Five steps to take before making your first real estate investment

Are you fairly new to real estate investing? You may have already heard that real estate crowdfunding is a simple way to explore investing from your own comfortable space and a handy computer. You can browse through different types of investment and properties – homes, apartments, retail stores, and office buildings, among others.

Many investors want to become more familiar with the real estate investing’s dynamics – evaluating the potential returns, possible risks, and choosing projects – before making that first investment of $5,000 or more. It’s true: online investing can become more comfortable if you’ve also viewed real estate properties first-hand, had a confidante to ask questions to, or gotten your hands on the right questions to pose.

Here are suggestions from iFunding to help you get started. This week we look at how to gain practical and local experience before you invest. In the next blog post, we will name the top introductory books to fill you in on investing strategies, understanding an investment’s potential, and asking discerning questions.

How to get started:

  1. Join a local real estate investors association (REIA): Most cities or counties host REIAs, which are casual meetups of down-to-earth real estate builders and owners, investors, contractors, lawyers, bankers, etc. discussing the best investing strategies and sharing opportunities. There’s usually a speaking time and plenty of time for networking. Ask if someone you enjoy speaking with at a REIA would take you along to see an investment property. REIA events are often monthly in the evenings, and membership is either free or for a modest annual fee. To find one, try googling on “REIA” and your town name, or visiting meetup.com.
  2. Join BiggerPockets.com: Bigger Pockets is the largest, most active online community of real estate investors freely sharing advice and responding to each other’s questions. We do mean “freely sharing” because there is no cost for an entry membership that delivers great value. Over 100,000 fellow investors and scores of discussion topics active on any given day can’t be wrong!
  3. Attend a real estate foreclosure auction or tax lien sale in your town: Actually investing in foreclosed properties or trying to buy the rights to overdue city property taxes is a high stakes strategy for the experienced investor. However, attending one of these live events as a bystander can be an fun and exciting way to consider a range of properties and exercise your intuition (and your calculator) to estimate the appreciation value of a house. It’s best if you read about properties in your town that will be “on the blocks” at the next event, then drive by the property in advance.
  4. Supplement your local visits to properties with online knowledge: Google Maps’ Street View will give you a look at the house before you visit. Zillow provides square footage, buy/sell/rent prices, supply and demand and photos for many residential properties. NeighborhoodScout reports about the economic trends and demographic profiles in the area around a property.
  5. Browse several crowdfunding sites: Crowdfund platforms like iFunding give you exposure to a variety of deals at once, including due diligence background research and deal terms. To gain experience with the same number of properties, and the same depth of data, through in person contacts would probably take months if not longer. Remember that an account for an accredited investor is free, and you don’t have to invest until you’re ready.

We’d like to leave you with this thought from Deirdre Virvo, co-founder of the Southern Connecticut REIA. Deirdre was asked in an earlier iFunding interview what it takes to get started in real estate investing.

“My first advice on learning about real estate is to read, read, read. However, in the end, accept that real estate is a hands-on business. Thus, you need to take steps both to get involved and to keep learning. A lot of people are real estate junkies, taking copious notes at endless classes. Then, when I run into them years later, they still haven’t invested in their first property. I say: get out and meet others, and be comfortable putting in a modest amount into your first venture to get your feet wet.”

Insights from iFunding/Citrin Cooperman Panel: the Current State and Future of Real Estate Crowdfunding

Thanks to the sizable audience that attended last week’s NYC panel discussion on real estate crowdfunding, despite the 7° weather.  As this market achieves a multi-year track record, then the findings, the possibilities and the panels are becoming more interesting. Here, we share the top insights from the panel, co-hosted by iFunding and our partner, Citrin Cooperman, a nationally recognized auditing, tax and advisory services firm.

Speakers:

  • Harmen Bakker, moderator, and Partner in Citrin Cooperman’s [www.citrincooperman.com] Real Estate practice;
  • Mark Mascia, President of Mascia Development [www.masciadev.com] – real estate developer and investor experienced with several crowdfunding platforms
  • Mark Roderick [www.crowdfundattny.com], attorney and expert on crowdfunding securities regulations, of Flaster/Greenberg.
  • William Skelley, CEO of iFunding [www.ifunding.co], real estate crowdfunding platform.

Bakker/Moderator: Let’s start with the advantages and any cautions with using crowdfunding, from the real estate developer’s perspective…

Fundraising efficiency

Roderick/Attorney: Crowdfunding is nothing more and nothing less than the Internet coming to the capital formation industry. The Internet directly connects developers and investors. It sweeps away all the middlemen. It’s disruptive, reduces cost, and increases efficiencies.

Skelley/iFunding:  The best deals I know of need to close fast to capitalize on an opportunity. Our latest investment offering was listed on our website the night before this panel, and was fully funded before I went to sleep. On the other hand, larger, more sophisticated deals can take one to several weeks.  We’re looking at 3-7 days to fund on average.  Also build in one to several weeks for due diligence and investment arrangement setup.

Mascia/Developer: I agree, speed of fundraising can be a key benefit, depending on the platform and deal. It’s not possible for me as a developer to raise $1 million anywhere near as quickly as the good online listings, and certainly not with so many investors.  Just having meetings and lunches with potential investors could take weeks. To me what it comes down to is delivery [of the financing on a timely basis]. I’ll gladly pay more for a service I can count on to deliver.

Investor Relationships

Mascia: There are (at least) two interaction models for developers with the investors. In the first, the investors are passed by the crowdfunding platform directly to the developer. In the second, the investors are pooled into an LLC managed by the platform. Right now I’m on the fence as to the preferred model, as I watch the size of crowdfunded investments grow and number of investors increase.  It’s more efficient for the crowdfunding platform to handle investor questions. However, if the platform starts to provide a larger portion of my total financing, I need to be careful to maintain my own relationships.

Roderick/Attorney: The most common investment structure is a single purpose vehicle (SPV) set up by the crowdfunding platform to pool all the investors’ funds into the deal through a single entity.  However, this limits the total number of crowdfund investors to 100, according to securities law.  You’ll start seeing other structural relationships as the field grows.

Investor Due Diligence

Mascia:  Many family offices tend to emphasize social due diligence, that is, reaching out to colleagues to gauge the integrity of a developer.  The good crowdfunding platforms tend to be more rigorous in their due diligence checklist. And, they share the findings with all the investors.

Bakker: It is important that investors and sponsors carefully review and understand the structure of the deal, the platform model, reporting provided, and the regulations to minimize their risk and increase the reward.

