North Seattle Real Estate Agent and Investment Services

Get Your Residential or Commercial Real Estate Investing Questions Answered FREE

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Fri, 23 Jan 2009 19:23:03 -0600

My business partner, Rob Powell and I are in the process of creating an exciting new real estate investing blog at www.TheRealWealthBlog.com. This is one of the few blogs in the blog-o-sphere focusing on commercial real estate and we were recently named by The Real Estate Tomato one of the top ten commercial real estate blogs on the Net. (THANKS TOMATO!)

All this is not to toot our own horn. Instead, we in the process of creating new content and want to answer YOUR questions. We are currently answering any and all questions posted about real estate investing. We've done a LOT of different types of deals - Strip Shopping Centers, Apartment Buildings, Mobile Home Parks, Raw Land, Office Space, and of course - single family homes!

If you've thought about getting involved in real estate, but have had trouble cutting through the sales-jargon that so many promoters have spinning around out there, this is your chance to find out how it really works...

How can you finance your investment deals?
How much does it cost to do your marketing?
Do you need a down payment?
Do creative strategies still work?

No question is too "Beginnerish!"

Hope we can help... please pop over and just comment on any post with your question, or email us!

www.TheRealWealthBlog.com

To your success!

Emily

Bringing Your Family Into the Business

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 21 Oct 2008 18:30:43 -0500

The Wall Street Journal recently ran a great article explaining how many stock investors were taking advantage of the depressed stock market by transferring stock shares while their values were low, thereby reducing their exposure to the 45% tax rate on gifts above $12,000, and allowing their heirs to benefit from the appreciation as the market recovers. While you're at it, it's also a great time to start thinking about how to involve your children in the growth and preservation of your real estate assets.

Many property owners dream of finding ways to incorporate their children into their real estate businesses whether it's through

Teaching young adults the value of hard work by hiring them to clean and show units after a tenant leaves
Employing an estate planning strategy to transfer wealth and save on taxes, by sharing ownership shares from your LLC, or
Off-loading some of the burdens of property management to free up more time for travel.

These can be fun issues to discuss at holiday get-togethers or at formal "Financial Summits," which my family likes to hold.

If you're beginning to consider these issues, and would like a better understanding of your property's position in the current marketplace, I'd be happy to provide a complimentary evaluation, looking at market rents, comparable sales, and economic conditions to help you come up with a strategy for your property. That way, you'll be armed with information when you sit around the table with your family, ready for the important business of preserving wealth in today's changing marketplace.

- Emily Cressey

Real Estate Agent, Specializing in Apartment Buildings in the Queen Anne/Magnolia, Capitol Hill and Beacon Hill Neighborhoods of Seattle, WA

Yes - Great Commercial Property Loans Are Still Out There, Despite the Ailing Financial Markets!

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 21 Oct 2008 18:25:36 -0500

Many of our clients are surprised to learn that despite the news on Wall Street about the troubles in the financial markets, banks are still lending on quality apartment buildings!

Little known fact: - Marcus & Millichap has an in-house financing department called Capital Corporation. We loan our own internal funds (as a mortgage banker) and also shop lenders nationwide and make loans across the country (functioning as a mortgage broker).

I talked to Glenn Gioseffi, whose office is adjacent to mine here in our downtown Seattle office. He's the Director of capital markets in Seattle and he told me that for the right property (high quality apartment buildings) there are still good loan programs available.

After WAMU's collapse, they are directing many of their loan business to us, and we get it funded.
We often get interest rates well below what Fannie Mae and Freddie Mac offer.
We go the extra mile. Glen has shopped over 20-30 lenders for many of our clients to make sure we find them a great loan to meet their needs.

Here at Marcus & Millichap and our Capital Corporation lending department, business has not stalled, stopped, or gone quiet.

If you anticipate needing financing in the near future for a purchase or refinance, make sure you give us a call to find out what we can do.

Call Glenn Gioseffi - 206-826-5700 Ext 5733 - and tell him Emily sent you!

P.S. If you're thinking about selling, this is great news - your potential buyers can still get financed!

Queen Anne and Magnolia Apartment Owners Expected to Fair Well Through Economic Uncertainty

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 21 Oct 2008 16:42:08 -0500

There's still reason for a positive outlook as we watch the stock market rise and fall like a gut-wrenching roller coaster and Americans hold their breath as they lose and re-gain millions in their stock portfolios. Never have I been so glad about my own diversified real estate investments as I have been during this time of economic crisis. The Marcus & Millichap Research Department has recently released an Economic Outlook report explaining what has happened to our nation's economy, and what impact these changes are likely to have on apartment investors. Please request your copy by phone or email.

Queen Anne and Magnolia Apartments Continue to Be Safe and Attractive Investment Although Price Growth Has Stagnated and May Fall

The good news for Queen Anne and Magnolia apartment owners is that Seattle's in-city apartment sector should remain well-protected, even in the face of falling employment rates. High gas prices and short commutes will help keep rental locations close to the city in high demand. However, we likely won't see the same 8% annual rent increases we've enjoyed for the past few years and vacancies are starting to rise toward a (still low) 3% vacancy rate.

