No Comments

Build Your Exit Strategy in 3 Simple Steps

Build Your Exit Strategy in 3 Simple Steps

Real estate investing is generally a short-term proposition, in the big scheme of things, and an investor needs a way to get out of every single investment. The plan for unloading a property is called an exit strategy, and every good exit strategy has three essential elements that make it work to build your portfolio.

Options

Exit strategies can take the form of wholesale, a renovation (or flip), rental (or buy and hold), or a lease (where a renter has the option to buy). Other options include liquidating the investment entity that holds the title and refinance, but we’re looking at clean breaks in this instance for investors who want to keep on investing. If you can leave more than one option on the table, do it.

Triggers

Obviously, wholesale doesn’t involve an actual purchase and doesn’t require a trigger. A trigger is the point at which the exit strategy comes into play. For a flip, it may be completion of specific renovations or meeting a budget ceiling. For a rental, it may be a change in the market or hitting a specific equity point. Whatever your exit trigger, stick to it.

Timeline

Timelines can be triggers, and vice-versa, but can also determine the nature of an exit strategy. An overall portfolio timeline, which lays out an investment plan that includes growth in stages, can determine which properties appeal to a buyer. As an example, an investor who plans to flip single-family homes for three years wouldn’t buy a property with a six-month flip timeline at 2 years and 10 months into the investment timeline. Some investors may want to maintain more flexibility than these elements provide. It’s a good idea to include flexibility within your exit strategy options rather than to give yourself an opportunity to let emotion lead your actions. Within the investment portfolio, after all, a single property and its disposal can make a huge impact that shouldn’t be left to chance.

Whether you’re implementing your investment exit strategy, or just starting to look into property investment, Class A Management has experts who want to help you develop a strategy and grow your investment portfolio. Call us today at 817-295-5959 or e-mail, info@classamgmt.com.

No Comments

How Sellers Can Win in a Buyer’s Market

How Sellers Can Win in a Buyer's Market

When you’re selling a property in any market, there are a few things you can do to play up your property’s positives and attract just the right buyers. It’s all about knowing what the buyers want and catering to their needs.

Be Sensible With Upgrades

First, let’s take a look at what buyers don’t want. People don’t mind music from the 1990s, but they also don’t want their homes look like they still live in the ’90s. Buyers don’t have to have stainless steel appliances and granite countertops, as long as the appliances are new. Dated, dark kitchens can bring down a selling price significantly. The best way to sell that 1989 brick ranch is to update and modernize. Also, if the property you’re trying to sell has a swimming pool, consider carefully about whether filling in the pool may be a wise idea to speed the sale of the home. That may seem drastic, but a swimming pool even in the best location typically only adds 8 percent of the value of the home, but it adds loads of maintenance and safety concerns. In some locations (near large bodies of water or in extreme cold-weather climates), a swimming pool can even lower the value of your property.

Make a Great First Impression

So, what do buyers really want? Think, “immediate gratification.” Buyers want home that is move-in ready. First-time home buyers, in particular, want updates and amenities that give a home great curb appeal and lots of character. They want to feel at-home from the minute they drive up and first see the house. They’re willing to give a little when it comes to commute time, but they won’t budge on updated kitchens and baths. Give them the updates and add some landscaping to that list, and there’s a good chance that your property will be one of the hottest properties in your local market.

Whether you’re implementing your investment exit strategy, or just starting to look into property investment, Class A Management has experts who want to help you develop a strategy and grow your investment portfolio. Call us today at 817-295-5959 or e-mail, info@classamgmt.com.

No Comments

Understanding Multifamily Classifications

Multifamily Classification

New to property investing, ownership or management? One thing you’ve likely picked up on is the rating of multifamily properties according to ‘classes.’ In other words, referring to properties as “class A”, “class B”, or “class C.” Doing so allows for the establishment of set standards and acceptable rental rates for each.

Here, we take a look at the standards defined within each class, as well as the property type you should consider for your investment dollar.

Class A: These properties are the best of the best. They are typically new properties, but do not have to be in they meet other quality standards. They are well designed and use the best quality materials and construction processes. They are also well maintained and well-managed, making them highly desirable to tenants, and capable of commanding the highest rent rate levels.

Class B: While an older property can qualify as a Class A, these properties are likely between 10 and 50 years old. They are built with average materials and construction processes. Management does a good job with the property, but not to the level of a Class A, and is considered status quo. They are functional, useful, and typically in-demand dependent upon the community demographic. Yet, there is not really anything unique or special about them.

Class C: The tenants who choose to live in a Class C property are typically most concerned with affordability. They don’t mind the older age of the buildings, or that the construction and materials used to build them are below average. Systems such as electrical and HVAC are average-to-poor as is management.

For Your Dollar

Many investors automatically think purchasing a Class A is the best route. Better property = greater demand and more money. This, however, isn’t always the case. Our recommended route, instead, is to look for the Class B property that can be enhanced to offer the appeal of a Class A property. There’s less outlay in the beginning, but with just as much potential.

