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Partnership Proposal: Residential
2015
Property Management
2
Our Mission
Real Estate Investing
“Buy land, they’re not making it anymore.”-Mark Twain
4
The Promises of Real Estate Investing
• Real estate compliments other investments and offers other attributes for investors to take advantage of in order to realize their long-term investment goals
• The real estate state market has been a prominent participant in all of the market advances and retreats over the past several decades, staying in lockstep with other investment products like stocks and bonds
• Real estate’s strength and variability has made it a desirable haven for investors not only seeking attractive returns but also security in an asset class that has enduring potential
Real estate has shown a timeless dependability as a destination for investors with disposable income seeking an above-average yield. General returns in real-estate offer a viable alternative to other short and long-term investment vehicles:
DiverseInvestment
Profile
REAL ESTATE
BONDS
STOCKS
OTHER INVESTMENTS
5
This Cycle’s Housing Recovery in Focus
“Foreclosure filings in January plunged to their lowest level
since April 2007”
"We're now well past the peak of the foreclosure crisis,"
– Daren Blomquist, RealtyTrac
“The Housing recovery gains strength”
“Barclays is forecasting a 6% to 7% price gain [in 2013], and 5% to 6% in
2014.”
6
Recent Real Estate Trends
Real estate has experienced a market a sector rebound nationwide with some of the once-racked markets enjoying a revival in sales, home values and overall investment sentiment.
Local Market Highlights
Rate of Housing SalesAUG 2012 vs. AUG 2013
Includes sales of new and existing homes
Northeast 16.7%
South 15.4%
Midwest 17.7%
West 5.5%
NATIONAL
13.5%
*Source: RealTrends.com
Kansas City - MO
• Median listing prices up 5.19% vs. AUG 2012
• Total listings down 5.46% vs. AUG 2012
• Median listing price: $142,000
Kansas City - KS
• Median listing prices up 2.19% vs. AUG 2012
• Total listings down 10.75% vs. AUG 2012
• Median listing price: $189,000
KCK
2.19% 5.19%KCMO
*Source: Realtor.com
7
Advantages of Property Investments
The striking track record of consistent annualized returns over time tells the story of real estate. For property owners, those benefits are further buttressed by the advantages that property investments bring:
• Rental Income – Investment properties offer a steady drip of passive cash flow from rental income
• Rising Investment Values Over Time – The U.S. market’s nascent real estate recovery presents an ideal opportunity to invest in property that has headwind and room to grow
• Property Duality – Your investment property gives you the option of continuing to collect monthly income. You can use the increased equity to make additions to the property or invest in others, or to improve the property in order to realize its full value at a sale
• Inflation-Accommodating – The rise in prices is a natural function of the economy. This however plays well for investment property owners, as higher construction costs and housing demands result in greater need for rent
• Leverage – The use of a mortgage allows investors to multiply their purchasing power and amplify returns on cash
• Tax Deductions – Property investments qualify for a hoard of tax deductions related to the financing and maintenance of the property over the time of ownership
8
Why 2014 is Ideal for Investors
TextNationwide supply of homes in
February of this year was down 22% from the supply in February 2012
Home prices’ rise has come on the back of the economy’s continued recovery,
which has lead to increases in hiring and household income
Rising monthly rents have made renters consider home ownership again
Rebounding prices have encouraged sellers to withdraw their properties from
the market rather than to sell at a loss
Growing demand is emboldening property owners, frequently placing prospective buyers in bidding wars
Mortgage rates have climbed from near historic lows to 4.5%, coinciding with a
rising economy
With segments of the American economy showing new verve, 2014 presents an attractive set of circumstances for potential property investors to take advantage of this window:
‘The housing recovery is behaving as it should. With interest rates at historic lows, rates will continue to move up in slight increases but it is not going to stop the progress forward of the housing recovery.’ – Lennar CEO Stuart Miller
9
Pathway to Property Investing
Licensed partners and affiliates of Integrity Capital Management, LLC (ICM) bring years of experience to the real-estate buyers and can assess the goals of each potential client in order to ensure that the best and most desirable property investments are made
Real estate agents and consultants stand ready to share specialized property investment knowledge with potential clients eager to learn the virtues of purchasing promising properties and unlocking investment values towards passive and reliable income stream
Managing & Realizing Your Investment
11
Ownership: A Part-time Occupation
Real estate has long been an ideal destination for investors to realize a stable stream of passive income. Such investments however require regular checkup to ensure that the property’s value is preserved during the long-term.