The period of euphoria that our real estate market experienced through the 2005 run-up has ground to a halt, and values have stabilized. Many savvy investors are taking advantage of this "breather" and "flight to safety" in the real estate market place to sell or refinance their buildings, and take some money off of the table. They are then poised with cash available, to take advantage of the opportunistic marketplace we are now experiencing.

Great Opportunities Available in the Marketplace to Exchange into Investment Property with More Cash Flow, Less Management, and More Appreciation

There are a lot of great buys availble locally and nationally, and your Seattle branch of Marcus & Millichap is closing deals left and right. We have hundreds of great listings right now including a Walgreens in Shoreline, government-leased Social Security Administration buildings, established mini-storage facilities, and free-standing fast food restaurants like KFC, Taco Bell, Pizza Hut, and Wendy's (by the way, inexpensive chains like these are expected to do very well in a period where families have less money available for expensive restaurant dining). We also have performing apartment buildings and a few turn-around opportunities from condo conversions that were unable to sell their units when the market shifted.

Evalute Your Property Regularly To Ensure Your Portfolio Continues to Perform At The Highest Level Possible For Years To Come

If you haven't taken the opportunity to look at your property's value lately, this would be a great time to do so. We forecast rising vacancy, stalled rents, rising cap rates and stable/falling prices. When our clients ask us when to sell, we respond, "If you're thinking about selling any time in the next five years, you should seriously consider selling now, rather than let your equity sit dead in a property with weak appreciation, while the market softens further."

Whether you plan to sell in the next five years or hold your property long term, I would be happy to talk with you about the performance of your building in today's marketplace. Re-examining rents, prices, and your return on equity is a great way to give your property a "financial check up" and make sure that your real estate portfolio continues to thrive, not just survive, during the current economic gyrations.

Warmly,

Emily Cressey

P.S. To request your complimentary Property Check-Up, or get your copy of our Economic Outlook Report, please call 206-826-5760.

Are Seattle's Commercial Properties Finally Heading Down the Drain?

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Mon, 06 Oct 2008 19:17:37 -0500

At our weekly training workshop last week, our broker taught us how to set up relationships with banks now so that we'll be prepared in the event that we start to see bank repo's and foreclosures rising like they did in the early 1990's. A trend that might have previously been unthinkable in Seattle's HOT-HOT-HOT real estate market of the last 20 years.

Our firm has already begun working on short sales with a few commercial deals that went south as a result of the declining markets in the last year or so. One distressed seller owned a retail center East of the mountains, and we also have two condo conversions where the developer hasn't been able to sell the condo's, so we are listing the properties for sale and the deal will involve buying out the owners of the few units that have sold.

He's anticipating future opportunties with

Short Sales on properties where the owners are in default
Bank owned commercial properties (REO's)
Owners struggling to make payments but not yet in foreclosure
Owners concerned about their tenants not renewing their leases

Although I don't expect a lot of foreclosure activity in Seattle's commercial property marketplace, I do see opportunities lining up for buyers with the fortitude to invest during the tumult. What do they say? It's time to invest when there's blood in the streets? If there ever was such a time, that sounds like now!

According to Marcus & Millichap's research, the retail and office sectors are likely to be the hardest hit by the economic downturn the nation is experiencing. With less capital available, businesses are not expanding, and consumers are spending less, leading to falling business revenues. Combined with all the building that has been going on in the last few years (leading to new inventory available to lease), we are expecting to see:

Higher Vacancy Rates
Lower Rent Rates
Slower Lease-Up periods
Higher Cap Rates

For those with cash, this represents a great buying opportunity. For those without cash, lenders are still lending money if you have a big enough down payment and clean credit. Loans are still going through and deals are getting done every day. However, cash creates additional negotiating leverage in this time of financial uncertainty.

We Call it an "Opportunistic" Market

This may very well be the buying opportunity that many investors have been waiting for in the white-hot Seattle market that has seen cap rates in the 3- to 4- cap range in recent years. 5- and 6- cap properties are now widely available and buyers are working off of ACTUAL property performance figures, rather than pro-formas, meaning there is less speculation driving up the prices.

We are projecting soft prices in the Seattle commercial market for the next several years. If you have been thinking about buying an apartment building, office or retail space, this may be your perfect opportunity.

Call me to find out what we have available!

Emily Cressey

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As real estate agent and investor, I understand the needs of all parties involved in the transaction. Call me if you need help, buying or selling a commercial property in Queen Anne, Magnolia, Capitol Hill, Beacon Hill, or the greater Seattle/Tacoma area.

If you need help sorting through the current financial market turmoil to determine your next investment move, give me a call - 206-826-5700.

What is Your Return On Equity?

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sun, 21 Sep 2008 19:09:31 -0500

Are you Earning What You Thought On Your Seattle Investment Property?

I was stunned earlier this week to find that the average "Return On Equity" after taxes for the clients whose apartment buildings we have the opportuntiy to evaluate, was only 4% .

