Why should I work with GameChangers to acquire properties instead of buying direct? GameChangers is a unique source for finding untapped revenue-generating, value -add and off-market properties because we have developed proprietary technology and tools that are unavailable to the general public. Our experienced partners are continually developing strategic relationships within the real estate market and can provide investors with a remarkable degree of knowledge that can only be obtained through experiencing an amassed volume of investment real estate transactions. The R.E.A.L. process solves the four main problems investors like you deal with:
- Access to Inventory
Over the past 10 years, Gamechangers has curated direct relationships with the TOP Asset Managers in the Country and Private Sellers.
- Ability to Due Diligence
A team of 42 top professions trained to due diligence within a rapid amount of time
- Quick Access to End Buyers
Thousands of buyers have been curated over the years Hungry and ready to purchase properties, consistently!
- Efficient Funding
Rapid, financing is in place for ALL levels of investors and for retails buyer as well.
How much research is done on the front end when a R.E.A.L. Gamechanger property is offered?
The agents at GameChangers begin by identifying opportunities that fit the R.E.A.L. investment guiding principles. Asset Value plus True Equity equals = R.E.A.L. Equity.
We start off by doing basic equations of acquisition costs, repairs, ARV and identification of True Equity. True Equity is the difference between the current owner’s acquisition cost and the current value of the property.
Recognizing that there is a degree of risk in any investment we recommend that you consider your own risk tolerance and variance when considering a particular opportunity and keep in mind that the R.E.A.L property estimate is just a general guideline and should be verified in greater detail by a professional that will be managing the repairs. Also keeping in mind that even with the best estimates factors may change and affect the investment process: the labor market can change, the cost of materials can fluctuate, and the investor’s level of construction management experience plays a big part in the cost of repairs.
The sale price of the home is also hard to predict accurately: given the fluctuations in neighborhoods, investors choices in deal value and repair value is directly proportionate to the level and quality of the repairs performed. it is important to understand that real estate is a high-risk/high-reward proposition and the occasional failure should be expected even for the most experienced investor.
How do I buy a property from GameChangers Private Equity Group?
The first step in the buying process begins with a strategic planning call with one or more of our 4 Managing Partners to discuss your investment needs and strategies. i. This personal meeting provides both you and us with an opportunity to develop a clear understanding of your buying criteria, abilities and establish a game plan for property provisioning. The in-office meeting is a great place to start because, not only will you learn about the process of buying a single-family home, a portfolio or commercial property and as well as what to expect from us. All of the properties that we have are provide are purchased on a first-come, first-serve basis, which will save you time and effort. Unlike buying a house on the retail market, closings here at GameChangers typically only take a matter of days or weeks and are straightforward, simple transactions.
How long does the average R.E.A.L. process take?
Generally, the average time to buy/fix/sell a property takes about 90 days to resell from the time of purchase.
There are two important time-frames in the R.E.A.L. process:
Investor Selection: This the time-frame in which you have made an initial decision to analyze the property for underwriting. (3 days from receipt of Property Package)
EMD: Earnest Money Deposit Submission: This is the time-frame in which you must submit your EMD to the title company to secure the property. ( With 3 days after LOI and POF have been submitted and accepted by the GameChangers).
Once the property contract has been ratified you have 5 days before the EMD goes hard. (Is NON-refundable) A ratified contract is a term used with real estate transactions. It refers to a contract in which the terms have been agreed upon by all parties but has not yet been fully executed, signed, and delivered. The typical steps in the contract process include the offer, acceptance, consideration, and ratification.
However, if there is a project that is going to yield a higher return, then it can take anywhere from six months to a year to complete the process and still be considered a good potential investment
What kind of return on investment is expected or considered good for a R.E.A.L. property investment?
For the investors who are sometimes willing to accept smaller returns to tackle a higher volume of transactions, the return margins may as low as 5%. Such a thin margin may seem small to an investor who has the goal to buy one home per quarter, but a fund may purchase one-thousand homes per year and rotates within them a ninety days, four times a year, then it represents a hugely successful business that can out-compete a huge segment of the smaller market. Thus as a Takedown Partner, the margins may be lower but the overall return can be considerably more significant.
On the other end of the spectrum are investors who may consider the EMD partnership of much more interest given the possibility of up to 17% Cash on Cash return. Generally, EMD investors are those who only look at properties with large margins and don’t find many properties that suit their needs. Therefore, the EMD transaction may be more palatable considering the higher yield over the six-month term. The discounts that you’re willing to accept are proportionate to the margin that you’re also willing to accept.
How do I get started with GameChangers R.E.A.L. property investing?
Step One: Determine how much you are willing to invest.
Step Two: Register as a R.E.A.L GameChanger Investor and Sign NDA (click here).
Step Three: Submit P.O.F., Personal/Corporate Real Estate Holding Bio and Buying Criteria
Step Four :Receive Property Matches, Evaluate and Select a R.E.A.L. property.
