Month: May 2017

17 May 2017

What’s Most Important

Somedays you are faced with what’s really important.

Yesterday I went with my brother to get chemo.  He was diagnosed with a stage 4 colorectal cancer and has been dealing with this challenge for over 2 years.  [If you or someone you know has been diagnosed with cancer, you should check out his inspirational website – Living For Hope.]

Cancer became the new normal in our family in February 2015 when he was first diagnosed, but yesterday it hit me again what’s important and why I’m doing what I do.

When you’re faced with mortality you understand that ultimately money is not important.  Having the most green houses or red hotels is not important.  Working the hardest is not important.

What is important is love, your family (those you are born to and those you choose), your health, and living fully.  For me “living fully” means that you can laugh, play, spend quality time with the people you love, and do what you were put on this planet to do.

I invest in real estate because it provides me the time and peace of mind to be more present with my family. Most of my income from real estate is passive, so it provides me time freedom.  I love that in the middle of a Wednesday I could be with my brother as he received chemo.

I invest in real estate because I love it.  I’m passionate about it.  I love to find properties and renovate properties.  I love improving communities.  I love how it helps create wealth for my family and others.  I love reading about it, learning about it, and teaching about it.  I love other real estate investors.  I especially love women real estate investors.  I really, really love real estate.  Could you tell?

When I am doing this (investing and doing Real Estate Investor Goddesses), I feel like I’m doing what I was born to do.  When I am doing this, I feel like I am living fully.

The money and properties is just bonus.  The rest of it is my why.

So why are you here?  What’s important to you?  Are you living fully?  If not, don’t let it be a cancer diagnosis that pushes you to change.  Do it now.

Believing in Your Magic,
Monick

P.S. Make sure to get your tickets for the Step Into Your Magical Self – Transformational Creative Women’s Retreat happening on Saturday May 27, from 10 – 6 p.m. in Santa Fe Springs, CA.  This is a day that will help you to live your fullest, most magical life.

The day will feature experiential talks, transformational art projects, food, wine tasting, yoga, sisterhood, and more.  We have tons of great sponsors for this event, so we are able to offer the day including food, drinks, art materials for only $97 for 1 or $175 for two!  Space is limited so get your tickets today  Join us!

17 May 2017

It’s a Class Thing – Understanding Property Classes

We get on the phone every week with the property managers from our buildings in Albuquerque.  We are never quite sure what we are going to hear.

There was the call about a drive-by shooting that thankfully didn’t hit anybody, the call about the fire in one of our townhouses that was a result of a love spat gone very, very bad, the call about the 10 units (out of 51) that we were going to have to evict in one month because they hadn’t been paying rent,  the call about the ex-con who threatened our property manager with a gun because he wasn’t happy about said eviction, the call about our elderly tenant who can’t pay rent because he thought a Nigerian Prince was really going to send him $10,000,000 and he sent a bank check equaling more than 2 months of his rent, and so much more.

This is what it’s like dealing with a Class C building.  [If you don’t know what that is yet, keep reading] .

Lately though the calls have been different.  There was the call when in one week several tenants from each building stopped our manager to tell her how happy they were about the changes and how they now finally felt safe enough to come out of their apartments and/or let their kids play outside in the courtyard, the call where several tenants who had been planning to leave decided to renew their lease, the call where people are offering to pay extra month’s rents to get a remodeled apartment in the building now, the call when we found out our maintenance man decided to move into one building and our property manager’s girlfriend is moving into the other, etc.

The calls are starting to feel good.  Through our management changes and targeted rehabs, we are transitioning our Class C buildings into Class B.

Often when you are looking for investment property, you will hear people talk about the properties in terms of class – Class A, B, C, or D.  Do you want to know what that means?  When you’re investing it’s important to know.  Class designations are shorthand for what you can expect with a property’s condition, location, and tenant demographic.

Here is a brief description of each property class:

Class A Properties: 

These properties represent the highest quality buildings in their market and area.  They are generally newer properties built within the last 10-15 years and have modern amenities (granite countertops, hardwood floors, etc.), high-income earning tenants and low vacancy rates.  Class A buildings are located in prime market locations and are typically professionally managed.  Additionally, they usually demand the highest rent rates with little or no deferred maintenance issues. These are stable investments, but tend to provide lower cash flow.

Class B Properties:

Class B investments are generally older than Class A (15-30 years).  They tend to have relatively recent upgrades and modern appliances, amenities, etc. but may lack some of the “top-notch” amenities of a Class A property.  Rental incomes in Class B properties tends to be lower than in a Class A, and you can expect higher maintenance costs due to the age of the property.

Mostly, these buildings are well maintained and many investors see them as a “value-add” investment opportunity because through renovation and common area improvements, the property can be upgraded to Class A or a Class B+.  Buyers are generally able to acquire these properties at a higher Cap Rate than a comparable Class A property because these properties are viewed as riskier than Class A.

