Understanding Multifamily Lingo : “RUBS”

blog May 15, 2020
What is a Ratio Utility Billing System?

What is RUBS? It's called the Ratio Utility Billing System. It's not a company. 

There are several companies that have this service or have created their own service but the general generic term is a RUBS system. And so, if you have a property that is an all bills paid property and you want to get away from it, you go online and you find a company that does RUBS and then you give them the information about your property and they'll give you a quote. They'll tell you what they can do for you. 

So, it's a method of allocating utility costs in apartments and other multi-family properties or multi-unit. The actual utility bill for the property is distributed to each resident based on an allocation of their usage, an allocation formula. Factors in the formula combine like the number of occupants. 

You see, this a lot especially with water. Water gets a lot of RUBS type of situations. If it's a one-bedroom, the water is going to be...

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#54: Setting Up Your Entity Like A Professional with Garrett Sutton

podcast May 13, 2020

I had the pleasure of speaking with Attorney Garrett Sutton regarding setting up your entity the RIGHT WAY! Boy was this call a lot of fun. I had a Baker's Dozen of questions for Garrett and he hit them all out of the park (except for one)... If you have ever wondered how to do it the right way and you don't want to spend all that money on people's courses telling you essentially the same thing, then listen to this podcast and enjoy!

Listen to all our episodes and leave a review: HERE

Download Podcast: HERE

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Setting Up Your Entity Like A Professional with Garrett Sutton

Garrett Sutton, Esq. is a Rich Dad Advisor, a nationally acclaimed corporate attorney, and asset protection expert who has worked with real estate investors for +30 years to help them structure their entities.

In this episode you'll learn: 

  • Why Garrett likes LLC's to hold real estate and brokerage accounts
  • The...
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Understanding Multifamily Lingo : “HVAC is ABP”

blog May 08, 2020
This one can be seen in a property package, which says HVAC is ABP. But what does that mean?

Well, HVAC is ABP means Heating, Ventilation, and Air Conditioning is All Bills Paid. This is versus tenant-paid. 

As we all know, we don't like to do all-bills paid. There are things that you need to know what to do when you're looking at the financial statement. 

If you see utility income on that statement or on the income section, that means that the tenants are paying up for a portion of the utility. You need to take your finger right down to the expense line item for what the utility expenses are. If you see the utility income is $60,000 you follow your finger down to the utility expenses. I can almost guarantee you, it's not going to be 60,000 bucks for the expenses. It's probably going to be closer to 100,000. 

In any type of a situation where you're billing back the utilities to the tenants, you’re never going to get a dollar for dollar payoff. Usually about...

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#53: The Science of Flipping with Justin Colby

podcast May 06, 2020

Justin Colby is a real estate investor, public speaker, podcast host, and coach. He is the Co-Founder of Phoenix Wealth Builders, a real estate solutions company, specializing in providing opportunities in a variety of areas within the Phoenix real estate market. Justin and I discuss how he got started flipping houses and how he's been able to expand his business to flipping and wholesaling over 1400 properties. 

 

Listen to all our episodes and leave a review: HERE

Download Podcast: HERE

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The Science of Flipping with Justin Colby

Justin had been running a real estate brokerage company in Northern California at 26 when he lost everything. He decided he wasn't going to let this moment define him and decided he was going to go all in. Justin moved to Scottsdale, AZ and has been wholesaling and flipping properties there since 2007. 

While Justin has wholesaled and flipped...

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Understanding Multifamily Lingo : “Rent Concessions”

blog May 01, 2020
Rent Concessions are an example of an "income reducer". Here are examples of Rent Concessions and why they are income reducers!

Rent concessions are what we call an income reducer. Income reducers are those things that bring your report from the gross potential income down to the gross collected rent. Everything in between is what we call an income reducer. Rent concessions are an example of an income reducer. Typically you don't like rent concessions. 

There are properties that offer rent concessions but don't report it. I caught somebody doing this one time when I just did a Google search on the address of the property. A Craigslist listing popped up, showing that they're giving away $200 free rent for the first month. I went to the seller, I said, "Hey, you're giving away 200 bucks." He goes, "Yeah, yeah." I said, "It's not showing up in your books." "Oh, it just started doing that. It hasn't caught on yet." But he never disclosed that they were doing rent...

