Street Smart Success: Recent Episodes
Roger Becker
Street Smart Success interviews successful Real Estate entrepreneurs in Multi-family, Self-Storage, Mobile Home Parks, and other asset classes. Guests share their experience, strategies, and valuable lessons learned.
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Many investors over the years have built portfolios of single-family rentals that have ultimately enabled them to quit their jobs and build legacy income for their families. Single family homes in the right neighborhoods can always attract good renters and some stay for many years with not a lot of management required. Dustin Heiner, Founder of Master Passive Income, has built a portfolio of single families in Northeastern Ohio, Houston, Tennessee and Phoenix since 2006 and never sells a home. Dustin also offers a FREE Real Estate investing course online at masterpassiveinvesting.com.
Alternative assets are getting a greater share of investor allocations as they seek higher yields and less volatility. Pension funds, endowments and other large institutions are directing more dollars to these assets in order to increase overall yields in their portfolios and to hit mandated returns. Kim Flynn, President of XA Investments and a Harvard MBA, specializes in Private Credit funds, some of which generate higher than 10% yields. Kim is responsible for all product and business development activities plus the firm’s proprietary fund platform and consulting practice.
The hardest part of Real Estate investing is finding the right deals, but there are great deals in any market. Someone always has to sell; you just have to be able to identify the opportunity when you see it. In order to do this, you need to stay in the market at all times. Jeff Greenberg, Principal of Heritage Capital Management, has been investing across several asset classes for over three decades and has enjoyed great success by utilizing 1031 exchanges in order to scale his portfolio. Jeff is currently acquiring flex industrial properties in secondary and tertiary markets in the $10 million to $30 million range, a segment too small for larger institutions and too large for smaller investors.
Currently, there are great deals being sold by developers on newly constructed properties at below construction cost. As institutions have been on the sidelines, this is a once in a decade to fifteen-year opportunity. In the right submarkets with job and population growth, rents will continue to escalate and Multifamily will continue to see a supply/demand imbalance for the foreseeable future. New construction has simply not kept pace, especially in the last couple years with high interest rates and soaring construction costs. Michael Zaransky, Founding and Managing Principal of MZ Capital Partners, has been acquiring newer properties in Texas, Tennessee, and his home state of Illinois and capitalizing on this rare opportunity for friends and family investors.
Nothing pays off like geographic focus and vertical integration, especially with multifamily. Multifamily is a block-to-block business where things can change quickly within a short distance. When managing or owning apartment complexes, a tight geographic focus contributes immensely to profitability, especially with smaller buildings. AJ Shepard, Owner of Uptown Properties in Portland, Oregon, has his own property management company where he manages 1000 units plus his own portfolio of 10 buildings. AJ buys Value-Add C and D class buildings in B neighborhoods.
Knowing how to buy right is the key to not losing money. When you paid the right price in the first place, you can better weather mistakes and sustain unaccounted for market conditions. One of the ways to achieve this is to buy off-market, direct-to-seller deals from ma and pa sellers. Whether you’re buying single family homes or commercial properties, direct-to-seller deals are the way to avoid overpaying in a competitive marketplace. Gabe Petersen, Founder of Kaizen properties, owns Mobile Home Parks, Self-Storage facilities and single families. Most recently, Gabe is focusing on wholesaling single family homes in Indianapolis and Gainesville.
If you’ve been looking to make passive investments in hard assets but are finding it difficult to get the returns you’d expect, there are other great vehicles that can generate 10 % or higher with conservative risk. Business loans made to well-run, established and profitable businesses that are not served by traditional banks or other sources can provide an attractive risk adjusted yield. Jamie Shulman founded Meriwether Capital with the purpose of providing short-term financing up to $5 million to businesses with $2 million to $50 million in total revenues. Jamie raises capital from investors and provides a steady 10% return.
The best ideas are simple. For example, creating a national coffee chain like Starbucks, or an alternative to taxis, like Uber, or Airbnb, etc. Joseph Woodbury, CEO of Neighbor.com, connects homeowners and businesses that have unused space to people who need to store cars or other storage items. Now people can find homeowners in their town where they can park their car, boat or RV. Neighbor.com has also created partnerships with office buildings, parking garages, and apartment complexes where renters can store their goods. There are currently more storage facilities in the country than all fast-food locations combined.
Starting a Multifamily brokerage from scratch can be a steep undertaking. It takes time to build awareness, and to get known in a market in order to hire the right agents and obtain property listings and clients. As the current environment is seeing agents leave the market, however, there’s opportunity to gain traction in starting a brokerage business. By adhering to basic sales and marketing disciplines, and providing superior customer service, there’s room for a hungry, newer player. Rob Rixer, Founder of Citypoint and author of Forced Appreciation, has opened an office in suburban Chicago and Scottsdale, AZ, and will be opening in South Florida later this year.
Despite the desire for short-term gains, the predicable wealth in Real Estate is built over the long term with quality assets and strong operators. In multifamily markets where employment and population trends are favorable, rents will continue to grow and the value of properties will increase substantially, especially in supply-constrained markets. Keith Wasserman, co-founder of Gelt Inc., buys properties with mostly 7-10 year fixed debt in western markets. Keith has amassed a portfolio of 5,000 units and has provided exemplary annual returns for his investors of over 20%. Kieth has also conducted many 1031 exchanges so investors can reinvest their money without immediate tax consequences.