Individual property investments versus funds of properties

Roderick:  In a sense, when an investor decides to work with a real estate crowdfunder, they are partly relying on the platform’s pre-screening of a deal. I believe investors will want more of this; pooled assets are the future.

Skelley:  We’ll offer investments in semi-blind funds, where the investor receives knowledge about existing investments and some information about potential future property investments. We generally don’t offer blind-funds, where only aggregate returns are reported, as that’s the domain of a REIT or a Blackstone.

Bakker:  One day, will there be aggressive and conservative portfolios an investor can choose from?

Skelley: In the not too distant future, expect to see from us the option to invest in different tranches in a deal, such as either the mezzanine debt or the preferred equity.  And, we’ll share analytics about risk and return. It’s early in the real estate crowdfunding era to have a large enough sample for good metrics, but we’re working on it.

Investor Reporting

Mascia: Some platforms send investment updates weekly; others do it monthly or quarterly. This also depends on the duration and speed of progress on an investment. The less frequent ones tend to be more detailed.

Skelley: For any deal where it makes sense, we provide weekly or bi-weekly updates, including a statement of progress, photos and even video. One developer shares time-lapse images showing stages at the site.  We encourage developers to reinforce the confidence of the investors in them, through the updates. This makes a big difference.

The Future:

Bakker: Looking ahead a few years, what will be game changers for real estate crowdfunding?

Skelley: Two years ago, no institutional investors would take a meeting on crowdfunding. Now, we’re in frequent dialogue with family offices, private equity firms and real estate power-houses.  You’re going to see more institutional money get involved in this approach, just as they have in consumer lending plays like LendingClub.com.

Mascia: I’d like to see a secondary market, where investors can resell their participation in crowdfunded deals to other investors.  I think investors at this point may prefer one to three year investments, but for my commercial deals, the best returns may come by timing a market sale five or even ten years out. I don’t want to have to refinance all of my crowdfunded equity every two or three years, so a secondary market would make the market more liquid.

Roderick:  To date, the crowdfunding platforms have been reluctant to become broker-dealers, given the filing and compliance requirements.  However, the role allows for the most straightforward way to be compensated proportionally to value added: as a percentage of the amount raised for a deal.  I’m seeing the emergence of a few broker-dealers with an online presence that make it easier and less costly for a crowdfunding platform to ‘plug into’ that broker-dealer with the same benefits.

Roderick: There’s a chemistry in any market sector, a critical mass where all the necessary ingredients start gelling. That’s coming. When securities regulations finally allow non-accredited investors to participate in most online deals, that will open up the market to millions of individuals and create even more innovation. I think the crowdfund platforms will want to balance the influence of individual investors and that of institutions wanting to syndicate their deals.

 

The real deal about using self-directed IRAs (SDIRAs) to defer taxes on real estate investments – Interview with attorney Mat Sorenson

So… you’re an investor with some real estate experience (maybe through a crowdfunding site like www.ifunding.co), and are looking for ways to shield your profits from immediate taxes through an IRA. You may be familiar with self-directed IRAs (SDIRAs) as an approach to using IRAs to invest in real estate, because traditional, institutional IRAs don’t allow direct real estate holdings. Our question for today is:

Exactly how do SDIRAs work and what types of real estate investments are they best for?

iFunding spoke with attorney Mat Sorenson , to give you more insights into SDIRAs. Mat is author of “The Self-Directed IRA Handbook”, the most widely-read book on the subject of SDIRAs, with a 5-star rating on Amazon. We ask him first about the growing use of SDIRAs, then turn to their application within real estate and crowdfunding.

Mat, when did you start building a legal practice around SDIRAs?

Starting 2006, my law firm encountered many clients involved with real estate and 1031 exchanges (‘swaps’ that defer taxation on real estate investments profits when a new investment is identified). We researched other means of sheltering gains from taxes, and found self-directed IRAs to be very viable. That’s true not just for real estate, but for holding precious metals or investing in startups as well. The practice at our firm, KKOS Lawyers, has grown, and I’ve spent the majority of my time advising clients on SDIRAs since 2008. My SDIRA Handbook was published in 2013.

How do SDIRAs work?

Self-directed IRAs give the individual more flexibility as to where they invest retirement funds. Traditional IRAs permit investments in stocks, bonds, mutual funds and CDs, for example. Only SDIRAs allow funds to be invested in specific real estate projects, direct loans to other parties, equity investments in startups, etc., while still providing tax deferral benefits, just with a broader range of investment opportunities.

Funds from existing IRAs or 401Ks (when you leave a job) can be rolled over into an SDIRA, or you can contribute new funds to an SDIRA, subject to maximum annual IRA contributions that the IRS allows someone in your particular situation. Your SDIRA needs to be administered by a service provider known as a custodian. For a fee, they hold the account, confirm the applicability of investments and wire funds on your behalf, and report form 5498 annually to the IRS regarding distributions, contributions, and your account value.

Is the use of SDIRAs to self-direct IRA investments growing?

Absolutely. They were created via government regulations in 1974, but didn’t receive attention for many years because individuals relied more on fixed pensions from their employer. Also, financial advisors are less inclined to recommend SDIRAs, because it empowers the individual to make independent investment decisions and place money outside of the traditional money management companies.

The environment today, where individuals are responsible for their nest egg, and feel qualified to make independent investment decisions, has changed things dramatically. There was a 2013 article in the Wall Street Journal that documents how the custodian companies for SDIRAs have grown from handling hundreds of millions of dollars around 2005, to tens of billions now.

With which kinds of real estate investments do SDIRAs work best?

iFunding recognizes that there is much more a potential IRA holder will want to know about SDIRAs’ benefits and set-up logistics. We recommend Mat’s book as a source, as well as a variety of articles on the Web. Here, we ask Mat about key real estate investing considerations that many other sources neglect to highlight.

You could invest in nearly any type of real estate investment property through an SDIRA, however only some of them will qualify for all the tax benefits of the self-directed IRA. Basically, real estate rental & income properties paid for in cash, as well as loans to real estate operators that strictly repay via interest, qualify for all the tax benefits. To restate, with loans or promissory notes on real estate projects, you would receive the interest payments fully tax-deferred in the SDIRA or tax-free if you have a self-directed Roth IRA.

When will taxes need to be paid with an SDIRA involving real estate?

