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duggal-blog · 10 years
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Quick Guide to Asset Classes within Multifamily Assets
Class A: newer buildings that offer luxury amenities in a prime location
Class B: either older buildings (usually 20 yrs+) with luxury amenities in a prime location or a newer building in a non-prime location missing luxury amenities 
Class C: very old buildings in less than mediocre neighborhoods serving low to middle income space users 
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duggal-blog · 11 years
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Hot House Music Tracks:
I am house music lover and as I discover new tracks that I enjoy. I will be sharing it on my Tumblr page. I look forward to creating an awesome playlist of hot house and electronic musi.c 
Showtek - Slow Down (Anthem Emporium 2013) [Music Video] (by SpinninRec)
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duggal-blog · 11 years
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New Jersey Deal of the Week
Bring you unbiased Income Investment trades that you can act on in Newark and Jersey City. Enjoy and Happy investing
Ankit 
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duggal-blog · 11 years
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NJ Property Tax Relief from Sandy
New Jersey law allows for a reduction of the assessed value of property 
for tax purposes when the value depreciates following a natural disaster 
or other event that occurs during the 3 months between October 1
st and  January 1 st of the following year.  
The relevant statute, N.J.S.A. 54:4-35.1  provides that:  "When any parcel of real property contains any building or other  structure which has been destroyed, consumed by fire, demolished, or  altered in such a way that its value has materially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casualty, which depreciation of value occurred after October first in any year and before  January first of the following year, the assessor shall, upon notice thereof  being given to him by the property owner prior to January tenth of said year,  and after  examination and inquiry, determine the value of such parcel of  real  property as of said January first, and assess the same according to  such  value."
Accordingly, commercial and residential property owners have until  January 9, 2013 to request that their tax assessor revalue a damaged  property, with such new assessed value to apply as of January 1, 2013.    This is a limited opportunity for property owners to have their tax  assessments revaluated and in many cases reduced as a result of the  damages sustained from Hurricane Sandy.  
Hope everyone fared well against the storm. 
Ankit 
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duggal-blog · 11 years
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Real Estate Market Analysis System
Over the last few weeks we have discussed how to find prospective deals and how to quickly filter them quickly using the 2-50% rule.  Now that you have a few prospects potentially spread across various towns or states, the next question that you as a investor need to address is which market has a higher competitive advantage between your various prospects.
The profitability of income producing properties is highly dependent on the geographic area in which the asset is located. This becomes another filter tool. So how does one analyze an economic region/market area? The best way to analyze a market area is to complete a supply and demand study coupled with economic driver analysis.  
I.               Economic Driver Analysis
One of the best ways to identify a growing geographic market is to find markets where both economic employment is growing and profitable businesses are clustered within the geographic area. A widely accepted approach in completing the economic driver analysis is referred to as a location quotient.
[Regional Employmentindustry]/[Regional Employmenttotal] <> 1.0
[US Employmentindustry]/[US Employmenttotal]
  If the industry that is being analyzed is greater than 1.0 then that industry would be identified as a base/driver industry for the geographic area. If you are trying to decide between two or more areas, pick the area that has the greatest number of base/driver industries. This is a tedious process and needs to be completed at the metro area level but once it is done you can identify areas that have future growth prospects of employment that is a leading driver for higher real estate prices.
II.             Supply-Demand Analysis
Supply and demand drivers of each market area affect real estate investments profitability. Each asset type has different demand and supply drivers. Since my expertise lies in multifamily asset class, I will give you a demand-supply factors table that I have utilized when analyzing market areas:
Key Demand Drivers
Key Supply Drivers
Number of Households
Vacancy Rates
Size of Households
Construction in progress
Median Household Income
Foreclosures / Shadow Inventory
Affordability (Price-Rent Ratio)
Age & Combination of existing stock
The above analyses will help you filter real estate prospects by profitable market areas so that you can identify real estate investment gems within your prospects. Next week I will show you how to start using some basic real estate finance to compare between filtered real estate investment opportunities.
Until Next Week- Happy Investing Fellow Investors!
Ankit
Questions: Tweet me @Ankit_RER  
Website: www.rernj.com 
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duggal-blog · 12 years
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Find NJ Auction Deals Online!