Here’s how:

  1. The construction and materials are already good, but it will require a thorough look at how to improve where needed. How old is the roof? Does the drywall need to be addressed? Is there a better “flow” to the individual units that would improve the appeal? How about the addition of a clubhouse or fitness center? You get the idea; and once it’s decided which projects will be completed, it’s necessary to do it with the best quality materials and construction.
  2. Upgrades are the key to separation between the classes. Take a look at Class A properties in the community and see what they have chosen to offer. Make a list and then get yourself access to a good wholesaler of discount, but high quality, products. This might include bathroom fixtures, lighting, blinds, carpeting or hard woods, countertops, and a wide variety of kitchen upgrades.
  3. Get a management company who knows what they’re doing and will not only help you get everything completed on points #1 and #2, but can also manage everything about it from marketing, to applicant screening, to everyday business.

We know the importance of creating appeal regardless of property class and can help take your property to the next level. Call the professionals at Class A Management at 817-295-5959 or send us an email to info@classamanagement.com.

No Comments

Why Your Marketing Needs a Floorplan

A picture may be worth a thousand words, but in 2D, prospective renters will be challenged to get the full depth of what the property or unit has to offer. And, while videos are highly recommended for their “touring” ability, it’s the good old fashioned floorplan that gives prospects full scope of what they’re looking for.

To get the most from your floorplans, they should:

  • Be realistic and to scale
  • Contain all rooms and features
  • Include square footage – demonstrating wall lengths, etc.
  • Be constructed for each and every option

The best news is that you don’t have to hunt down a designer with CAD skills. These days, floorplans, like everything else, have been taken online. Now, with a simple Google search, you can find a number of apps and services that either provide floorplans at reasonable costs, or allow you to create your own. Here are some of our top recommendations:

  1. Floorplanner – This is our personal favorite and the one we’ve used on a number of occasions. For a simple pricing structure, you can create your own full-color plans online, and then download for immediate use.
  2. Room Sketcher – With this option, you can create your own or use their service to create one for you. Pricing is a bit more than Floorplanner and uses credits instead of per-plan.
  3. Gliffy – This easy-to-use online platform has simplified and affordable pricing with the ability to tap into unlimited storage space and unlimited diagrams every month. Its primary limitation in comparison with aforementioned products/services is in its shape options, which are elementary and not custom to floorplans (kitchens, TV nooks, bookcases), but diagrams in general.

If the thought of creating one more marketing tool has you feeling woozy, leave the worry to us. Call Class A Management today at 817-295-5959, or send us an email to info@classamgmt.com .

No Comments

7 Lease Violations You Can Unknowingly Commit

As a renter, lease violations are easy to commit if you haven’t thoroughly read your lease agreement. How often have you taken the time to thoroughly read through a lease before you sign it? If you’re like most tenants, you probably skim the text for dollar signs, but otherwise assume you won’t violate any terms of the lease because you’re a generally good person.

Yet, in so doing, you’re legally binding yourself to an agreement you may not fully understand. This is the situation many renters find themselves in, especially when it comes to lease violations they didn’t even know existed. Here are 7 examples.

  1. You bought a new car or borrowed your friend’s car while yours is in the shop. Most leases require tenants to register all vehicles with the leasing office. Neglecting to do so is a violation and can result in a fine or towing. Yes, even when just borrowing.
  2. You support your favorite candidate with a campaign sign in your window. While political opinions aren’t against the rules, going against property uniformity may be. Look closely and you may find that your property has a rule against placing anything in or around the unit that keeps it from looking like others.
  3. You decide to grill steaks out on the patio. If using an electric grill, you’re probably okay. But, open flames are a big no-no near building or overhangs and can result in fines or worse due to the risk of fire.
  4. You leave town for a couple of weeks for a much-needed vacation. Indignant that your property may have a rule against getting away? Consider it a way to protect yourself and your belongings. Landlords will most often want to know if you’ll be away for extended periods of time. They will be more alert to your unit, watching it while you’re away. You may have to sign an agreement that he/she can enter while you’re away in the event of an emergency.
  5. You let a friend spend the night…with her new kitten. If your property has a “no pets” policy, it covers even one-night stays. You could wind up facing a hefty fine even with the best of intentions.
  6. You let a friend spend the night…for the whole month while she’s searching for her own apartment. You must be the nicest person on Earth. Yet, your lease likely specifies how long a guest is considered such before they are considered a tenant who needs to sign the lease and pay additional rent.
  7. You find a great bundle and sign up for satellite TV. Attaching a dish to the owner’s property is usually not allowed, and it’s not the satellite company’s job to know it. Imagine having to pay to have the dish removed due to a lease violation, then being stuck in a contract for satellite TV you can’t even watch. Check your lease terms.

Avoid Lease Violations With Clear-Cut Lease Agreements

Class A Management has a number of properties throughout Texas and the surrounding areas. If you live in one of our properties and have a question about the terms of your lease, contact your apartment manager or login to your tenant account to send a question. If you’re looking for a new apartment rental, check out our apartments for rent in Texas and Oklahoma.