There are several situations where taxes will apply to income made in a SDIRA. If the real estate project involves in new construction, or in property improvements (“flips”) for short-term turnaround and sale on a regular basis, then it is considered to have generated profits from a business, which are subject to UBIT, or Unrelated Business Income Tax. The SDIRA will need to pay taxes on these profits. You can see the taxation rates on the IRS’s form 990-W. They range from 15% tax on profits in a year under $2,500, to 39.6% marginal tax on profits over $12,150.

Second, if the investor has contributed equity to a rental project, and the real estate operator on that project has also taken out a loan from a bank, then the equity returns – that is, the profits – that the investor receives are subject to taxes in proportion to the amount of debt on the overall deal. This is called UDFI, or Unrelated Debt Finance Income Tax. The UDFI Tax rate on the sale of the property is the capital gains tax rate. UDFI rates on other income (e.g. net rental income) range from 15% to 39.6% on the margin; you can look them up via the IRS’s “Trust Tax Rate” for the current year.

There are other prohibited transactions to learn. You, or a direct family member, can’t be personally involved in the real estate project’s operations, for example. A qualified lawyer or CPA can ensure you set up and use your SDIRA property.

How well do SDIRAs work with crowdfunded real estate investments?

They work very well together, given the considerations mentioned above. Many crowdfund investments are structured as pass-through LLCs, so the tax deferral and other treatments are very similar to deals where an individual directly invests in a property. In some respects, investing through crowdfunding is more efficient for a SDIRA than direct real estate deal participation. That’s because the investor, and therefore the custodian, doesn’t incur costs of lots of income and expense handling; the crowfunding platform takes cares of that. For example, if you owned the property yourself, you would need to record monthly rent income or individual maintenance expenses through the SDIRA; with crowdfunding you’re only recording net income as it is distributed to you, at moderate intervals or end of project. You can read my blog post introducing the principles of SDIRAs with crowdfunding.

Does the custodian chosen by the investor matter for crowdfunding investments?

Yes, it can. Custodians charge servicing fees using a different calculation approaches. If you are making a higher number of smaller investments via crowdfunding – meaning relatively modest profits per investment – then try to avoid a custodian that charges fees based on the number of investments transacted. That will eat into your profits, potentially more than the tax deferral benefits of the SDIRAs will offset. In contrast, other custodians will charge based on total funds within the account.

Also, research that the custodian has a solid reputation for timely responses. The good ones can approve and disburse funds within a day. Crowdfund platforms typically look for funds to be wired within several days to a week after an investment commitment is finalized. [iFunding notes that, on sites like biggerpockets.com, the real estate community has highlighted certain custodians that take much longer to approve wires; buyer-beware].

A few custodians have made a specialty out of working with crowdfund investors, and are more familiar, and fee-compatible, with crowdfund sites. I am familiar with IRA Services Trust Company in Northern California, and Pensco Trust Company based in Denver.

Can we run through deal examples to see how SDIRAs work with respect to tax deferral?

Let’s explore:

(a) a debt/loan deal in a new building construction, and

(b) equity in a home fix-and-flip

(c) equity into an apartment building’s improvement then rental.

In the first case, assume the investor is participating in a loan to a new condo construction project. The crowdfund structures financing this as a promissory note. In this situation – a loan or promissory note that strictly pays interest as the return on investment to the individual– then 100% of the profits are tax-deferred (or tax-free for a Roth IRA). If this was a traditional (non-Roth) self-directed IRA, then you wouldn’t pay any taxes on the gains until you take out the money for retirement.

In the second case of a home fix-and-flip, let’s say the crowdfund site raised $300,000 in an all cash project investment. One investor puts in $15,000, or 5% of the total. In 10 months, the real estate operator finishes the project and sells the home for $360,000. That’s a $60K total profit. Fix-and-flip businesses are subject to UBIT (tax). This investor receives 5% of the profit or $3,000. If this is their only SDIRA investment subject to UBIT that year, than the IRS tables say the taxes will be $500. In Q1 of the year after the investment ends, the crowdfund platform issues a K-1 tax filing and copies the SDIRA custodian, and the custodian pays taxes from the SDIRA, on your behalf, usually during the traditional April filing period.

In situation ‘c’ with an apartment building, there are some improvements being made, but the primary purpose is to buy-and-hold the property and generate rental income. There is no UBIT that applies to these profits. However, let’s take a case where the total project receives $600,000 from a crowdfund company’s investors as equity, then takes an additional bank loan for $400,000. In year one, the project generates $30,000 in net operating income. In this situation, there is a loan on the property as well as the investors’ equity, so UDFI tax will apply. The proportion of debt into the project financing is 40% (= $400,000 / ($400K + $600K)). Therefore, 40% of the profits of $30,000 are subject to UDFI, or $12,000 (= 40% * $30K). The amount of tax for one investor will be based on the IRS tables and that investors’ proportion of the equity investment.

What are the main caveats using an SDIRA?

The custodian companies vary in degree of experience and funds under management, as well as in customer responsiveness and turnaround times to approve investments and wire funds. So, choose carefully. Look for FDIC protection. Custodians use a variety of fee structures, some of which are much better suited for crowdfunding and real estate. Fees can be based on IRA value, or number of assets owned, or driven by activity including wires or tax reports generated. The weightings of setup fees, ongoing fees and termination fees vary significantly and typically range from a few hundred dollars to a thousand or more, assuming you aren’t actively managing each bit of income and each payment from a property yourself. Be sure to investigate which structure is most cost-efficient for your investing.

The custodians need to approve the transfer of funds for investments, but are only verifying that the types of investments you are making fall within the guidelines for SDIRAs. They are not evaluating the soundness of the investment itself. That’s the responsibility of the individual. In my book, you can read an extensive checklist of due diligence steps that should apply to any SDIRA investment.

Finally, seek out sound legal and accounting advice when creating, using, and reporting on your SDIRA. When properly set-up, the accounts can be very tax efficient and rewarding, and avoid IRS-related or other issues from occurring later on.

Thanks very much for your insights, Mat.

Thank you. I welcome questions on the subject, and can be reached at (602)761-9798 or mat@kkoslawyers.com. You can also find my book, The Self Directed IRA Handbook, on my website and on Amazon.com.

Looking at Long-Term Housing Demand & Financing: Trends and Strategies

While many residential real estate investors closely scrutinize every deal they consider, not as many keep an eye on big picture trends. This long-term view is important, but not only for the professional real estate developer that finds greater demand from specializing in a growing niche. It’s also valuable for the limited-partner investor that wants to reduce risk by focusing their due diligence on a few types of projects.