Single family homes in the U.S. are the largest asset class in the world at $37 trillion dollars. This is why the largest financial institutions on Wall Street have been increasing their investments in this lucrative asset class. There are many ways to make money in single families from flipping, to buying and holding, to lending against them. Jim Manning, CEO of Doorway Properties, started out fix and flipping in his hometown of St Louis and is now specializing in lease purchases where tenants make payments toward the purchase of the properties. Jim has funds of these properties that have generated safe, consistent, passive returns for investors with conservative leverage.
In an environment where it’s difficult to achieve significant cash flow with direct equity investments in Real Estate, investing in the debt can be an attractive option with much more liquidity. Investing in debt can have less risk and generate yields as high as 9%-11%, and sometimes even higher, with the assets as collateral. Carrie Cook, President of Ignite Funding, makes investing in Real Estate available to people who always wanted to invest, but didn’t think they could afford it, in addition to seasoned investors seeking a high yield on their money.. Through Ignite Funding, individuals can invest in loans against specific Real Estate properties in different asset classes for as little as $10,000.
Most of the problems in commercial Real Estate right now are related to debt. In addition to evaluating the General Partner, debt is the most important aspect of a deal. James Eng, “The Professor” of multifamily financing, is the National Director at Old Capital in Dallas. James has helped hundreds of multifamily investors strategize the right debt to obtain and acquire over $1 Billion dollars of properties. James has also been a Limited Partner investor in 45 multifamily deals in Texas. James shares valuable information on the current market and his experience on how he vets sponsors and deals that he invests in.
Making money in Real Estate requires timing and being able to see what others don’t. Just a few years ago, retail was written off for dead because of e-commerce and Amazon. More recently, office has become a hated asset class because of the work-from-home trend and the problems of urban cores and central business districts across the country. Neighborhood retail, however, has the highest occupancy rates of all time, and select Class A suburban office is doing very well in the right locations. Dennis Cisterna, Co-founder and Chief Investment Officer of Sentinel Net Lease, is acquiring great, single tenant NNN suburban office buildings, retail and industrial properties at attractive prices in his latest fund offering.
Both residential and commercial Real Estate occupancy rates and rents are contracting in many markets in combination with higher expenses. When investing in the right part of the cycle, however, Real Estate can generate attractive cash flow. Aside from Real Estate, there are other great cash-flowing businesses that can scale efficiently and generate consistent, high double-digit returns. Justin Sloan, a successful Real Estate entrepreneur and President of Sloan Capital, is also deploying capital into non-Real Estate, cash flowing, debt- free assets. Justin recently bought the franchise rights to Ever Bowl in Texas and Iowa, a successful smoothie franchise.
Real Estate is a block-to-block business where an intimate lack of local knowledge can be costly. It’s critical to know the nuances of a submarket and the different neighborhoods to mitigate risk. Eddie Ring, Founder and CEO of New Standard Equities, only buys in markets he knows like the back of his hand. Eddie specializes in value-add multifamily on the West Coast and has generated 29% IRR’s and equity multiples of 2.6 over three to five years hold periods. Eddie sticks with what he knows, as opposed to exploring other markets, and has generated incredible returns for his investors.
In the world of multifamily, 80% of total units are in buildings with fewer than 50 units. This represents a big opportunity for buyers, because these buildings are mostly too large for most smaller operators to acquire, and too small for institutional buyers. Ray Heimann, Managing Director of Terra Capital, specializes in acquiring properties in this smaller range. These buildings are mostly older properties in gentrifying neighborhoods in midwestern cities with strong job and population growth. Terra Capital has in-house property management that leverages technology, which brings management costs down and the tenant experience up.
Although the multifamily market has seen huge headwinds, the competition for buying these assets remains fierce. Even in this market, there is still lots of competition, but Lee has managed to find great value-add properties that perform well and generate great returns for his investors. There are still markets experiencing rent growth, and the long-term prognosis for multifamily remains strong as a result of a persistent national housing shortage. Lee Yoder, Founder and CEO of Threefold Real Estate, has done a great job acquiring and managing Class C properties in Southwest Ohio. Lee recently brought property management in-house to achieve greater operational efficiency and profitability.
You don’t need to be a direct operator of Real Estate to get a great return on your money. You can invest in the secondary mortgage market and get a 12% return with conservative leverage against single family homes. Nic DeAngelo, President of Saint Investment Group, invests in pools of mostly non-performing single-family notes at a discount and a conservative loan-to-value. Nic works with borrowers to get the loans back into performing status by modifying the terms in their favor. Over 95% of his current borrowers are current on their payments.
Getting high returns is very difficult in Real Estate investing, largely because there are too many people chasing the same deals and sellers want a lot for their properties. If you’re willing to invest in projects that are off most people’s radar, however, there are great deals that can generate double digit cash flow. Mike Holdwick, Co-Founder of Pro Team Commercial, identifies non-residential value-add properties, mostly in the Detroit metro, where he resides. Mike has acquired six commercial buildings with 30 tenants, mostly in the $500,000-$1,000,000 range, all while working a W2 job. Mike has generated enough monthly cash flow to stop working his W2 job.
