#יםמהשבוי Post 5 - Business thinking and methods of action. As far as methods of action are concerned, I will refer to Neko...

# Entrepreneur This Week Post 5 - Business Thinking and Ways of Action. When it comes to action, I will refer to clean ...

# Initiated week Post 5 - Business Thinking and Ways of Action.

When it comes to courses of action, I will address a point from a personal angle that is important for us to raise and in my opinion this is part of the long-term strategic thinking - the partnership in the business,
Some see it as an advantage and others who see it as a disadvantage, but in our experience one and another in our case is much more than two. Of course, when the partnership is healthy, we encourage all those who work today to find the right partner.

In addition to the partnership between us, we are constantly working and producing additional strategic partnerships, local / global cooperation.
Local collaboration has business and economic implications, the benefits we found in it are in brainstorming, everyone has their strengths, it is expressed in division of labor / travel splitting / etc, everyone has accumulated a set of capabilities in recent years, and can give their capabilities to the business. "To make a long and challenging journey, easier together" - everyone knows the sentence.

We have already talked about global cooperation, with an emphasis on allowing an option for American funding (for those who are not US citizens).
The division of labor is also in field trips.
One of the goals we set ourselves is a joint trip at least once a quarter to visit assets, maintain relationships with contacts, create new relationships and new business opportunities, and adapt virtual information to reality.

The first time we traveled together (only on this trip could you write a book ??) We met friends we already knew from many conversations, and immediately saw the benefit in partnership. The very journey together, and later also in the personal perspective in each situation, and in the division of labor due to lack of time and more.

In a framed article we will add on the importance of traveling there, as you all know and are experienced, we went to meet friends we already knew from many conversations but in face to face meetings we immediately identified with whom we want to continue the relationship and with whom we don't, "good eye sight.."
In addition, it is important to plan a schedule in advance, it is important to understand in advance that the time will probably never be enough to carry out everything we want.
The schedule was to be prepared in great detail, but in spite of everything, there were emergencies that required time intervals for them, which changed a bit from the original plans. Undoubtedly, even in these places one must be creative, know what is more important and what is less. We have known more and more people who are relevant to us.

Action:
Regarding transaction analysis, which is a specialty in itself in real estate entrepreneurship, there are a number of things that we think can be emphasized, beyond ARV/Comps, etc., which you are probably all familiar with.

We will describe and describe our transactions:

The investments we have made so far have been single or duplex properties, not in luxury areas, not in failed areas and neighborhoods, but in mid-range neighborhoods, mainly C+ areas, these areas will usually give the percentages of return we aim for [7-10 percent net return] The focus within the neighborhoods is on the area The developer and the debts adjacent to it, where we buy properties at prices 60-100K

The difference between a good deal and a less good deal for us is the ability to identify the state of the home, and the cost of renovation and maintenance over time of property maintenance, of course beyond location and price.

Problematic apartment maintenance will "bite" us from the yield, and cause heartache for us and the investor, there are certain neighborhoods where even if the apartment is in good condition, there are many cases of vandalism that the repair costs are on the owner, so it is important to check with the realtor or the nearest police station beforehand about this. In addition to examining and reading the inspection reports in a thorough and thorough manner, we require from the broker videos from the outside and inside, and beyond the representation of the management company that arrives at the apartment even before the purchase, we send the video for advice from a local handyman we work with, and of course physically send it to the property to inspect and evaluate Also these repairs will require.

The advantage of using a local remodel is that even after purchasing the property you can do more things that can help in the future. Periodic tests and small, cheap and important treatments that will prevent major breakdowns down the road.

Here are examples of the last 2 properties we bought.

• The properties are located in neighborhoods that border on growth areas,
• The area has new projects, apartment buildings.
• We make sure that beyond the deficiencies that may exist (even in the hands of the tenants) the return that will remain in the hands of the investor - net annual return will be at least 7-9% annually. Our calculation is based on 50% of the gross value, that is, the return before expenses should be in the region of 20% (everything before tax).

We bought the first property at about 60K.
The seller demanded 70K, we knew in advance that the price was right for us, but we will not buy an apartment at market price, and we submitted an offer for 57K and in the end we closed on 59K. The condition of the house was excellent, there were no significant things to fix.
We added about $ 2000 to replace what seemed to be a turnover, and took it out for rent, and after a month and a half we found tenants paying about $ 950 rent + $ 100 expenses (we could get more but it was in winter and the amount broke the ear for an investor to move ahead).

We took the second property a few hours after going to MLS.
What caught us was the quality of the apartment and the materials. (the only house in the area that was covered with bricks) and the condition inside was really good even compared to other houses. Of course, we performed all the tests that Eyal was talking about, and discovered a house kept at a very high level of maintenance (it turned out that the seller himself lives in it). The seller wanted 60K and we made an offer for 50K and finally closed at 52K.
As we put the apartment on the rental market it was "kidnapped", and within a week it was occupied with a rent of $1100 + $100 expenses.

D.A. What helped us bring it down to almost 8K is that initially the seller inserted a clause that if defects are found in the inspection report, he will be given the right to correct them himself and we will not be able to "negotiate" the (initial) price
In the end, after consulting with the Inspector (who literally begged us to buy the apartment??) He added everything he could to the report so that the seller would agree to actually renovate the house, or alternatively lower the price for us - which eventually happened??

In the picture: the properties in question and the reminder next time to come for more time - we thought we would have a whole day to see the city, but from the hour and a half that was barely even we went to take a look at the legendary Harley-Davidson museum

- with Yoel Borovsky.


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