The Real Estate Launchpad: The ultimate toolkit for multifamily and other property investing success

Jefferson Lilly is the co-founder of Park Avenue Partners, which invests in mobile home parks across the country. Jefferson was an early investor to get into the mobile home park space. In this episode of Real Estate Launchpad, he explains how he discovered this class of property to invest in, why he believes mobile home parks continue to be a great investment even at this point in the market cycle, and how you can best participate in this attractive investment class. You don't want to miss this conversation, so be sure to listen.

Jefferson spent a year and a half to find his first mobile home park deal. With interest in real estate investing, he began to research online. Looking at apartments, he would sometimes stumble on mobile home parks that were priced better and had a higher yield. He was intrigued by the idea of investing in a mobile home park and wanted to know if they were truly better than apartments. He read books, talked to people, and built an advisory board of those who knew the business. For his first mobile home park investment, he used his own money. With no investors, he borrowed about 80% loan to value. His second deal was very similar. It was not until afterward that he began to raise outside capital. Jefferson continued his day job for a year after his first purchase, and then he began to transition into the niche of mobile home park investing. Be sure to listen to hear more of Jefferson's journey to a mobile home park investor.

A mobile home park has a park manager that handles all 3-figure issues. These are anything under $1000 - collecting rent, posting late or eviction notices, or handling issues like a main sewer line backup. Jefferson explains that in his early days, he would get involved in 4 or 5-figure decisions such as should he buy a mobile home and sell it one a rent-to-own note… Now, he hires someone to make those decisions, and he is only involved in 6 or 7-figure decisions.

Jefferson gives a spectrum of how management intensive mobile home parks are ranging from a seniors mobile home park where the residents own their own homes (least intensive) to a park where the landlord owns and rents all the mobile home parks to families with kids (most intensive). These are very difficult to manage because you get to own all of the maintenance of the homes as well. While not all of the homes in Jefferson's parks are tenant owned, 90% of them are, which makes the headaches of managing a park decrease heavily.

Jefferson began by using his own money to invest in mobile home parks. He then began to partner with people to do deal-by-deals. These would be single assets, where 1-7 people would fund the acquisition. He would simply put the word out there through his networks that he had a goal, and money would be raised in a timely manner. Because he had a track record with partners, in 2015 he began to raise money for his first fund. This fund raised 5 million dollars, with his second fundraising 14.3 million in merely 7 months. Currently, Jefferson is on his third fund and has raised about 5.1 million in only 90 days. He says that because he does not charge fees, the amount of money he will raise is based solely on the deal flow.

Jefferson explains that if you are going to raise money for a fund, you should always hire an SEC attorney, who is experienced in the field. The law is vague when it comes to raising money from friends and family. There are very few regulations - you don't have to register with the SEC, can raise unlimited money from unlimited people, and can use whatever agreement you would like. However, when raising money from "strangers," the fund must be registered with the SEC. There are two types of funds: 506B and 506C. A 506B must have a Private Placement Memorandum in place, be registered with the SEC, and have up to 35 investors. It also mandates that you cannot advertise and you must have a prior relationship with investors. A 506C is also registered with the SEC, but it allows you to advertise and solicit investors. It mandates that you only take money from accredited investors. Don't miss Jonathan's insights further into this matter on this episode.

• [1:35] Who he is and what he does
• [6:32] His first mobile home park deal
• [9:05] On freeing yourself from your corporate job
• [14:07] What managing a mobile home park looks like
• [19:21] How management intensive owning a mobile home park is
• [24:13] Pad-only vs. owning mobile homes
• [26:19] What returns you can expect from investing in a mobile home park
• [29:20] How to find deals
• [30:45] The transition from investing to raising money
• [38:58] What is really involved in raising a fund
• [50:38] The prerequisites for building a fund

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]
• Website: www.www.Loopnet.com
• Podcast: Mobile Home Park Investors
• Tool: www.VerifyInvestor.com
• Private Placement Memorandum Attorneys: www.CrowdFundingLawyers.net

• www.ParkAvenuePartners.com
• Phone: 415-228-6900

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

Founder of Grocapitus Investments and MultifamilyU, Neal Bawa, joins Jonathan on this episode of Real Estate Launchpad. Have you ever wanted to know how to increase revenue in your multifamily investments? Neal is a master of adding value to apartment communities by optimizing leasing revenue, using his L-A-S-A-L process! You don't want to miss his explanation of his system and how to start applying it to your own multifamily investments today. Be sure to listen!

