G’Day, everyone. I hope you’re well and that you had a great Easter holiday. It’s time to get back into things and hit those numbers again. How many emails, calls and meetings have you committed to? I always stress that if you do the small things consistently, it will allow the big things to just fall into place. Keep pumping the numbers daily, and you will see the miracle happen.

Today I want to share with you my opinion on the top 3 potential future maintenance issues to look out for before purchasing a property. This is not exactly my complete area of expertise, but I have always followed a rule of having smarter people around me doing the things that I can’t do or don’t want to do. Using this approach has enabled me to learn as I go while growing my knowledge base.

Imagine this scenario. You have found what appears to be a steal in a hot market like Toledo or Dayton, Ohio, and you have an accepted offer and are in the inspection period. It is easy to look at the purchase price as well as the drafted after repair value based on comparable sales and be on cloud nine about what you have in front of you. However, do not get ahead of yourself — because some homes that may seem like diamonds in the rough turn out to be big lumps of coal if you do not examine these three key maintenance hazards.

Related: Act Now, Thank Yourself Later: A Preventative Maintenance Checklist for Landlords

3 Potential Maintenance Hazards That Kill Deals (and How to Spot Them!)

Maintenance Hazard #1: Foundations

One of the first things we look at with the homes we intend to purchase is the foundation. No matter if it is a basement, crawl, or even slab (rare in the area, but still an item we have found), we want to be sure the foundation is in good shape. Without a good foundation, the cost of repair and ongoing maintenance can be a profit killer for any deal. We look for signs of cracking on the exterior of the home, examine the ground around the home to determine if water damage could be possible, and pay very close attention to any chips or blocks that seem out of sorts, broken, or shifting. From the exterior view, we can generally tell major issues.

In the case of a basement, we will always look for signs of water infiltration and issues by again looking for cracking or worn out grout on the interior of the basement walls or staining on the walls, especially a few inches off the ground. We also examine any mechanicals in the basement to see if any water has damaged them in the past. If we see any warning signs of current or previous foundation issues, we will not go forward with a purchase and will escape our contract within the inspection period of the purchase agreement.

Maintenance Hazard #2: Roofs

During our walk around the property examining the foundation, we will also look at the roof as a potential maintenance hazard. This hazard can be a very pricey item down the road if we do not take prudent steps in looking over the roof, gutters, shingles, and more in our inspection. We will look for major slopes, grooves, or weak spots on the roof. This could be a sign of issues with the roof decking, indicating weakness in the structure of the home or aged materials requiring costly repair down the road.

We will look at the condition of the shingles (and if there are multiple levels of shingles). Curved shingles, missing shingles, or more than two layers of shingles all point towards the age of the roof being over 15 years. We will examine soffits and, if applicable, venting. In general, we are looking for an age on the roof to be no more than 10 years and in proper shape to avoid maintenance hazards down the road and to assure we do not see major expenses early in the life of the property.

Maintenance Hazard #3: Electric Panel and Furnace

Ok, maybe there are technically 4 maintenance issues. The last two are simple to explain, but are indeed very important to review as you finish your inspection walk through of the property. When we hit the basement or garage, or wherever we find the panel, we are looking to see if the house has a minimum of 100 amps. These days, with all the electronics tenants and homebuyers have, if you do not have 100-amp minimum, you will undoubtedly run into issues with electric in the home. These issues are not only maintenance hazards, but fire hazards as well.

The furnace along with the electric is one that requires care in examination. We are looking to see if the home has at least an 80% efficient furnace. Without due care in examining the furnace and the age of the unit, this can quickly lead to issues once you get the property to close and begin work, let alone once you have the unit tenanted.

Related: 4 Common Maintenance & Repair Mistakes Property Managers Make

When buying a property, do not be fooled by great pricing with motivated sellers and the perception of a great margin. We will never allow major maintenance issues to slip by us because we are looking at the potential profit in the deal, as maintenance issues should never be passed along to the next buyer. Keep your head in the game, be thorough with your inspection, and when in doubt, get a second opinion from your trusted partners and contractors just like I always do.