Single family homes in U.S are the largest asset class in the world at $43 Trillion. Many investors have made a fortune investing in single family homes over the decades, and large institutions have been aggregating single family portfolios over the past dozen years. One sector of the market that has unique appeal is homes in the best school districts in the best zip codes. There are very few homes for rent in these neighborhoods and families pay a premium for their kids to attend the best schools. Sean O’Dowd, Managing Partner of Scholastic Capital, is building a portfolio of single family homes in the best school districts in top markets in the Upper Midwest. Sean is targeting the acquisition of 250 homes for his fund that projects an 8% distribution to his investors.
Investing passively is a great way to generate cash flow and appreciation, without having to deal with day-to-day operations. You just need to develop the skills at vetting operators and specific deals. David Shirkey, a fellow passive investor, has done a great job finding quality operators and profitable deals over the past eight years. David has made numerous successful multifamily investments plus several profitable investments in Mobile Home Parks. He is also focusing on Industrial properties. Additionally, David founded the Michigan Investor Group to help other investors like himself learn about Real Estate and other alternative investments that produce strong cash flow.
Most multifamily syndicators are facing major headwinds including interest rate increases, new supply, and escalating expenses. In order to thrive in this environment, you have to have an excellent organization that executes on business plans and maintains healthy working relationships with their lenders. Zack Haptonstall, Founder of Rise 48, has never made a capital call or missed a debt payment. For the properties he acquired in 2021, Zach’s now making distributions to investors. In the face of unprecedented rate increases, Zach accelerated the pace of renovations in 2023 and completed almost 2000 units. This enabled him to increase net operating income enough to continue making debt payments and distribute cash to investors.
Eventually, ma and pa Mobile Home Park operators will be swallowed up by professional operators, so the opportunity to invest is now. The demand to live in Mobile Home Parks is growing while the supply is shrinking. The average Mobile Home Park owner stays in their home 17.5 years, some stay even longer. Many ma and pa owners, especially second or third generation family members, don’t reinvest into their properties and the assets become mismanaged and neglected. These parks can be great value-add opportunities for professional operators. Jack Martin, Co-founder and head of Investment Capital of 52/10, specializes in the acquisition, management, and development of Mobile Home Parks.
Even before covid, the Southeast was rapidly growing, but the trend accelerated during covid, and still continues. The population of Atlanta, for example, is projected to multiply three times in the next thirty years to over 15 million. Currently, office leasing activity in Atlanta is 80% of the volume of 2019, which was robust. As recently as 2022, however, companies were still questioning whether they would return to the office, now they’re focusing on the best way to outfit offices to best serve their employees. Joey Kline, a commercial Real Estate broker and Executive Vice President at JLL in Atlanta, helps tenants find new space or renew in downtown Atlanta and surrounding suburbs, plus other markets in the country.
Compared to most other Real Estate asset classes, Self-Storage has more resilience in the face of different economic climates. Self-Storage has a steadier revenue stream, a smaller percentage of operating expenses, and therefore greater margins and profitability. There’s also a shortage of self-storage facilities in smaller markets. Tom Dunkel, Managing Director of Belrose Storage, has acquired 14 Self-Storage facilities directly from sellers in the mid-Atlantic region and the Southeast, with big value-add components. Tom has consistently increased income and lowered expenses to achieve great returns for his investors.
One of the time-honored ways to make money in Real Estate is flipping single family houses. For years, this is how many successful Real Estate investors have made a great living. In fact, many Real Estate moguls started with single family homes. Sharad Mehta, Founder and CEO of REsimpli, has flipped over 400 homes in Lake County, Indiana, 45 minutes outside of Chicago. Sharad currently owns 50 homes outright with no debt. As a home flipper and investor, Sharad recognized the need for better software to run his business. That’s why he created REsimpli, software that simplifies Real Estate investing by automating tasks that help investors manage their business more efficiently.
Over the past several years, as prices in multifamily have escalated, the greatest value has been in acquiring older, C Class assets with the highest returns. As interest rates have pushed prices down more recently, however, and the market normalizes, great opportunities are also emerging in newer vintage Class B assets that don’t require as much work. Vadim Kleyner, CEO and Chairman of Smartland in Cleveland, is continuing to pursue lucrative Class C properties, but is also poised to take advantage of the course correction in B Class prices as well. Vadim has focused mostly on Northeast Ohio, but recently expanded to Miami, and is exploring other markets as well.
The rate at which the Real Estate market has unraveled is unprecedented in recent history. The debt and equity markets have all but frozen, which has suspended the market. Many operators and lenders are in trouble because operators are unable to make payments and rate caps are expiring. In the near future, more lenders will be forced to take properties back from borrowers, and prices will continue to contract. This will become an opportune time for investors with access to capital. Matt Burk, Chairman of Fairway America, has consulted hundreds of Real Estate entrepreneurs to create and manage their own funds in addition to running his own funds across most major asset classes.
Many Real Estate investors start out investing in residential properties before migrating to asset classes like industrial, self-storage, or office for less day-to-day management. Jonathan Hayek, founder of Endurance Properties, started with single family houses and small multifamily properties before acquiring a vacant office building in Cheyenne, Wyoming. After he realized that small office buildings can also be high maintenance, however, he sold that property and recently acquired single tenant NNN industrial properties. With NNN industrial, the tenant is responsible for everything except for the roof and structure. They pay all expenses including tenant improvements, taxes, insurance, and utilities, making it true mailbox money.