Recently I covered the topic of how to find potential deals from the comfort of your chair. Continuing along that theme; I will be talking about s how you can find deals at upcoming real estate auctions in the Northern New Jersey market.
What is a real estate auction?
A real estate auction is an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property—most certainly including those that are nondistressed—through open cry, competitive bidding.[1]
Who can hold an auction?
Auctions can be held by both private entities such as auctioneers hired by the seller or realtors or public entities such as the sheriff, municipality, and the federal government. Each entity usually utilizes one of the following three types of auctions:
1. Minimum Bid is the lowest bid (decided by the seller prior to auction) the auctioneer will accept for a property. Once that bid is reached, the property will sell to the highest bidder.
2. Published Reserve is the lowest amount that the seller must sell a property at auction, but the bidding can start wherever the bidders choose. If the Published Reserve bid is not reached, then the seller can accept, reject or counter the highest bid.
3. Absolute Auction is where the highest bidder acquires the property, regardless of the amount. There is no reserve price below where it will not be sold. Absolute Real Estate Auctions tend to attract the highest amount of interest.[2]
Where can you find out about upcoming real estate auctions?
Private Entity Auction Sources:
The National Auctioneers Association's Web site (www.auctioneers.org) or the National Association of Realtors' Web site (www.onerealtorplace.com) lists dozens of upcoming auctions nationwide. Or, www.auctionweb.com offers an online list of affiliated real estate auctioneers. Some namesake private auctioneers that continuously hold auctions in the New Jersey market are as follows:
Williams &Williams                           http://www.williamsauction.com/
Sheldon Good & Company               http://www.sheldongood.com/
Real Estate Disposition Corp            http://www.auction.com
Hudson & Marshall                           http://www.hudsonandmarshall.com/
Max Spann                                         http://www.maxspann.com/
So subscribe to their email lists that way you can be update on the auctions that are coming in this area.
Public Entity Auction Sources:
Public entities auctioning real property can include sheriff sales, IRS sales, US Marshall sales, Treasury & IRS etc.  The major issue that I had when I first started was finding out about them without spending hours searching each entities website. So how do you find out about these auctions so that you can act upon them quickly and easily. For that you need a system and I will give you mine.
I usually break apart this auction category into two buckets: Sheriff Sales Auctions and Other Government Auctions.
Lets attack the easy one first- Other Government Auctions. There are few good websites that compile different government department upcoming auctions:
Bid4Assets                                         http://www.bid4assets.com/
GovSales                                             http://www.govsales.gov/govsales/govsales/     
CWAMS                                              http://www.cwsmarketing.com/realestate.htm
Sheriff Sale is the other public entity auction that happens on a weekly basis at the county sheriff office. A sheriff sale auction happens when an unpaid money judgment such as a mortgage needs to be satisfied with the sale of the asset backing that judgment. Sheriff sale in New Jersey happen on a weekly basis at a fixed day and time in each county. So you need to keep on top of the sheriff sale websites to see what are the properties coming up at the next week’s auction. Below is the list of sheriff sale county websites in Northern New Jersey where you can find the upcoming foreclosure auctions (PS its FREE on these sites unlike Realtytrac or Foreclosure.com):
Essex County    http://salesweb.civilview.com/SalesListing.aspx
Passaic County http://www.pcsheriff.org
Bergen County  http://168.229.7.54/sheriff_sale.aspx
Union County    http://ucnj.org/government/sheriff/sheriffs-sale-information/
Morris County   http://www.mcsheriff.org/sales/
Hudson County http://www.hudsoncountysheriff.org/Sales/
Use the above resources and websites to find your next auction deal but be careful, as auction buying is a tricky and a high-risk strategy. I will be covering in the upcoming weeks on how you can complete due diligence on traditional distressed assets along with auction purchases to help minimize the risk associated with distressed asset investing.   
