A Sampling of Past CJREI Meetings
Renting Through Airbnb
An increasingly popular portal, Airbnb allows property owners to rent out space on a short-term basis, whether a single room or an entire house. This can be a great way to attract people to your property and can be especially interesting for those with homes along the Shore who may be considering Summer rentals.
Before jumping in however it's worth considering some of logistics such as checking people in, cleaning and turnover costs, as well as local ordinances and legalities. Thus we brought in a guest speaker with experience in these issues to discuss these and other issues such as what makes for a desirable and profitable location, the benefits of working with Airbnb when it comes to accounting, and tricks for securing quality renters.
Guest Speaker: Nancy Nearman
Real Estate Investing 101
All great investors started somewhere and like any other industry, real estate investing is full of its own lingo. There are certain terms and definitions along with common abbreviations that are important for all current and prospective real estate investors to be familiar with. In addition, this meeting covered eight common real estate investment strategies or niches along with an outline of specific, concrete steps that someone should be aware of and engage in at the early stages of their investment career such as forming a team and creating a business entity.
Hard Money Loans
Hard money loans allow real estate investors to get into more deals by leveraging another person's capital. They are typically intended for short term investments and carry higher than average interest rates than traditional lenders. Hard money lenders also qualify borrowers based more on the deal than their personal credit. Funds may also be available for construction costs as well as for property acquisition.
This month's speakers are from First Equity Funding, a hard money lender located in nearby Sea Girt, NJ. Their combined experience in investment funding and in investing on a personal level makes them uniquely informed about the uniqueness of the Monmouth County and Central New Jersey market.
Guest Speakers: Christian Pepe & Jarrod Fennimore
Many investors like the idea of having some "buy and hold" properties in their portfolio as a way of gaining some monthly cash flow. However having rental properties also means that you typically become a landlord (assuming that you haven't hired a property manager), which can be confusing at times and present itself with some legal challenges.
At this meeting we took a chronological look at the landlording experience from looking through tenant applications and avoiding discrimination, to pet policies and how service animals are viewed, along with when you can and how to go about legally evicting a tenant.
Guest Speaker: Dean Semer, Esq
Foreclosure sales (also known as Sheriff's Sales) occur when a lender, typically a bank, pursues their legal rights to foreclosure on a property. This forced sale is done in order that the lender be able to recoup their losses on a defaulted loan. Many investors have taken this as an opportunity to purchase property below market value.
Purchasing property at a Sheriff's Sale may sound exciting, but it can also be risky. CJREI put together this meeting to explore what happens at a Sheriff's Sale, how these sales are run in Monmouth County, how to prepare for a sale if you're interested in bidding, and some scenarios to be wary of.
Mortgage loans are major transactions and it pays to be prepared. It's important to know how to present yourself as a serious applicant. Show your loan officer that you know what you're doing and make a positive first impression. One of the best ways to do that is to have an understanding of what the loan officer is looking for. In other words, put yourself in their shoes and give them what they need in order to say yes.
Loans comes in many different shapes and sizes including residential and commercial, high and low LTV, good credit/bad credit, etc. But the only loan you should be after is an approved loan.
Guest Speaker: Joe Scorese
Jan 2016: Short Sales
According to CCN, in 2012 short sales accounted for 32% of all home sales. Thus it's not surprising that many real estate investors got involved in them. Short sales occur when a homeowner's debt exceeds the home's value. In other words, someone owes more than they can sell their home for.
Short sales involve both a buyer and seller, but must also be approved of by the lender (usually a bank). Banks are not always all that eager to allow short sales to go through, as it means that they will have to take a loss. That loss is basically the difference between the home's selling price and the balance on the mortgage loan. Still there are opportunities for investors to earn a profit in facilitating short sales.
Guest Speaker: Eric Einholz
Dec 2015: Tax Overages
Tax overages come into play when a homeowner fails to pay their property taxes, their home is foreclosed upon, the winning bidder at the foreclosure auction bids more than the amount owed afer all lienholders are paid, and there remains cash left over. Most homeowners do not know that they're entitled to this money and since they've likely already moved, they can be difficult to track down.
This provides an opportunity for an investor, wherein if you can identify an overage and find the individual or individuals that the overage is owed to, you can receive a portion of their overage when you help the now former homeowner(s) get their money back.
Oct 2015: Tenant Screening
Guest speaker, Joe Neilson found himself a 61 year old, without a job or pension. Refusing to go back to corporate America, he spent the next seven years building a portfolio of over 60 homes with an income in excess of $22,000 a month and over $4 million in equity.
Joe takes a thorough and uncommon approach to finding quality tenants and although he serves as his own property manager rarely receives calls from those tenants because of his system. He also has a particular interest in 4-5 bedroom properties and student housing.
Guest Speaker: Joe Neilson
Sept 2015: Tax Liens
Tax liens have been used both to earn a high rate of return in the form of interest and to obtain properties at a tremendous discount. Depending on your objectives it's important to keep in mind the difference between tax lien certificates and tax deeds.
When investing in tax liens or tax deeds you'll want to understand the auction process, which is sometimes held in person and other times held online. But before you place your bid, you'll also want to do some due diligence. Even if you can't get inside of a house you have your eyes on, there are steps that you can take to protect your investment.
Guest Speaker: Joanne Musa
June 2015: Crowdfunding
Crowdfunding is a way of raising money with small investments from a lot of different people as opposed to finding a single large investment from one person or place. With crowdfunding you can get involved in larger, more complex, and often more profitable deals that might have otherwise never been made available to you.
There are a number of legal issues that someone getting involved in crowdfunding must be aware of and consider, including changes based on the JOBS Act. These changes are opening up opportunities to lower income and smaller investors who previously were not legally permitted to be involved in some of the most profitable investment opportunities out there.
Guest Speaker: Syd Chase