We probably all agree that 4% is a pretty low rate of return to be earning on an asset as challenging to invest in as real estate. When we look at the projected rate of return for vehicles much safer (savings accounts, CD's, money market accounts) and easier to invest in (stocks, bonds, REITs, and mutual funds), earning a 4% rate of return could really make you wonder if you were doing something wrong by holding real property. Especially if you started seeing your property values began to fall, as they are now doing, even in Seattle.

Seattle Apartment Buildings are Starting To Lose Value

Even historically sterling neighborhoods like Queen Anne, Magnolia, Beacon Hill, Capitol Hill, Greenlake, and other close-to-the-city areas are starting to see cap rates creeping up and properties becoming harder to sell as brokers have to drop listing prices to keep up with the falling market.

Is My Real Estate Investment A Big Mistake?

When you remember that real estate is illiquid, cyclical, can take time and money to manage, and doesn't provide an easy way to keep track of your investment returns, you may began to ask yourself if it wouldn't all be a little easier to just cash in the building and buy a nice easy municipal bond.

Well, be careful at what you're looking at. ROE only tells you part of the story.

Make Sure You Are Tracking Your Results and Looking at the Right Financial Indicators

The way we calculate it at my firm, the "ROE" or "Return On Equity" figure gives us only the CASH return the owner is earning on his equity. It includes cash flow from rents, laundry, vending and other income sources, but, importantly, this figure does not include a number of other important indicators such as debt paydown, tax savings, and most importantly, appreciation. When we evaluate property for clients, we include projections which incorporate these numbers as well.

You see, appreciation is the real wealth building powerhouse when it comes to investing in real estate. Especially in Seattle, where we've enjoyed rates of return on our real estate in the 10-20% range in more than our fair share of years.

That high anticipated appreciation is, in fact, the reason that people are willing to buy apartment buildings here with 4-5 cap rates (they're rising now, as property values fall...) for which they have to make a 50% down payment to qualify for a mortgage.

A Good Return After All

When taken together, these four real estate profit centers (cash flow, appreciation, tax savings, and debt pay down) comprise the real reason we invest in real estate. According to Lisa Vander, author of "The Real Guide To Making Millions Through Real Estate," these four sources combined should give us a 20-30% annual return on our investment portfolio.

And THAT, my friends, is the real reason we invest in real estate.

Seattle Area Real Estate Valuation - How to Get Yours!

Now, for a shameless plug. One of the most important services we offer for our clients at Marcus and Millichap is a real estate analysis. We offer these consultations free of charge, kind of like an "annual check-up" for your property, to help you better understand your property's performance and whether you are meeting your investment goals.

There is no cost to our clients for these services and, since it takes about 30-40 hours of work to analyze one building, the reports and data we provide are very comprehensive and useful.

Since on average it makes sense to sell a property after about 7 years of ownership, it can make sense to review your apartment building's performance regularly, even if you've bought it relatively recently.

If you would like us to take a look at your books and records to compare your property's performance to your investment goals, we would be pleased to do so. Give me a call and I will put you in touch with our best experts, whether your building is an apartment building, commercial building, office building, mini-storage or warehouse! Each of our agents specializes in a geographic area and property type. Talking to someone who knows the market will help you get the best numbers.

I hope you'll call and make sure your investment property is in good health in these turbulent times!

Emily

A Flight To Quality

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sun, 21 Sep 2008 18:35:56 -0500

My firm, Marcus and Millichap, hosted a nationwide webcast last week to discuss the outlook for the retail sector for the next year or so.

It was a great time to get more information, especially in the wake of the Lehman Brothers meltdown, AIG failure and Merrill Lynch buyout.

The takeaway message was that there are still buyers out there, but they are taking refuge in quality buildings. No more the high prices or eager interest in sub-par properties with marginal locations or mom-and-pop tenants. Even a lease with Walgreens, which was once the golden standard of tenants, is not enough to keep a building from seeing its cap rates rise.

Prices are going down, and many buyers with cash available are demanding particularly good deals in order to warrant the risk involved in buying into a down market.

However, we are telling our apartment building owners to assess their needs when considering a sale of their building. It's never fun to sell into a down market, but if you anticipate getting out of the building any time within the next five years, now might be the ideal time to make your move, sell the building and use your cash to get into a property at a great price.

Downtown Seattle Apartment Buildings is My Speciality at Marcus & Millichap

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Fri, 19 Sep 2008 17:40:25 -0500

The First Weeks On The Job

I am so excited to be a commercial agent at Marcus & Millichap. What I was told about the training process is correct! They provide their new agents a LOT of training and support and our in-house resources help us serve our clients better than the competition.

Here's what I've been up to in the "jump in and learn to swim" first few weeks:

Choosing a Specialty: Property Type - Apartment Buildings, Location - Downtown Seattle

Now that I'm two weeks into my position as a New Agent with Marcus & Millichap I am deep into training. One of the first things we do is to select a farm area. Mine includes the Queen Anne and Magnolia neighborhoods in Seattle, as well as the "Downtown Hills" - Capitol Hill and Beacon Hill.