The L-A-S-A-L system is a free system of best practices and metrics. It incorporates the ecosystem of leasing from start to finish. The most important thing an asset manager can do is not cutting expenses but driving top-line revenue. L-A-S-A-L teaches you how to increase revenue by managing ratios between each of the following below:

L - eads

A- ppointments

S - howings

A - pplications

L - eases

Be sure to listen to hear Neal give examples of how implementing this system can double leasing velocity in apartments!

In the L-A-S-A-L system, there are ways at each step to increase performance ratios. Neal shares that the ratio increases from leads to appointments when the customer is contacted quickly. He goes so far as to say that call-backs within 5 minutes as gold leads, but a lead that has not been nurtured for a whole day is dead. Longer business hours and working during peak hours allow this contact to happen more! From the appointment to showing, the ratio increases based on the manager's sales ability. From showing to application, the ratio depends on the cleanliness of a unit. Neal never shows a home that is not completely wiped down. This ratio is also dependent on how well the customer was screened on the phone. You don't want a client to show up who simply cannot move forward. Lastly, the ratio between applications and leases is simply depending on processing time. The quicker the turn-around, the less time a client can get cold feet and walk away. Be sure to listen to hear Neal explain all of these ratios in more detail, and how increasing lease velocity can account for a 3 million difference in income in ONE year!

Neal turns to numbers to increase revenue and add value to a rental property. He is constantly measuring and benchmarking his own properties against one another to see what can be doing better. He believes in hiring the best photographer in the market to capture his properties because the difference in a cheap photographer and the best can be extremely different and result in more leases signed. Neal finds creative ways such as adding cameras not for security but to track whether tenants are not paying pet rent. This can account for an increase of hundreds of thousands of dollars a year, so it is a simple way to increase revenue.

Not only does Neal have processes to increase revenue in multifamily investments, but he also has a large team of investors that he works with. Neal believes that outreach is the best way to grow a syndication business, which is why he teaches a large number of free courses. He helps others learn which cities and neighborhoods are the best to invest in. He speaks at 25 conferences annually and teaches locally once a week. Through his MultifamilyU platform, he provides 100 free webinars a year that are simply educations - no pitch involved. Neal says his "secret sauce" to building a team of investors is by creating a vast education network.

• [1:51] Who he is and what he does
• [8:58] How he got into real estate
• [13:49] Problems real estate investors were having and how he helped solve them
• [18:33] The L-A-S-A-L system
• [20:30] How this system helps with property management
• [25:28] How leasing velocity adds to the top line
• [28:06] Reasons other ratios improve
• [39:24] What Neal does to add value to a property and increase returns
• [48:41] How he great his syndication business

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]

• www.MultifamilyU.com
• www.GroCapitusInvestments.com
• Neal (at) MultifamilyU.com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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REI Mom, Anna Kelley, joins Jonathan on this episode to talk about her journey the last five years. Five years ago, Anna made a 5-year plan to free herself from her 9-5 job through real estate investing. She is now a month out from retiring from her job - right on schedule. Motivated by the freedom to spend time with her family and not simply money, Anna is the real thing. Listen in as she explains what a disciplined, conservative approach to investing really requires and how she has achieved her goal to retire in 5 years.

Anna made a goal five years ago to replace her six-figure income through real estate investing. At the time she owned 12 buildings. She had purchased them for extra cash flow. She had renovated theses units and raised their values, so banks began to let her tap into their equity, which could allow her to grow her real estate career. She knew if she could continue to buy property and raise values, she could buy more cash flowing assets and eventually replace her income to be more present with her kids. Anna figured that she would need 60 units to replace an income of $150k/year after debt service and repairs. After 4 years, she had 5 million in equity and an income of $120/year, but she was faced with 2 large insurance claims at her properties. Be sure to listen to hear how Anna faced these unexpected costs and still hit her goal to retire in 5 years through real estate investing!

Anna has invested in all types of property: single family, multifamily, 4-plexes… 4-plex units are her sweet spot because they have the benefits of a commercial building when they appraise and have an economy of scale by having 4 units under one roof. However, as she has progressed in her real estate investing career, she has begun to look at apartments that she can syndicate with others.

Anna invests locally near Hershey, Pennsylvania, where most tenants are middle class. There are some tenants below the average income pool, but they are typically hardworking. She focuses on having a stable tenant base and is able to achieve this due to the local market and through good tenant screening on the front end. Her goal is to have a middle-class tenant that stays for a long time and wants to be in her unit.

When looking at an area to invest in, Anna looks for class B to C+ areas with strong schools. She wants to see diversity in the area with things to do in town: good recreation, museums, and restaurants. Economic stability and diversity in employment also help make a good area to invest in. Listen to this whole episode to hear Anna explain more!

