Venture Real Estate is a full service real estate company that specializes in the Boston Metro area market. They are located in the heart of Allston Village in western Boston, giving them easy access to Downtown, Cambridge, Brookline and the suburbs. Venture Real Estate sells, manages and rents property.
Company: Venture Real Estate Group
Managing Partner: Sean McConarty
Location: Allston Village in western Boston, MA
INVESTORS BEAT: What type of properties does your company help investors purchase?
SEAN McCONARTY: When selling a property, the obvious focus is on the buyer?s personal investment criteria. Investors, in my experience, are looking for a combination of long-term growth in property appreciation and short-term gains with cash flow. Our focus is on underutilized property in top appreciation locations.
IB: Why are these good investment options for investors?
SM: This allows us to buy properties and within a year have a significant cash flow on a monthly basis while gaining value on a yearly basis. This allows a buyer to expand their real estate portfolio using both their cash on hand as well as leverage, at a rate significantly faster than other types of investments.
IB: Where has your company purchased property?
SM: We purchase in established rental areas where tenancy is predictable, rather than in areas where we see over speculation and it largely depends on 1 or 2 years of high rental prices to justify sale prices.
IB: Why are these locations good investment choices for investors?
SM: An area that is ?trendy? but does not have the indicators of long-term home values, such as jobs, school systems, and transportation, are not areas we are interested in. This helps our investors, since we are not chasing the next big thing. We use growth models to ensure significant gains over 3, 5, and 10-year periods while avoiding a bubble in a specific market.
Our focus is on underutilized property in top appreciation locations.
IB: Where are your investors located?
SM: Our investors are everywhere, from local plumbers and construction company owners, to international investors who only touch base a few times a year. We are able to tailor our involvement to their involvement according to their location.
IB: What information do you supply to your investors?
SM:?Supplying investors with information is one of the aspects that set us apart. Whether it is rent potential, city politics, or developments projected in the area, we want our investors to be extremely knowledgeable in the area they are investing.
IB: Do you recommend investors see the property before buying or do your clients typically buy sight unseen?
SM: I always recommend investors see the property, but many times with the speed of the market, investors that have worked with us for a while will buy sight unseen.
IB: Can you share a couple of examples of typical investments you have available to investors?
SM: As we change our search per investor, the investments tend to differ.
- Case 1 was an investor who was just starting to build their portfolio. They wanted as little invested and as much cash flow as possible. In the past 12 months we helped them purchase two buildings in Waltham, MA. The first was a three family house for $342K with $12,000 in renovations and a monthly income of $4,300. The second was a three family house for $472K with $25K in renovations and a $5,700 monthly income. The renovations on these projects were minimal things like new paint, cabinets, and appliances.
- Case 2 was a more established investor who was looking for renovation projects. Last year he purchased a four family house in Allston near Boston University for $1.460M and will renovate the 4 units this fall for $75,000 a unit. This will increase the rent from $9,600 a month to $15,000 a month on the pre-leased units. These renovations will not only increase revenue but lower costs as the utilities will be separated, making them the responsibility of the tenant. The same investor purchased an 8 unit building in Kenmore Square for $3.400M and simply by changing the marketing of the buildings, he was able to increase the rent from $15,600 to $29,800. Buildings on this street of Kenmore Square have realized an appreciation of over 50% in the last 6 years.
We want our investors to be extremely knowledgeable.
IB: How many properties does your company help purchase each month?
SM: We sell about 3 to 5 investment properties per month.
IB: How does the purchasing process work when an investor wants to purchase a property from your organization?
SM: The first step to helping an investor is for us to discuss, in the clearest of terms, what their goals are. Once we are able to establish that, we can begin to discuss options, usually in that same conversation. When we are sure we are on the same page, we begin to immediately look for the right property to match the buyer. If it is an out of town buyer, a proxy of some sort is a good idea as good investments tend to be very time sensitive.
As soon as we find a property we negotiate the terms of purchase, enter into an agreement, and set up a closing for the property. On the day of the closing, we will do a walk through, alert tenants of a change of ownership, and plan any renovations. For most investors, that?s the end of the process. They begin to collect rents and we communicate as needed about the property. Usually within a few months things are going well enough and we start the process again.
IB: How is your organization different from others doing property solutions to investors?
SM:?The major difference between our property solutions and those of other companies is that we handle every aspect in-house and keep costs as low as possible. While many companies will outsource the rental side or the property management side, we are able to do all aspects within the Venture Real Estate Group. This means that we can see the potential rents because our office managed properties in these areas, and we know what renovations to do because we know what works.
When purchasing a property, knowing the 3 to 5 year expectations accurately can completely change the feasibility of an investment. Many companies forget that lowering costs, not at the expense of quality, is another way to raise revenue.
We are able to tailor our involvement to their involvement.
IB: What are the typical updates and renovations you do to the property?
SM: Kitchens and baths are the two aspects that set apartments apart. Once those are removed from the equation, there are really only walls and floors, which though important, are easy to adjust. In specific instances, changing layouts can also add significantly to the unit, but we always need to weigh the cost vs benefit for those types of changes.
IB: How can investors avoid paying too much for the property?
SM: Avoiding high costs, especially when starting a portfolio, is extremely important as it can stunt or even cripple your growth. You must feel comfortable buying and renting the property as is while also knowing how to increase the value of the property. Buying a house that has amazing rents is great, but it usually means that the seller knows the rents are high and unsustainable.
Instead, purchase a home where the rents are lower than the market or where potential adjustments will make large gains. If it?s a good investment as is, but has additional upside, that?s always better than buying at the top of the market and hoping the ceiling goes higher.
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Source: http://www.investorsbeat.com/turnkey-real-estate-venture-real-estate/
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