|“If you’re not willing to learn, no one can help you. If you’re determined to learn, no one can stop you!”
This past week I had a person ask me what is one of the biggest epiphanies I have learned about myself in the last couple of years. Great question and it only took me a few seconds to respond. I said, “the older I have become, the more I understand how much I don’t know and how much more I have to learn.” Another way to translate this insight comes from an old saying my grandfather used to tell me and it goes like this, “To know what you know and to know what you don’t know, means that you know.”
One of my greatest discoveries is that human beings can never exhaust their capacity to learn. Many people learn to be lazy and become complacent in life, then they can’t figure out why they battle dread and become unfulfilled. However, when you make a commitment to learn and grow every day you begin to understand and enjoy the journey of life. There is no final destination on this earth. Our purpose is to grow to our full potential, serve others and make a difference with our lives. Today I want to share with you a few keys to help you enjoy your success journey.
1 – THINK LONG TERM – one of the greatest tragedies in contemporary living is short term thinking. Successful people set long-term goals and they understand that these targets are merely the result of short-term habits they need to do every day. These healthy daily habits should not be something you do; they should be something you are. Patience and discipline are two prerequisites to succeed in any area of your life. Think about it. Which did you plan for more, your wedding or your marriage? Which do you plan for more your vacation or life? See the difference?
2 – THINK BIG, PLAY BIG – I love this quote from Marianne Williamson,“Your playing small does not serve the world”. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We were born to make manifest the glory of God that is within us. It’s not just in some of us; it’s in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” It is so important to take risks and try new things. If you never try and take advantage of opportunities or allow your dreams to become a reality, then you will never realize your true potential.
3 – TAKE PERSONAL RESPONSIBILITY – yes, take personal responsibility for everything in your life. We live in a world today where most people want to blame their past, their parents, the government, their boss, their spouse, their ex, the color of their skin, their whatever. I’m grateful to my grandmother who taught me the importance of taking responsibility for everything that happens in my life. The truth is that life is not so much about the cards you are dealt, but how you play the hand. Adversity it is not prejudice and visits all of us. No matter their weaknesses, past failures or beginnings, successful people know they are responsible for their life.
4 – ELIMINATE TOXIC PEOPLE – Get rid of people in your life that subtract and divide – draw closer to people who will ADD and Multiply to your life. People we spend the most time with, add up to whom we become. I love how Jim Rohn said it, “you are the average of the five people you spend the most time with.” There are wise people and foolish people. There are less ambitious people and there are more ambitious people. If you spend time with people more advance than you, no matter how challenging that might be, you will become more successful. Who do you surround yourself with? What changes do you need to make today?
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One of the issues that I see when an agent closes with a Client-whether it is a Residential Sale or a Commercial Transaction is that they do not maintain a relationship with that person.
It is easy to “promise” to do lunch or drinks or Barbecues. However, we are all busy and this is usually not feasible.
I want to speak about the Commercial Transactions.
It is important to keep abreast of the markets and where the asset sits in the flow of the market. I recommend that everyone have at least a 6 month look at what is going on. I work at preforming 6 month check ups with all of my commercial closings. However, in order to do this I need a fresh set of books and records along with any capital improvements.
We keep an email; drip campaign going with Market updates. BUT—————- I am available for conference or meetings from everyone of my Clients. Many times I have someone call me and say, “You probably don’t remember me but…” Most of the time not only do I remember them but I can describe their properties.
My Clients are often surprised when I call them and update them on their market. It is a good time to evaluate the properties position in the market. So no matter large or small-Clients STAY on my radar.
Key Points of Corporate Tax Reform
- Corporate tax reform looks to be a top priority for Congress and the Trump administration
- Supporters are promoting strategies designed to boost the economy
- Changes implemented could have an impact on the markets and investors
Discussions about corporate tax policy are usually just the ticket for those wanting to be left alone at dinner parties. As investors though, we should be aware of how potential changes in corporate tax policy can impact the value of companies of which we are shareholders. In some cases, changes in corporate taxes can have as much impact on our financial well-being as changes in personal tax rates.
Changes affecting imports and exports
There are a number of proposals reportedly being evaluated, but one in particular could have notable implications for the economy, corporate earnings, currency values, and even international trade.
This proposal is sometimes called a “border tax”, but legislators more accurately refer to it by its full title of “destination-based cash flow taxation.” The title may not exactly roll off the tongue, but it denotes the basic idea of eliminating taxes on exports while disallowing the cost of imports as a deductible item for tax purposes. The goal is to incentivize shipping more goods abroad while reducing imports, presumably to encourage more domestic production.
It remains to be seen how far this proposal goes, but in its purest form, it could have significant investor implications. Based on present activity, this proposal could also generate higher tax revenue for the federal government given that the U.S. currently imports more than it exports.
Improving U.S. competitiveness by lowering taxes
The U.S. currently has the highest corporate tax rate in the developed world at 35%, according the Organization of Economic Cooperation and Development (OECD). Allowable deductions and credits lower the actual or “effective” tax rate most companies pay, but the complexity of the U.S. tax code often inadvertently entices businesses to locate operations in more favorable tax jurisdictions outside the U.S.
Benefits of repealing the “repatriation tax”
Any meaningful reform of the corporate tax code is also likely to lower or eliminate the tax on income generated outside the U.S. Currently, businesses face the full corporate tax rate (as high as 35%) on foreign income — but only when the profits are brought home to the U.S. (i.e. “repatriated”). This policy is very unusual and has the unintended consequence of encouraging companies to keep their foreign generated profits outside the U.S. As a result, it can be more appealing for large, multi-national firms to expand production overseas.