You Live and Die By Your Database

The most important thing I've learned so far is that it's vital to have a database that's large enough that you'll have good transaction volume and can get a piece of the action with the property sales going on. But the database has to be small enough that you can really get to know the properties and people that you'll be working with, so you can legitimately say you're an expert.

So far, I've downloaded from the title company about 1700 property records for apartment buildings in this area. Now my job is to go through the records and update them with the owners' phone numbers and a picture of the property.

Become an Expert in a Small Area

As I build my database, I am also becoming an expert in my market area. Unlike many firms whose agents are generalists working on retail, office, apartments and warehouses all over town, Marcus & Millichap requires its agents to specialize in a property type and within limited neighborhoods.

I'll need to know all the details such as CAP Rates, GRM, Market Volume and Velocity in order to serve my clients well and and help them price their properly effectively. As I have learned in training, this will attract more qualified buyers thus helping the seller achieve his desired sale quickly and for as high a price as possible.

Special Training Helps Us Work Effectively With Our Clients

In November I'll go to a group training in California with new agents from across the country. Then I'll be cleared to start calling property owners in my neighborhoods and developing relationships with them.

The goal is always to get the owners the information they need to make the best decisions possible for their property strategy, whether that means buy, hold or sell. We focus on a consultative approach and building a long term relationship.

Coming Soon

Soon I'll start to be able to share more information about the neighborhoods I am visiting and make this blog a valuable resoure for my future apartment owner clients.

Creating A Fabulous Apartment Investing Partnership

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 02 Sep 2008 18:40:08 -0500

A Great Apartment Investing Team

The way I got started investing in real estate was by taking some great training from a company called Mentor Financial Group, LLC. However, I quickly found that reading about something and DOING IT are very different things. In order to get started investing in commercial real estate, I wanted more than just training or "book knowledge," I wanted to work with a group of people who were already out there in the field.

I ended up buying my first commercial property, a single-tenant office space in El Paso, TX, with two other gentlemen. One, Rob Powell, had started investing in houses when I had, and after buying about 40 investment homes, moved on to work with his father in law, owning and managing a strip shopping center - also in Texas. The other, Roger Maupin, had been a real estate broker, investor and landlord for 15 years and also ran his own electrical contracting business. They both had great experiences to draw upon.

Together we formed a company, Grassland Investments, LLC, and begain buying raw land, apartments, office space, and strip centers.

My desire to be a commercial real estate agent here in Seattle came from my experience working with these great investors and acquiring and managing my own investment portfolio. I wanted to find another way to capitalize on my understanding and love for real estate, and with Marcus and Millichap, I have.

In my work as a commercial broker, I like to think I am carrying the mission of Grassland Investments, LLC - Doing more, together, for the benefit of all. - into a new venue.

Whether you have been investing with partners, or are considering working with someone else for the first time, I would encourage you to consider the following questions.

Some Things To Consider, When Forming An Investing Partnership

What does your potential partner bring to the table (skills, contacts, financing, experience, etc.) that you lack?
How does this person treat other people (Family, Waitresses, Boss, Employees, etc.) and what does this tell you about him?
What is his financial track record? Has he been through bankruptcy? What is his credit like?
Does he have integrity, does he keep his committments?
At the end of the day, what is his committment level to the partnership? When things go wrong - will he make personal sacrifices to keep the business afloat, or will he cut ties to save himself?
Do you share common goals? How long do you plan to invest together? How much money is he looking to make?

There are many more... it can be helpful to work through just one deal first, on a one-off basis, to see how you work together, before committing to a long-term relationship. Then you'll go through the process of forming an entity and creating an operating agreement. This is a great opportunity to hammer out your strategy.

The key to success for my investing company, Grassland Investments, is to be fluid, and have a level of committment and respect that involves always striving to put others needs before our own.

If you would like more information about our investment strategies, the opportunity to be a cash or credit investor in one of our next projects, or to invite one of us to speak to your group, please visit our website: www.TheRealWealthCompany.com.

Emily Cressey
Commercial Real Estate Agent
Seattle, WA

Contact Emily J. Cressey, a commercial sales agent in Seattle, Washington at 877-762-7332 to list your commercial property for sale or to purchase a property in Seattle, Bellevue, Everett, Marysville, Renton, Redmond, Kirkland, Des Moines, Issaquah, Tacoma, or the rest of Snohomish County, King County, or Pierce County, Washington. I am accepting referrals.

Call me today at Toll Free 877-Snap-Deal (877-762-7332). Contact me by email if you prefer by clicking on email me on the right side of this page under my profile.

To view all the Seattle, Washington Commercial Property for Sale, call me today.

Copyright © 2008 By Emily Cressey - Creating a Fabulous Apartment Investing Partnership, All Rights Reserved.

Contact Me for a free portfolio review.

The Best Thing He Ever Did For His Business: Build a Devoted Following with a Real Estate Investment Club

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 02 Sep 2008 17:08:25 -0500

Real Estate Investor Clubs and public speaking events that target your potential clients can be a great way to build a devoted following who have a relationship with you, view you as an expert, and are willing to spend money based on your recommendations.