Anna is a big believer in a conservative approach to real estate investing. She believes that economic indicators show that the market is nearing or at the end of an expansion period. During the last financial downturn, she was extremely affected - losing retirement and hearing whispers of losing her job. The past serves as a reminder to her to not overextend - personally or in real estate investing. She says to be cautious with debt and to ask yourself the questions: can you still make payments without rents? What about if you have to reduce rent? To be conservative, she chooses to model flat rent growth and a higher cap rate upon exits instead of projecting a percentage increase in rent growth.

Anna shares two of her biggest surprises as a real estate investor. When she started out, she was not great on tenant screening and let her heart get the best of her. She made sacrifices on rent amounts and whether people could have pets. She ended up with tenants who killed profits and made her life miserable. She rented to people she shouldn't have. She learned to go with her gut on renters and to have standards that she sticks with! The people you rent to are just as important as the building you buy! Anna was also surprised when things cost more to renovate than expected. She says to expect things to go over budget and to look at the age of the building to predict whether things will need to be replaced.

• [1:49] Who she is, and her 5 year plan to retirement through real estate
• [10:20] The difference between her plan and reality
• [13:49] What she looks for when buying property
• [16:08] The ideal tenant profile
• [21:46] Criteria she looks at when considering buying in an area
• [31:00] Her conservative approach to investing
• [40:09] Lessening risk with buying and lending
• [47:01] Her biggest surprises as a real estate investor
• [49:11] Where she is going in the next 5 years

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]

• Info (at) REIMom.com
• www.REIMom.com
• Anna Kelley's Facebook Page

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

Kathy Fettke, co-CEO of the Real Wealth Network, operates a turnkey real estate rental business. She is a powerhouse in real estate investing, and her company guides people through the process of identifying strong markets, good rental properties, and great property managers so that running an investment property far from home is manageable. On this episode, Kathy shares with Jonathan why she started her company, how she built a system for identifying the best markets, rehabbers, and managers around the country, and what she is seeing in the market today. Because of her tremendous experience with real estate investing and her network of teams all around the country, her read on the market situation is unique. You don't want to miss what she has to say.

Kathy began her journey to turnkey real estate investing out of desperation. She had a degree in broadcasting but decided to stay at home when she had children. Her husband, now co-CEO of Real Wealth Network, came home from the doctor with news of cancer. Preparing for the worst, she wanted a way to pay the pills and be able to raise her kids. Kathy already had a radio show from her broadcast career, so she decided to change the topic of this show from news to passive income. She began by interviewing millionaires and found that they were wealthy from either owning a business or from real estate investments. She also found that most of these millionaires were using profits from business to invest in real estate. Her show's following grew from interviewing interesting people. She eventually got a show sponsor and co-host - a person in the mortgage industry. With this partnership, she began interviewing this lender's clients to see where they bought their real estate and how they were making money. Kathy saw that many of these interviewees were retiring by the age of 30. At the suggestion of her co-host, she got her real estate license and became a mortgage broker. She learned how to build wealth with leverage. Her show continued on a major network, and she interviewed more big names.

Kathy guided listeners to obtain loans that would make money. She began looking for a market to invest in and found a small town in Texas on the lake that would soon have a freeway coming in. New properties were selling at great prices, and they tripled in value shortly after because of the freeway and access to Dallas. Kathy came back and talked about this experience on her show, and her listeners wanted to know everything! She realized there was a demand for someone to show others where and how to invest if your homework doesn't make sense. From this point, her business was born and continued to grow.

From the beginning, Kathy realized that there was a low barrier to entry in real estate, so she could easily run into others who would not make good team members. In the beginning, her company did background checks, looked at the quality of construction, and real property management testimonials. However, they quickly realized this was not enough. Having good team members - realtors, property managers, and more - was vital to the success of real estate investing. She created an auditing system to prove that people they hired could keep up with standards.

To find good property managers, she recommends looking online to see reviews. She wants to see their track records, whether they are licensed, what other investors have to say about them, fair fees, that they have been in business for at least 2 years, understand construction, and have systems in place! She has an extensive list of things that make a good property manager, but these managers are crucial to the investment property. Kathy's team helps find these managers and connects them with investors. Though she is not in a fiduciary role, she advocates on behalf of the investor.

Kathy begins by saying there is not one housing market, but lots of different housing markets that are all at different places in the cycle. However, there has been a slow down in sales across the board in the last 3 months. Kathy explains that home prices are still up 6% on last year, but that the slow down on sales and price gain is a good thing. This means things are stabilizing with real estate and the market is becoming more normal. There is currently a shift from a crazy seller's market to more of a buyers market.