Property owners are often required to balance multiple obligations unrelated to the supervision of their investments. That in turn may afford them limited time for the nuances needed to ensure that their properties continue to generate reliable returns over time.
Advertising
Rental
Property
Vetting
Potential
Tenants
Collecting
Rent
Payments
Preparing
Taxes
Conducting
Regular
Inspections
Maintaining
Property
Upkeep
Stable Investment Returns
12
The Solution: ICM Property Management
Integrity Capital Management, LLC (ICM) alleviates the burden of property ownership on residential and commercial investors by acting as both scout and sentry to the owner’s interest throughout the engagement period.
ICM recognizes investors’ desire to excel at finding promising opportunities in the marketplace, which makes their time extremely valuable. The more effort investors are able to devote to furthering their investment pursuits the better their time and returns will be.
As the owner’s property manager and investment advocate, Integrity Capital Management works to ensure that concerns over owners’ property’s wellbeing remain as passive to that
property’s owner as his or her investment income
• Lives far away from investment property • Is unable or unavailable to make frequent visits to the property• Owns multiple rental units and properties• Has limited experience with routine property maintenance and repairs• Is unable to quickly rent out a unit or property in event of any vacancy• Is unavailable to be on call 24/7/365 to tend to tenant needs• Is unfamiliar with current local and state laws governing landlords• Prefers to devote time and resources to other affairs
VALUE
ICM’s value is fully realized for the property owner with these circumstances:
13
ICM Core Principles
Integrity Capital Management’s objective is to guarantee the preservation of the owner’s property over time and secure its continuous cash flow. ICM’s operations are rooted in four core principles:
Use of quality leads to
minimize vacancy cycle
Recommend ideal rent
rate to assure high
attraction and quicker
rental agreement
Ensure tight rent
collection process
Advise on capital
improvement needs
Maximizing Owner Cash Flow & Investment
Building Positive Tenant Relations
Triaging Maintenance & Upkeep Needs
Minimizing Liability & Risk
Build goodwill with tenant to:
Verify on-time monthly rental payments
Minimize property wear, tear, and repairs
Secure longer leases, fewer turnovers, and better tenant retention
Address property repairs and upkeep needs in a timely manner
Engage maintenance staff or proven licensed contractors when needed
Secure project discounts and economies of scale
Conduct full tenant background and credit histories
Perform routine inspections to guarantee property’s safety and wellbeing to reduce risks
Recommend liability insurance
Advise on latest tax benefits and deduction qualifications
1 2 3 4
14
Value Proposition
Integrity Capital is committed to being the consummate partner in the guardianship of owners’ properties. The firm therefore offers an expanded set of solutions to give owners greater familiarity and transparency into their properties’ operations:
Traditional Property Management Functions
Initial Property Assessment
Capital Improvement Project Management
Regimented
Semi-annual report on property maintenance and conditions
Exit-Report with a summary of engagement and service evaluations
Integrity Capital’s Value
15
Trilateral Relationship
OWNER(You)
TENANT(S)AGENT
(Integrity)
• Owner (You)o Have clearly defined goals and expectations
for your investment property and it’s dwellers
o Understand stated terms, agreements, and laws in the state’s property
o Offer preferences or courses of actions for advisement on property maintenance
• Tenant(s)o Understand and honor all rental terms and
agreementso Ensure the property’s general upkeepo Timely submit monthly paymentso Timely report maintenance requests
• Agent (Integrity)o Advise owner on property-related matterso Conduct property marketing and
prospective tenant screeningo Timely provide owner and tenant with
invoices and statements o Timely serve owner and tenant relevant
notices
Our Methodology
17
Residential Engagement Lifecycle
Partnership
ReadinessOngoing Activities
Partnership
Establishment
Property Turnover &
Evaluation
• Meet with client owner and
understand needs and goals
• Sign Management Agreement
• Onboard owner
• Conduct Property Assessment
and follow-up on Capital
Improvement needs
• Advertise the property
• Present tenant findings to
owner for final selection
• Collect deposits from tenants