Nothing pays off like tight geographic concentration and laser focus on one asset type. In multifamily, there are critical subtleties that vary by neighborhood that can make or break an investment if you don’t know what they are. That’s where intimate market knowledge pays off. Natasha Falconi, President of Falconi Capital, buys C Class properties in Hialeah and Miami Beach built from the 1940’s and newer. Natasha buys buildings under market rent with deferred maintenance that she fixes up and brings to market. She’s committed to turning ugly buildings into beautiful buildings and improving the communities she’s investing in.
When you’re dealing with family offices, you’re dealing with the top .0001% of America’s wealthiest families. As a result, your approach to allocating capital needs to be nearly flawless, with well-developed strategies and investment theses. Sal Buscemi, Managing Partner and Co-founder of Brahmin Partners, allocates capital on behalf of 13 Family Offices. Sal is an expert at building relationships with these sophisticated families and helping them preserve and grow their legacies. Sal has vast experience across asset classes and a well-informed, holistic view of the market that benefits his clients.
Once a Mobile Home Park is fully stabilized, it has the most predictable cash flow of any Real Estate asset class. The average Mobile Home Park tenant who owns their own home stays 17.5 years, and some stay even longer. Many ma and pa legacy owners, especially second or third generation family members, don’t reinvest into their properties and the assets become mismanaged and neglected. These parks can be great value-add opportunities for professional Mobile Home Park operators. Frank Rizzo, President of Stone Capital Investors, specializes in the acquisition, management, and development of mobile home parks throughout America`s Southeast and Sunbelt states.
If you want consistent, predictable cash flow and easy-to-manage property, you should consider single tenant retail. There’s currently an insatiable demand for quality locations in this property type relative to the amount of supply. It’s an attractive asset class because you have long lease terms with strong tenants and very little maintenance. Aaron Zucker, CEO of Zucker Investment Group (ZIG), specializes in the acquisition of retail properties throughout the country. ZIG works strategically with property owners, brokers, tenants, and vendors to create value. Aaron is also a successful franchisee in a growing number of Urgent Care centers in North Carolina.
In the past few years, hundreds of new Real Estate operators began syndicating deals. Many of these operators are great marketers, but unfortunately inexperienced, and unqualified to operate their properties. Many paid too much, got overleveraged bridge debt, and have been unable to execute on their business plans. As a result, they’ve lost a lot of passive investors (LP) money. The smartest thing LP’s can do is to become educated and informed about how to properly vet operators before investing their hard-earned capital. Aleksey Chernobelskiy, an experienced advisor to passive investors, helps vet deals and sponsors to prevent these investors from losing money. Aleksey also writes investing tips to thousands of Limited Partners at LPlessons.substack.com.
Regardless of cap rates or interest rates, heavy value-add projects still make a lot of money if there are proven ways to dramatically increase revenue and Net Operating Income in the short term. The key is having the knowledge and the systems to find off-market deals and the ability to consistently execute on the business plans. Matt Ricciardella, Founding and Managing Partner of Crystal View Capital, has made a career out of finding great, off-market deals, adding value, and generating huge returns. Crystal View finds great value-add opportunities in Mobile Home Parks and Self-Storage facilities in secondary and tertiary markets and currently operates in 28 states.
In the past several years, hundreds of new operators and capital raisers have emerged into the Commercial Real Estate landscape. Unfortunately, many of these new entrants are out of SEC compliance in how their corporations are structured and the way they raise capital. Additionally, many of these operators joined with other new operators with a similar lack of experience and are having massive troubles with their deals. They overpaid for properties, took on expensive bridge debt, and have limited operating experience. Seth Bradley, Chief Legal Officer of Tribevest, is helping operators set up and operate Fund of Fund models so General Partners are operating within compliance and implementing best practices within their organizations.
Steady cash flow is the holy grail of Real Estate investing. Stable, predictable cash flow with tax advantages is what investors are seeking. Nothing fits this description better than highly sought after, well-located NNN retail properties with creditworthy tenants. Phil Boggia, Director of Acquisitions at NNN Invest, acquires stabilized properties with in-place cash flow plus value-add vacant or soon to be vacant properties with opportunity to add value and generate big returns for investors. With recent interest rate increases, there are great opportunities to acquire properties in excess of $5 million at substantial discounts.
Amidst the distress in commercial Real Estate, one asset class that’s striving is neighborhood retail. There’s been almost no new construction since 2008-09 and the tenant demand for space has been incredibly strong. National occupancy levels are almost 95% and many properties are fully leased. Between restaurants, gyms, medical retail, and recreation, the demand is at all time highs. Beth Azor, “The Canvassing Queen,” and Founder of Azor Advisory Services, is an incredibly successful leasing agent for over 30 years in South Florida. Beth is also an owner of strip centers, consultant, and trainer. Beth trains leasing agents all over the country and is on a mission to increase the number of women who invest in commercial Real Estate.
If you bought a multifamily property in 2022, it is likely worth considerably less now because higher Interest rates have driven prices down. Additionally, new supply has negatively impacted rent growth in many markets, which has further created downward pressure on prices. Declining rents, higher vacancy, and increased expenses has burdened operators. The long-term prospects for workforce housing are very strong because of a national housing shortage, but several challenges are making it difficult in the short-term. Jordan Fisher, Principal of Next Wave Investors, is navigating these choppy waters. Jordan is an excellent value-add operator of mostly C and B class properties, and has generated great returns for his investors.