One key part to Kathy scaling her turnkey real estate investing business was building the right team. She is the idea person and visionary but needed someone to implement them. Defining her company's core values was huge because it allowed her to hire and fire people to those values. She paid the right people to manage others, and she only had to manage those directors. Each person has a unique ability, so Kathy tries to find that for each person and allowing them to do that alone.

Kathy's husband and co-CEO is an early adopter of technology. When podcasts came out, he began publishing her show on iTunes. She was one of the first real estate podcasts and got listeners worldwide. They were also the first to do webinars, allowing them to go from local meetings with investors to having virtual meetings where people all around the world could join. By having the right team and utilizing technology, Kathy's business has grown to 40k members!

• [2:07] Who she is and what she does
• [5:43] Identifying good markets
• [6:50] How she got started
• [14:28] The second market she invested in and why
• [20:20] How to find reliable people to make a team
• [24:40] Her company's relationship with property managers
• [31:32] What markets are interesting right now
• [38:01] Kathy's view on the current real estate market
• [42:37] How she scaled her business to 40k members

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]
• Kathy's Book: Retire Rich with Rentals
• Rich's Book: Extreme Success
• Book: Traction

• www.RealWealthNetwork.com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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Have you ever wondered what causes a housing bubble or why it pops? On this episode of Real Estate Launchpad, the author of The Housing Bubble Blog joins Jonathan to explain what is going on in the current single-family home market. Ben Jones is dedicated to examining the home price boom and its effects on owners, lenders, realtors, regulators and the economy as a whole. His blog tracks news on housing bubbles and bursts around the world. This episode is not to be missed!

During the savings and loans crisis in the 1980s, everyone was talking about real estate. As the market began to collapse, Ben saw headlines daily about scandals. He mentions one scandal where the same office building was flipped 7 times in one day. The complexities of 7 transactions in a day were massive. Lawyers, realtors, appraisers, and many others would have to be involved in this, so there were a good number of people in on the scam. Ben notes that this crisis was caused by fraudulent commercial loans, and essentially caused him to bail on a real estate degree and move towards business and economics. However, what he saw during this crisis piqued his interest in the housing market and housing bubbles.

Prior to the housing market crash in the 2000s, Ben began to see signs of a problem in Sedona, Arizona. Average houses were appreciating $10k/month, and homeowners were giddy about it. Masses of people were fixing up homes and cashing out money on refinancing based on the speculation that their homes would continue to appreciate. However, they did not and many people were left owing more on their homes than the home was worth. The housing bubble actually popped in Sedona around 2005-2006, before the national housing crash.

Ben mentions that the common narrative surrounding the housing market collapse of the 2000s was that subprime loans were defaulting. Lenders had too many defaults in this category, which caused the issue. However, Ben says that the crash had nothing to do with prime or subprime loans. The common denominator in borrowers defaulting was that the buyer had purchased the home when the price level was at an all-time high. Buyers were simply purchasing homes they could not afford, and they defaulted quickly.

Many buyers borrowed on speculation: speculation that the market would continue to grow, that homes would appreciate, or that they could cash out money by refinancing and not have to pay it back. However, these speculations were not fact and ultimately contributed to the market collapse.

Ben says that the money supply is driving price appreciation around the world. A crisis is typically met with money creation, which causes a lack of accountability. For example, in Australia, they are bailing out banks and homebuilders. In China, there are ghost cities where condos have been built but no one has ever lived in. The construction of these ghost cities is important to jobs and the economy, but they are simply creating another bubble around a bubble.

Currently, Ben sees speculation again in the housing market. Consumers are continuing to refinance their homes and take cash out. They are speculating that their home will continue to increase in value, and they will make this money back at the time of selling their home. There is a general attitude in America represented by reality television shows that you can "fix and flip" and make instant money on a home. Housing bubbles are caused by an attitude towards the market, so once the attitude goes away, the confidence in pricing bursts. Ben believes this is beginning to happen, noting what is going on in Miami Beach and Manhattan.

