For existing properties, I also would recommend the use of a qualified inspector prior to the purchase of any commercial investment property, especially multifamily investments. If you are purchasing a multifamily property that has deferred maintenance, it would be wise to locate an inspector that specializes in apartments. Please ensure to request a report that details repair items and estimated repair cost. This can serve as supporting documentation for your request for seller concessions. Due diligence also requires the buyer to examine a survey and ensure that any easements are included as part of the deed or lease. When purchasing a multifamily property, you will want to make sure the legal description on the survey matches the legal description on the title insurance commitment.

The title insurance commitment is issued by the title company that will most likely be facilitating the settlement of the property. They will search the property for liens or encumbrances that will prevent transfer of title for the specified property, status of tax payments and verification of seller’s authority to sell the property. These services can also be performed by an attorney experienced with commercial real estate due diligence.

Real estate financial due diligence involves the investigation or audit of the financials of a real estate property. This is a fundamental process that requires some ability to understand the primary profitability drivers related with a multifamily property. This process is critical to determining whether the potential investment meets established investment thresholds and objectives. At a minimum, most investors prequalify investment candidate based on predetermined cap rates, debt coverage service ratios and cash-on-cash returns. Conducting financial due diligence for a multifamily property can be tedious, but the effort brings immeasurable value to the overall due diligence process.

All decisions regarding the underwriting of a multifamily property requires a complete comprehension of key market and financial drivers. In order to determine the true economic health, keen investors analyze the property’s actual numbers as compared to the property’s proforma data. Remember, you are purchasing the property based on the current operating income with any upside based on future net operating income improvement should show on your balance sheet and not the previous owner. Based on my financial experience, this is part of the due diligence process that I tend to enjoy the most. At a minimum, you will want to request the prior three years operating statement, YTD operating statement, balance sheet and last 12 months rent rolls.

In addition to environmental reports, survey and title commitment, physical due diligence require you to inspect the property, so to determine any required cosmetic or major deferred maintenance improvements. One major area that many investors overlook relates to utilities and sewer connections. This can be a major cost consisting of both financial and time to coordinate with local city officials. Don’t forget to ask the seller to contribute to the cost via repair credits or price reductions. Multifamily investing can be profitable with some basic knowledge of national trends and the local real estate market.

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “A Portfolio Diversification Exert” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post Commercial Real Estate Due Diligence first appeared on Crowne Equity Partners LLC.

Cash Flow

[dark_headline]Monthly cash flow provides the investment earning returns in the form of income.[/dark_headline]

Equity Capture

[dark_headline]How about the possibilities of taking profits from equity tax-free[/dark_headline].

Principal Pay Down

[dark_headline]This relates to the mortgage reduction paid by the tenants who reside within the community.[/dark_headline]

Appreciation

[dark_headline]Property values rise overtime that serves to increase property equity values.[/dark_headline]

Depreciation

[dark_headline]Depreciation is an allowable non-cash expense and can create tax loss benefits.[/dark_headline]

Diversification

[dark_headline]Real estate is an excellent addition to portfolios since the asset class lacks correlation to the stock market.[/dark_headline]

Leverage

[dark_headline]Larger properties can be acquired by use of acquisition loans, therefore eliminating the need for 100% cash funding.[/dark_headline]

Stable Returns

[dark_headline]Multiple income avenues provide safe consistent investment returns in the form of cash flows and capital gains.[/dark_headline]

Refinancing

[dark_headline]Provides ability to use equity appreciation to acquire additional properties to hold within the asset portfolio.[/dark_headline]

Favorable Tax Treatment

[dark_headline]Real estate is typically treated more favorable compared to other investment vehicles.[/dark_headline]

The post 10 Benefits of Multifamily Investing first appeared on Crowne Equity Partners LLC.

Mark Spradlin of Fort Smith, Ark., paid $1.65 million for the vacant Cypress Ridge Apartments, 1209 W Hefner Road, with plans to spend $3.8 million to bring the 256-unit property back into service. It is Spradlin’s first investment in Oklahoma City, said Mike Buhl of Norman-based Commercial Realty Resources Co., who handled the sale.