Happy Investing
Ankit
Any questions reach out to me at @Ankit_RER or [email protected]
[1] http://www.realtor.org/auction/the-basics-benefits
[2] http://www.propertyauction.com/blog/index.php/2011/01/defining-the-terms-the-3-main-types-of-real-estate-auctions/
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duggal-blog · 12 years
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Find Deals from your Chair
Last week we covered the topic of how to establish your investment criteria in order to setup a decision matrix to help you filter good v. bad deals. Today we will discuss using online search tools to help you find potential deals so that you can filter them down.
CAVEAT: The best deals are not usually found online since deals that wind up online usually deals that the realtors or their investors did not want to buy. So be careful but use online searches as a business tool to find potentials. You can make a potential into a deal by using your structuring and creative negotiating skill set.
My firm does real estate deal sourcing predominantly in Northern New Jersey so I am going to provide you tools and resources from this area perspective. I am break apart the search location into Residential and Commercial asset class buckets:
 Residential (1 to 4units)
http://new.gsmls.com/publicsite/propsearch.do?method=getcountysearch
http://www.njmls.com/
Setup a user profile on these sites and search for deals based on your established investment criteria. A few tips on how to use these sites more efficient are:
A.   Save Properties that match your investment criteria and request updates to be sent to your email. This allows you to know as soon as an agent changes the price, remarks, or the status of the asset without you having to go back daily. The goal is to more efficient not more laborious.
B.   Setup a search criteria and request the website to send you daily deals that match your criteria. This allows you to comfortably every day sit in front of your email and see what new deals have come into the market that meet your search criteria.
Commercial (5+ units, retail, self storage etc.)
http://www.loopnet.com
http://www.showcase.com
http://www.marcusmillichap.com
  Use these sites to find commercial deals online. These are typically more robust in my opinion that the residential sites so use those features to get more creative. Most investors use these online sites to search for properties in a specific geographical location and/or a specific asset class. Your goal is to be better than the next investor so what if you got creative and combined the geographic/asset search with the keyword search feature.
Here is how you can make the keyword search combination to find your next creative or below market deal:   Go to the Search Properties for Sale link. Fill in your locations and the asset types that you are interested in investing into. Now here is the creative part, look at the bottom of the screen for the section titled “Keyword”. Now get creative with your search terms.
 Think about keywords that might work in helping you find creatively structured or distressed deals. Here are some of the ones that I use in my daily reminder search: owner financing, motivated, reduction, make a deal, owner financing.
 Next click Search and Happy Hunting!
I hope that you find these resources and tip/tricks helpful in finding your next real estate deal. If you need any help in making that happen, please feel free to reach out to me at [email protected] or tweet me @Ankit_RER.
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duggal-blog · 12 years
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Really Interesting 
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Most Expensive Home Insurance Claims
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duggal-blog · 12 years
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Criteria to Find Real Estate Deals
It is the start of a new month so comes the start of a new topic within the real estate investment processes. So far we have just finished covering topics relating to financing your deals using debt and equity. Financing is usually the biggest impediment to completing real estate deals since without capital you have no deal. On the same token, financing is irrelevant if you cannot find a deal that is worth raising capital behind. So this month we will be covering tips, tricks and methods to finding deals. We will start with defining your investment criteria so that you can use that as a filter system to find deals that match your investment style. 
Prior to beginning your investment search for deals, I would recommend that you sit down over a cup of coffee/tea and lay out the investment criteria for your target or “sweet heart” deal. So you must be asking what are the investment criteria’s that I should have at a bare minimum. Below I highlight a few metrics that I would recommend pondering over and having as a part of your investment criteria:
Market Area- this is basically the area of your target investment. Some investors want to invest in their “own backyard” while other feel comfortable going out of their state and even out of country. So this criteria filed can be as board as the state/city or as refined as the zip code.
Maximum Investment Price­- some gurus out there say that it does not matter what the price is as long as the deal makes sense. There is truth to that statement but the honest truth is that money is not unlimited and every investor has a different capital investment budget so that should be kept in mind as you decide on your maximum investment price. Since looking at deals that you can raise capital behind will be a waste of your time in the long run and time is a very precious commodity when it comes to finding and acting on deals.
Asset Type- this is criteria is important by my standards as a investor should start in one asset class and get comfortable prior to jumping into others. The asset classes can range from single, multifamily (2 to 4 or 5+ units), retail, industrial, special purpose, hotel and healthcare. Within each broad category there are sub-classes so pick your asset class on the basis of your interest and expertise.