At iFunding, we consider these trends when exploring projects to offer our investors. You can see that type of assessment where investments include condos built in mid-sized cities with growing tech/finance industries, and where starters and rentals are built for younger professionals, who view housing more as a service to lease than a lifetime mortgage to hold. You’ll also find the big picture view in mobile park home investments, suited for the service economy’s lower paycheck holders, and in lifestyle communities for the more affluent retirees.

This article touches on these long-term trends, including the residential shift to “echo boomers,” regional migration, and new sources of financing for homes.

From Retiring Baby Boomers to Changing Echo Boomers

An aging population will mean adapting existing homes for disability, where the owners wish to age in place. Others will want to move to convenient, low-maintenance communities which offer townhouses and condominium apartments, which should increase dramatically for this group as well as for the young who are just starting out.

The increasing demand for rental housing should continue through 2020 as Echo Boomers, those born after 1990, form new households. The trend towards job-hopping rather than the long careers of the Baby Boom generation favors the flexibility of renting, and Echo Boomers will likely be better educated, particularly women, which will mean a higher average financial position for this generation in the long-term.

After 2020, it is expected that this cohort will move toward home ownership, absorbing some of the single-family houses released by retiring Baby Boomers. Smaller houses will better fit the needs of the smaller households with fewer children that Echo Boomers seem to prefer, although the increase in minority home ownership, with higher average family sizes in some cultures, will offset this trend somewhat.

Home ownership remains the preferred housing choice until then, even among the Echo Boomers, with walking access to civic services a priority for many. As the economy recovers and credit balances return to manageable levels, we should see younger owners lead the remodeling market as they adapt older units to contemporary standards for sustainability and lifestyle. Investors will see this frequently in “infill” projects, where existing tracts are upgraded or rebuilt from the ground up, while benefiting from the historic ambience and/or small-neighborhood feeling of a particular area.

Locations for Growth

Although the “March to the Sunbelt” should be supporting a strong housing market, it is here that the bulk of the foreclosures occurred. As the recovery continues, the Sunbelt should see the highest demand for remodeling and renovation, as units are brought out of foreclosure and upgraded for resale.

Large cities offer many opportunities for renovated housing, including the conversion of vacated industrial buildings to desirable apartments. Smaller cities and towns with viable commercial areas, especially near transit stations, are also promising locations for housing renovation and replacement. However, the local job market is of paramount importance in making any investment decision, as the great burst of new construction and energy extraction activity in North Dakota–otherwise inexplicable–makes clear.

The Future for Mid- to High-End Single Family Homes

A segment of larger, free-standing suburban homes may decrease in value, as Baby Boomers release them for something smaller and easier to maintain. The Echo Boomers won’t be ready for such big houses for a while, and they have so far shown a hesitation about the isolation of suburban living, preferring the civic bustle of even small towns. Highest-value luxury homes, however, are in a class by themselves, and there is little reason to expect a decline in demand for them. There have been signs that tastes in recreation are changing, however, and that golf course developments, for example, may have trouble holding their value. Individual Investors and Family Offices becoming a new Financing Base As the US government explores way to change and reduce the roles of Fannie Mae (FNMA) and Freddie Mac (FHLMC), the private credit sector will play a larger role in providing credit to the nation’s housing market. Since 2008, much of the foreclosed/bank-owned housing stock has been purchased by hedge funds. Because the opportunities for the largest investment returns rebounding from the 2008-2010 housing implosion are diminishing, these hedge funds are now purchasing fewer of the remaining houses on the market. Demand is shifting back to individual home purchases, who are sticking with their planned housing budgets and looking for value more than ever.

This trend implies that the refurbishment efforts (which some call “fix-and-flips”) of individual real estate operators and modest-sized companies remain key for housing investments in the mid-term. However, not any type of house will do. It’s best to focus on housing trends like the ones above, pointing toward specific regions and cities, rentals & condos for young professionals, community living spaces for an older generation. Beyond flipping homes, other operators will find that running long-term rentals building – 1-4 family units, and apartment complexes – is the best way to develop a core competency while generating long-term income.

Meanwhile, the financing for such ventures needs to come from somewhere, if not the government –backed mortgage securitization agencies. Crowdfunding will be one of those fast-growing funding sources, in iFunding’s opinion. Our research into research about crowdfunding activities show that crowdfunding across all industries is growing 85% year-over-year, and is likely to reach $10bn in investments by 2017. Meanwhile, real estate has become the largest market for “private securities, publicly raised” (i.e., crowdfunded), with $60m raised so far in 2014, according to research firm Crowdnetic (http://www.crowdnetic.com/reports/sep-2014-report). Of $150bn in worldwide real estate transactions of all kinds (not just crowdfunded) in a recent year, $25bn were funded by accredited individual investors. Now, with regulations expanding access to non-accredited investors, we expect to see even further growth in crowdfunding. As a result, we recommend that investors familiarize themselves with crowdfunding by ‘dipping their toes in’ with modest early investments.

Sources:

U.S. Housing Trends: Generational Changes and the Outlook to 2050. John Pitkin and Dowell Myers, 2008

The US Housing Stock: Ready for Renewal. Joint Center for Housing Studies of Harvard University, 2013

Housing an Aging Population: Are We Ready? Center for Housing Policy: Barbara Lipman, Jeffrey Lubell, Emily Salomon, 2012

Women in Real Estate – Interview with Jennifer Taylor of Atalanta about Career Development and West Coast/Hawaii Investments

Does gender make a difference in how real investors and developers succeed in the real estate industry? Do women get involved in real estate from different starting points than men, or find different ways to thrive?

These were questions that came up as iFunding was exploring the demographic of real estate investors and developers that attend our events, propose properties for development and participate in crowdfund investments. We’ve been interviewing female real estate developers and investors to hear their thoughts. This is the second of our interviews.

Jennifer Taylor is Managing Principal and founder of Atalanta Realty Investments, which targets investments in office, retail and industrial assets in the Western U.S. including Hawaii. Jennifer has been named one of “Ten Disruptors” this year by National Real Estate Investor magazine. Atalanta is a socially-responsible business that invests in culturally diverse, under-valued, urban neighborhoods.

Q: Your background is interesting, Jennifer. How did you get involved in real estate?

I started my career as a receptionist for an executive suites building, owned by Aetna. I knew nothing about real estate at the time, but could sense the potential power of operating the type of building I worked in.