• [2:00] Who he is and what he does
• [4:04] Ben's experience with the S&L crisis
• [6:15] What is property preservation
• [8:12] What he saw in Sedona's market that made him nervous
• [10:58] What pricked the bubble
• [15:09] Ben shares what actually happened during the collapse
• [19:44] What he sees now in the real estate market
• [21:37] Why more expensive homes fall first
• [23:47] What data Ben uses
• [28:48] What is driving the price appreciation around the country and world?
• [35:45] What Ben sees coming next
• [41:53 The results of our current market

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]

• www.HousingBubble.Blog
• TheHousingBubble (at) Gmail.com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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Dusty Bates and Steve Harper, two California-based commercial brokers, join Jonathan on this episode to educate listeners on a triple net lease. Dusty and Steve help baby boomers nearing retirement sell multifamily properties and transition to triple net lease properties. They explain that triple net leases have many advantages such as being stable, providing consistent income, and being very hands-off investments. You are sure to enjoy this episode if triple net leases are a topic of interest for you. Listen as Dusty and Steve share why triple net leases are attractive for retiring baby boomers, what makes a good triple net lease investment, and how to evaluate them.

Dusty and Steve explain that a triple net lease is simply a leased property with advantages. The triple net portion means that all of the property taxes, insurance, and maintenance costs are paid by the tenant on top of their rent. With a triple net lease, there is little to no management other than receiving annual certificates of insurance from the tenant and proof that property taxes have been paid twice a year. Triple net leases allow owners to "get rich slowly" with a structured investment and hands-off approach.

There are several factors that make a good triple net lease property. Dusty and Steve agree that location is vital. You must look at the market and submarket around the property. They help their clients select properties and run studies on the area to make sure the location is good in the short and long term. In doing due diligence, Dusty and Steve look at the length of time left on the current lease and the strength of the tenant. The quality of income strength is key, and they typically like to see a remaining lease of 10 years or longer. There is always a guarantee on the lease, whether it be from a corporation or high net worth individual. This means that should the tenant default, this business or person will pay the rent and expenses. Dusty and Steve share that they want to see good financial viability of the entity or person guaranteeing the lease as well.

Dusty and Steve share that there are several safe industries to be in for a triple net lease. Fast food and quick food are two types of business that remain steady. Medical companies are also very safe. They reference Harry Dent's prediction on the current economy based on an aging population. Currently, there are mass retirements from the baby boomer generation that will continue until 2025. Because of this, there is a need for medical care. Dusty and Steve mention the need for dialysis centers is on the rise, so that industry is great to have in a triple net lease.

There are geographic locations that are better for a triple net lease. Dusty and Steve look for states that are business friendly to put people into a triple net lease. Rural areas are more risky, so Dusty and Steve do not advise their clients to purchase there. Instead, they look to city centers where business is booming, and the viability of a tenant staying in business is higher.

Dusty and Steve have a program that helps baby boomers looking to retire transition from multifamily investments to triple net lease properties. To begin, they build an analysis for their client. They look into their client's current multifamily property and analyze how it is doing, what it is lacking, and what could be done better. A detailed report is made from this analysis. They then show their client several triple net lease properties, and they compare these along with the client's current property side by side. Clients are then able to make a decision and close within 60 days. Dusty and Steve say that the hardest part is figuring out what the client wants, but once that is nailed down, they can finish the deal.

• [2:09] Who they are and what they do
• [3:32] What is a triple net lease
• [5:19] What's in it for the owner of a triple net lease property
• [6:47] What makes a good triple net lease property
• [9:29] What goes into due diligence
• [11:11] How to evaluate the financial strength of a tenant
• [17:00] Lease terms they are comfortable with
• [24:44] The safest industries and geographic locations to be in
• [32:39] The spread between a "AAA tenant" and someone who isn't
• [36:47] How their exchange program from multifamily to triple net lease properties works

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]
• Free Download of Dusty and Steve's Book:www.TheRetiredInvestorBook.com

• To Call or Text Dusty Bates: 916-804-2128
• To Call or Text Steve Harper: 916-798-1116

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

Subscribe to REAL ESTATE LAUNCHPAD onApple Podcasts|| Google Podcasts|| Android|| SpotifyStitcher|| TuneIn Radio|| Google Play Music

Jack Gibson and Jeff "Shecky" Schechter own High Return Real Estate, a turnkey real estate rental business. They provide a unique, full-service product. Working backward from a profitable return for their clients, they source, spec, rehab, inspect, and fully tenant their products before taking them to market. After their properties are sold, Jack and Shecky also manage the property, making these rentals a completely passive source of income.

In this episode, Jack and Shecky share with Jonathan how they built their business with patient marketing efforts, targeted the ideal customer through SEO, and cultivated trust through a transparent process. Whether you're interested in investing in turnkey real estate properties or looking to build your own real estate business, this is an episode has valuable information for you.

With a background in social marketing, Shecky uses search engine optimization, or SEO, to help their business organically come up in search engines without having to pay for an advertisement. For example, he wants High Return Real Estate to show up when someone searches "real estate investment Indianapolis." This has proven to be a BIG DEAL for finding the ideal customer. The people finding High Return Real Estate in this way are already actively typing keywords and looking for real estate investment opportunities that High Return offers.