Return Criteria- everyone is looking to purchase or invest in real estate to do one thing: Make Money! Hence it is important to understand what is your target investment strategy? There are two broad criteria of investment strategies: Flipping or Cash Flow. B
Based on the target strategy, you need to establish return metrics that a deal must have for it be marked as a “Prospect” within your search. For Flips investments, it is important to define the “minimum spread” between market value or the After Repaired Value (ARV) and your all in investment.  For cash flow investments, you can setup measures such as Cap Rate, Cash on Cash Return, Equity Multiple (we covered how you can calculate these measures in prior e-newsletters so feel free to contact us to resend them to you if you need them for reference)
The criteria metric laid out about is a good basic investment decision tool to help you find your next real estate deal faster by being able to reject deals that don’t work for your investment style/strategy. If you have any questions or need further help in establishing your investment decision matrix, feel free to call at 973-894-3004 or email at [email protected] 
Happy Investing
  Ankit  
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duggal-blog · 12 years
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Creative Financing in Action- Real Life Example
Last week I highlighted a few creative financing techniques that may be worth considering as part of your future real estate investment acquisitions.  To help make the seller financed technique more concrete I wanted to share an example of an investment that our firm structured and invested into alongside our capital investors.  Here is some basic background to help make the example more palpable: 
Background
The asset is a 4 unit multi-family property in Bergen County that had expired from the MLS without a price drop. After the asset expired off the MLS, we approached the brokerage agency that held the listing and discussed if the seller would be flexible on terms if we were able to get the seller the price that they wanted. The listing agent, being a salesperson, said to draft an offer and they would present it to the seller. Through some background research at the Bergen County vault in Hackensack we found out that the seller got the asset via probate and owns the property free and clear.
The Numbers
The seller was looking for a $380,000 sales price, which was the current fair market value of the asset. We offered the seller three different options (all cash; cash with third party financing; and cash with seller financing) to see where the seller’s motivation lied. The seller wanted their asking price and did not want to take anything less, whether it was all cash or with third party financing. This is where most real estate investors might give up and move on, but getting creative can make a deal come alive. So what did we do; we got creative!
The seller was willing to be flexible on terms.  So we offered the seller $50,000 in cash today along with $16,185 in interest only payments per year for a 5 year term. By accepting our offer the seller would wind up with $379,000 paid out over a 5-year term. So did the seller accept our offer right away? Well, no. The major hurdle when it comes to seller financing technique that real estate investors come across is the default/foreclosure risk. So after some lengthy back and forth discussions with the seller, we were able to reduce that default risk by providing a deed in lieu foreclosure option wherein we provided a pre-signed deed made out to the seller in case we were behind in payments by a certain number of months. This helped reduce the risk as the seller would not have to go through a lengthy foreclosure process to get the asset back.
 Synopsis
By being creative all parties we were able win! The realtor was able to win by selling an asset and earning a commission. The seller was able to win by getting their price and getting annual payments per year. We were able to win by owning a quality 4 family asset in Bergen county that will provide our capital investors a 10%+ dividend yield per annum along with a projected 15%+ IRR.  
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duggal-blog · 12 years
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Getting Creative
Sometimes it is important as a real estate investors to get creative when traditional capital channels keep shutting you down. Never give up on a good deal as there can always be a way to get it funded if you are creative enough.
What is creative financing?
Creative financing is a defined as acquiring or financing an asset/acquisition utilizing non-traditional financing structures
What are the different types of creative financing techniques?
This is a tough question to answer as there can be an unlimited number of methods depending on how creative you can be and how willing the seller is to work with you. Below is a list of a list of a few creative financing techniques that I have utilized and others that I think can actually work in real world real estate transactions:
A.     Owner financing - In this technique the seller becomes your banker on an asset that they are familiar and comfortable with. The seller will transfer the title to you in exchange for a promissory note and deed of trust/mortgage for the full purchase price of the property.
B.     Payment assumptions - If a seller needs to sell a property quickly and has financing in place and is willing to let you work with them on assuming it. Then you can utilize this technique to take over the mortgage on the property either through assumption, subject-to, or wrap mortgage.
