Emerging Real Estate Markets

Objectives Recognize and Profit From Emerging Markets Value Add Through Micro Repositioning Other Factors

In The Beginning…… 3 - 6 Families in Boston Emerging Markets Northeastern U – Economics Harvard Business School – OPM Portfolio of 8,000 Plus Units Largest Residential Deal In Texas 2014 - 5,220 Units

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

BMI SMII SMI BMI BMII BMII

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

Sellers Market Phase I Supply of Property Dwindles Foreclosures start to decrease in number Properties Sell Fast Unemployment Low Prices/Rent Rising Speculation in full swing Construction starts accelerate – Condo Converters Existing properties changed to highest and best use/tear downs Demand At It’s Highest

Sellers Market Phase I Key Strategy Buy and Hold Flip

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

Sellers Market Phase II Time On Market Increases # of Properties Increases Rent become stagnant Still Getting Inflated Prices Potential for overbuilding Investment properties are bought on speculation/not cash flow Demand for construction and materials are still rising Foreclosures remain low but steady Business/Jobs Begin To Slow

Sellers Market Phase II Key Strategy Sell Off Inventory Flip

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

Buyers Market Phase I Price/Rents Falling Unemployment Highest Excess supply Time on market/longest No Speculation Existing inventory sitting idle, in need of repair Foreclosures sharply increase Construction – overpriced and stagnant Inv Prop At Lowest Levels Demand At Lowest Point

Sellers Market Phase I Key Strategy Buy and Hold For Cash Flow

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Job Fulfillment Seller’s Market I Buyer’s Market II Job Growth Job Construction

The Real Estate Market Cycle Seller’s Market II Buyer’s Market I Buyer’s Market I Seller’s Market I Buyer’s Market II

Buyers Market Phase II Time On Market Decreases Absorbing Oversupply Job Growth Increases Prices Slowly Increase Demand begins to increase Very Little Speculation Existing Properties Being Rehabbed Foreclosure – competition fierce as numbers decline Rents Begin To Slowly Rise

Buyers Market Phase II Key Strategy Buy and Hold!!

Emerging Markets Large Markets Markets – Late Innings Dallas Austin San Francisco Anaheim Atlanta Oakland Cape Coral Denver Orlando

Emerging Markets Santa Rosa, CA Port St Lucie, FL Boise Knoxville, TN Money In Secondary Markets! Fort Collins, CO Columbia, SC Santa Rosa, CA Port St Lucie, FL Boise Knoxville, TN San Antonio Waco, TX Richmond, VA Montgomery, AL Daytona Beach Jacksonville, FL Chattanooga, TN Dayton, OH Manchester, NH Akron, OH St Louis Reno

Micro Repositioning 86 – 90% Occupancy B Property/A-B Area Upgrade Exterior - Landscaping, Parking Lot, Signage, Leasing Office, Minor Ext Repairs, Paint Exterior, Common Areas Interior – Carpet Cleaning, Paint, Spray Counter Tops, Lighting Package Total Cost - $1500/3,500 per door Complete Time – 2/4 Months 18 Month Refinance Into Long Term Debt/ Equity Return

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