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#52: Owning Your Own Property Management Company with Colin Douthit

podcast Apr 29, 2020

Colin Douthit started as an investor and spent 24 months purchasing and managing his own assets. Then he started the management and construction companies to help in servicing their out of state investors. He now manages over 300 doors and has multiple multifamily renovations and repositioning projects in process for investors. Colin and I discuss how you can create your own property management company.

Listen to all our episodes and leave a review: HERE

Download Podcast: HERE

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Owning Your Own Property Management Company with Colin Douthit 

Colin had the entrepreneurial bug and after working 7 years in the Engineering field he decided he wanted to do his own thing. Colin quickly had a 7-unit property under contract... but not before he was fired from his job. With a will to win, Colin did what was necessary to make sure he closed on his first property. 

From his first...

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Understanding Multifamily Lingo : “Net Operating Income VS. Net Ordinary Income”

blog Apr 24, 2020
What's the difference between Net Operating Income and a Net Operating Income?

What's the difference between the net operating income and the net ordinary income? 

Well, technically, nothing, but you have to understand what you're defining here. When you say net operating income, you're talking about a multifamily property - NOI. When you're talking about a net ordinary income, you're talking about every other business. 

So, a net operating income is unique to multifamily. And net ordinary income is not - it talks about every other company. What happens is, when you become experts in multifamily financial statements and when a broker sends you the documentation, you're going to be able to look at it right away and know whether you've got a good report or something that is one step above a cocktail napkin. 

And the easiest way to do it, is to look at the income, the expenses and the line that says net ordinary income. If the financial statement that they're giving you...

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#51: The Future Of Workforce Housing with Scott Choppin

podcast Apr 22, 2020

There are Big Changes Ahead and Scott Choppin is on the tip of the arrow. If you have ever thought about building and developing real estate, you have got to listen to this podcast (especially if you live in California). Scott Choppin is revolutionizing the concept of multifamily with his Workforce Housing Solution. Check it out.

Listen to all our episodes and leave a review: HERE

Download Podcast: HERE

Subscribe:  Apple | Google Play | Stitcher | Spotify

The Future Of Workforce Housing with Scott Choppin

Scott oversees all operations of the Urban Pacific family of companies, including business development, capital acquisition, and strategic planning.

Prior to forming Urban Pacific, Scott was Director of Land Acquisition for the Multi-Family Development Division of Irvine-based Sares-Regis Group. In that position, he was responsible for all land acquisition activities for the development of luxury, market rate and senior rental...

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#50: What Do You Have When You Have Two Lawyers in a Room? with Jeffrey Love

podcast Apr 15, 2020

What do you have when you have two lawyers in a room? Three Opinions. And this episode is no different. Meet Attorney Jeffrey Love from LA. If you need a California attorney for your deals, Jeffrey is your man! Listen in while we share some war stories from the trenches so that you can learn what mistakes not to make while you are building your empire!

Listen to all our episodes and leave a review: HERE

Download Podcast: HERE

Subscribe:  Apple | Google Play | Stitcher | Spotify

What Do You Have When You Have Two Lawyers in a Room? with Jeffrey Love

Jeff Love is a partner with the law firm Gibbs Giden Locher Turner Senet & Wittbrodt LLP. His practice encompasses all facets of real estate transactions, including drafting and negotiating purchase, sale, syndication, and financing transactions in connection with commercial, industrial, and residential assets. He also regularly drafts and negotiates office, retail, and industrial leases...

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Understanding Multifamily Lingo : “Capital Stack”

blog Apr 10, 2020
This is always the fun one! I spoke to many folks on my Podcast and they talked about Capital Stack. Then, I get so many emails asking "What is a Capital Stack?" 

Capital stack is nothing more than all the money you need to raise in order to buy that property, and it's going to come in a couple of different forms. It's going to come in debt, or your mortgage. 

"Well, I got an 80% loan-to-value." 

Great, 80% of your capital stack has just been taken care of. 

Now we got 20%. Well, where is that going to come from? 

"Well, my pocket, I could put down 5%." 

Okay, fine, now we need 15%. Where is that going to come from? 

"Well, I got investors. "They're going to come up with 10%." 

Good, now we're at 95%. Where's the other 5% going to come from? 

"Well, the seller's going to give me a seller financing." 

Boom, we just got our 100% capital stack. 

That's what a capital stack is. That's all it is. 

It's where all of the money is...

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