Cypress Ridge Apartments, at 1209 W Hefner Road in Oklahoma City, are shown. PHOTO PROVIDED BY CRRC

 The seller was Cypress Ridge OKC LLC, led by David Darley and Joseph Broadbent of Salt Lake City, Utah. They had acquired the property for $750,000 in September 2010, after nearly a decade of mismanagement and lack of capital improvements. Cypress Ridge, built in 1971, has 205,851 square feet in 32 two-story buildings.

“The buyer viewed this acquisition as a ‘value-add’ opportunity where he can create value through renovation,” Buhl said. “The buyer will seek to capitalize on the success of the nearby Britton Crossing Apartments at 413 W Britton Road, in this same northwest submarket. The 256-unit Britton Crossing property was acquired for $2.3 million in May 2008 and also underwent a substantial rehab.

“Britton Crossing has been transformed to one of the nicer communities in this submarket and is now reaching full occupancy. The renovations at Cypress Ridge will follow this same pattern of providing above average units in a clean and safe rental environment.”

The post OKC Value-add Multifamily Project first appeared on Crowne Equity Partners LLC.

An option for using 401K and real estate investing together is to place the money into an IRA, SEP IRA or SIMPLE IRA. In order to accomplish this, you will need to establish what is called a self-directed account. This type of account provides the account holder more diversity regarding investment options. Several self-directed account custodians offer such account and can be established within a few days to weeks. The timeline mostly depends on  the account holders funding method and account option selected to established the investment.

One of the most popular options to consider when investing in real estate is multifamily property investing. This asset class consists of small multiplex units to larger commercial multifamily apartments. The process of making a profit with multifamily rental properties is straightforward. Since there are several units in one building you have the ability to rent each unit out for a set price each month. Each unit will vary in rate due to factors such as size, market availability or current market rates. Compared to single family homes, you have the ability to reap benefits of economies of scale.

Multifamily rental properties can be challenging to manage if you decide to take on the process of managing the units. The process might be considered challenging, but it can also be very rewarding for the property owner.  Most of your time will be consumed by handling tenant problems, such as maintenance issues and ensuring timely rental payments are submitted.

Issues such as the aforementioned, does not have a set day or time for its occurrence. Therefore, you may find yourself working nights and weekends. Not to mention the time away from family and work if you are employed. If you are not excited about the management aspect of multifamily properties, you may consider hiring a property management company.

You can hire a property management company to assist you with all of the day to day tasks that can be quite time consuming. These companies will help to collect your rent each month, and will also be responsible for all of the repairs and overall well-being of the property. Of course you will have to pay for this service, but for most multifamily rental property owners it is well worth the money. In general, real estate investing can provide the following opportunities to help you 401k or IRA account to secure your future.

[h3]Your 401K or IRA can win 6 Ways with Real Estate Investing[/h3]

• Cash Flow
• Equity Capture
• Principal Pay Down
• Appreciation
• Depreciation

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post Multifamily Investing and Your 401K first appeared on Crowne Equity Partners LLC.

If you are planning on investing in your own commercial real estate venture, financing your commercial real estate investment will probably take place at your local bank. You will have to come up with a good part of the money for the project, a detailed business report, a statement of assets and liabilities and other documentation that states how you are going to pay for the property and how it is going to be used. They will also want to see a business plan as well as information from the municipality where the property is located prior to loaning you money.

Getting a bank loan can be time consuming, but if you are planning on making a career out of investing in commercial real estate, this is an excellent opportunity to build up a relationship with your banker. Once you have established a good credit history with your banker, chances are that they will be willing to lend you more money in the future at a better rate.

You will also most likely have to provide any financial information pertaining to yourself as well as income tax statements. If your business is incorporated, you will have to show proof that it is in good standing with the state in which it is incorporated when financing your commercial real estate investment through a bank.

If you do not wish to pay interest rates or fees charged by a bank, you can enter into a real estate partnership with an investment company or investment group when financing your commercial real estate investment. You will only have to put up a portion of the money, but will have to split the profits with the other partners in the group. This can be quite beneficial for someone who knows little about the commercial real estate market but wants to make their money earn a higher yield that it would do in a money market account, mutual fund or a bank.

Commercial real estate investment is blooming across the United States. Unlike the residential market, the commercial market is still proving to be a viable option for those who want to invest in the real estate market today. However, investing in commercial real estate is completely different than investing in residential real estate and financing your commercial real estate investment is also quite different. You will deal with a bank that is rather stringent in their requirements or an investment group where you will share in the costs as well as the profit.