We’re republishing this article to help out our newer readers.

Investors: What items would you add to my list? Have you ever been burned by purchasing a property with one of these major issues?

Leave your comments and tips below!

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New investors face seemingly endless questions.

Many of them are fundamentals like “Where should I invest?” and “What kind of real estate investing I should I do?” When every decision is unfamiliar and new, it layers on the uncertainty and overwhelm for new investors.

But as critical as those fundamental questions are, they’re obvious. What about the less obvious questions?

In teaching new real estate investors over the years in our online courses, I’ve found some questions that many fail to ask, but should. Here are seven of those questions, that you should know the answer to with absolute certainty before pulling the trigger on an investment.

7 Questions New Investors Don’t Know to Ask (But Definitely Should)

1. “How can the deal lose money?”

You think you’ve found a great deal. And maybe it is.

But before you invest thousands of dollars on it, set aside your excitement and assume for the moment that the deal has risks.

Because every deal has risks, even if they’re ultimately risks worth taking.

What are those risks? What protections do you have in place to mitigate them?

For example, one risk in any renovation deal is that the contractors will take your cash then disappear. What precautions are you taking to prevent them from running off to the Caribbean with your money?

List out all the risks, and brainstorm ways you can minimize them.

2. “What contingency plans can I implement if my exit strategy fails?”

Similarly, what’s your exit strategy? Is it simple and straightforward?

Nearly as importantly, what happens if it fails?

Say you buy a property to fix up for your niece to move into. You trust that she’ll be a good tenant, because she’s family, and you know her well. (Although renting to family members comes with its own risks.)

Related: The New Investor’s Simplified Guide to Landing a First Investment Property

Then your niece walks into the property upon completion and says, “Ew, I don’t like the color scheme in here. Way too ‘90s. I’m not moving in.”

Will the property cash flow well with a market renter? Could you sell it as a flip instead? Maybe it would make a good Airbnb short-term rental?

Run the numbers on several contingency plans, and make sure you won’t lose your shirt if the deal takes a hard left turn.

3. “What’s the vacancy rate in this neighborhood?”

I’ve owned more than my fair share of rental properties in low-demand markets. It’s not pretty.

Before investing a cent in a neighborhood, get a strong sense of the vacancy rate there. Talk to local landlords, local Realtors, local property managers. Walk the streets. Look up the homes for rent on Zillow.

Do you see any boarded up properties or other indications of long-term vacancy?

Beware of low-demand markets. And make sure you always include vacancy rate when calculating cash flow for a rental property.

4. “What direction are prices trending? Are they accelerating or decelerating? Why?”

Yeah, OK, that was three questions. But one premise.

How are prices moving? If they’re declining, why is that? Did a recent bubble burst? Are there fundamental problems with supply and demand in the area (e.g. a shrinking population)?

As a general rule of thumb, new investors should not invest in any market with shrinking prices. Leave tricky markets to the veterans.

Understand how your local housing market is moving. This bigger-picture perspective will serve you well, and help you become a better investor faster.

5. “What direction are rents trending? Are they accelerating or decelerating? Why?”

Similarly, you need to understand how rents are moving.

Because they don’t always move in concert with home prices.

Low prices and high rents is a good combination on paper. But be careful about the 2% Rule and investing in any neighborhoods that are too low-end.

Also remember that when rents (or prices, for that matter) skyrocket upward too fast, they have a tendency to come falling back down.

There are no hard and fast rules about what conditions you “should” buy in, but again, the better your know your market, its trends, what drives the local economy, etc., the more likely you are to make money on your real estate deals.

While not a rule per se, slow and steady growth in rents and home prices is a good sign.

6.  “What are two reliable sources of funding beyond my first choice for funding?”

You probably have a lender in mind for your next deal. (If you don’t, you better get cracking!)

But what are your backup plans if that lender turns down your deal, once it’s under contract?

Notice I said “plans.” Plural. You should have at least two backup sources of funding lined up, in case your first choice for financing falls through.