Even though average occupancy can be decreasing in a market, it doesn’t mean a well-managed property needs to experience lower occupancy. If you maintain the property, communicate effectively with tenants, and handle maintenance issues promptly, you can far exceed the average market occupancy levels and also exceed average rents. Jimmy Edwards, Founder and Director of Acquisitions at High Five Group, has excelled at adding value and repositioning Class C assets and selling them for a large profit. Jimmy is currently looking for Value Add opportunities in the I 35 corridor between Dallas and San Antonio, but still not seeing enough price concessions to make most of these deals pencil.
Buying a great property at a fair price beats buying a poor property at a cheap price. When buying property, it’s essential to do enough due diligence on the property and the market to determine the future prospects for that property. It’s critical to evaluate rent to average income ratios to determine whether local renters can afford to live in your property. It’s also important to evaluate diversification within the local economy to mitigate risk of a stagnant or shrinking rental pool. If there’s a recession, you need to know the risks of increased vacancy and lower rents. Ryan Webster, Managing Partner at Equity Yield Group, has had great success investing in multifamily properties in Florida and is looking to grow his portfolio in the Southeast and Texas.
One asset class that has stood the test of time is Mobile Home Parks. As the housing shortage in this country persists, and the price of single-family homes continues to rise, mobile homes remain the most affordable housing option for many people. Additionally, the number of Mobile Home communities is not only not growing but is actually shrinking in many markets. Derek Vickers, Owner of Vicktory Real Estate Group, has acquired 38 Mobile Home communities since 2021. Derek is buying value-add properties and creating value by fixing them up and attracting more desirable tenants. He has also transitioned several of communities from park-owned homes to tenant-owned homes, which makes them easier and more profitable to manage.
Although gateway and other primary markets are difficult to find compelling value in, secondary, under the radar markets exist where you can still find great value, especially in smaller, non-institutional Flex Industrial properties. Many of these properties are still owned by ma-and-pa operators with significantly below market rents and prices up to 50% below replacement costs. Because of supply constraints, these properties can also be in the high 90%’s, or even 100% occupied. Grant Reaves, Managing Director and Co-founder of Stoic Equity Partners in Alabama, has created a fund to acquire value-add Flex Industrial properties in secondary markets in the Southeast.
As loan maturities come to fruition over the next couple years, great deals will emerge for experienced operators who can raise capital and secure financing. One asset class where there will be an inordinate amount of distress will be Class C Multifamily where inexperienced operators took on too much debt and overpaid for properties. Steven Gesis, COO at Smartland in Cleveland, specializes in Class C, and is poised to capitalize on this opportunity. Smartland has innovated the approach to adding value in this class of properties including the installation of wireless packages, EV charging stations, and creating a Smartland app where tenants can schedule maintenance requests. Smartland has even opened on-property convenience stores, Subway sandwich shops, and more.
We may be near the bottom of the market on Commercial Real Estate. As the Fed continues to tame inflation, interest rate reductions may result that creates cap rates compression and escalating prices. This may be a once in a generation buying opportunity. Nathan Clayberg, Vice President of MLG Capital, is responsible for raising capital for MLG funds and sourcing JV opportunities with other multifamily operators in the Midwest. MLG Capital specializes in acquiring multifamily properties built in the early 2000’s and adds the same amenities found in newer properties but rent for $300-$400 per month less. This strategy, combined with low leverage and fixed rate debt, targets achievable annual investor returns of 11%-15%.
Making a lot of money in Real Estate doesn’t require actively operating or directly investing into assets. Top-performing brokers can make a lot of money without any of the risk or brain damage of dealing with operations. As a highly productive broker, the sky is the limit in terms of how much you can earn. Many successful brokers make over a $1 million per year, and the uber elite can make several millions. The key is to identify the right niches and effectively market yourself. Dan Lewkowicz, Director of Investment Sales at Encore RE Investment Services, specializes in brokering shopping centers, medical office buildings, industrial fulfillment centers, and NNN fast food restaurants.
Maintaining properties efficiently and managing expenses can make the difference between making or losing money. Many operators of multifamily properties spend way too much on supplies and labor and don’t have effective processes to manage their assets. On larger properties, this can cost hundreds of thousands of dollars or even more in profitability over just a few years, thereby adversely impacting overall returns. Strong operational efficiency reduces expenses and also lessens tenant turnover. Andy McQuade, Managing Principal of the ARM companies, helps operators reduce overhead, increase operation efficiency, and add value to their properties. Andy provides strategy, management, and operations consulting to the multifamily industry.
The best Real Estate in the world has historically appreciated through good times and bad. With the right properties, demand has always exceeded supply and values have increased over time. These properties rarely come on the market, however, because sellers know the value of what they own, and don’t need or want to sell them. Larry Taylor, Founder and President of Christina Development Corporation, operates in the five cities that make up West L.A, which comprises some of the most expensive Real Estate in the world. Larry pursues unique buying opportunities that result from partnership dissolutions, family disputes, or other event-driven scenarios.