Submit LOI and/or PSA
Step Five: Buyer Interview/Questionnaire additional NDA
Step Six: Buyer/Seller Introduction
Step Seven: Offer/Counter Offer present by GameChangers and acceptance
Step Eight: Due Diligence
Step Nine: Financing and Waiver Contingencies
Step Ten: Closing at Escrow
The first step to getting started in real estate investing is to determine your financing. How much can you afford to spend on your first property? You should have, at least, a minimum of $50,000 to make a responsible real estate investment, along with authentic sources of financing that ensure your closing capability for any properties put under contract.
CAP (Capitalization Rate): Percent of cash return in the first year if the property were purchased for cash. The ratio of NOI to purchase price.
NOI (Net Operating Income): Income after vacancy and expenses and before debt service.
Rent Ratio: (monthly rent/purchase price or market value). Should be 1.0% or more for acceptable cash on cash return with a 75-80% loan. Mostly used for rental homes.
Gross Rent Multiplier:(purchase price or asking price / gross rents received from an investment). Mostly used for multifamily (apartment) properties.
Depreciation: Commercial is 39 years linear depreciation, residential (to include multifamily) is 27.5 years. This assumes all physical assets will predictably depreciate to a value of zero after this time, and the losses from this offset income on a tax basis. Depreciation is one of the main benefits of investing in real estate ownership.
Cash on Cash Return: Percent of cash out of an investment in a year relative to the amount of cash invested. It does not consider the time value of money. It is a very commonly used metric however, seldom used professionally.
Internal Rate of Return (IRR): The annual rate of return that one receives on investment for all of the capital and cash flows based on the net present value for each when deployed. It is the discount rate such that the sum of today’s investment and future cash flows have a net value of zero. It expresses in the form of an interest rate the value of a given investment in today’s terms. It is the most accurate and one of the most widely used ways of calculating and comparing multiple investments by professionals.
Average Annual Return
The annual rate of return that one receives on investment for all of the capital and cash flows invested. It does not factor in the net present value of all monies that go into and out of the investment.
How does the Average Annual Return compare to IRR?
The IRR typically is slightly lower than the Average Annual Return because the profits at the end upon sale have a lower net present value than monies that are spent at the beginning of an investment. Debt Service:Amount of the principal plus interest loan payment per month or annual. The cash flow that services the debt.
NNN:A type of lease in which the tenant is responsible for the taxes, insurance and maintenance of the building that the tenant leases. Often there is some landlord responsibility (i.e roof and foundation, parking lot, hvac etc)
Absolute NNN:Similar to above however, the tenant receives and pays all bills directly, bypassing the landlord as an intermediary. This is generally the most favorable lease for a landlord.
Gross Lease:Taxes, insurance, and maintenance are the responsibility of the landlord. The tenant is still responsible for their utilities.
- Modified Gross:Similar to above but with a slight modification – the modification is determined through the negotiations between Tenant and Landlord.
Full Service Lease:Tenant’s rent includes all the same components of a Gross Lease but the Landlord is also responsible for paying the utilities used by Tenant.
Retail Location Terms
Traffic Count: The number of cars that drive by a given street, highway or freeway of a property. Traffic counts are important when evaluating the value of a location in certain types of commercial real estate such as retail, office, and multifamily. End Cap:The end space in a retail center. Often this space fetches some of the highest rents in a given shopping center on a $/SF basis. They generally attract regional or smaller national tenants. Pad Space: The free standing buildings in a shopping center. These spaces tend to achieve high rents like end caps but tend to be more popular with QSRs (Quick Service Restaurant a.k.a Fast Food) due to their ability to accommodate a drive-thru. These were once popular with Banks as well. Anchor Tenant: The tenant with the largest geographic draw in a given shopping center. Also often the largest tenant in terms of space taken. Anchor tenants can make or break a shopping center. They are generally national credit tenant and can service a very large radius of residents depending on the immediate trade area demographics and population density. Shadow Anchor: A retail shopping center or strip center that is next to an Anchor Tenant but on a separate parcel. Therefore the center benefits from the Anchor tenant’s regional draw but is independent from the shopping center which has the anchor tenant. Hard Corner: A location that is at an intersection or on a corner. The parcel has frontages on two roads. Due to increased traffic counts hard corners are very desirable in retail real estate. Signalized Intersection: An amenity to a hard corner location. This would make a hard corner location even more desirable. Generally signalized intersections have high traffic counts – hence the need for the signal and cause cars to stop and look around during a red light which is also perceived as a benefit to retail tenants especially those in end cap or pad locations. How do I select the best metros to invest in?
1.Filter for the following parameters:
Highest CAP rates
- The highest potential for actual vs. virtual returns
- Potential for appreciation and rent appreciation
- Population growth & inward migration
Cost of living
Political support of business and development
How do I select the best team to help me achieve my investment goals?
- Track record
- Ability to qualify for loans
- Access to deal flow
- Ability to negotiate
- Ability to manage investment
What are the different asset classes within commercial/multifamily real estate?
- Single Tenant
- Power Center
- Regional Shopping Center
- Neighborhood Retail Center
- Strip Centers
- Single and multi-tenant
- Independent Living
- Assisted Living
- Nursing Care
- Flagged / Non-Flagged