Start building relationships with lenders, because you’re going to need them. The good news is that the more history and trust you build with a single lender, the less likely they are to turn down your deals moving forward.

Related: What Newbies Should Know About Financing Investment Properties (Versus Homes)

7. “What are my competitive advantages in this market?”

Do you have at least one? If not, you better put your brainstorming cap back on and get back to that drawing board.

Perhaps you live in the neighborhood and know it better than anyone else. Perhaps you’re a cash buyer. Or maybe you’re a contractor and can do the repairs yourself.

Or a hundred other potential advantages, but you need at least one or two. Know what they are, and work those advantages for everything they’re worth.

The corollary is also true: know your weaknesses. As an inexperienced investor, experience is an obvious disadvantage. But what are your other disadvantages? If there are too many, you may need to find ways to shore them up. For example, if you don’t know a market very well, get far better acquainted with it before investing.

Asking Questions Makes You a Better Investor

Don’t assume you know all the answers. As a new investor, you don’t know what you don’t know, which means you may not be asking the right questions.

Whether you take a real estate investing course, partner with a more experienced investor, join a real estate investing club, or hire a coach, make sure you gain exposure to more experienced investors.

And ask them plenty of questions, because that’s how you’ll discover risks you didn’t notice before – and how you can find ways to mitigate those risks.

What questions do you wish you asked in your first few deals? What questions have you found to be the most critical?

Share your knowledge below!

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Bridge Investment Group hired Meena Thever as the new managing director of its capital markets group. In this new role, Thever will be managing the capital markets group’s capital raising, investment analysis and investor relations across all asset classes including multifamily, affordable housing and senior housing.

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American homeowners are sitting on a record amount of home equity, but many are not accessing what might be their greatest source of wealth. The situation has given rise to a fairly new concept called homeownership investment, which may transform the way consumers cash in on their home equity. Patch Homes is one such company looking to grow in this burgeoning space.

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PeerStreet is rolling out a new product to boost liquidity for investors. The real estate investment platform is offering investors the chance to invest in shorter term loans ranging from 30 days to 36 months through its new Cash Offer Loans.

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If you’ve inhaled just the faintest wisp of the particulate billowing out of the internet marketing world in the past 15 years, it was almost certainly in the form of a smoke signal that said, “Content is king.” That concise maxim is a very oversimplified way of laying out the truth behind modern internet marketing. The truth is that all of the gimmicks used by internet marketers to “trick” search engines into good rankings only last a short time before the search engines catch on to them. So, the best way to market yourself online is to legitimately market yourself—which means producing content.

But not all content is equal. Some content is better for some purposes than others, some content is better for some industries than others, and some content is better for some audiences than others. So we’re going to look at various kinds of content and talk about how each one relates to property management marketing.

Breaking Down Content

Content in general breaks down several different ways. For the purpose of marketing yourself, the primary way to break content down is by intent. You should always know whether the content you’re creating is intended as:

  • Content that gets attention, generally for the purpose of increasing awareness of your brand, products, or services;
  • Content that motivates action, obviously used to sell, but less obviously used to get sign-ups for repeat marketing efforts (i.e. “clubs,” newsletters, direct mail efforts, or any other “opt-in” marketing); and
  • Content that relates information, most often used to prove your expertise and legitimacy within your industry or to legitimately teach or inform.

Too many businesses just spit out content without knowing what each piece is for, and that makes for a very wasteful content-production effort. We’ll talk a bit about how to know what kind of content you need to be creating in out next post, but for now let’s move on to other ways to think about content. You can also analyze content by its format:

