# Entrepreneur of the Week Il Tropen # Post 6
First of all I want to thank again for this wonderful forum that gave me the stage and for Avi Ben Mordechay who approached me, and thanks to everyone who read and commented both here and in private.
I wanted to end by presenting my favorite types of properties:
Anyone who has dealt with rentals, especially in the last two years of the corona, knows the shortcomings. The maintenance calls (sometimes in the middle of the night), the lack of transparency in working with the property managers (see post 4), empty apartments, theft of electrical appliances (especially when it comes to tenants with limited means, like section ?, etc.
Is not it better to invest our money in a property with much less headache, and with a nice return? Is there such a thing?
So the answer is yes!
Self storage:
It turns out that in the US there is a huge demand for warehouses for rent. Here are some interesting statistics:
• One in ten Americans will use self-catering
• The average occupancy per property is 93.6%, but an occupancy of less than 70% is usually required for economic occupancy.
• The United States has over 49 self-storage facilities with a total area of about 1.9 billion square feet
• The self-storage industry generates close to $ 40 billion in revenue per year and is considered the fastest growing commercial real estate, with the lowest operating costs in the US
Imagine a portfolio of 2,800 housing units, but without any kitchen, only about 9 toilets (all without bath / shower), and only about 9 maintenance people. Low operating costs we said?
Prohibition on evicting tenants who do not pay? (In Seattle, for example, even before the Corona, tenants must not be evicted for non-payment of rent between November and April, lest they become merciless in the winter) - the ban is not valid for self-storage - change the lock tenant And if he still does not pay, his belongings are sold at auction.
My wife and I invested in a self-storage portfolio about a year ago, and the return so far has been above expectations.
See the link below to the investor portal of the fund I set up to finance the purchase and management of a portfolio of 9 self-hosting complexes.
Parks of Modular Homes Mobile Home Parks & RV Parks:
Not all parks of this type are the same. In many cases, the property owner is also the owner of all the prefabricated buildings on it, and he rents and maintains them like a regular rental. In the parks I am looking for, the property owner owns only the land and common facilities. That is, its liability is less even than the Condominium Tenants Association, where the association is usually responsible for things like repairing roofs and exterior walls. Here the owner is responsible for landscaping, garbage removal, and supplying water / sewage / electricity / gas to the unit. And that's it. The tenants buy the units, and pay a LOT RENTAL fee for the use of the land.
More preoccupation than self-storage, but a great field!
I have not yet personally invested in this field, so if you come across a suitable opportunity, I would love to collaborate!
Seller Notes:
I wanted to mention the lending field of this kind as an extension to the Be The Bank topic I talked about in # Post4. One of the more creative methods of selling homes is through reputable financing. There are hundreds of thousands of Americans with good incomes and enough money to pay down, who, for all sorts of reasons, cannot qualify for a mortgage. In my work as a mortgage agent, the most common reason is self-employed business owners whose income is not reflected in the bottom line of their tax refunds. (By the way, if you are in this situation and live in one of the countries where I am licensed for residential mortgages - maybe I can help).
So, how does it work? The seller spreads the purchase cost of the buyer, in exchange for a pre-agreed interest rate - usually, an interest rate higher than the interest rate at the bank. The amortization (the period for calculating the monthly payment) is between 20 and 30 years, although often the loan period is only 5-10 years (with a "balloon payment" at the end of the period).
The buyer's commitment is long-term, but you can sell the promissory note to someone else at any stage - if you have a promissory note you want to sell, contact me!
If you are selling a property and want to enjoy all the worlds, selling financing can be a solution for you:
• You will receive cash at closing
• You will not be responsible for tax payments (you will still need to protect yourself and make sure the buyer pays his taxes on time)
• You will not be responsible for property insurance (you will still need to make sure the buyer pays the insurance premium on time)
• You will not be responsible for maintenance and repairs (here it is advisable to buy suitable insurance coverage for protection against neglect by the buyer)
• Continue to receive cash flow in the form of monthly mortgage payments
• Enjoy space on both the property and the financing
For seller financing for homes of 1-4 housing units, there are the following restrictions (which do not exist in other transactions, which are considered commercial):
• No more than one transaction per year, or three transactions per year if there is no balloon, and if you have reasonably verified the buyer's ability to meet payments
• You are not the contractor who built the property
• You are the sellers of a property you own
• The payment agreement does not include a negative amortization (payments that do not cover all accrued interest)
• It is recommended to use a fixed interest rate only
• All this, unless the buyer is another investor who does not intend to live in the house
If you exceed the above limits, you will be subject to huge fines, and will be subject to all Dodd-Frank regulation, RESPA, and other laws that apply to mortgage banks!
This! Hope you enjoyed this week's post series! I would be happy if you contact me with any questions regarding real estate investments in the United States, both for those living in the United States and for those living in Israel, financing, leverage, and more.
I would also love to hear about opportunities for collaboration in Kenya, and make connections with other experts in the field!
Contact:
Investor Portal for Self-Storage Fund - The fund is open until February 2022:
Facebook page for guidance, advice, and real estate investments:
On any other topic, please contact me via Messenger, WhatsApp, or make an appointment at the following link:
Eyal Tropen NMLS 874253
425-922-1055
https://mypropertyfunding.com/meet-me