Class C value-add projects are a rite of passage for most new multifamily investors. These assets generally have a lower barrier to entry than newer properties and promise higher returns. What most operators learn, however, is that these properties cost a lot more to operate than anticipated, and rent increases are harder to achieve than initially projected. That’s why many operators advance to newer properties. Newer properties can be more profitable to run and can appreciate more because more buyers acquire newer assets. Geoff Kudlacz, Managing Partner of Pacific Sands Funds, owns over 700 C Class units across Kansas City, Texas, and California. With distress appearing in the market, Geoff and his partners are pursuing properties built in the early 2000’s and newer.
Once you turn a property into a profitable, cash flowing asset, it makes sense to keep it indefinitely. If it’s built enough value, you can refi out and redeploy the capital into another asset and continue to benefit from the cash flow and appreciation on both assets. This is a repeatable process that builds multigenerational wealth. After years of trial and error, and investing in several valuable mentorship programs, Gino Barbero has built an impressive, long-term multifamily portfolio with his partner Jake Stenziano in Eastern Tennessee. Gino also co-hosts the well-known Jake and Gino Real Estate podcast.
One of the challenges to properties in tough neighborhoods is that while expenses continue climb, rents don’t. Buying older properties can make sense, but mostly in better neighborhoods. What’s important is being able to add value that translates into higher rents and a higher sales price for the asset, where most of the returns are. Ken Gee, President and Founder of the KRI Group of Companies, started out with multifamily properties in Cleveland before entering the Florida market in 2015. Ken has always treated his tenants the way he likes to be treated and prospered as a result. Ken is meticulous in underwriting and managing his properties and has never lost investor capital.
Consistently passing on deals requires unusual discipline. It’s too easy to rationalize they work when they really don’t. It’s this lack of discipline and lack of underwriting knowledge that’s currently costing a lot of operators and their investors a lot of money. It also helps when sponsors manage properties in-house to avoid excess costs, slow and expensive unit turns, and ineffective leasing efforts. Wyatt Simon, Founder and Principal of Full Circle Real Estate, steadfastly adheres to his underwriting standards and has built an in-house management team to make sure his properties are fully optimized to achieve projected returns.
Many multifamily operators avoid C Class properties built in the 70’s or 60’s in tougher neighborhoods. These properties often have issues with crime and delinquencies, not to mention deferred maintenance. In the past, these properties were priced low enough to justify the risk and the work involved to make them highly profitable. In the past few years, however, newer operators paid too much for these properties and incurred aggressive floating rate debt that will be difficult to refinance. Many of these operators are now in trouble. As a result, prices have declined 30% and even more. Matt Faircloth, Owner of the DeRosa Group, has developed a formula for acquiring and managing Class C properties, and is positioned to flourish as prices continue to plummet even further in the next couple years.
Investing in private credit is growing at a rapid clip as traditional lenders are getting increasingly restrictive in their lending practices and investors are looking for safe havens for their money. One of the most conservative Hard Money lending spaces is against single family homes in non-coastal markets because the home values are relatively predictable without dramatic fluctuations. Will Coleman, CEO and Founder of Urban Gate Capital, has a debt fund that loans money to single family flippers in Nashville with a growing pool of borrowers and investors. Will is currently paying investors 10%.
Buying properties in satellite markets within short driving distance to secondary or even tertiary markets can produce alpha returns, especially when buying them from older owners. Often times, these owners aren’t current on what their properties are worth, and their rents are significantly under market. To make money on these properties, however, you still need to buy them at a discounted price. Farris Gosea, Founder and CEO of Farris Gosea Capital, has amassed an impressive portfolio of multifamily apartment buildings in Northwest Indiana, a market that has become a commuter market of Chicago. Farris has a vertically integrated company that controls all aspects of maintenance, construction, and leasing.
One of the ways to become successful in Real Estate is through the path of brokerage. There’s almost no barrier to entry and unlimited upside. You can be successful as a broker if you develop a niche, passion, and discipline. Bob Knakal, a modern legend in the NYC brokerage community, leads the Private Capital Group for JLL in New York and has brokered the sale of well over 2000 buildings, more buildings in New York City than any individual broker ever, totaling over $21 billion in sales. In the past several years, Bob has sold mostly Multifamily in Manhattan, with an average transaction price of $40 million.
Investing in Real Estate syndications can be risky, especially if you don’t have the necessary years of experience and the knowledge to effectively vet the operator and the specific opportunity. As a result, many investors have lost money, especially in the last year. One way to mitigate this risk is to invest in a fund that’s run by a fund operator with a lengthy track record of success and diversified holdings within the fund. Paul Moore, Founder of Wellings Capital, is operating his sixth fund for accredited investors to invest across recession resistant asset classes that are positioned to do well over the next several years. In Paul’s latest fund, he’s investing in Pref Equity deals that provide in-place cash flow plus significant potential upside in the form of refinances or sale events.
Although core gateway markets have the highest appreciation for multifamily over time, secondary markets also offer tremendous growth and stability, and they have smaller barriers to entry. Bobby Larsen, Principal and Founder of Vanamor Investments, has invested successfully in submarkets of Portland, Oregon and Tampa, Florida, plus others. He’s deployed a very conservative approach to acquisitions and operations that’s minimized risk and produced great returns for investors. Vanamor also utilizes 1031 exchanges, so their investors avoid tax consequences when properties are sold and compound gains over years. With huge distress in the market, and even more to come, Bobby anticipates making great acquisitions in the upcoming year.