  • “Snackable” content is designed to be consumed in a very short timeframe and have an impact due to being easy to digest and provoke a striking reaction. Because it’s both striking and easy to digest, snackable content is highly sharable—in fact, most content that goes viral is snackable content. If you’re talking written content, you’re usually looking at a single paragraph or tweet. Graphical content is almost always snackable unless you’re making a huge infographic or a visual novel. Snackable videos are generally no longer than a typical commercial on TV.
  • “Midrange” content is designed to balance accessibility with information—it’s not as immediately impacting as snackable content, but it’s easier on the brain than long-form content. It’s what you create when you want to sell something, or when you want to convey the gist of a complex subject without getting into intricate detail. Most blog posts are “midrange” content, as are the aforementioned infographics. Videos demonstrate the balancing act midrange content performs: you can have information-dense minute-and-a-half video, or a seven-minute lighthearted and flowing video and they’re both midrange content, because it’s less about the how long it takes to consume, and more about the total cognitive load the content puts on the consumer.
  • “Long-form” content is designed to really capture the consumer’s focus, convincing them to devote a significant amount of time and energy interacting with the content. Psychologically, the more a consumer feels like they can interact with your content for an extended time, the more likely they are to consider you trustworthy. Long-form content is also obviously the best for teaching complex topics.


Related: How to Write SEO-Friendly Content for Your Real Estate Website

The last way to break down content that we’ll talk about here is breaking content down by medium. Content that you create for Facebook, for example, should be very different from content you create for LinkedIn, even though both are considered social media. Every medium has its own unique flavor, and you should keep the attributes of your intended medium in mind when you create your content. But more than just the medium-specific flavor, there are also attributes of the general category of medium:

  • Social media posts include tweets, Facebook posts, Instagram posts, Reddit posts, and any other sort of content that is going to show up in a stream or timeline that includes a number of other posts from a bunch of users. Social media, more than any of these other categories, all but requires a specific format: You must post snackable content to social media, because the posts are competing for a very limited “bandwidth” of consumer attention. Content that is too complex will be ignored or at best read but not shared—and sharing is literally the point of social media (more on that in our post devoted to social media in a few weeks).
  • Articles and blog posts include any sort of content that appears as a standalone web page that has its own ranking on the search engines and is largely static. This includes YouTube pages, podcasts, actual blog posts, and Q&A posts like those on Quora or WikiHow. These media can be used for any of the purposes, but they also serve the important extra function of acting as an SEO tool (see our SEO post in a couple weeks for details on that).
  • Page content includes any content you put up on a website that you own and control. Page content almost always serves the purposes of “establish legitimacy,” “sell stuff,” or “help existing customers.” Because of that, it’s almost never snackable. Page content is the stuff your entire sales funnel points toward (and if you haven’t guessed the pattern, you can come back next week for some more detail on what that means).
  • Directed content includes any content that you target a list of specific individual consumers with. The most common forms of directed content are emails, but almost any channel that offers direct messaging, from Skype to Facebook, can be used to deliver direct content. Direct content is unique in that it’s the only kind of content that is likely to be considered “spam” and thus actually turn the receiver against you if used improperly. Because of that, it’s usually a good idea to only create directed content that targets people who have opted into receiving them.

There is a vast array of other forms of content that have occasionally been used by businesses in the past, but are largely not worth the effort. Posts on message boards, “social bookmarks” like the ones you can create on Digg or Delicious, directory entries (on websites that just list other websites), and comments put on other peoples’ content are all things you might hear about people using in various marketing efforts, but none of them have been terribly useful in the past several years at least.


How to Use These Categories

It should be obvious by now that every piece of content falls into every one of these categories, and each category affects the structure and format of the end product. In an ideal world, each piece of content would go through a “conception phase” that went:

  • What is our goal? (What purpose does this content serve?)
  • What format is best suited to that goal?
  • What medium is best suited to host that format for that goal?

But of course in the real world, a number of concerns can twist that formula on its ear. Let’s take this very post as an example. In this case, we knew that we had to give BiggerPockets a few blog posts because it’s been a little while since we posted here and we needed to rebuild a little momentum. So, we started with the medium of the BiggerPockets Blog in mind.

BiggerPockets’ blog here is known as a place where experts come to share their expertise as a form of marketing—which means generally the content here is on the long end of standard or is out-and-out long-form content. Furthermore, the flavor of BiggerPockets is “networking business casual,” so you’ll almost never see anyone around here putting up content that is silly fun, openly provocative, or straight sales-pitch material.

