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Real Estate Investment In Detroit for REIA Detroit by Leor Barak

Real Estate Investment In Detroit for REIA Detroit by Leor Barak. THANK YOU for being part of positive change in Detroit!. CONTACT INFORMATION. Leor Barak, Esq., M.B.A. Detroit Solutions 313-909-9340 leoribarak@gmail.com. Areas of Expertise (1). Real Estate Law

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Real Estate Investment In Detroit for REIA Detroit by Leor Barak

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  1. Real Estate Investment In Detroitfor REIA Detroit by Leor Barak THANK YOU for being part of positive change in Detroit!

  2. CONTACT INFORMATION Leor Barak, Esq., M.B.A. Detroit Solutions 313-909-9340 leoribarak@gmail.com

  3. Areas of Expertise (1) Real Estate Law * Buying, Selling, Leasing * Land Use/ Zoning * Property Tax Appeals

  4. Areas of Expertise (2) Business Law * Forming LLCs * Forming Nonprofits * Drafting Contracts

  5. 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

  6. I. Introductions • Who I am – Problem solver, troubleshooter, boots on the ground • Purpose of this presentation • I want to hear from you!

  7. II. Detroit Landscape • More positive press • Better political leadership • More attractiveness • More investment

  8. III. Acquiring Property (1) Finding Property • Online (zillow, auction.com, etc) • Governmental entity • Broker/ agent • Word of mouth

  9. 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)

  10. III. Acquiring Property (3) Purchase Agreement • Critical Document • Ensure due diligence period • Ensure proper contingencies

  11. IV. Ownership Structures (1) In a nutshell • Sole Proprietorships • Partnerships • LLCs • S Corporations & C Corporations • Nonprofit Corporations • L3Cs • Community owned

  12. 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

  13. IV. Ownership Structures (3) Limited Liability Companies (LLCs) • Filing • Licensing and Regulatory Affairs (LARA) • Limited liability • Flexibility • Single-member vs. multi-member • Operating Agreement

  14. IV. Ownership Structures (4) Nonprofit Corporations • File special corporate form with LARA • Nonprofit Corporation vs. 501(c)(3) • Also protects liability, but provisions needed

  15. IV. Ownership Structures (4) Nonprofit Corporations • Advantages: • May apply for tax-exemption • Good PR • Broad support • More accountability • But...moves slower

  16. 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

  17. V. Due Diligence General • Title • Survey • Physical Inspection (including environmental) • Financial Inspection

  18. V. Due Diligence Sample Considerations • Inspectors • Rent & Deposits • Insurance • Utilities

  19. VI. Contractors General • Often very difficult to find • Often difficult to manage • GC model vs. Project manager model • Word of mouth recommendations are best

  20. 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

  21. VIII. QUESTION & ANSWER SESSION Let 'em roll....

  22. CONCLUDING THOUGHTS AND THANK YOU!!!

  23. CONTACT INFORMATION Leor Barak, Esq., M.B.A. Detroit Solutions 313-909-9340 leoribarak@gmail.com

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