It is estimated that domestically based companies held approximately $2.5 trillion outside the U.S. as of the third quarter of 2016 according to Capital Economics, an economic research firm. It’s impossible to say how much of this money would be brought back to the U.S. if rates were cut or eliminated, but reinvesting that cash domestically could have notable economic benefits. Companies could invest in new operations, hire more workers, pay higher dividends, reduce debt, or repurchase shares.
Nothing firm yet, but an issue to watch
Specific proposals for corporate tax reform are still taking shape. The potential of these policies to have material economic or financial market implications, however, makes it an issue worth careful watching. Investors should note that changes to corporate tax laws could have a meaningful impact on their portfolios.
So in this article, I want to share 5 important reasons for real estate investors to invest in multifamily real estate as part of their overall investing plan.
#1 Easier to Finance
Although multifamily investment properties are more expensive than single-family properties, they’re generally easier to finance, all things considered.
While this may sound counterintuitive, investors need to understand that multifamily properties pose less risk for a lender, because multiple families are living under one roof.
Vacancy relating to multifamily and single-family property is just one example of how multifamily properties are less risky for lenders. A vacancy with a multifamily property has less of a negative impact than with a single-family property, because it continues to generate cash flow from rents collected from the remaining families.
#2 Quickly Grow Your Portfolio
Investors can grow their rental property portfolio more quickly with multifamily investment properties than single-family homes.
For example, the time, energy, and expense of purchasing 300 single-family properties with 300 closings can be drastically reduced by purchasing one multifamily property with 300 units. An aggressive investor can grow his portfolio quickly with a few multifamily purchases, rather than taking years to purchase individual properties.
#3 Easier Property Management
Some real estate investors with single-family homes try to self-manage their properties in order to save money, especially when they only own a few properties. Of course, this usually does not bode well for the investor or tenants, and causes major stress for both parties.
Multifamily investment properties can be easier to manage because they produce the cash flow and income to reasonably afford the staff to manage the property.
Additionally, multifamily properties can be less expensive to manage because:
- Professional management staff work full time, and possibly live, on the premises.
- Units in a multifamily property are centrally located, and not spread out over a large geographic area.
#4 More Options for Forced Appreciation
Forced appreciation occurs when an investment property increases in value as a result of actions taken by the owner.
Multifamily properties inherently have more options for owner-driven appreciation, because a small change adds value affecting multiple families, not just a single family. Also, larger multifamily properties have large common areas and community amenities that can be enhanced to add value and force appreciation.
Finally, when breaking down the numbers on a per family basis, the cost per family for the improvements of a multifamily property are often considerably less compared to a single-family home.
Common improvements to multifamily investment properties that force appreciation include:
- Improving curb appeal.
- Updating common areas and individual units.
- Adding and improving amenities.
- Adding security features, such as a gate, security guards, etc.
#5 More Cash Flow
Multifamily investment properties have a greater opportunity to generate cash flow than single-family properties, because of the reasons we’ve discussed.
Higher profits are generated by lower expenses resulting from having multiple units under one roof, when compared to single-family homes spread great distances apart. Also, multifamily properties have centralized and consistent management teams that can generate profits by lowering expenses.
Cash flow is also generated with multifamily properties by consistently forcing appreciation, which results in higher rents, higher profits, and a stronger balance sheet.
While it is possible to buy and/or sell a commercial property yourself, a good Commercial Broker is often a great source of information.
A Commercial Broker is valuable to the Buyer and the Seller in a real estate transaction.
FOR THE BUYER
Buyers often fear that using a Commercial Broker will require they pay a fee. Generally (but not always) it is the Seller who pays the sale commission. Another frequent myth is that the Buyer can find a better deal by purchasing “For Sale by Owner” properties because the Seller is avoiding the Broker’s commission. However, in many cases, the selling price of the property ends up being equal or higher than those listed by Commercial Brokers.
Commercial Brokers can:
- Help determine an approximate price range
- Refer you to a lender with financing options best suited to your needs
- Provide access to many resource
- Information on a broader supply thru their resources including sources not available to the public
- Provide a market analysis
- Use their experience in negotiating
- Follow up on all of the contract details and closing process
FOR THE SELLER
When selling a property, the focus should be on:
- Getting the best price
- Selling the property with the least amount of hassle
Commercial Brokers can:
- Provide up-to-date information on what is happening in the real estate market, including financing changes and competing properties
- Serve as your marketing coordinator
- Suggest repairs to market for the highest and best price
- Providing access to Commercial Listing Services
- Marketing to other Commercial Brokers
- Pre-screen and show your property to qualified Buyers
- Guide the transaction to a successful close
HOW TO QUALIFY THE RIGHT COMMERCIAL BROKER FOR YOU
Some of the questions that can help you decide are:
- How will you keep us informed on the progress of the Sale?
- Where do you feel that your strengths lie?
- How did you arrive at the suggested listing price?
- What is your marketing plan?
- Can you give me references of past clients?
- How long have you been practicing Commercial Real Estate?
- Are you a full time Broker?
- Are you an investor yourself?
- How many sales did you have last year?
- How many Buyers/Sellers are you currently working with now?
- How “available” do you make yourself?
- How does someone contact you?
- Are you familiar with the type of property involved?
- What is the average transaction that you did last year?