Maintaining high occupancy levels in apartment complexes can be an ongoing challenge, especially in highly competitive markets. This is why affordable, government subsidized housing can be a great option for investors. If the properties are in the right location, occupancy can consistently run at 100%, with waiting lists for new tenants. Not only are these properties full, but delinquencies are a non-issue because most of the rents are paid by the government. Ira Fisher of North Loop Investments owns over 400 units of affordable housing, mostly in Chicago and the surrounding areas.
One of the hottest asset classes right now is neighborhood retail. Although it was out of favor just a few years ago because people thought ecommerce would replace it, it has proven to be not only resilient, but incredibly stable. There has almost been no new construction for over fifteen years, so existing properties are seeing occupancy levels at way over 90%. As a result, the competition to acquire these assets has gotten fierce. Nate Melchior, Principal of Dutton Commercial, vertically manages his own retail portfolio and also third party manages a portfolio of 70 mid-size retail and office properties throughout Colorado. In addition to pursuing retail properties to buy, Nate is also searching for highly discounted office properties in great submarkets.
Cracks are starting to show in the multifamily space. Several owners have expiring rate caps and are underwater on their properties as they face dramatically increased debt payments. This is starting to force sellers to get realistic and capitulate on price. Great deals are starting to emerge with healthy spreads between interest rates and cap rates. Julian Vogel,
Fund Manager at Colony Hills Capital, is acquiring recession resilient Class B- to A- properties with 20% return targets in growth markets in the Eastern U.S.
In the last several years, industrial Real Estate has become a highly visible asset class, mostly because of ecommerce. One growing subset of this category is Industrial Outdoor Storage. It’s a great asset class because there’s very low capital expenditure or management involved. It’s mostly land with a small, sparsely furnished industrial building, and sometimes no building at all. As a result, it can be extremely lucrative. Matt McLennan, Executive Vice President of Kidder Matthews in Seattle, help clients buy, lease, and develop Industrial Outdoor Storage facilities. Matt has also invested in these assets individually.
There can be outsized returns in out-of-favor asset classes when there are still strong underlying fundamentals. Office, in particular, can still be lucrative. Matt Drouin, Partner at Oak Grove Development, has acquired great legacy office buildings in downtown Rochester that are generating great cash flow. Matt also invests in multifamily, retail, and industrial in Rochester. Tight geographic focus and intimate market knowledge eliminates a lot of risk and results in great returns. Matt only does fixed rate debt and buys for long-term holds.
In the alternative investing space, there are numerous ways to build long-term wealth. Many of these opportunities involve direct investment in Real Estate, but there are other investments that the same or even better returns. Dave Zook, Founder and CEO of The Real Asset Investors, invests in alternative asset classes including ATM machines, Oil and Gas production, Car Washes and Self-Storage facilities. Dave creates partnerships with proven operators who specialize in respective asset classes and has a very strong track record generating outsized returns for investors over a long period of time.
As we’ve emerged from the pandemic, Americans are now travelling almost as much as they were back in 2109. In certain markets, the hospitality industry is doing as well, if not better than ever, but there are still great opportunities to invest in hotels. Paul Hassebroek, Principal of Six Four Asset management, has been successfully operating hotels in Iowa and Wisconsin and will be raising a new fund to acquire more value-add opportunities within the Marriott chain. Paul will increase profits by implementing corporate sales strategies and improving operational efficiencies.
A great sector of Real Estate investing that has a low barrier to entry is land flipping. Land flipping requires very little start-up money, and the profits can be incredibly lucrative with very little downside. Mike Deaton, a successful land investor, generates as much passive income from land investing as he and his wife made combined in high corporate salaries. Buying and selling land is easier than selling a house, apartments, or other commercial buildings because it’s just land with no physical structure. After becoming very successful, Mike is now coaching others on how to replicate his success.
A well refined market niche for real estate entrepreneurs can deliver outsized returns, but it’s easier said than done. It takes a lot to discover a niche in a crowded marketplace, and it requires discipline to stick with it without getting distracted by other shiny objects. Axel Ragnarsson, founder of Aligned Real Estate Partners, buys 10–50-unit value-add apartment buildings in Southern New Hampshire directly from sellers. Axel’s completely vertically integrated and knows the market incredibly well. Southern New Hampshire is a supply constrained, stable market with population and rent growth as residents are moving there from more expensive markets in the Northeast.
Over the last five years, overly exuberant investors vastly overpaid for multifamily properties. Instead of basing their pricing on in-place property performance, they based their pricing on overly aggressive proformas. In many cases, these proformas didn’t materialize because of increased renovation costs and declining rents. Because of these factors plus increased borrowing costs, we’re starting to see distress in the marketplace. Bill Hamm, Co-founder of Broadwell Property Group, was smart enough to sell off his portfolio a couple years ago when the market was incredibly frothy. Bill is now looking to jump back into the market to acquire B Class core properties in great locations in major metro markets with 5 – 7 year holds.
Although there can be gains from physical improvements to a property, the most expedient value-add occurs when you buy well-maintained properties for less than they’re worth. Ben Kogut, founder of Rooster Equity, buys single tenant retail properties, office buildings, shopping centers, and medical office properties from motivated sellers at prices below market. These properties have few improvement needs and are generating impressive cash flow at the onset so investors get solid distributions right away.
