Compact Living Offers Big Opportunities

Compact Living Offers Investors Big Opportunities
For commercial real estate investors, small may be beautiful. Urban centers are starting to adapt to overcrowding by embracing the tiny house movement and compact vertical living, which not only promotes sustainability but presents new – and for many, exciting – investment opportunities.

Major metropolitan areas such as New York, Los Angeles, and Portland, are reviewing their building codes, and signs are positive. Here are three types of compact living concepts that may interest investors anxious to take advantage of this growing trend.

Tiny houses. The tiny house movement has been growing for years. It began as a way for people to own a home while minimizing their carbon footprint and reducing living costs. Many owners of tiny homes have no mortgage at all, and tiny home builders have begun offering both short- and long-term rentals so those interested in the tiny home lifestyle can try it without long-term commitment.

Micro-loft/apartments. In November 2017, the city of Miami began considering proposals for residential units with a minimum square footage of 275 square feet. Now cities such as New York and Los Angeles are trying to adapt their zoning to allow for smaller residential accommodations.

Student housing. College and university towns have seen sharp increases in the costs of student accommodations. Investors can meet these towns’ housing needs by investing in apartment-type projects with the same footprint as a traditional building, but which include the communal living spaces students crave. The result: increased numbers of units and the lower overhead costs that will appeal to this competitive tenant group.

Steps to Success: Marketing Your Business on a Budget

Good news: You don’t need a huge marketing budget to promote your business. Why not? There are abundant opportunities to gain exposure through social media.

“Customer-ize” your marketing. Since social media is all about engagement, use social media platforms to learn about your customers, identify topics that matter to them, and engage with them rather than sell to them. Ask questions, solicit opinions, and find ways to strengthen connections. Get people talking about your product or service.

Platforms. Facebook, Twitter, Instagram, YouTube, and Pinterest are essential platforms. For these and others, there are many low-cost/no-cost ways to reach out. Here are some from an article on bootstrap marketing in The Balance:

  • Blog: Start your own blog and/or comment on other related blogs.
  • Vlog: Upload videos to a branded YouTube channel or embed video on your website and share on social channels.
  • Post a podcast, webinar, or tutorial workshop, or host a real-time Q&A session.
  • Use Meetup to organize networking events with potential customers and demo or distribute samples of your products.

Spotting trends. These approaches can help you spot trends. Focus on what people are searching for online; keyword research is an easy way to identify hot topics, and there are free tools, such as the Google Keyword Planner and Soovle, for this. Getting to know, understand, and communicate with your customers is probably the most powerful marketing technique you can use. Best of all, when you do this through social media, the only real expenditure is your time.

Steps to Success: How to Build a Comprehensive Business Plan

“I have always thought that one man of tolerable abilities may work great changes, and accomplish great affairs among mankind, if he first forms a good plan, and, cutting off all amusements or other employments that would divert his attention, make the execution of that same plan his sole study and business.” Benjamin Franklin

There is no better way to thoroughly know and understand your business, your industry, and your market than to go through the process of researching and developing a business plan.

A good business plan outlines a vision for your company and demonstrates how you intend to realize that vision. It serves as a blueprint to guide you through start-up, establishment, and eventually, business growth. It will also help you secure loans and attract investors.

In a comprehensive business plan, you should include an executive summary, a mission statement, descriptions of products and/or services, a market review, detailed financial analyses, and a succinct description of the business’s short- and long-term goals.

Also necessary are in-depth data about your target market, sales and marketing strategies, cash flow projections, operational particulars, and growth milestones and other ways of measuring progress.

There are many tools available to help streamline the process, including templates, business planning tutorials, videos, and kits. Many of these are free and available online. But the prospect of writing a business plan can still be daunting for a would-be small-business owner.

That said, and in the spirit of Benjamin Franklin, writing a business plan is a critical step in establishing your business as a success. And over time, this essential, living document will be just what you need to guide your business decisions and keep your business on track.

Pros and Cons of Investing in Small Communities
Most high-profile commercial real estate investments tend to happen in larger urban centers. They’re the ones we hear about and perhaps aspire to invest in. However, there are lots of opportunities for real estate investors in smaller communities; small town properties can still offer positive cash flow and the advantages of lower prices and limited competition.