Read On For More Tips About How You Can Start a Real Estate Investment Club in Your Area...

I was at a Bill Bronchick information marketing seminar last year (for those that don't know, he's a real estate attorney, real estate trainer, and real estate investor) and he said the single best thing he had ever done to drive his business was to start an investment club.

I think he has close to 1,000 members in his Denver-based real estate investors club (CAREI) and he has several profit centers there.

Bill gets leads from his club for all his business activities:

Investors come to him to do their real estate closings and review their contracts,
New investors partner with him on deals or bring him leads when they're in over their heads, and
When speakers come and speak/sell at his club, he gets 50% of the sales revenue.
What's more, as a trainer and consultant himself, he can sell his own products and services to the group directly.

But How Can You Capture More Market Share?

What can you learn from this example? Maybe nothing, maybe everything.

Although organizing a special-interest club takes some work, you don't have to start with a huge group to be effective. Even having a small meeting of qualified people in your home or office conference room, a local hotel meeting room, or in the back of the Sizzler, you can effectively build your status as an expert and gain a following.

I know a mortgage broker who gets 30-50 people a week at her "Rich Dad" Cash-Flow-Game Meetings. When each person arrives, she captures their contact information with a sign-in sheet. She teaches a little lesson for 15 minutes at the beginning, then gets out the cash flow boards and lets everyone play. Meanwhile, she circulates and introduces herself to everyone. At the end, she does another little commercial for her business, and hands out a few door prizes.

This is a great example of doing something small, fast and low-cost (it takes place in her firm's conference room after hours) that generates a big following. She has cooperating real estate agents helping her market the event, and they get to come and schmooze as well.

Target Your Niche Market and Partner with Other Professionals

If you're not working with investors, you could extrapolate on this idea to target your audience better. We all know about the first-time-home-buyer free events, but what could you do to be more creative while still finding a ready-to-work-with-you audience?

One important task is to find people who are ready to do a transaction. A great way to do this is by providing a value-added service to another professional.

Here are some ideas:

Co-host an event with a mortgage broker for clients who are buying/financing a new home but haven't sold their old property yet.
Work with local attorneys: Eight things you need to do to get top dollar for your inherited property. The price of divorce: When Your House is NOT a Blessing. Understanding Foreclosures and Bankruptcy - How To Get Out of Debt Quickly When You Can't Afford The House.
Partner with a Moving Company - How To Time Your Move With Your New Job and New Home Purchase.
Speak with local firms Human Resources Departments - do a "Lunch and Learn" event where you talk about all the issues involved with relocation.

One of the keys to partnering with another professional is to share in their list of contacts. You bring your contacts, they bring theirs. You each get to cross-market to the other's list, and you are providing an extra value to each other's clients.

Use Your Marketing Savvy

How can you get the word out about your real estate club or speaking events?

Many newspapers will advertise your meeting for free in their Events or Announcements section,
You can also put flyers up in local businesses,
Advertise online on your website, blog or with Google Adwords. Ask if you can post a link on other people's sites, or ask them to send out an email to their contact list for you.
Call and invite prospects to attend personally
Or be a guest speaker and speak to other similar groups to build your following

Be sure to capture the names and email addresses of everyone in your audience so that you can update them easily about upcoming meetings and topics of discussion as well as featured guests!

If you are willing to start small, commit to regular meetings, provide value to everyone who attends, and market aggressively to increase attendance, you, too can build a special interest club focused on real estate investing, or any other topic, that can eventually become a profitable part of your business plan.

Emily Cressey
Commercial Real Estate Agent
Seattle, WA

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Call me today at Toll Free 877-Snap-Deal (877-762-7332). Contact me by email if you prefer by clicking on email me on the right side of this page under my profile.

To view all the Seattle, Washington Commercial Property for Sale, call me today.

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A Markeing Campaign with Personality

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sun, 31 Aug 2008 17:30:23 -0500

I was talking to my mom yesterday about my real estate business and how I could make a splash in my new farm area. And we came up with a great idea.

As a new commercial agent with Marcus and Millichap, my goal is to find a farm area and MASTER IT - going out taking pictures, getting comps, talking to tenants, etc. Then I'll be calling all the owners of these properties to introduce myself and try to create a relationship with them right off the bat.

I was also telling my mom about Send Out Cards, which is a personalized direct mail company that I have been investigating.

She came up with the brilliant idea of sending each owner a card the week that I call them with a picture of their building on the front. Since send-out-cards lets you insert pictures on your cards, it would be easy to upload my electronic pictures and let them know that I had visited their property. --> PROOF!

I thought this would be a great way to get people's attention and build credibility from Day 1.

Has anyone else already implemented something like this? I'd love to know how it's worked for you.

Sincerely,

Emily

Choosing a Farm Area as a New Commercial Broker

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sat, 30 Aug 2008 13:05:12 -0500

So next week (Thursday) I begin my first day in the office of Marcus and Millichap as a commercial real estate agent. As I understand it, one of my first tasks will be building up my database of clients. I'm supposed to create a database of about 1500 buildings and get the contact information of all the owners.