C.     Lease options - a lease option allows the buyer to rent the property for a given amount of time, with a portion of their rent credited toward the purchase price of the home. At the end of the lease, the buyer has the option to purchase the property at the amount agreed upon when the lease was created.
D.    Sandwich Lease- a sandwich lease is in which a party rents property from the property owner and then subsequently leases it out to another tenant. An investor can use this technique when a seller is not comfortable holding a mortgage or transferring title to you but they want to get rid of the day to day headaches associated with owning the asset.  This is truly an arbitrage play wherein you give the seller a no headache lease at below market rent and you re-rent it to a market rate tenant. The spread between your lease with the seller and your lease with the tenant is your monthly profit spread.
These are just a few examples of creative financing. There are tons and tons of other ones that can be structured utilizing bartering, options, trades and other financial instruments/assets. So get your creative juices starting to flow and structure your next deal creatively. 
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duggal-blog · 12 years
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Deal of the Week 08 03 2012 (by RERllcNJ)
Jersey City Multifamily Asset with Double Digit Dividend Yield. An in the money Newark multifamily asset. Check out these assets that maybe worthwhile to add to your real estate portfolio. 
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duggal-blog · 12 years
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Valuing Real Estate in Changing Markets
Pricing an investment property can be done through a number of methods ranging from the income approach to the sales comparison approach. Today we offer rules of thumbs to use when try to value assets in an appreciating or a depreciating market.
Market: Appreciating
Rule of Thumb: Use Active Listings instead of Sold Listing to come up with a fair market value of the asset
Rationale: Sold comps are always 2 to 3 months behind in timeline given the period of time needed with financing hence the sold listings can under value the asset in an appreciating market
 Market: Depreciating
Rule of Thumb: Use Under Contract Listings adjusted by a median discount percentage rate
How to calculate the discount percentage:
Discount percentage is calculated by Sale Price/Under Contract List price for similar comps across a 6-month period of time. (Utilize the median discount percentage instead of average discount percentage)  
Rationale: Sold comps can be higher in valuation given that the market value is declining on a weekly/monthly basis. Active listings can be irrelevant given that the market can be saturated with over-priced properties due to unrealistic sellers 
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duggal-blog · 12 years
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Streaks - Newark Penn Station
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duggal-blog · 12 years
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I am beginner just starting out. I created my LLC, posted some ad's on a few websites & will be attending some RE associations in the next few weeks.i Would you be interested in working in the Jersey City area on some deals? I'm willing to do 70(you) / 30 (me) split on deals i find. If you are interested or may know someone my contact info: Rich G (347) 669-2059
Rich
Glad to hear that you are getting into the real estate game. For the right deal I can definitely jv with you. If you need any help as you get started in your real estate career then give me a call at my office line 973-894-3004
Regards
Ankit 
www.rernj.com
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duggal-blog · 12 years
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New Age of Real Estate
Five MORE Predictions for the New Age of Real Estate
1. An abundance of capital will likely keep cap rates low through 2017.
2. The talent shortage will continue for years as the real estate industry transforms itself from a supplier of services to a provider of knowledge and asset solutions for multiple stakeholders. Watch for a greater reliance on technology, temporary employees, contingent workers, leased employees, specialists, job-share employees, near-shoring and the off-shoring of select functions.
3. Of the regional/local real estate service firms which existed in 2010, 30 percent will disappear by 2020.
4. The best long-term, value-appreciating opportunities in real estate will be found at or adjacent to: (a) major colleges and universities; (b) hospitals; (c) coastal and capital cities; (d) corridor or string cities; (e) 24/7 knowledge cities and financial centers; (f) edge cities; (g) areas surrounding ports and transportation hubs; (h) locations proximate to the growing populations of Hispanics, retirees and Generation Y adults; and (i) niche markets serving growing industries.
5. Look for the creation of a global eBay look-alike for the real estate industry.
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duggal-blog · 12 years
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Using one's IRA to invest into real estate opportunities. Yes it is true and it is not illegal. Take a gander on this report by CNBC
-Ankit 
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