Ideally, once you get started, you’re going to notice that the property that you’re investing in should start to cash flow in a manner that it would then allow you profit to reinvest for future investments. But of course, you’ve got to be in a position where the buy and hold is going to be a several year hold pattern so that you can take the equity out of the properties and reinvest it for future properties. But step one is to get your finances in order and know exactly what you can afford, or cannot afford to use as cash for your purchases. When you go out to identify properties, you’re going to be wanting to look at the current rent rolls, the current finances on the building, as well as what the perception is or the perceived end result of where that cash flow can go. How long it’s going to take to get there? As well as any kind of improvements that you’re going to need to make to actually get the property to its stable environment. Once you do that, and you’ve identified properties that make sense, you’re going to want to make multiple offers. And why I say that is we’re in a super competitive market. And even if we weren’t in a super competitive market, it’s really important to throw a lot of stuff against the wall and see what sticks. This is how you find the best deals out there. By offering repeatedly and the ones that make sense will actually come together. So throw as many offers as you can out there. And by throwing offers out, I don’t actually mean that you should be low balling anything. Because that’s just a waste of time for you as well as for your real estate advisor. You’re going to want to make sure that the offers that you are making are consistent with the market averages as far as list price to sale price ratios, and that it makes sense for the overall financials on the building that were provided to you. So you’re throwing out multiple offers. Hopefully a couple of them stick. Now you’re going to be expected to provide an escrow deposit for the hold of that contract. And that escrow deposit is something that is fully refundable and will come back to you at settlement assuming that you did not default on the contract during the term of the contract. You will then immediately go into your lease analyzation period, you will go into your due diligence period simultaneously. In Pennsylvania, please understand that all timelines run parallel to each other. So they start, it’s not one starts and then the other one starts after one ends. They actually run parallel to each other. So when you are making a purchase on a property, you’re going to have to identify how much money you are willing to put up in escrow. How long do you want your due diligence period to be? How long your bank is going to need for financing if you’re using any kind of leverage? And then how long we’re going to need for closing. Once you go to contract, all of those dates start simultaneously. Your escrow is usually doing within five days. A due diligence period on smaller residential multi unit properties could be anywhere from seven to 10 days. On larger commercial properties, the due diligence period could run anywhere from say 10 to 30 days. And your mortgage commitment is usually due within 45 days or so of the contract acceptance date. Your appraisal is usually due within 30 days of the contract acceptance date, and then your settlement can be anywhere from 45 to 60 days post contract acceptance. And during all that time, not only are you going through due diligence and meeting the demands of the lender and setting up your title insurance to make sure that you’re getting a property free and clear. But you are also looking to plan your next moves on your property.

06:42

The episode will continue in just a moment.

06:46

The best investments with the highest potential for a solid return always start with the right real estate purchase. But it’s not just about a flips potential margin or how fast you can ready a property for leasing. It’s about creating a future of financial stability for yourself and for your family. One that supports the lifestyle that you want. If you’re an active investor and purchase, renovate and lease your own properties and you love the process, the chase and the returns, you’re in the right place listening to the show. Especially this season, because we’re talking about a deep dive into how to purchase the best property for you. However, if you’re more of a passive investor, and one who wants to diversify your stock portfolio with real estate, but you don’t want to get involved in the active management of those properties, you’re also in the right place, as we serve both types of investors. To gauge where your real estate investment tolerance sits and what would be the best fit to grow your income with real estate, I invite you on a call with me. To book your call, visit growingempires.com and click book a consult. That’s g-r-o-w-i-n-g-e-m-p-i-r-e-s.com and I’ll help you choose the best real estate model to help you achieve your real estate investment goals.

07:50

Next season we’re going to talk about building the Dream Team and how important it is to number one have the right team, but, how important it is to make sure that you are making proactive moves on your real estate investments. We’re going to go into great detail on how to find a great property manager. How to find the agents that are going to find the best deals in this competitive market. We’re going to talk about building a network of business partners to set you up for future success and to be able to really capitalize on the equity plays on these investment properties for future purchases. We’re going to talk about creating partnerships and business arrangements that makes sense financially for you. We will have our question and answer segment. And we will have our special guest interview with one of the members of my management team to talk to you about their role in our structure and how important they think it is to have that relationship directly with the owners of these investment properties. So I hope that you stay tuned for season seven, because there’s certainly going to be some phenomenal information in there for you. I want to go back for a moment and talk about the step by step process if you are a seasoned investor and looking for your newest acquisition. First, before you buy properties, we want to make sure that your current investments are stabilized and are doing well. If you’re going to be forced to put money into a property to redevelop it or rehabilitate the property, you’re going to want to make sure that you can pull that cash from other resources. It should never be your personal cash as I had said once before. So after you have a couple of properties under your belt and you’re more of a seasoned investor, we want to start making sure that that cash flow works for you. And we want to make sure that the cash flow that you’re generating on the other buildings are being used to reinvest into future acquisitions. And you can also think about starting a partnership and developing business partners so that your ability to purchase expands much further. You can think about diversifying your portfolio into hedge funds or other syndication events. But ultimately once you have a property or two under your belt, the cash for purchases should no longer ever come from you personally or financially. It should always come from your profits on your investments. Whether you’re pulling money out of your stocks or 401K’s or you’re pulling your equity out of your properties refinancing, selling, exchanging the properties. All of these things are great creative ideas to reinvest by making your cash work for itself. And you’ll hear me talk about this often as you get started. And as you become more of a seasoned investor, you always want to make sure that your cash is working for itself. Sometimes that cash should be realized through the sale of a property. If you have stabilized the property, you may want to consider selling that asset using that capital and then moving it into another location where you can continuously grow that capital. If your property is yet to be stabilized, you’re going to want to hold on to it, reap the rewards of your hard earned work, and then use that equity that you have stabilized in that property to pull out and reinvest in other entities or other purchases. And again, never forget that the opportunity for you to expand your growth, expand your worth, is sometimes acquiring in larger pools of capital with other investors. Like I said before a real estate hedge fund or some sort of syndication. The tricks of the trade though, are always about making your money work for you, being smart and savvy in the choices that you make, and making sure that you build that dream team for future purchases and to protect your investment strategies. Thank you for listening to season six. I hope you got a lot out of it. And stay tuned for season seven, where we will go into great detail about how to build that dream team that will work for you. And until next time, take care.

11:41

For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio visit growingempires.com