Here are some knowledge points you may want to factor in when considering whether to invest in a smaller community:

Limited competition. Smaller urban centers don’t necessarily attract the same number of investors as larger metropolitan areas. As a result of reduced competition, newer investors have the time to carefully inspect the financials and be more thorough in the due diligence phase of property selection. Savvy and patient investors may find solid bargains that would not otherwise be available in larger real estate markets.

Property values tend to be lower. Small towns tend to have lower price points compared to bigger centers. This is predominately a result of supply and demand. Commercial property investors in smaller communities may feel they are getting bargains on properties; however, monetizing those properties can be problematic if investors don’t take the time to familiarize themselves with the communities they are considering investing in. It’s very important to know the community and be aware of the impact that market forces in the area may have on your investment.

Lower overhead costs. Major urban centers tend to have higher infrastructure and maintenance costs, which often translate to higher levels of taxation for investors. Also, because there are larger populations in big cities, crime levels in certain areas can be higher than in smaller centers; this impacts tenant bases, taxes, and security costs. Big cities also lean toward placing greater levels of regulation to control the balance between commercial, industrial, and residential spaces. So smaller centers may be less costly for both developers and landlords.

Brand growth and community impact is greater. The limited competition in rural towns will provide a unique opportunity for brand growth and recognition in the early phases of your business venture. Word of mouth has a greater impact in small towns; both positive and negative messages spread quickly in close-knit communities.

Small town issues. The impact of your business can be greater in a smaller community. This can go both ways: As a new employer, people may speak positively about your project, but poor customer experiences also have legs (and not in a good way). Careful messaging may be required to attract and retain customers.

Resources: Some resources that are easily available in a larger center may not be as readily accessible, and professionals such as property managers, lawyers, maintenance professionals, and building inspectors may be more difficult to access.

Appreciation: Commercial investors also need to be aware that properties may appreciate more slowly in small communities. Also, if you’re considering a development project in a smaller community that boasts a current employment boom, ensure your investment will still be sustainable if the boom slows or ends.

SA Realty Watch Group
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Worth Reading
How to Read Financial News
By Morgan Housel
Collaborative Fund

These days, news is everywhere and constant, and it can feel overwhelming wading through the noise. But reading financial news – and news in general – doesn’t have to be overwhelming. Learn what strategies to implement to help you make sense of it all.

Don’t Fail at Decision-Making Like 98% of Managers Do
By Erik Larson


As Larson points out, very few of us track the outcomes of the decisions we make. Even top executives. A survey of 500 managers and executives found that a shocking 98% of participants failed to implement best practices when making decisions at work. To discover seven ways to make better decisions, read on.

Most Millionaires Created Their Own Luck by Taking These Four Approaches (It’s Not about Working Hard)
By John Boitnott

Are millionaires just lucky, or is there something they know that the rest of us don’t? According to Boitnott, most invest in themselves, ensuring they’re building their lives on a strong foundation. As Boitnott puts it: “Their health, productivity, and all manner of other things are so solid that success flows through more naturally.” And it’s results, not hours worked, that count with this group. Create your own luck by following their lead.

You and Your Suppliers
You know suppliers are key to your business’s success, but have you unlocked the “hows” of managing yours? Business owners need to know how to fully engage their suppliers. Use the following links to strengthen your supplier knowledge and build a strong supply chain:

Who are your suppliers, and what makes a good one? Find out here:
How to Find and Work With Suppliers

Establishing good relationships with your suppliers is vital. Discover the secrets to supplier relationship success:
How to Establish a Good Relationship With Suppliers

Is your business getting the agreed-upon price? Here’s how to protect your bottom line:
Your Business May Not Be Getting The Pricing Your Suppliers Agreed To

Find reliable wholesale suppliers for your business with these tips:
4 Tips for Researching and Finding Wholesale Suppliers

Are trade shows a good source of new suppliers? Find out here:
Should My Small Business Use Trade Shows to Find New Suppliers?

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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