Then I will hit the road and start driving my farm areas, taking pictures of the buildings, doing rent surveys, talking to tenants and neighbors and becomeing the MASTER of my domain.

It should be great, and I'm looking forward to it, the hardest part will be leaving my baby Blake in day care for the first time. He is 3 months old, and a happy baby, so he should be fine. It's always harder on the moms than the babies, from what I understand.

The main thing I'm working on now (besides deciding what office supplies I'll need to bring with me) is deciding on what segment of the market I want to work. Marcus and Millichap made its name in apartment buildings, but has expanded successfully (from what I understand) into office buildings and retail space as well. Although the Seattle office doesn't have a lot of market share in the office and retail spaces, the regional director is eager to get people on board in those areas.

So... the question is - do I go with apartments - the area I have the most personal experience as an investor, or do I pioneer and learn something new - tapping into commercial buildings, an area where I won't have as much internal competition from my firm.

I'm interested in your comments!

Thanks!

Emily

Save Money on Taxes with an LLC

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Fri, 29 Aug 2008 16:44:25 -0500

You Earned It, Don't Give It Away To Uncle Sam if You Don't Have To!

As Independent Contractors, real estate agents earn money differently than people with W-2 income. If you used to have a job and haven't run your own business before, you might not be planning your tax strategy effectively to reduce your annual tax bills.

If you are paying too much in taxes, or are a sole proprietor, read up!

I have been an independent contractor (real estate investing coach) for years and I am also a real estate professional, buying and managing my own investment properties. For the first few years, I did my taxes myself, but after getting a few "OOPS, YOU DID IT WRONG" notices from the IRS (Scary!) I decided I needed an accountant to help me get things handled right!

I'm glad I switched, now I don't have to do all my own bookkeeping and tax returns (I used to have to shut down the office two weeks every spring to sort out all the paperwork!) Besides saving me time, my accountant knows all the best ways to save me money... I don't have to pay as much self-employment tax, I am a real estate professional, so I can deduct more of my investment losses (like depreciation), and I am in a lower tax bracket than I otherwise would be after calculating in my home office deduction, vehicle mileage, marketing costs, and other business expenses.

My accountant recommended creating an LLC to take my commissions as a real estate agent.

In talking with my accountant about using entities for my real estate agent business, she highly suggested using my LLC (taxed as an S-corp) to hold my real estate license.

As I found in my prior consulting work, the self-employment tax rate on income from personal service activies is 15% because you're paying both sides (employer and employee) of FICA.

That means when you earn income as a sole proprietor and report it on your Schedule C on your 1040, you have to pay 15% off the top for FICA on any income you make. Then what's left is taxed at your regular income tax rate.

So, if you earned $100,000, you'd have to pay $15,000 in FICA taxes. Then your $85,000 remaining income could be reduced by standard deductions and the like, and you'd pay your personal income tax on the balance.

When you have an LLC in place, you cam pay yourself a salary with part of your income (still subject to self-employment tax) and take the rest out as Owner Distributions which are at a lower rate.

For example, if you earned $100,000 and paid yourself a salary of $50,000 you'd pay 15% for FICA on your salary. But you would NOT have to pay the full 15% on the $50,000 you took out as a distribution.

(DISCLAIMER: You should check all this over with your own advisor, I am NOT a CPA, just repeating my understanding of how it all works, here!)

Consider Talking To a Tax Strategist!

The main thing to remember is that as business owners (and investors, if you own real estate) there are a lot of tax savings available to us if you do it right!

If you're leaving money on the table, talk with a tax advisor now... chances are you will reduce your audit risk, pay less in taxes, have better record keeping, and the more you make, the more you will save!

Emily

I am accepting referrals.

Do You Use "Send Out Cards" or a Similar System?

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sun, 24 Aug 2008 21:31:01 -0500

Hello Fellow Business Owners,

I follow accountant Diane Kennedy (Rich Dad Advisor) and noticed that she was recently promoting Send Out Cards. As I understand it this is an MLM business that charges a monthly fee to allow you to send out a certain number of cards to stay in touch with contacts on a regular basis.

It seems ideal for real estate agents and other businesses that are referral driven. Perhaps the "next best thing" to cards you actually hand-write since you can personalize your message in each card.

When I searched for "Send Out Cards" on AR, I found a number of people promoting this business, but no posts from actual users.

Does anyone use this service, or something like it?

What has been the most economical way for you to stay in touch with your past clients and referral base?

Thanks!

Emily

Are you Bigger Than Your Problems?

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Sun, 24 Aug 2008 21:02:29 -0500

A few years ago, I was at a T. Harv Ecker "Millionaire Mind Event" and first heard Harv's advice about being bigger than your problems. It didn't really sink in, though, until I read the same idea in his book earlier this year. Apparently I learn much better by reading than experientially, because I got a TON out of Harv's Millionaire Mind book, that I missed at the live event.

Anyway, his point was that you have to be "bigger than" your problems, and that our success in life is limited by the size of the problems that we are able to overcome.

Jump Out Of Your Comfort Zone!

