Real Estate Investment In Detroit for REIA Detroit by Leor Barak
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Transcript of Real Estate Investment In Detroit for REIA Detroit by Leor Barak
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Real Estate Investment In Detroitfor REIA Detroit by Leor Barak
THANK YOU for being part of
positive change in Detroit!
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Real Estate Law
* Buying, Selling, Leasing
* Land Use/ Zoning
* Property Tax Appeals
Areas of Expertise (1)
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Business Law
* Forming LLCs
* Forming Nonprofits
* Drafting Contracts
Areas of Expertise (2)
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THE AGENDA
I. Introductions
II. Detroit Landscape
III. Acquiring Property
IV. Ownership Structures
V. Due Diligence
VI. Contractors
VII. Asset Managers and Property Managers
VII. Question and Answer session
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I. Introductions
Who I am – Problem solver, troubleshooter, boots on the ground
Purpose of this presentation I want to hear from you!
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II. Detroit Landscape
More positive press Better political leadership More attractiveness More investment
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III. Acquiring Property (1)
Finding Property
Online (zillow, auction.com, etc) Governmental entity Broker/ agent Word of mouth
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III. Acquiring Property (2)
Varied Assets and Entry Methods
Structure type (single family, multi, commercial)
Long-term vs. short-term Entry methods (Development, Build Up,
Turnkey)
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III. Acquiring Property (3)
Purchase Agreement
Critical Document Ensure due diligence period Ensure proper contingencies
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IV. Ownership Structures (1)
In a nutshell Sole Proprietorships Partnerships LLCs S Corporations & C Corporations Nonprofit Corporations L3Cs Community owned
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IV. Ownership Structures (2)
Limited Liability Companies (LLCs) Created in early 1990s Formally created and filed with State Hybrid between partnership & corporation
– Taxation like partnership (default)– Liability like corporation
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IV. Ownership Structures (3)
Limited Liability Companies (LLCs) Filing Licensing and Regulatory Affairs (LARA) Limited liability Flexibility Single-member vs. multi-member Operating Agreement
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IV. Ownership Structures (4)
Nonprofit Corporations
File special corporate form with LARA Nonprofit Corporation vs. 501(c)(3) Also protects liability, but provisions
needed
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IV. Ownership Structures (4)
Nonprofit Corporations Advantages:
– May apply for tax-exemption
– Good PR
– Broad support
– More accountability But...moves slower
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IV. Ownership Structures (5)
Alternative Models L3C – Low Profit Limited Liability Company
- Hybrid of LLC & Nonprofit
- Created to encourage foundations to make gifts and loans to for-profit
- To be have a tangible effect, the Internal Revenue Code (IRC) must be revised
Community Ownership Model
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V. Due Diligence
General Title Survey Physical Inspection (including
environmental) Financial Inspection
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V. Due Diligence
Sample Considerations
Inspectors Rent & Deposits Insurance Utilities
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VI. Contractors
General Often very difficult to find Often difficult to manage GC model vs. Project manager model Word of mouth recommendations are
best
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VII. Asset Managers & Property Managers
General One or both may be necessary Underestimated by small investors Contract as percentage of gross
revenue (often 10%) Should be tied to performance
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Let 'em roll....
VIII. QUESTION & ANSWER SESSION
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AND THANK YOU!!!
CONCLUDING THOUGHTS