Investing in Income Properties

Transcription

1 Investing in Income Properties 2 nd Edition Kenneth D. Rosen

2 Introduction... 1 Part One The Basics... 3 Chapter 1 Why Commercial Real Estate?... 5 Learning Objectives... 5 Introduction... 5 Real Value, Real Ownership, Real Estate... 5 The Control Factor... 6 Financing Options... 7 The Leverage Edge... 7 Tax Benefits... 7 Access to Information... 8 Easy Troubleshooting... 8 Overcoming Fear... 8 No-Money-to-Invest Fear... 9 Fear of Inexperience... 9 Price Tag Fear... 9 Fear of Management and Leasing... 9 Fear of an Economic Recession... 9 Fear of Risk Lack-of-Information Fear The Bottom Line Review Questions Review Answers Chapter 2 Real Estate Learning Objectives Introduction What Is Real Estate? Types of Income Properties What Real Estate Can Do for You The Search Begins Purchase and Sale Contracts Closing Education Real Estate Lingo The Bottom Line Review Questions Review Answers Chapter 3 Assembling the Team Learning Objectives Introduction The Broker Value of the Broker From Beginning to End Should You Use Only One Broker? Going It on Your Own The Attorney Value of the Attorney The Attorney s Fee The Certified Public Accountant Setting Up Your Accounting System Value of the CPA... 27

3 Accounting Fees Involvement of Other Professionals The Bottom Line Review Questions Review Answers Chapter 4 Getting the Money Learning Objectives Introduction Obtaining a Home Equity Loan IRA Accounts Cash Value of Life Insurance Customized Creativity The Use of Options OPM Present Sacrifice for Future Benefits The Moped Story The Bottom Line Review Questions Review Answers Part Two The Big Six Formula Chapter 5 Location: Planting Investment Roots Learning Objectives Introduction Evaluating Locations Type A Locations Type B Locations Type C Locations Industrial Properties Short-Term Gains and Declines Long-Term Gains and Declines The Bottom Line Review Questions Review Answers Chapter 6 Building Quality and Design Efficiency: Ensuring the Long-Term Viability of Your Portfolio Learning Objectives Introduction Class A Buildings Class B Buildings Class C Buildings Class B Apartment Buildings Class B Retail Strip Store Centers Class B Office Buildings Industrial Properties The Bottom Line Review Questions Review Answers Chapter 7 Tenant Profile: The Right Fit Learning Objectives Introduction Factor No. 1: Rental Rate and Terms Factor No. 2: Gross or Net Lease Factor No. 3: Size of Units ii

4 Factor No. 4: Impact of a National Tenant First Scenario Second Scenario Factor No. 5: Right of First Refusal Factor No. 6: Potential Condo Buyers Factor No. 7: Parking Considerations Factor No. 8: Undesirable Mix of Tenants The Bottom Line Review Questions Review Answers Chapter 8 Upside: Maximizing the Return on Your Holdings Learning Objectives Introduction Tenants Can Set the Price of a Building Upside Strategies Converting Buildings from One Use to Another Creative Thinking Expansion Potential Mismanaged Buildings Executive Centers and Coworking Centers Turnaround Buildings Let the Building Talk to You The Bottom Line Review Questions Review Answers Chapter 9 Financing: Choosing the Fiscal Formula That Matches Your Goals Learning Objectives Introduction Before You Begin: Your Credit Report Financing Components and Dynamics Interest Rates Loan-to-Value (LTV) Ratio Debt Service Coverage (DSC) Ratio Balloon Mortgage Loan Points Prepayment Penalties Assumption Appraisal The Advantages of Dealing with Local Banks Ideal Financing Getting Your Loan Approved Insurance Companies Private Lenders The Romance of Leverage Infinite Return All-Cash Buyers Burn the Mortgage Quickly Mortgage Brokers Healthy versus Unhealthy Debt The Bottom Line Review Questions Review Answers Chapter 10 Price: Looking Beyond the Price Tag to See the Big Picture Learning Objectives Introduction The Price-Is-Too-High Syndrome iii

5 The Louisiana Purchase You Got Here Too Late Young Man Things to Know Length of Ownership Motivation Decision-Maker Seller Financing Quick All-Cash Deal Capitalization Rates Knowing the Numbers The Bottom Line Review Questions Review Answers Chapter 11 Anatomy of a Big Six Deal Learning Objectives Introduction Adam s Manor The Sellers Listing the Property The Buyer Setting the Stage The Buyers Strategy Sealing the Deal Brokers Meet the Sellers Five Years Later Now What? The Bottom Line Review Questions Review Answers Part Three Moving Forward Chapter 12 Management and Leasing to Enhance Your Investment Learning Objectives Introduction Managing Apartment Buildings Managing Small Retail Centers Managing Small Bay Warehouses Managing Office Buildings The Bottom Line Review Questions Review Answers Chapter 13 Condo Conversions: Big Money in Converting Rental Apartment Buildings Learning Objectives Introduction My Start in Condo Conversions Criteria for Condominium Conversions Location Architectural Design Apartment Mix Privacy and Open Space Reasonable Maintenance Costs Seclusion Critiquing the Units Existing Tenant Profile Existing Leases iv

6 Purchase Price Announcing the Conversion How the Tenant Incentive Program (TIP) Works Announcing the Improvement Program Handling the Unsold Units Legal Requirements Bradford Terrace: A Mini Case Study The Bottom Line Review Questions Review Answers Chapter 14 One Good Real Estate Investment is Worth a Lifetime of Labor Learning Objectives Introduction Love at First Sight by Tony DeRosa If I Never Made Another Deal by Cliff Suchman You Can Never Know Too Much by Anthony Dilweg and Andy Roberts I Made It in Buying by Kenneth D. Rosen The Bottom Line Review Questions Review Answers Glossary Index v