Table of Contents
Acknowledgments xiii
Chapter 1
A Different Approach that Creates Huge Real Estate Profits 1
How This Book is Different 2
Chapter 2
Why Invest in Apartments? 9
Apartments Set You Free 10
Let’s Explode the No-Money-Down Myth 13
More Myths about Apartment Investing 14
This is Not a Myth, This is Reality: They’ll Laugh First, and You’ll Laugh Last 18
Opportunity is Everywhere 20
A Brief Overview of the Different Kinds of Multi-Family Housing 21
Burned-Out Landlords are Great Sources for Deals 23
In the Next Chapter 24
Chapter 3
An Overview of How to Get Your First Deal 25
The 14 Steps to Acquiring a Property 26
1. Decide What Size Buildings You Want to Start Investing In 26
2. Decide Where You Want to Invest 27
3. Determine What Types of Multi-Family Properties You’ll Buy 29
4. Put Your Team in Place 30
5. Market to Get Your Deal 31
6. Analyze the Deals 31
7. Create the Offer or Letter of Intent 32
8. Negotiate the Deal 33
9. Create and Sign the Purchase-and-Sale Agreement 33
10. Do Your Due Diligence 35
11. Renegotiate the Deal 37
12. Start Your Financing 38
13. Choose a Management Company 40
14. Close the Deal 41
Option 1: Buy and Flip 42
Option 2: Buy and Hold 46
Option 3: Buy, Reposition, and Sell 47
In the Next Chapter 53
Chapter 4
Where to Find Enormous Profits from Repositioning 55
It’s All about Raising the NOI 57
Problems to Look For 58
Making a Change 60
Then there’s the Perception 61
Send the Message that Change is Happening 62
The Property Cycle 64
A Common Repositioning Mistake 67
The Two Main Reasons Why Repositions Fail 68
The City Cycle 69
Revitalization Zones 70
In the Next Chapter 73
Chapter 5
How to Attract Deals to You with a Minimum of Time and Money 75
Principle #1: Make It Easy to Do Business with You 75
Principle #2: Do What You Say You Will Do 77
Principle #3: Don’t Be a Pain in the Butt 78
Inexpensive Deal-Attraction Techniques 79
Go Directly to the Owners 84
Other Techniques that Cost Little but Bring Big Results 88
Go After the Don’t Wanters 90
Cruising for Dollars 91
Another Way to Cruise 92
Oh So Many Ways to Get Deals 93
Don’t Make These Three Mistakes 93
In the Next Chapter 95
Chapter 6
Separating the Gold Mines from the Land Mines 97
The Power of Negative Thinking 97
Profiting from Value Plays 98
How to Find—and Profit from—Burned-Out Landlords 99
Profiting from Management Nightmares 100
Properties that Need Repair: Where the Gold is 101
Avoid Certain Repairs 102
Solving High-Vacancy Problems—Once and for All 104
How I Filled 400 Units 105
How to Raise Rents at Takeover and Not Lose Your Tenants 106
How to Raise Rents Steadily While Keeping Your Tenants 107
When It Makes Sense to Clean House 109
In the Next Chapter 111
Chapter 7
How to Analyze a Property Using the Fewest Numbers for the Most Profit 113
Back to the Cap Rate 114
Analyzing Your First Deal 116
How Do We Know It Really is a Deal? 118
Current Management: When to Hold ’Em and When to Fold ’Em 119
What Matters the Very Most to Tenants 122
Is Someone Putting Lipstick on a Pig? 123
Let’s Look Inside 125
Market Area Inspection 126
The Sidewalk Tells the Story 128
But What If My Numbers are Off—129
Don’t Get Depressed on Me! 129
In the Next Chapter 130
Chapter 8
Where to Get the Money for All Your Deals 131
Why Banks Like Apartments 132
Three Flavors of Lenders 133
Conduits 136
When to Use a Mortgage Broker 136
Putting Your Package Together 137
How to Get Partners to Fund Your Deals 138
The Big, Profitable World of Private Money 139
Debt versus Equity Deals 143
In the Next Chapter 145
Chapter 9
Twelve Negotiating Secrets of the Pros 147
1. Be Prepared 147
2. Understand the Other Party’s Needs 149
3. Set Your Goals and Rank Them in Order of Priority 150
4. Decide What Your Strike Price is and Don’t Exceed It 152
5. Anticipate the Next Move and Don’t Avoid Haggling 153
6. Remain Calm and Unemotional 154
7. Build Rapport and Trust 155
8. Create a Win/Win Environment 155
9. Remain Flexible and Open to Options 156
10. When the Seller Speaks, Listen Closely and Delay Your Response 157
11. Demonstrate Empathy 158
12. Silence is Golden 158
In the Next Chapter 160
Chapter 10
The 80/20 Rule of Rehabbing 161
Exterior Improvements 162
Interior Improvements 166
How to Get the Most from Insurance Claims 170
Dealing with Contractors 171
In the Next Chapter 176
Chapter 11
How to Avoid Being a Landlord: Secrets to Hiring Great Property Managers 177
How to Find the Best Managers 179
What You Should Expect to Pay 182
Repositioning Managers: A Special Breed 187
How to Get Contractors to Beg You for Business 190
Managing the Manager: Reports You Should Get Regularly 191
You’re an Asset Manager 194
In the Next Chapter 194
Chapter 12
Reselling for Huge Profits 195
Return on Equity 196
Is Your Property Stabilized? 198
Get Your Financial House in Order 199
Get Your Physical House in Order 201
Time to Tell the World 202
Your Obligations as a Seller 205
In the Next Chapter 205
Chapter 13
The 10 Biggest Mistakes Repositioners Make, and How to Avoid Them 207
Mistake #1: Running Out of Money During a Repositioning 207
Mistake #2: Leasing Up Too Soon 210
Mistake #3: Not Using Licensed Contractors 211
Mistake #4: Not Getting Three Bids 212
Mistake #5: Assuming the Lowest Bid is the Best Bid 213
Mistake #6: Not Going after Private Money Sooner 214
Mistake #7: Not Marketing Consistently 215
Mistake #8: Discriminating 215
Mistake #9: Not Having Signing Authority on Bank Accounts 216
Mistake #10: Buying a Property with Environmental Issues 217
Mistake #11: Inspecting the Property Yourself 218
Mistake #12: Managing the Property Yourself 219
Mistake #13: Using Fill-in-the-Blank Legal Forms 219
Mistake #14: Dealing with Tenants 220
Mistake #15: Thinking You Know It All 221
In the Next Chapter 222
Chapter 14
Creating Your Success Team 223
Real Estate Brokers 224
The Property Manager 225
Attorneys 227
Property Inspector 229
Appraisers 229
Lender 230
Contractors 230
Insurance Agent 231
Demographer 232
1031 Specialists 233
Accountant 235
In the Next Chapter 236
Chapter 15
Next Steps on Your Road to Wealth 237
How Impatient are You? 239
The Absolute Shortest Shortcut to Real Estate Wealth 240
Free Bonus Materials for You 241
Index 243