I transitioned into property management, and worked in the field for nearly a decade. While there, I wanted to grow into the investment side of the business. I’ve always been a self-starter and have spent a lot of time learning about real estate from others, including the institutional asset managers that visited my management company’s to check on their properties.

Q: How did you grow your investment and operating business?

In 2002, I started an investment group called Arroyo Realty Partners with two partners. We invested in office building in Honolulu and expanded to other properties in Hawaii. We were fortunate with our exit from that business, as we sold the assets to an institutional investor in August 2007, right before the downturn.

I then rode out the downturn, before putting a new business plan together for a similar platform, now called Atalanta Realty Investments. We focus on operating and enhancing the value of commercial properties in markets with significant Asian populations, particularly parts of California and all of Hawaii. We aim to acquire retail, industrial and office assets. The first thing we did was to buy back the portfolio of Hawaiian assets we had sold to Morgan Stanley in 2007. Now, we just closed on our first acquisition: two offices buildings in Honolulu.

Q: Why did you focus on Hawaii?

I’m of Filipino descent. My parents came from the Philippines and met in New Jersey, where I was born, then we moved to Pasadena, California. I feel my family background has made it easier for me to operate in the Hawaiian real estate market. Hawaii is strongly influenced by its trade relationship to, and inhabitants from, the Pacific Rim. Interactions are subtly different from the mainland. For example, your word is held to a high standard, with less emphasis on the written contract to make progress in a relationship. Discussions are more subtle and toned down.

By the way, Hawaii has a ton of opportunity right now. The office market is still recovering from the earlier downturn, however retail and industrial vacancy is just 4%, and tourism and hospitality remain strong.

Q: Turning to the impact of gender in the real estate business, where do women and men concentrate in the real estate business? Does that make a difference in their success?

Most asset managers are men, though women can clearly stand out results-wise in investing as well. There are both male and female agents in high numbers and some of these will migrate to the investment side.

In property management, the majority of people I’ve met are women. I think having property management experience is valuable with cash-flowing commercial properties, because you gain a strong sense of what aspects of the property can be improved, and where financial efficiencies can be gained. Atalanta has four principals, three of which are women: Robin Dean, Lourdes Canlas and myself. It’s not coincidence that we’ve all had property operations experience. Our fourth partner is a gentleman named Aden Kun with a background from the investment side of the industry.

Q: Do you sense that there is a “glass ceiling” of patterns and perceptions that hinder a women’s career more than men’s?

I feel that I’ve experienced the glass ceiling at times. But I’ve focused instead on breaking through to new roles and relationships with senior management and peers, without being offensive to others. In a sense, every step upward in my career was an opportunity to grow and be seen as more senior. Growing up with two sisters helped me later to navigate individuals’ sensitivities in the office.

Q: Is it important to understand the numbers in real estate?

Absolutely, for both women and men. There actually are many things you need to understand to be successful in real estate, including the financials and contracts. I’ve trained myself to be able to evaluate income statements for cash-flowing properties, for example, but it’s not something I’d prefer to browse in my spare time.

Q: Are there other ways you think women and men may differ professionally, generally speaking?

I think women act more intuitively. Both men and women can be strong in the art of the deal; that is, picking the right market, negotiating terms, and choosing your timing. But women seem to read people better and are willing to communicate more frankly. For example, I found it pretty easy in a recent acquisition to get an early sense from the seller, another women, about whether we were in the right ballpark to get the deal done. With men I’ve negotiated with on deals, there was more beating around the bush about intentions.

I also have found that women in business are extremely supportive of one another. Throughout my career, I have seen women share information, refer each other to opportunities and mentor one another to get ahead. I think that this trend is only increasing and that this support will continue to have a positive and significant impact on the careers of emerging female leaders.

Q: What’s next for you and your business?

My partners and I are excited about Atalanta’s prospects, based on team chemistry and our understanding of Hawaii, California and other west coast markets with Asian populations. The focus suits us well. We will evaluate deals in the $5 – $30 million range. We’re also excited to be under contract to develop The Gathering Place, a 55,000 sq. foot open-air retail center on Oahu. Each acquisition and a growing operating history is building on our track record. That demonstrates to potential equity partners that we know our markets well.

“Walk on By” – Using Walk Score to evaluate neighborhoods for home investments

One of the keys to successful real estate crowdfund investing is to get a sense of the property and surroundings, without necessarily visiting the site. One useful online tool to accomplish this is Walk Score (www.walkscore.com). iFunding (www.ifunding.co) has recently incorporated Walk Score into its residential investment listings.

Here’s how it works:

Walk Score® measures the attractiveness of a location based on distances to nearby restaurants, grocery stores and other amenities, plus additional analyses such as population concentration, block length and intersection density. A rating of 1 to 100 is generated where, for example, 90-100 is a “Walker’s Paradise” where nearly all errands do not require a car. A score between 25 and 49 means most errands require you to hop in your Prius or Chevy Suburban, and so forth. A separate Transit Score® measures accessibility via public transportation, and there’s a Bike Score® too.

City residents tend to think a lot about the accessibility of their neighborhoods, as do suburbanites. And it’s just as useful to individuals looking to buy or rent, as it is for those investing in home construction or fix-and-flips wanting to understand the ultimate buyer’s viewpoint.

For curious businesspeople and technologists, Walk Score is a progressive adopter of APIs (that is, computer/web interfaces) to make the data available anywhere. That’s how 20 million scores are being viewed each day, through partner sites such as Zillow.com and now iFunding. Livability data also is important for urban planning and targeting affordable housing in “inclusionary zones” within the local economic network.

iFunding is happy to see the available of more real estate evaluation data for investors, available through web interfaces for sharing across sites. We’ll cover more technology trends like this in coming blog posts.

Women in Real Estate – Interview with Deirdre Virvo of CT Property Network and the Southern CT REIA

Does gender make a difference in how real investors and developers succeed in the real estate industry? Do women get involved in real estate from different starting points than men, or find different ways to thrive? Or do mainly the same skills and passions apply to most everyone?

These were questions that came up as iFunding was exploring the demographic of real estate investors and developers that attend our events, propose properties for development and participate in crowdfund investments. We’ve been interviewing female real estate developers and investors to hear about their careers, successes and learning moments.

Our first published interview is with Deirdre Virvo, a managing member of CT Property Network, LLC and co-owner of the Southern Connecticut Real Estate Industry Association, (SoCT REIA). CT Property Network has a considerable investor following, based on its steady offerings of loan investments on home flip and buy-and-holds in Connecticut.