Shecky says to think: where is the investor we want consuming content? He says investors will never be found on Instagram. He has seen some leads from Facebook. But, his ideal customers for turnkey real estate investments consume content by searching on Google, watching Youtube videos, or listening to Podcasts. He shares that your company must have good content on these platforms for the long term. Build content and stay consistent!

Jack and Shecky do all of their turnkey real estate business in Indianapolis. They have good relationships with wholesalers and hedge funds. Because of this, they are often able to purchase homes before they hit the market. High Return always pays cash to expedite the process. Then, they bring in a 3rd party property inspector to find out if anything is wrong with the property. The property is rehabbed and inspected again. The report from this inspector is always shared with investors. The property gets rented to get cash flowing, and is then sold to an investor. The homes always come with a full 1-year warranty and are managed by a professional property management company. Jack and Shecky share that their company has lots of checklists to go through, and they have learned over time to never cut corners.

Jack and Shecky point out that their focus isn't simply on rehabbing real estate, but also on building the machine of their business. Their business practices support the rehabbing of real estate. They both agree that division of labor is a key element. Shecky has skills that Jack doesn't and vice versa. Jack worked with real estate and sold rehabs previously, but he wanted a digital marketing platform to scale business. There was a need for a turnkey solution. Shecky brought skills for creating a serious, professional website, good SEO work, Google keywords, and Facebook ads. They built a great team around them to get the job done. They put the right people in the right seats, and created systems as their business grew larger.

High Return Real Estate is built on providing investors with double-digit returns. Jack and Shecky use this end goal to help them purchase, rehab, and sell the right properties. They focus on homes that need between $5-$10k worth of work on them. They tend to shy away from any home that needs more than $20k in work for several reasons: they have a high demand for homes and need work done quickly, you tend to find bigger issues when you dig into the bones of a house, and the math simply does not work to get a good return for investors. Jack and Shecky say to fall in love with the data, not the deal! Without the right property, they cannot provide investors with the best return.

• [2:24] Who they are and what they do
• [5:05] Who buys their turnkey products?
• [8:05] The process: the story of a house from beginning to end
• [12:08] Building the business
• [20:11] High Return Real Estate's marketing
• [23:48] Advice for those just starting out
• [26:36] What makes their business different
• [35:14] The customer intake process
• [37:54] What properties they choose to target
• [42:48] Final thoughts and advice to others

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]

• HighReturnRealEstate.com
• Podcast: The High Return Real Estate Show

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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David Friedman, CEO of Knox Financial, is a tech entrepreneur who noticed a problem in real estate investing. Homeowners face several issues when attempting to convert their home into a rental investment property. Many times homeowners are unable to purchase a second house without the equity that is locked into their first home. Generating income from a rental property is also alluring, but they don't want the headache of being a landlord.

Knox Financial offers a solution. This new company uses technology to determine whether a home should be converted into a rental income property. It provides streamlined services that allow the owner to obtain income and appreciation through their first home passively. Listen in for valuable information on rental income properties and how David's company provides a way for homeowners to become investors on this episode of Real Estate Launchpad.

Why would you sell your home if it will continue to appreciate? David's company, Knox Financial, helps homeowners to maintain ownership of their first home while they buy a second home. His company provides refinancing options so that homeowners can pull enough cash out of their first home's equity to buy their next home. Knox Financial finds renters and insurance for its clients. Once a renter moves in, Knox takes over the responsibility for paying utilities, taxes, and the mortgage. This allows homeowners to transition to passive owners of an investment property.

David identifies three ideal groups who benefit from rental income.

• Late 20-year-olds to early 40-year-olds. Their home may no longer fit their lifestyle, and they are looking to move out of a good rental market in the city to a more of a suburb community. They have prime real estate that can be rented and also leveraged for cash on a second home.
• The baby boomer generation. This generation typically has owned a house for decades, with little to no debt on it. They are looking for cash to support a retired lifestyle and preserve wealth for future generations. Rental income allows them to keep their asset while creating cash flow.
• Current landlords. These landlords may have one to multiple rental properties, and they are no longer wanting the burden of the job's responsibilities. Knox Financial is able to take over their duties, while still providing a return with rental income.