• Update owner on all relevant
move-in activities
o Tenant deposits
o Move-in kits
o Property cleaning, home
fixture, and other amenities
• Establish electronic or manual
payment system
• Provide Summary Profile of
each property dweller
• Provide monthly statements and rental payments
• Report maintenance and tenant requests as they arise and submit detailed Maintenance Record
• Provide semi-annual property updates
• Provide notable updates regarding property upkeep and tenant updates
• Confirm tenant’s decision to
vacate property at end of lease
• Conduct walkthrough of
property for defects and report
findings
• Discuss alternative paths
forward such as property sale
• Conduct Property Assessment
and ensure readiness for next
tenant
• Deliver Exit Report
• Advertise the property
• Collect leads and build tenant
registry (place on Tenant Map)
• Screen prospective tenants
• Perform walkthrough and
document results
• Administer background checks
on prospective tenants
• Perform final walkthrough and
review maintenance plan
• Sign lease agreement
• Request renter’s insurance
policy
• Establish electronic or manual
payment system
• Sign key agreement and deliver
property keys
• Deliver monthly rent invoices
• Fulfill necessary property
repairs as they arise and alert
tenants in the event
subcontractors are engaged
• Document occurrences and
incidents
• Maintain open and consistent
communication with tenant
• Perform final walkthrough
with property owner
• Close all accounts
o Settle financial accounts
o Collect keys
o Return eligible deposits
• Perform property inspection in
preparation for next tenant
Ow
ner
-Rel
ated
Act
ivit
ies
Ten
ant
–Rel
ated
Act
ivit
ies
Before Month 1 Month 1 Month 2 – 11 Month 12 and Beyond
18
Quarterly Regimen
Party Month 1 Month 2 Month 3
PROPERTY
OWNER
PROPERTY
TENANT
INTEGRITY
CAPITAL
MGMT
The value that Integrity Capital brings in partnership with property owners and tenants is rooted on a regimented schedule of events designed to engage all parties during the regular and crucial intervals of the relationship
Make monthly rent payment
Upkeep property to agreed-upon standard and report any deficiencies
Make monthly rent payment
Conduct Property Inspection
Address property maintenance or safety requests as needed
Receive monthly rent payment
Receive monthly rent payment
Receive quarterly maintenance, tenant, and property report
Send monthly rent statement to tenant Send monthly rent statement to tenant
Receive monthly rent payment
Receive monthly rent payment
Send quarterly maintenance, tenant, and property report
Begin quarterly maintenance, tenant, and property report
19
Integrity Tenant Map
One of the tools that Integrity Capital employs to keep a pulse in the rental market while reducing vacancy cycles for property owners is with the Integrity Tenant Map. This matrix is part of a larger tenant screening process and offers a quick glance at the prospect of a tenant so that they can be quickly matched to prospective properties based on their fit and means.
Each tenant lead appears on the Integrity Tenant Map for quick reference so that they can be later matched to vacant properties in Integrity Capital’s registry of properties
“Maturity Scale”
“In
com
e S
cale
”
Dep
end
ent
Ind
epen
den
t
Student Professional Senior
2
Student or minor withself-sustaining income
1
Student or minor dependent on parent or guardian for
steady income
4
Professional or adult withself-sustaining income
3
Professional or adult dependent on another
party for steady income
6
Senior earning self-sustaining income
5
Senior dependent on another party for steady
income
Next Steps
21
5 Step Plan
Engage ICM and Begin
Management Relationship
Find and Close on
Investment Property
Arrange Consultation
With a Representative
From White &
Associates
Establish a Budget and
Engage Bank or Financial
Institution
Meet with Client and Identify
Investment Needs and Goals
12
34
5
22
Partnership Objective
23
Partnership Pledge & Owner Resources
As partners in your property investment pursuits ,our trademark is to act not only as your property’s manager but also as your trusted advisors. Our goal is to make a habit of exceeding our clients’ expectations. We look forward to working with throughout the duration of our partnership, forging a partnership that will be rewarding and fulfilling for all parties involved
Please use all resources available to contact us regarding any matter:
Business CardWebsite Direct
Integrity Capital Management
816.759.0355
705 Suite B SE Melody Lane, #340Lees Summit, MO 64063
www.theintegrityexperience.com