A couple of caveats for our Women in Real Estate blogs: we have focused on investors and developer/operators as opposed to sales brokers/agents and property managers, roles in which women and men are both well represented. Also, we realize that each person’s story is unique, and that stereotypes are just patterns, which needn’t define individuals’ success.

Q: Deirdre, how did you get into real estate?

I owned a successful advertising agency for 15 years. Ultimately though, I realized that it wasn’t a business that built equity or was saleable. It depended on me and my partner being there for its value. The 2007 downturn affected my family as well, so it was time to re-invigorate our nest egg. I love a new challenge and love to learn, both through hands-on experience and education. I started taking a lot of classes – from rehabbing to note-buying, short sales, marketing real estate, even realtor and appraiser classes. I probably spent over $15,000 on seminars; equivalent to about one semester of grad school! Using OPM (“Other People’s Money”), I bought my first six-family rental property, which I still hold for the income.

Q: Did that ‘wide net’ of learning lead to certain strategies?

At the time, short sales were a clear opportunity. There were few startup costs; just a need to understand the local real estate demand, screen the contracts, and build relationships. I was doing “double closings” (wholesaling, or arranging to purchase a property and in parallel contracting with the follow-on buyer). When double-closings, while legal, started to be construed as not the thing-to-do, we started straight closings. These netted less, but we were able to do about 100 per year. We then started investing in fix-and-flips and buy-and-holds.

Q: What is your strategy now with CT Property Network?

Investors say they like to work with our CT Property Network business because we carefully screen properties, offer great returns, and are trustworthy. My business partner and I now hold 13 units and have flipped five homes this year to date. By offering secured debt , and delivering returns far better than the checking account or CD interest rates that many have been keeping all their nest egg in, people thankfully have been thrilled to lend us their money.

Q: Let’s talk about any differences you see in the approach of women and men in real estate.

I have a great business partner, Edward Zislis, who works with me closely on both CT Property Network and on the Southern CT REIA. We have complementary strengths, and in some ways this plays into common traits you might say are more related to women or men. For example, even though I am direct when it comes to most things, especially business, certain circumstances require kid gloves. When we purchase probate homes, where someone has passed away and the spouse or immediately family wants to sell, I inquire about their loved one, the house, what they are looking to do and then ask how we can help. I also send sympathy cards when I leave. Eddie tends to get down to business faster to present their options and talks terms earlier in the first conversation.

Q: So perhaps relationship building is more important for women?

Nurturing is definitely second nature to women. We love to connect. Closing on more than 100 deals per year takes finesse. I believe attorneys that I close with remember me for being able to facilitate complicated deals, and being the “Queen of Short Sales,” but they may also remember my home-baked chocolate-dipped, chocolate chip cookies, which I like to bake for all closing participants. I may be a “tough cookie” in business, but I am not afraid to show my feminine side, and I love to bake and feed people! Those cookies certainly are good for marketing and relationship-building. Also, I set high expectations for results, but I’m not very competitive. I love to be really good at things, but I respect that others are also as good and, if better, I see that as an opportunity to learn from them. My motto is WIN-WIN. Sometimes, I find that competitive men need to come out of a negotiation feeling they got the longer end of the stick.

Q: What about stereotypes about women and men, and their emphasis on intuition versus numbers?

First, everyone – men and women – active in real estate investing needs to be comfortable with the numbers. My dad was an engineer and my mom a librarian; I was required to get straight As in every subject. I’ve always loved numbers, can calculate formulas in my head and have steadily improved my eye for estimations in real estate projects. On properties we are rehabbing, I like to calculate holding costs down to the week to see what time costs us. People that rehab and see real estate as something other than a numbers game are not viewing it correctly as a business. I met a gentleman recently who decided to do most of the work on a house flip himself, but I don’t believe he is calculating the opportunity costs of his time well. Second, intuition is helpful, but don’t let it mislead you. I have recently had two separate interactions, one with a man and another with a woman, both of whom got too emotionally attached to a property they were involved with. They mispriced their deals versus what the market would bear, then got personally insulted when potential buyers asked for changes to be made to what they felt was a perfect renovation.

Q: Any other advice for real estate investors and developers?

My first advice is to read, read, read. However, in the end, accept that real estate is a hands-on business. Thus, you need to take steps both to get involved and to keep learning. Too many realtors I know won’t stray from showing housing; they won’t learn the appraisal side or the investing side. Why not? They have their finger on the pulse of deals but stop there in terms of value-add. Also, a lot of people are real estate junkies, taking copious notes at endless classes. Then, when I run into them years later, they still haven’t invested in their first property. I say: get out and meet others, and be comfortable putting in a modest amount into your first venture to get your feet wet.

Q: Might we say that crowdfunding can help introduce investors to real estate?

I haven’t worked with crowdfunding myself yet, but I’m very interested in the concept. The target returns seem appealing, and it helps a lot that investors can invest as little as a few thousand dollars in a project. That could allow them exposure to a few property types at once. I’m excited that iFunding is going to present about crowdfunding to the SoCT REIA this week (Sept. 10, 2014, 6:30pm in Fairfield, CT). (http://www.meetup.com/SoCT-REIA/events/192165942/ ).

Q: What else is going on with the Southern CT REIA?

We’ve been holding educational seminars for some time, first in Stamford and now usually in at the Fairfield Public Library here in Connecticut. We’re getting 40 or more people per event, which makes for great joint learning and networking for our attendees. We have individual investors, developers, contractors, brokers, lawyers all speaking up and contributing ideas and questions to the seminars. Topics have included short sales, bank-owned properties (REOs), cash-flowing commercial buy-and-holds, self-directed IRAs and multi-family residences. Both my partner Eddie Zislis, and our team organizer, Melissa Ternier, are super and make the events that much more interesting and enjoyable for the audience. I expect to grow the organization with a full-blown web-site (currently we’re at http://www.meetup.com/SoCT-REIA/) and day-long or multi-day seminars. I’d welcome hearing from folks who would like to attend or to contribute to our growth in some way. I can be reached by email at dvirvo (at) ctpropertynetwork (dot) com.