As the interest rates are low, financing your commercial real estate investment through a bank has never been better than it is right now. Be forewarned, however, that if you choose this route, you have to know something about what type of investment you are financing, how it will be used, have good credit and have a solid and proven business plan.

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post Commercial Real Estate Financing Options first appeared on Crowne Equity Partners LLC.

Many professionals, such as doctors and attorneys, form limited partnerships when investing in real estate ventures. A commercial real estate venture or limited partnership enables several individuals to take part in a larger commercial real estate venture. Investing with partners in commercial real estate can include purchasing property, strip malls, industrial buildings or even large apartment complexes.

Forming a joint venture to purchase commercial real estate can be facilitated in the office of your attorney. Everyone will put a certain percentage towards the property and receive part of the profit. Real estate is usually a good investment but takes good knowledge of the market.

The ideal way to invest in commercial real estate is to have several partners who can all add something to the venture. One partner may have more money while the other may have more real estate knowledge. Another partner may be willing to manage the venture. Everyone should either have an equal financial stake in the commercial real estate venture or be able to contribute in some other manner.

When choosing the right commercial real estate venture in which to invest, consider the location of the property as well as the use. There are many bargains when it comes to real estate today as the market has reached rock bottom on some areas.

If you are considering investing with partners in commercial real estate, it goes without saying that you need to know your partners very well as well as their financial situation. Be wary of anyone who wants you to give them money for a chance to make easy money. Although there are some great commercial real estate investment deals on the market today, there are also con artists who prey on those who want to make fast money.

Investing with partners in commercial real estate can be a great way to make your money work for you. Real estate can be one of the best investments you can make as it tends to appreciate in value, in some cases, very quickly. If you have some money to invest and want a good return, consider investing with partners in commercial real estate. Whether you decide to purchase a large area of land for future development, or a strip mall, with knowledge of the real estate market, you can make your money earn a good return.

The commercial real estate market offers thousands of options for investment, however, commercial real estate tends to be more expensive than residential real estate and financing is not as easy to attain. One reason people invest in the real estate market with partners is to eliminate the need for financing. Investing with partners in commercial real estate can be the best way to make money in the real estate market today.

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post Investing with Partners in Commercial Real Estate first appeared on Crowne Equity Partners LLC.

“Planning for Retirement & Improved Business Cash Flow”

Small-to-medium sized business owners should take heed of an important investment strategy known as the self-directed IRA, solo 401(k), SEP and SIMPLE.

Not only are there tax benefits, but the benefits of a self-directed IRA as an alternative investment option can help the small-to-medium sized business owner and his or her family plan for long-term personal goals, like retirement.

The bottom line: it is extremely important to diversify one’s assets – this can be achieved by allocating a portion of assets and funds into alternative investments.  In particular, the “true self-directed IRA” is one of the best vehicles to accomplish such diversification.

The media is even widely discussing these benefits:

A recent Today Show video (view it here) discussed this investment vehicle:

>> when does it make sense to go to something as alternative as these alternative IRAs ?

>> if you have an asset that you think is going to have explosive growth. it might make sense to look at this. one of the benefits of IRAs is that the assets in the account grow tax-deferred until you have to pull them out at age 70 1/2 or a roth IRA grows tax deferred forever because you pay taxes up front. that can be hugely beneficial. there are hitches as well. you’ve got to be careful in these accounts of what we call self-dealing which basically means you can derive no benefit from your IRA until you pull the investments out. I think the easiest way to think about it is if you bought a vacation property and you put it in your IRA , you could not live there. you could not stay there. your family can’t stay there. the proceeds you get from renting the property out has to go right back to the IRA and even if you were to need to fix the roof on this vacation place, you can’t do it yourself because the IRA — the government might actually look and say, hey, that represents a contribution of more than $5,000 a year and in that case, the whole transaction, the whole account and the tax benefits fall apart.

>> so I’m hearing two things. the point you made me think there is no way I will want to put a house in my IRA and maybe in the olden days, house prices will go up and you felt comfortable. would you — how would you put a house in your IRA today?