Most of us are looking to be "comfortable" rather than "successful." The problem is that being successful very often demands that we step out of our comfort zone and face problems that are scary and challenging.

A few examples of ways that I have stretched myself to create success even when it was uncomfortable:

Door knocking in target neighborhoods for leads
Spending money on marketing without certain/tested results
Cold Calling
Raising $5 Million in private money for a commercial property purchase
Buying an apartment building (with partners) that subsequently needed a $200,000 roof replacement that we hadn't anticipated.
Speaking on stage and selling from the platform

As we tackle and overcome challenges that initially seem outside our scope, a funny thing happens. We grow better able to handle these discomforts without as much anxiety.

What Does It Look Like?

As a new investor, it was initially hard for me to pick up the phone and call someone using a script. This was maybe a "level 2" challenge. As I overcame that, I was able to go out door-to-door and talk to people about my business. This was maybe a "level 5" challenge. By the time I was doing these "level 5 challenges," the cold calling (level 2 challenge) didn't seem so scary.

Then I went on to buying my first apartment building with my partners - a "level 7" project. The confidence I got from my earlier successes, helped propel me through this new challenge.

Even though these level settings are arbitrary, you can see that doing what's hard for you, makes your medium-difficulty tasks seem easier.

Rocket Ahead By Getting The Most Valuable Things Done Each Day

As you look at your business and your daily activities, you will probably find a few "should do" items on your list that you have been putting off because they make you uncomfortable, even though they have the potential to rocket your business forward.

I encourage you to bite the bullet and push yourself.

If you get comfortable being uncomfortable, you will soon find that you shy away from fewer and fewer activities, and develop the good old fashioned "gumption" displayed by many successful Realtors and investors.

Five Things To Consider When You are Selling Your Seattle Apartment Building

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Fri, 15 Aug 2008 12:57:23 -0500

Apartment buildings can be a great investment. Sometimes we buy them thinking we'll hold on forever so the property will support us in our retirement years. Sometimes we view our properties as just a stepping stone on our way to buying bigger properties down the road. Sometimes the property is a turn-around project which demands a lot of work, but offers a substantial back-end reward. And sometimes, we inherit property, or find ourselves needing to dispose of property unexpectedly due to a family illness, relocation, a change in financial circumstances, or because of other unforeseen events.

Whatever your reason for selling your apartment building, whether it's in Seattle, WA - where I live - or another area of the country, it's important to make sure you're taking the right steps to make sure you get the most back from your property. Whether it's worth $1 Million or $10 Million, for most people, an apartment is an asset that makes up a significant portion of their portfolio, and after doing all the work to acquire and manage the property, it makes sense to finish the job right, and make sure you sell it at a profit!

Here are five important things to consider before you sell your apartment building:

1. Does the building show well?

2. Are your financial records in order?

3. Do you need to do a 1031 Exchange?

4. Is the property easy to finance?

5. Do you know what the property is worth?

Let's look at them in more detail:

1) Does the building show well?

For most people, the decision to buy an apartment building is an intellectual choice, not an emotional one. Investors aren't going to be too vested in the color of the linoleum in the kitchen, or whether the bathroom tile will match their towels. However, having a property that looks good on the outside makes a seller feel confident that the property has been well maintained, and actively managed. A property that looks sloppy on the outside, even if the repairs needed would be inexpensive to fix, will raise questions in a buyer's about the quality of the construction He will know that a property that is attractive to tenants is more likely to maintain high occupancy rates.

When you're putting an apartment building on the market to sell, consider bringing in a friend to look at the property with a fresh eye to see what could stand to be improved. Sometimes a little more attention to the landscaping, a fresh coat of paint, picking up around the dumpster and repairing fences or gates is all it takes to make an otherwise average property really shine!

2) Are your financial records in order?

Let's look at the bottom line! When a new buyer comes along to purchase your property, he's generally not buying it so that he has a place to live, so that he has a fun hobby-project to work on, or so that he has a tax-deductible reason to come vacation in Seattle! Most investors buy property strictly because they want it to make a profit. If you have good financial records (and they indicate the property can be run profitably) you are more likely to convince the next buyer that he can make money with the property, too. In my experience, it is much better to have detailed and accurate financial records to PROVE the property can run well, then to just TELL the buyer that he could make money with the building.

Above all, do not falsify your documentation. One time I was looking at buying a piece of land with a car wash on it, and the business owner told us that he did not have all the income from the property recorded in his records because his was a "cash business" and he was not reporting all his income to the IRS. My partners and I figured if he would lie to the IRS, he would probably lie to us about the property also, and decided not to do business with him because we didn't feel we could trust the information we were getting to be reliable. We were right that this guy was a bad actor, when we told him we decided not to do the deal and asked for our earnest money back, he refused to release it and we ended up not getting all of our "refundable earnest money deposit" refunded to us.

3) Do you need to do a 1031 Exchange?

A 1031 Exchange is a great way to roll your profits from the sale of one property into another investment property right away, without having to pay taxes on those profits. However, a 1031 can be tricky because you have to identify and purchase your next investment property right away after selling your first. Also, you must work through an intermediary (an "exchanger") and not lay your paws on your profits yourself.