Understanding ‘Net’ versus ‘Annualized’ Returns with Real Estate Investments

Though there are many factors that should be considered when evaluating real estate deals, predicted financial returns are near the top of most investors’ lists.

iFunding recently has begun posting non-annualized (in addition to annualized) forecasted returns, to give our investors more visibility into an equity deal’s potential and the impact of time. With our debt investment opportunities, we are displaying the annualized rate, or APR, which is industry standard. These figures and other investment details can be reviewed when you log into the project area of our site.

Let’s look at how to incorporate these numbers into your deal comparisons. As an example, we’ll consider a home refurbishment whose all in cost is $200,000; projected sale price is $280,000; profit to the investor and developer is split 50/50; and estimated time from funding to sale is 9 months. After that example, you’ll read about the same project, but where the investment is a loan at 10% APR.

Stating returns for equity versus debt.

On equity investments (i.e., sharing of profit or loss), it’s most common to state the return on a non-annualized, or absolute % basis. In the above example, the return to investors is 20% (50% of the $80K profit, divided by the $200K invested). This return is distributed upon sale of the home, that is, after 9 months. If one were to calculate the annualized (12-month) equivalent return rate, it would be 26.7%. That’s determined by taking 12 mo’s divided by 9 mo’s, and multiplying by the 9-month return of 20% to scale it up for a year.

On debt investments (loans), it’s most common to state the return on an annualized basis, or “APR” (annualized percentage return). So, if above our example instead involved lending $200,000 to the project operator for 9 months at a 10% APR, then the actual interested would be 7.5% (that’s 9 mo’s divided by 12 mo’s, then multiplied by 10%). This assumes there are no early repayment fees imposed on the project operator.

Time’s Impact on Return Estimates

Projects can take shorter or longer than expected, due to factors like receipt of building permits, using or not needing the buffer time built into a project plan, or time-to-sale on the market. Here’s a comparison of the impact of time on the above equity and debt examples, with that $200,000 investment.

Net (non-annualized) returns for the above equity and debt examples:

Invest. Type Project Duration: 7 months (ahead of schedule) 9 months
(on schedule)
12 months (behind originally estimated schedule)
Equity 20% non-annualized 20% 20%
Debt 5.8% 7.5% 10%

Now, here are the annualized returns for the above equity and debt examples:

Invest. Type Project Duration: 7 months (ahead of schedule) 9 months
(on schedule)
12 months (behind originally estimated schedule)
Equity 34.3% annualized 26.7% 20%
Debt 10% 10% 10%

Each type of investment, equity or debt, can be right for you as an investor after you consider all the factors, such as security/guarantees backing the capital and total potential return, not to forget reputation of the developer, the financial dynamics of the local and national markets and your own portfolio diversification needs. Just recall to use an apples-to-apples comparison of return rates in the process, either annualized or non-annualized.

Re-building New Orleans and profiting from challenging home refurbishments, with Justin Mills

Q: How did you get started in real estate investing, Justin?

I got into the real estate business in 2005. I’ve always been open to business opportunities and locations with great potential – the book Rich Dad, Poor Dad was an early inspiration – so I decided to move from western Louisiana to Orlando, Florida and received my broker’s license. I focused on a lively niche in Florida, mobile home parks, and sold several for over $1 million.

My first house renovation had a clear, profitable exit. Someone held a property with a main home and a separate, spacious guest house, about 60 feet down a narrow alley. The owner had the idea that someone should be able to split it into two lots, and fix them both up. He didn’t want to invest the time or effort himself. After researching this possibility with the city zoning commission, the deal was very viable. This prior owner had purchased the property for $190K and I bought it from him for about $250K. After a few thousand dollars in legal fees and filings to rezone, some painting and floor finishing, plus a separate driveway, my profit on the two separated homes was roughly $110,000. The deal reinforced for me the value of building relationships with local real estate participants, and I’ve stayed in touch with the original owner ever since.

Q: When did you begin home projects in New Orleans?

My real estate career actually began a few months before Hurricane Katrina. At that point, of course, Florida was a better market to address. By 2012, my wife and I decided to move back to Louisiana. There were probably thousands of homes in New Orleans that were in need of repair – abandoned, suffering from water or termite damage, etc. They took time to be addressed in terms of ownership status and financial situation with the banks, and were coming back online in the market. We saw a major opportunity to be part of that turnaround, and I set up Mig Fund as my development company.

Q: What makes these attractive investments?

A lot of it is location: New Orleans will always be an attractive place for families, professionals, and students, not to mention tourists. A huge hospital facility is being built in downtown, in New Orleans parish. It will cover many city blocks, employ thousands of people and is getting closer to completion.

Because we are at an upward turning point for the city, timing and neighborhood are key investment considerations as well. In one neighborhood, Lake View, an average home that might have cost $90K a few years ago could now be worth $400K. The positive developments and energy in that neighborhood are feeding on themselves. Lake View was always a decent place to live, but now the largest, new construction homes might go for $800K or more. It’s attracting the families of professionals, such as doctors and lawyers, and great restaurants are appearing on more corners. It still feels suburban, but Lake View is just 5 minutes ride by local highway to downtown New Orleans. The Uptown Market district, south of St. Charles to Tulane Ave, is also in demand. These are the types of hot spots I look for.

Q: How do you manage projects involving older homes that may have been exposed to the elements?

I specialize in refurbishing older homes in New Orleans; they can have great potential. I’m fully committed to these types of projects; not many others are. There are many benefits to this approach.

Because there are few buyers for these properties, they often can be acquired for the cost of the land.

You need a good team to plan and budget properly. Given these houses are older vintage, you may be replacing terra cotta pipe with PVC, or completely updating the wiring. I’ll reserve funds wherever needed to replace wood beams, too. My contractors are very familiar with what needs to be done. Some are specialists in terms of skills and related city inspections. Others are experienced handymen that help me with a variety of tasks, from flooring to walls and bathrooms. I always serve as the general contractor, to think creatively about the big picture of beautifying a home, while controlling costs.

We’ll reorganize the floor plan wherever it makes sense. Because older homes here originally didn’t have air-conditioning, they were build railroad style, with no separators between the living areas, bedrooms and kitchen/dining areas and a need to walk through the bedroom to get to the kitchen. We’ll introduce hallways or sliding doors to guide activity in the house, and place the kitchen in the middle, next to the dining/living room area.

Materials are used that make sense for New Orleans today. Exteriors historically were made of wood. Today, the most accepted material is Hardie brand cement lap siding, which gives you a variety of wood looks, at an attractive cost, that weathers conditions well.

Finally, we add modern amenities like granite countertops in the kitchen, and expand the bathrooms.

