In this episode, Wayne talks to Virginia “Ginny” Bolling. Ginny has been in real estate for over 35 years working as a consultant expert in real estate acquisitions in the governmental arena. She has extensive knowledge and ability to understand and work through land title, land use, zoning, valuation, contracting, litigation, permitting, and environmental issues, as well as closing complex transactions. She has:
- Acquired or supervised the acquisition of over 600 properties
- Earned the designation of Senior, Right of Way Associate (SR/WA)
- Bought first foreclosure property in 1987
- Real estate broker over 30 years
- Residential (2-yr) and commercial real estate appraiser over six (6) years
- Started first of five (5) businesses in 1984
- Worked in highly litigious & contentious environments (eminent domain) 22+/- years
- Fix & flip investor (4) years
- Currently holds rentals in Central Florida and Jacksonville
- Limited Partner in 544 units in Houston, TX
Ginny is known for her calm, collaborative style, zest for data, and communicating difficult concepts well. She has a passion for community development and redevelopment and one of her businesses in the 1980s performed real estate research specializing in feasibility studies.
She is known for having a considerable real estate network. She connects with, as well as follows, leaders in the industry closely. She enjoys volunteering in the community and has served on many boards. Ginny currently serves on the Board of Directors for Valhalla Villas, a nonprofit whose mission is to provide independent living facilities for people with autism.
Topics on Today’s Episode:
- Ginny’s Journey into Real Estate began early in childhood with her parents being real estate investors involved in flipping and selling. After studying marketing, she entered the governmental arena, participating in real estate purchases for the state of Florida and negotiating complex settlements.
- After leaving the governmental arena, Ginny moved into commercial real estate syndications. Covid presented a great opportunity to get into Syndication as renters were defaulting and sellers were looking to get rid of properties.
- It is less important to time the market than to “buy right” with solid underwriting and have the 3-legged stool of commercial real estate syndications.
- 1. Location
- 2. Team
- 3. Business Plan
- The darling investment of the day is still multifamily, generally value-add. Ginny’s acquisition team is mostly focused on Multifamily because of a long-term housing shortish.
- Additional opportunities in Commercial space include potential to build, medical office, mobile home park, self-storage, and assisted living.
- The “Silver Tsunami” is coming and there will be opportunities to invest in assisted living facilities. There is potential to invest as an owner and hire complete management.
- The 2 biggest factors to consider when underwriting are taxes and insurance
- You should assume that the property will be appraised after purchase to 80-90% market value.
- Insurance estimates can increase by 40-60% higher than initial underwriting in coastal cities.
- Get real insurance estimates before you close, and assume the taxes will increase due to assessor valuation increase.
- It is becoming harder in Florida to find insurance options because many companies have left the state. Florida recently signed legislation to mitigate potential lawsuits for insurance companies to open competition and reduce rates.
- The new law signed by Florida Governor DeSantis gives funding to two major funding programs and tax credits. These will allow for a 4-9% tax abatement dedicated to the affordable housing market. This will create opportunities for multifamily investment. Incentive is toward solving the affordable housing problem-Investors are incentivized to build affordable housing complexes. They are also possibly offering additional services, like financial literacy classes, to improve the lives of residents.
- The current market presents an amazing opportunity for investors as the debt service cover ratio rises due to the increase in interest rates on variable loans. It will be harder for owners to re-finance, moving forward, so they may be more inclined to sell.
- Future challenges for property owners will include the inability to refinance or will need to bring in more capital to do so. This is due to higher debt-to-loan ratio and interest rates.
- For Investors out there listening: This is a great time to forge broker relationships and find properties off market that might be suffering because it’s getting harder and harder to refinance.
- Investment companies need to build key relationships with lenders to explore whether they know about a property that might be in distress, that they don’t want to take back.
- Key idea to learn: It is possible to invest in multifamily with retirement savings, rather than cash savings. You don’t have to limit yourself to the stock market. Using custodian accounts, such as 401K, retirement funds could be a fantastic way to get started in passive investment.
- The Jobs Acts of 2012 and 2017 paved the way for current models of syndication. The 2017 TCJA created opportunities for syndication. Current business models have been called the “information age” by Harvard and other experts. Trends have moved away from packaging a product to shipping it out.
- Its important to know, like, and trust syndicators that you passively invest with. It is a long-standing relationship with a lot of moving parts, so positive feelings between parties helps the process.
- Real Investment Firms must follow SEC guidelines. These require that you formalize a joint venture opportunity through a Private Placement Memorandum. This allows investors and the management team to understand their responsibilities and liabilities.
- If you are not in the game, you can’t play. It’s always a good time to buy real estate if you buy it right. The syndication model allows people to control their risk better than stocks and other assets as a shared risk model.
- Proudest moment: Florida DOT success story-Ginny was involved with negotiations in which a 2 story, L-shaped condominium building. She was able to negotiate a settlement with the building to remove and replace an entire wing. Negotiations took more than a year but were successful.
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