If you are planning to do a 1031 Exchange with the proceeds from the sale of your apartment building, make sure that your real estate agent knows that is your plan, and that you are actively in the market working to identify new properties you might like to buy, so that you can move forward quickly when the property you are selling goes under contract.

4) Is the property easy to finance?

This is a biggie right now with the shake-up and slow-down in the financial markets. However, with a strong buyer, a strong property, and a good down payment, deals are still being done! You can do your part to help the buyer get new financing by making sure your property is in good physical condition and all capital repairs, such as roof or foundation issues, have been taken care of. Make sure your financial records are in place, too, and the more operating history you have on the property the better! If you've done a turn-around on the property, bringing up low occupancy rates, or doing a lot of construction work, you may want to hold on to the property for a year or so, so that the lender can see that the operations there have stabilized at an acceptable level.

If the property will be hard to finance, consider offering some owner financing, or dropping your price in order to attract buyers in a timely manner, and help them get into the property in a way that will make sense for THEIR bottom line!

5) Do you know what the property is worth?

Before making a decision to sell a property, it is helpful to know what it is worth. Knowing the value of the property can help you assess whether market conditions indicate this is the right time to sell, whether refinancing is a viable alternative to getting you the cash you need, and whether selling makes the most sense to help you meet your long- and short-term financial objectives. You can do a quick-and-dirty assessment of the property's value by finding out what cap rates are in your area, and using the Net Operating Income to calculate the price.

Price = Net Operating Income/Cap Rate

The cap rate is a percentage rate, for example "5 cap" means ".05" in this formula.

For Example:
NOI = $100,000
Cap Rate = .05

Price = $100,000/.05 = $2 Million

For a more detailed analysis of your property's value, consult with a number of commercial real estate agents who are familiar with your property class and your neighborhood.

They will be able to go beyond an income-based approach, to incorporate general market dynamics, neighborhood trends, and other local and national data into their estimate of your property's value. Over-pricing property is a good way to make it sit on the market forever, or have deals that are under contract fall through.

If you want to make sure your property sells quickly and profitably, price it correctly from the first.

---

I hope this article has given you a few things to think about when it comes time to consider selling your apartment building. If you need help in estimating the value of your Seattle-area apartment, I would be happy to do an assessment for you at absolutely no cost, and with no obligation.

If you have a property in another part of the country that you need assistance with, I would be happy to put you in touch with a skilled professional who would also be delighted to offer you that service. Please let me know if I can assist you. Emily

Tips For taking the Real Estate Exam?

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Tue, 12 Aug 2008 11:55:56 -0500

Hi there,

I'm a potential new licensee about to take the test for the first time.

I am about to finish up taking my 60-hours of online training for the Washington State Real Estate Licensing Exam. I am doing the training at RealEstateExpress.com.

Does anyone have any tips or useful advice regarding how much to study for the test, how hard it is, how long it takes or anything else that might be reassuring or help me prepare?

Thanks for your suggestions!

Emily

New Commercial Investment Agent in the Seattle Market

Shoreline and Lake Forest Park, WA Emily J. Cressey (The River Rock Group, LLC) — Mon, 11 Aug 2008 23:50:54 -0500

Hello World,

This is my first Active Rain post, so I hope to introduce myself and make a good first impression.

I am new to the field of commercial real estate brokerage, but not new to commercial real estate or investing. You see, for the past six years I've been working my way up the investment food chain.

I started investing in single family homes in Winston-Salem, NC and built my network, confidence, and skills, over time. I was using lots of no money down techniques like subject to and lease options, and they worked very well!

My success in that arena brought me to the attention of the company that trained me, and I began coaching for Mentor Financial Group, LLC - the same company that got me started with investing. Then I teamed up with some folks that I met through Mentor Financial Group to do my first commercial deal.

My First Commercial Real Estate Deal

My first commercial purchase was a building I bought with my partners at Grassland Investments, LLC - a company I formed with a few other investors. It was a $600,000 single-tenant office building that we bought with 95% owner financing. We got a $30,000 second mortgage from my partner's accountant, so the whole thing was 100% financed and it had positive cash flow from Day One. Sweet!

After The First Deal, The Rest Seemed Easy

We went on from there to acquire raw land, a strip mall, office/manufacturing space, and apartment buildings. I love the thrill of putting a new deal in place, especially running the numbers and projecting the long-term impact good real estate investments can have on our financial freedom!

We bought a lot of our projects with private financing from cash investors who put up the money for the down payment, after we got a bank loan for the majority of the acquisition price. I have participated in raising over $5 million in private funds for real estate projects.

Now, an Agent, too.

I have found real estate investing to be a fun business. I am looking forward to working with clients who are equally passionate about building wealth through real estate investing. I am excited to learn from other successful members of Active Rain and I am hopeful that by being an agent, I'll become a better investor, and being an investor will make me a better agent.

I'm looking forward to meeting everyone here! Thanks in advance!

Emily Cressey