The financial reward is of course driven by the difference between acquisition and construction costs, versus sales potential. I can usually build additional space at $40/square foot and sell it for $150/square foot. I’m looking at a deal now, where we can add a second story to a home, for a nice potential profit. I’ve had another successful project, a five-plex home, where we reorganized the floor plans of two units, modernized the others, and I’ve held onto it as a rental.

Q: What’s your interest in crowdfunding?

I feel I have a good handle on how to do the projects I’ve mentioned. My next goal is to expand my capabilities, especially access to financing, to sustain several projects at the same time. I’m doing one home flip right now, closing on a single family next week, and planning to close on a four-plex by the end of July. Crowdfunding can help with this vision.

Urban re-development and the Charlotte, NC real estate market, with Kenneth Bell

Developer Kenneth Bell and his partner, Mark Foster, build and refurbish homes in the area of Charlotte, North Carolina. They specialize in “infill development”- rebuilding or enhancing property use within built-up urban areas. In this post, Kenneth explains why investment returns on infill projects can be like “consistently hitting doubles in baseball,” and why Charlotte is a great city for real estate investment and for living – after he spent much of his life in Queens, NY.

Q: Ken, tell us about infill development.

A: Infill is about building, or enhancing, a property within an already-developed, urban area. We do both new development and refurbs, but prefer new construction for a number of reasons.

In addition to looking at the project’s value, there are community and social benefits of infill development. You’re not contributing to suburban sprawl by commercializing open land nearer the edge of the populace, which might destroy elements of the ecosystem. Some people even call our approach to infill “urban refill,” because you’re revitalizing a neighborhood that could otherwise be suffering from empty lots or vacant buildings, and adding value to the neighbor’s homes at the same time.

Q: Why are infill and new construction attractive as an investment ?

A: One reason investment returns can be more consistent with infill than with building in the outer suburbs is that there are more “comps” (comparable sales prices for nearby homes with similar characteristics). With comps and experience, you can closely estimate what an extra 500 square feet, or granite in the kitchen, will bring in home sales price. I look at offering prices and sales in the market every single week, and confer with my team on what features and square feet are selling at what prices. Because we’re building new product, we can offer features like two-car garages that home-buyers love but can’t find anywhere else on the market right now, and achieve a per square foot sale price that’s above most of the surrounding properties. A combination of desirable neighborhood with the best home features is a big reason why investors like our projects.

I believe there’s also more consistency in investment returns with new construction than with refurbishments, or “flips.” There’s only so much visual inspection you can perform on an existing home. There was one house flip I invested in, at an excellent purchase price and a conservative budget we laid aside for enhancements. But once work began, we discovered water damage to the supporting structural elements, and had to tear out the floor. Then we noticed there was termite damage to the main girder and other structural issues followed. It costs $20,000 more to fix than anticipated, which really ate into the investment returns. Adjustments to an existing home in general are challenging – what do you do if the foundation has shifted and the floors aren’t level?

With new construction I feel I can deliver a very solid and fairly reliable return rate. Mark Foster is my construction partner. He’s been in this business since 1993 and together we’ve built a solid, growing business that emphasizes consistent outcomes. My first mentor in real estate told me “it’s nice to get a home run [i.e., outsized profits and IRR] once in a while, but much better as a business to deliver a double or triple every game.” These are some of the reasons I really prefer new home construction, though our team look for good opportunities wherever they arise.

Q: How do building codes affect house fix-ups in old neighborhoods? I once looked at a 1920s tudor where you could see bare copper wire running to the outlets.

You’re right about the wiring; that old, uninsulated approach is called “knob & tube.” Just as with wiring, you’re never sure about what insulation or mold is inside old walls. It may be R-15 insulation value, or the insulation may be totally compromised, when with new, infill construction we build with R-30. Home buyers usually come to appreciate the importance and ROI on quality insulation after they move in and winter arrives, so with the new homes we have that feature built-in.

When a building isn’t up to modern spec, getting city approvals can be unpredictable. With any given old home, the city inspector may decide the current performance insulation, electrical and other utilities is good enough to proceed as is, while with another house the inspector may require a complete overhaul. With the new homes we build, of course, wiring for the digital age and insulation that respects the environment are always included.

Q: You put a lot of emphasis on maintaining the historic feeling of the residence, correct?

A: Absolutely. Most homes we work on were built between 1900 and the 1940s. Historic neighborhoods are very attractive, both because they’re often near many amenities and also because a lot of people like “character” in their home. The challenge, though, with older homes is that the existing structure doesn’t fit modern living needs. For example, older homes don’t have walk-in closets, or open floor plans between the living/dining rooms and kitchen. Garages are separate from the houses, usually down a small alley.

The key is to reflect the style and craftsmanship of the neighborhood while adding modern features to your property. The architectural style we often work in is “bungalow,” featuring front porches and efficient use of space and good ventilation, and clean exterior lines with a steep roof pitch. Most have cedar shingle; sometimes brick is used.

When we build a home in this type of neighborhood, we work with an architect who exclusively designs bungalows, and every home design we create together is unique. Bungalows have oak floors, taller baseboards, and shaker-style cabinets, which we faithfully include. Then we introduce the modern features, including multiple, spacious bathrooms, accommodating closets, and where possible an attached two-car garage. We can side the house with simulated cedar shake to make it attractive yet affordable, and sometimes we’ll use brick as highlight facing for the front porch. We’ll selectively introduce gables or exposed rafter tails, like the original homes in the neighborhood.

Q: What do you like about Charlotte, as a place to live and build?

I grew up in a borough of New York City, in Queens, so I know what the largest cities can offer. My kids, girlfriend Bryn, and I really enjoy the quality of life in Charlotte, though. Many people don’t know that Charlotte has second biggest banking sector in the country; Bryn works in that industry. There are a lot of young professionals here and the population is growing, along with the restaurants and other amenities they enjoy. But there are still the local shops in each neighborhood.

Charlotte is one of the few vibrant and growing cities built around a true central downtown. It has its commercial district, the NASCAR museum, art exhibits and theaters, several major sporting venues, even a light rail, all within walking distance of each other. It’s not like some places that need you to drive to various strip malls and sports centers on the highways’ outskirts. There’s an amazing greenway to stroll through, and participation in bicycling is insane in my neighborhood.

Look, my partners and I could obtain the materials, buy the land, and build a house anywhere. A home’s value isn’t so much about the sticks and bricks. Location is a big part of the reward.