Related: How to Correctly Format Content on Your Website for Thousands of Online Leads

We use this platform for the purpose of establishing our expertise as property managers, knowing from experience that people who read our posts here are likely to see the content we’ve produced over the years and think, “Hey, these guys obviously know what they’re doing.” Then if they ever decide they need a property manager in the Metro Detroit area, they’ll recognize our name and be more inclined to call us first.

So the medium and the purpose both point strongly at long-form content—which obviously this is, seeing as we’re approaching the 1,500th word of this post and we’re just now getting to the wrap-up.

The Wrap-Up

Content still is king when it comes to internet marketing—you literally can’t perform online marketing without it. But it’s not enough just to put words into the ether; you should have a grasp of the why (purpose), how (medium), and what (format) before you start producing. But while content is vital, you also need to understand how each piece of content connects to the pieces around it—called your sales funnel. Come back next week for an equally in-depth examination of sales funnels, how they work, and how they connect your various forms of content to your sales, branding, and market efforts.

How do you craft content you know will target the correct audience?

Share below!

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Megatel Capital Investment, Megatel Homes’ capital markets division, promoted Kris Masias to vice president, sales desk and operations. Along with Masias’ promotion, Megatel is promoting Stormi Mills to operations and client relationship manager

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As the country’s largest manager of vacation rentals, Vacasa has access to actual performance data for thousands of vacation rental properties across the country. We recently packaged some of that data into a buyer’s guide called the Insider’s Guide to the Top 25 Vacation Rental Markets. In this post, I’ll discuss some of the elements we used to create our guide so you can apply the thinking in your own searches.

Get Insider Knowledge

First, a note about what makes our Insider’s Guide unique. The guide, which has been featured in dozens of publications from FOX Business to USA Today, offers both a high-level view and local look at the country’s top vacation rental markets. It’s our first investment tool that combines national data with insights from our local agents. We hope you find both the guide and methodology behind it helpful.

Related: 13 Mistakes New Vacation Rental Owners Always Make

The first element we considered (and the first element we recommend you consider when choosing where to buy a vacation home) is cap rate. If you’re not familiar with the term, capitalization rate, or, cap rate, is the ratio of a property’s net operating income over its value. It’s an easy figure to determine if you have the right data, but getting accurate net operating data for entire markets can be a challenge. This is where we’re hoping to add value.

To determine net operating income for our guide, we looked at actual performance data for over half a million U.S. vacation rental properties. From there, we calculated gross rental incomes for each market, then subtracted each market’s average operating costs. Finally, we divided those figures by the historical costs of buying a home in the markets to get cap rates, which we believe provide investors the truest representation of potential ROI.

But That’s Not All

The second element you should consider when choosing where to buy a vacation home is local expertise. Having access to local metrics that you can trust is essential when shopping for investment properties. That may sound obvious, but you probably have better things to do with your time than try to identify trustworthy local sources for vacation rental-specific advice in destination markets across the country. This is another instance where we felt we can provide value with our guide.

Related: 6 Steps for Successfully Investing in Vacation Rentals

Vacasa Real Estate currently works with expert agents in vacation rental markets across the country. These partners represent leading real estate companies including Berkshire Hathaway, Century21, Coldwell Banker, Keller Williams, RE/MAX, Sotheby’s and others. After we determined our top 25 markets, we picked up the phone and asked our real estate partners and our local property management teams for their best insider advice. Clicking on any of the markets in our guide will take you to a vacation rental market page with insights from local experts.

What markets are you looking at for vacation rental investments? 

Share in the comments below!

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Purveyors of a growing trend in the multifamily market, Starcity, is expanding its co-living operations to Los Angeles. Los Angeles is the second city Starcity is operating in. San Francisco, a city desperate for affordable housing, was the first.

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In the first fundraising round since Chris Rediger was named CEO, Redefy garnered a new equity partner that drove its valuation up to $25 million. As a result of his investment in the company, James Albertelli will join Redefy’s board of directors.

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