real estate investment in detroit for reia detroit by leor barak

Real Estate Investment In Detroitfor REIA Detroit by Leor Barak

THANK YOU for being part of

positive change in Detroit!

Leor Barak, Esq., M.B.A.

Detroit Solutions

313-909-9340

leoribarak@gmail.com

CONTACT INFORMATION

Real Estate Law

* Buying, Selling, Leasing

* Land Use/ Zoning

* Property Tax Appeals

Areas of Expertise (1)

Business Law

* Forming LLCs

* Forming Nonprofits

* Drafting Contracts

Areas of Expertise (2)

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

I. Introductions

Who I am – Problem solver, troubleshooter, boots on the ground

Purpose of this presentation I want to hear from you!

II. Detroit Landscape

More positive press Better political leadership More attractiveness More investment

III. Acquiring Property (1)

Finding Property

Online (zillow, auction.com, etc) Governmental entity Broker/ agent Word of mouth

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)

III. Acquiring Property (3)

Purchase Agreement

Critical Document Ensure due diligence period Ensure proper contingencies

IV. Ownership Structures (1)

In a nutshell Sole Proprietorships Partnerships LLCs S Corporations & C Corporations Nonprofit Corporations L3Cs Community owned

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

IV. Ownership Structures (3)

Limited Liability Companies (LLCs) Filing Licensing and Regulatory Affairs (LARA) Limited liability Flexibility Single-member vs. multi-member Operating Agreement

IV. Ownership Structures (4)

Nonprofit Corporations

File special corporate form with LARA Nonprofit Corporation vs. 501(c)(3) Also protects liability, but provisions

needed

IV. Ownership Structures (4)

Nonprofit Corporations Advantages:

– May apply for tax-exemption

– Good PR

– Broad support

– More accountability But...moves slower

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

V. Due Diligence

General Title Survey Physical Inspection (including

environmental) Financial Inspection

V. Due Diligence

Sample Considerations

Inspectors Rent & Deposits Insurance Utilities

VI. Contractors

General Often very difficult to find Often difficult to manage GC model vs. Project manager model Word of mouth recommendations are

best

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

Let 'em roll....

VIII. QUESTION & ANSWER SESSION

AND THANK YOU!!!

CONCLUDING THOUGHTS

Leor Barak, Esq., M.B.A.

Detroit Solutions

313-909-9340

leoribarak@gmail.com

CONTACT INFORMATION