>> if you were looking at a distressed property. say you got an IRA someplace else or a 401(k) and you want to roll it over, use the money to buy one of the distressed properties, the key is finding one of these alternative IRA custodians who can actually take you through the process and make sure you don’t mess it up. and if you want to do this several times, if you want a vacation property , horses and cattle, separate IRAs so if you mess up one you don’t mess them all up.

It should be noted that it is easy for small business owners to place retirement planning on the back-burner.  After all, running a business is complicated, which drives business owners to focus more on resolving today’s problems.  Day-to-day operations can bring on enough stress that long-term planning is not paid the proper amount of attention.

But not only is retirement planning an area where small business owners tend to lack a sense of forward looking initiative; planning and forecasting how to change such forecasts is also an important business tactic that deserves – but does not necessarily get – adequate attention.The latter concern is important for the owner’s business itself, while the former is important to the business owners’ long-term goals and his or her family members’ goals. So often, the business owners rely on the vitality of their company to put food on the table.

Planning for The Future with Non-traditional Investments

Therefore, it is imperative to plan for the future by diversifying assets, in an always-changing financial landscape and economy.One of the most important benefits to planning ahead in such a way is so the business actually leverages certain opportunities to create a tax free real estate income that can be used for retirement, as well as generational wealth planning. As a result of the Economic Growth and Tax Relief Reconciliation Act, “many of the restrictions of what type of funds could be rolled into an IRA and what type of plans IRA funds could be rolled into were significantly relaxed.”

Focusing on improving the business’ cash flow can help provide a source of new funding for a self-directed IRA, 401k solo, SEP or SIMPLE retirement account. The business owner can achieve a well-diversified retirement portfolio and potentially build a legacy for his or her family when properly advised. Also, the new cash flow can be used to help improve the cash generated when the time comes the sell the business.

Focusing on improving the bottom line to diversify retirement portfolio by investing in a self-directed IRA is a means to kill two birds with one stone. The combined effort allows the business owner to plan for his or her future, as well as improve their business’ cash-flow over the long-haul.

Article Overview

Bottom-line, when a buyer is seeking to acquire an existing business, they are valuing the cash flow potential. All things being equal, the higher the cash flow, the higher the sales value. By seeking to leverage hidden cash flow from your business to fund a self-directed retirement account, you can kill to two birds with one stone. More cash for you and more cash for your business.

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post Killing Two Birds with One Stone—Business Owners first appeared on Crowne Equity Partners LLC.

The rule states that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72. As an example, to find the estimated time frame to double your money at an interest rate of 6%, then divide 6 into 72 for a result of 12 years.

Years to double =  72 / Interest Rate %

Conversely, you can also determine the required interest to double your money within a specific time period. Using the previous example, you could work backwards to determine the required interest rate needed to double your money in 12 years. For example, you determined you have $25,000 and need $50,000 in 12 years. You want to know what interest rate would be required, so you are able to align potential investment options with your financial goals. Based on the following formula, the results compute to 6%.

Interest Rate % to double =  72 / Years

So given the information, you should consider how this impacts your retirement portfolio.  In order to help you, I have provided some thought provoking questions.

1. How many years would it take my portfolio to recover from the recent market crash?
2. What interest rate do I need to double my money within the next 10 years?
3. How long will it take for my CD to double based on my current interest rate?

The above questions should provide some direction for you to consider. The goal of the article is to give you enough information that you can now consider when planning your retirement portfolio. The key is understanding your investment time horizon and the impact the applied interest rate has on your ability to achieve your retirement goals.

The post The “Rule of 72” first appeared on Crowne Equity Partners LLC.

The solo 401(k) is also known as a self-employed or individual 401(k) and has a Roth option allowing you to take advantage of tax exempt income during retirement years. This is accomplished by contributing after-tax dollars to fund the account.  The Roth option allows your contributions to grow tax free and provides tax free income during later years. Theses benefits combined with a self-directed feature is powerful for any self-employed individual seeking to take control and better prepare for the future.

While traditional banks or brokerage may offer self-directed account, they rarely offer the wide investment options provided by a “true” self-directed custodian. You can do it with a custodian that allows you to invest in any of the asset classes permitted by the IRS.

Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.

He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.

To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.

The post What is a Solo 401K? first appeared on Crowne Equity Partners LLC.