David previously owned a condo in Boston. Once he saw his property appreciate $250k, he sold it. Four years later, he heard that his same condo was purchased for $200k more than he had sold it for. He wished he had not sold so soon and began talking with friends about this experience. Everyone had a similar story. Homes they had sold were now worth multiples of what they had been purchased for. His friends wished they had the foresight to hold and rent their homes while they continued to appreciate. However, they worked day jobs that didn't make being a landlord realistic. From this, David realized that if he could make the process easier for homeowners to keep their homes and rent them instead of selling, then more people could become real estate investors. Knox Financial will launch its services to homeowners beginning in February 2019. Be sure to listen to hear more on how they can help you turn your home into a rental property!

The conversation on homeownership has always been: own a home, sell a home, buy a new home. However, David hopes to change this. His company makes buying a home and holding on to it an easier process. He thinks the conversation on homeownership should be: own a home, hold on to the home, move, buy a new home. Through this, people would amass real estate properties as investments. He mentions that the long-term investment in real estate rental properties in more profitable than investing in stocks and bonds.

• [2:10] Who he is
• [2:37] How his company can turn your home into rental income
• [6:37] How Knox Financial operates
• [10:00] Knox's 3 ideal client bases
• [14:57] The solution to the baby boomer issue
• [17:59] Where the idea of Knox Financial came from
• [20:08] The current state of Knox Financial
• [23:00] What makes an are a good market for rentals?
• [32:43] Areas that don't work with rentals, and why
• [35:17] The profile of a renter

• [email protected] - Learn to be an asset manager and Investor
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]

• www.KnoxFinancial.Com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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Hunter Thompson began his commercial real estate investing career after he woke up in 2008 to find his U.S. stock portfolio was dependent on sinking Greek government bonds. This led him to search for an asset class that would generate attractive returns, but have risk factors he could identify and control. He found real estate. He began by lending money privately for others to flip homes before founding Cash Flow Connections. Cash Flow Connections helps private investors put money into best-in-class deals for mobile home parks and self-storage units. Listen in to this episode of Real Estate Launchpad to hear Hunter share more on why commercial real estate investing works, advantages of commercial real estate investing, his journey from single family investing to investing in mobile home parks and self-storage units, how his business model works, what deals he is looking at, and so much more! This is an episode you don't want to miss!

On Hunter's search for a new investment opportunity, he found real estate. Though the current housing market was not performing well in his home state of California, he began his real estate career by attending networking events to gain knowledge. He met other investors, and realized they all had something in common: they had created systems to weather economic challenges.

Hunter identified opportunities to invest and brought friends and family in as his first investors. He then began recruiting other investors. He started with single-family homes and flippers and then moved to commercial real estate. Throughout the process, Hunter kept the thought in mind that his investments needed to be able to perform even during hard economic times, which is what led him to mobile home parks and self-storage units.

Hunter says that there are many reasons commercial real estate investing works.

• He says that the simplicity of single family does not allow for the differentiation between the best-in-class operators from mom-and-pop operators. That is different for commercial real estate. With commercial real estate, there are many ways to add value to a property. Each of those ways can be tweaked and optimized from property to property, so you get an exponential difference between someone who owns one property compared to someone who owns many. Being a best-in-class operator matters, and that is possible with commercial real estate.
• He notes that there are monetary benefits to commercial real estate investing like depreciation and financing, but that you can apply management strategies like running a business to commercial real estate. You can use these strategies to add value without taking on proportional risk. Listen to hear Hunter's example of how his self-storage units do this with truck rentals.
• There are also a limited number of moving parts in commercial real estate investing compared to other types of investments, so a small firm can achieve success. It is not as complex as trying to identify how many iPads Apple will sell in the next quarter or predicting what the stock market will do.

Hunter shares that Cash Flow Connections leverages preexisting relationships with sponsors and connects them to their investor database. His company will create a fund where only one type of assets is included. Cash Flow Connections can conduct due diligence, and then share the investing opportunity with investors. His company allows its investors more quality access to investments because it allows them to buy in with a minimum of $30-50k instead of a million. They do not need as much money to get a good product to invest in. Hunter says that he invests personally in each deal and that his company is compensated almost exclusively based on the performance of a preferred return. This ensures that the deals that are presented are beneficial to the investor.

Hunter's company, Cash Flow Connections, focuses on mobile home parks and self-storage unit deals. He notes that the worse the economy is, the better the mobile home parks perform. This protects this commercial real estate investment throughout hard economic times. People tend to use self-storage during periods of change or transition. Whether this be downsizing due to a loss of a job or moving home from college, the demand for storage units can also stay stable even through a recession. Both of these asset classes are able to weather the storm and continue to be profitable, independent of the current economy.