Class C Properties: 

Class C properties are typically more than 30 years old and located in less-than-desirable locations.  These properties are generally in need of substantial renovations, including updating the building infrastructure to bring it up to date and possibly to code as well.

Class C buildings tend to have the lowest rental rates in a market with other Class A or Class B properties. Some Class C properties need significant repositioning.

Class D Properties: 

Class D properties are old like a Class C, but with far more neglect.  It’s possible that a Class D building is uninhabitable.  Class D buildings are generally extremely cheap, but it can be very difficult and sometimes even dangerous to turn those buildings around and get good tenants in place

***
When you’re investing, it’s important to be know about building class.  Also, be mindful that brokers will pretty much always “grade up.”  So they’ll market a Class B as a Class A, a Class C as a Class B, etc.  Do your homework and really check it out.

Also, be mindful of the fact that each class level down requires a whole new level of management.  The lower the class, the more intensive property management will be required to up-level the building.  If you have the constitution and can weather the storms, then repositioning buildings to take them up a class can be very lucrative, gratifying and fun.

Share in the comments below what class of building you’re looking to invest in/ have invested in.

04 May 2017

Book Review: Worth It – Your Life, Your Money, Your Terms

I’m a voracious learner and am always reading.  I probably read over 50 books per year.  I especially love reading about investing and money – especially with regards to women.  So when I found out about Amanda Steinberg’s book Worth It – Your Life, Your Money, Your Terms, I of course picked it up.

Steinberg is the founder and CEO of DailyWorth.com—a financial site for women with more than one million subscribers.  The book is about the relationship between women, self-worth, and money, and how women can view money as a source of personal power and freedom and live life on their terms.

The book is imminently readable, and I recommend it.  It’s particularly good for women who need to deal with their stories around money and their money mindset.  It’s also great in it’s focus on what’s really important: your net worth.  Creating true financial abundance is not just about how much you make or how much you spend, it’s about how you can grow your net worth.  Lastly, it provides a very doable means to budget and handle your money – something that’s very necessary since 70% of people can’t budget at all.  So all in all, Worth It is worth it.

HOWEVER… I have one big issue with this book that I have about most books about investing. When the book talks about investing it really only talks about the stock market.  When Steinberg suggests “diversifying” your portfolio, she talks about buying a mix of stocks and bonds depending on your age.

In my opinion that is not diverse at all.  When the market crashed in 2008, stocks AND bonds crashed.  People who were only invested in the market got seriously screwed.  Having all your investments in paper investments can put a person at serious risk.  To have truly diversified investments, it’s important to have other types of assets.

And in my honest opinion, there’s no better asset than cash flowing real estate.  It pays you cash every month, it provides many tax benefits (even though you make more money, you often pay less in taxes), and it won’t go bankrupt and disappear on you like a company whose stocks you own can.  It’s the best way to significantly grow your net worth.

As President Franklin D. Roosevelt said:

“Real estate cannot be lost or stolen, nor can it be carried away.  Purchased with common sense, paid for in full and managed with reasonable care, it is about the safest investment in the world.”

That was true when he said it back in the 1930s and it’s still true today.

Steinberg does talk about real estate in the book, but she generally only talks about real estate in the context of buying your own home.  For those who have read Robert Kiyosaki’s Rich Dad, Poor Dad and understand the true difference between assets and liabilities, you’ll understand that, regardless of what the bank says, your own home is not an asset.  An asset is something that pays you back.  A home is something that you pay to live in.

Generally real estate will appreciate over time so when you sell your home, chances are you’ll have made some money on it.  In the meantime though, every month your home results in a net loss of money.  So unless you do something like rent out parts of your home through AirBnB or you purchase a multi-unit property where you live in one unit and rent out the others, your home is not an asset.

Steinberg does understand that your home is not a great investment, and counsels women to think really seriously before investing a hunk of cash in your own home.   She also gives the similar counsel about flipping houses (something that is quite speculative and is very different from buy and hold investing of cash-flowing property).

Worth It does not otherwise talk at all about real estate investment (investing in real estate, not to live in but for a financial return) and the many ways it can help women create real wealth, financial stability and abundance in their lives.  For me, leaving out this major pillar of wealth building is a serious failing of the book.  Like I said, this is not limited to Worth It.  It’s a major failing of pretty much every book for women about money.

This is why I’ve written – The Real Estate Investor Goddess’ Handbook – Everything You Need to Know to Get Started Real Estate Investing Like a Goddess.  It’s a book that explains the why and how of real estate investment for women.  It’s coming out at the end of this month, and I’m very excited to share it with you.  Want to find out more and be first on the list to get the book with all the great free launch bonuses? If so, sign up here.


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 Monick Halm is the co-founder of Real Estate Investor Goddesses.  She is a real estate investor with over 12 years of investing experience in single family, multi-family, mobile home parks, flipping, and syndication. She is also a certified interior designer, Feng Shui expert, bestselling author, speaker, certified NLP and Money Mastery coach, and attorney.  Monick is passionate about real estate, design, and helping women to thrive.