• [2:04] Who he is
• [6:09] How Hunter got where he is today
• [8:32] Why commercial real estate works
• [11:32] The journey from single family to self storage units
• [12:38] Hunter's business model explained
• [18:08] What he does vs. crowdfunding
• [25:26] What kind of deals Hunter is looking at
• [28:38] Why 2018 has been good for business
• [35:51] How privatized real estate investing has gotten where it is
• [40:29] Hunter's take on the current commercial real estate market

• Multifamily Launchpad Membership Community- Join the waitlist for 1 of 100 discounted charter memberships available January of 2019
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]
• Book: Self Storage Almanac

• www.CashFlowConnections.com
• Info (at) CashFlowConnections.com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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If you're looking at a new market to invest in, you must understand the demographics and economic growth factors of the area. Demographics and economic growth are important indicators of whether a market is healthy. Aaron Renn, a Senior Fellow at the Manhattan Institute for Policy Research, joins Jonathan on this episode. Professionally, Aaron focuses on economic development, infrastructure, and demographics.

On this episode, Jonathan asks Aaron to comment on what forces lead to strong population growth or decline, what cities can do to counter broad demographic trends working against them, why it's potentially dangerous to invest in markets with population decline, what under-the-radar markets are growing, and much more! This episode is a must listen for those who appreciate the connection between demographics and real estate investing.

Demographics help you understand the health or lack of health of a community. In looking around the country, population loss is one of the best proxies for seeing whether a community is struggling. Aaron points to a current study of his to make this point. The study lists regions of less than a million people whose central city has declined more than 20% since its peak. Coincidentally, on this list are some of the most distressed cities in the country.

Aaron mentions economies of scale as a large reason that population growth is linked to the health of the city. In economies of scale, you have fixed and variable costs. As population increases, the fixed costs of a city are spread across more people. A thriving city has more people to share the cost. With population loss, there are fewer people to absorb fixed costs. This is burdensome for the citizens, and also makes the city less attractive to newcomers.

Population decline is dangerous because it devalues property. Aaron mentions the midwest as an example. There are many abandoned, old houses available because the population has shrunk. Although the cost of real estate is low, all the homes would need to be renovated before a professional would consider living in them. People cannot make back the money spent on these homes after the cost of renovation. Homes become a wasting asset, where they devalue like cars.

With population decline, businesses also close. With the lack of jobs, the entrepreneurial class shrinks. The area no longer attracts new people. Many times the inhabitants of these cities are majority natives, which creates a local culture that is hard to penetrate. In a cycle where a city is not growing, it cannot attract new people.

There is now a concept called the new donut in demography. In the past, cities like Detroit were considered donuts. Their downtown was disappearing while the suburbs flourished. This new donut has a thriving downtown and urban core as well as an outer suburb that is doing well. However, it has a ring between the downtown and the outer thriving suburbs. This ring has become a challenge for municipalities today. There are two approaches to revitalizing this middle ring.

1: Urban growth boundary policy - this freezes construction so nothing new can be built, causing infill of this middle ring but also jacking prices up

2: Sprawl model - cheaper homes are built on the outer edge of the donut, but since the population is not growing, there is even more pressure put on the middle ring

It is important for a growing city to be drawing people in nationally. Aaron compares Nashville, Tennessee and Columbus, Ohio. He says that both cities have a similar quality of living. However, Nashville is attracting people from a national footprint while Columbus is attracting people from within its own state. Aaron says that eventually, cities need to attract people nationally to grow, instead of draining the population pool within their own state.

He mentions that though these cities both have the potential for growth, its region is influential in why Nashville is able to attract nationally. Southern cities create a larger than life ethos, attracting people to them. Many Midwest cities are unable to realize their potential because they are good with the status quo and how things are.

• [3:38] Why study demography?
• [5:16] What large businesses look for when they choose a city to locate to
• [11:15] Why population decline is dangerous
• [17:16] The myth of the super mayor saving declining cities
• [25:14] The relationship between a thriving city core and suburbs
• [32:27] Under the radar markets that are doing well
• [41:14] Up and coming small cities
• [50:32] Successful cities must reinvent and rebuild themselves
• [53:54] Policy prescriptions for healthy cities

• Multifamily Launchpad Membership Community- Join the waitlist for 1 of 100 discounted charter memberships available January of 2019
• Bellwether Enterprise(sponsor) - contact Will Oldham [email protected]
• BOOK: If Mayors Ruled the World

• Urbanophile.com
• ARenn (at) urbanophile.com

• To invest with me go to www.TwoBridgesMgmt.com/investors
• To learn from me go to www.MultifamilyLaunchpad.com
• Join my free Facebook community

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