With construction costs having increased for value-add properties, and better deals coming online for newer properties, acquiring older properties may make less sense than a few years ago. Older properties also have a lot of maintenance costs and higher unit turn costs. As prices continue to come down for newer properties, these deals pose less risk and greater reward. Mark Weinstein, President of MJW Investments, has acquired over $1,5 Billion of apartments, student housing, commercial buildings, industrial, and self-storage facilities over the last several decades. More recently, Mark has focused on Multifamily in growing markets that have been less impacted by oversupply.
In the past few months, great deals have materialized across asset classes as the buyer pool has shrunk and sources of capital have dried up. As a result, more deals are generating attractive in-place cash flow. Cash-on-cash upon close is more important than IRR and Equity Multiple because cash flow is immediate and reduces risk. IRR and Equity Multiple are speculative and don’t always materialize. Irwin Boris, Head of Investments at Heritage Capital Group, has decades of experience across most asset classes. Heritage stopped acquiring multifamily five years ago and has been acquiring warehouses and flex industrial and generating in-place cash-on-cash of 9% or higher.
Prices on most Real Estate assets have come down significantly over the past year. In multifamily, class C properties in particular have gotten crushed and prices on Class A and B properties have also contracted. Too many sponsors paid too much for properties, overleverages, and got floating rate debt. Over the next couple years, great opportunities will present themselves to invest in high quality assets at discounted prices. If interest rates come down during this period, as many predict, and cap rates follow, big profits will be earned. Mark Hamilton, Chairman of Hamilton Zanze, a multifamily operator of 25,000 units, is bullish on the next few years for what multifamily has in store as absorption, occupancy, and rents increase.
Supply-demand imbalance is what drives value in Commercial Real Estate. In this country, we currently have a severe shortage of affordable housing in many markets. In the case of Mobile Home Parks, the ultimate in affordable housing, supply is actually shrinking because municipalities are repurposing the land Mobile Home Parks occupy for other uses. Nathan Jameson, Founder and Managing Director of ARX Capital, has an incredible track record of buying, improving, and operating Mobile Home Parks in Pennsylvania and surrounding states...
When institutions like pension funds or other groups like family offices invest in Real Estate, they’re looking to invest with best-in-class operators with stellar track records to partner with. They have very specific criteria for asset classes, markets, and operators. Jon Siegel, Co-Founder and Chief Investment Officer of RailField Partners, has developed a strong track record in core plus multifamily assets across growth markets, and has attracted capital from large capital partners as he continues to generate consistently excellent returns.
When it comes to doing larger Real Estate deals, the power of partnerships comes into play. It’s helpful to leverage several sources of capital and specific areas of expertise in order to fund deals and execute on business plans. Scott Jacobson, Founder of Onward Equity, started out as a solo operator in smaller apartment buildings and a small office building in Indiana before joining a networking group and scaling his efforts with other members into larger multifamily buildings across several states.
It’s difficult to create value when you do whatever everyone else is doing, and hard to find opportunities others haven’t discovered. One such asset class in independent hotels is small, popular tourist towns. Many of these hotels are run by ma and pa operators who have antiquated operating processes and lack the resources to update their properties. By making simple adjustments to operations, and updating the physical premises, there’s huge upside to these properties. Jonathan Twombly, Managing Member of Two Bridges Asset Management, is buying and improving independent hotels and achieving great profitability.
When it comes to stable tenants and predictable cash flow, it’s hard to find a better asset class then Medical Office. As the population ages and people live longer, the demand for medical care will continue to flourish. Plus, technology will never replace the human body. Whether its dermatology practices, dentists, dialysis centers, emergency care, eye care, hospitals, veterinary practices, etc., health care is rapidly growing. Ben Reinberg, CEO of Alliance Consolidated Group of Companies, has specialized in Medical Office for the last twenty years and is generating predictable, steady cash flow and strong appreciation for his investors.
Since mid-2022, Commercial Real Estate prices have been in a freefall. Dramatic increases in Interest rates have pushed prices down, capital has dried up, and the market has come to a standstill. The lending industry, however, is varied and complicated, and no one quite knows what will transpire when loan maturities transpire. Unlike 2008-09, operations on most properties are sound, but unprecedented rate increases will saddle properties with more debt than they’ll be able to service. Brian Burke, President and CEO of Praxis Capital, has been through several cycles, and believes the fallout from this phenomenon will not be as bad as many predict.
In the past few years, great deals for multifamily properties have been few and far between because the prices have simply been too high to make sense. As a result, many inexperienced operators relied on risky financial engineering to make deals pencil and are now paying the price. A lot of these operators are going to lose some, if not all, of their money and take their investors with them. Bruce Fraser, Managing Partner of Elkhorn Capital Partners, has avoided these overpriced assets, and created a smart niche of buying highly distressed properties at deep discounts and turning them around for big profits. Elkhorn Capital oversees over 2000 units across Tulsa and Oklahoma City and plans on further expansion into these markets.
For Real Estate investors who are capitalized enough to acquire properties over the next couple years, a lot of money will be made. Many current operators are over-leveraged and using floating rate debt and are now suffering the consequences. Many of them are losing money and will have to sell at a steep loss. Others are still making money, but not enough to qualify for refinances upon loan maturity, so they will also have to capitulate at a loss. Dan French,
Managing Director of ATX, sold most of a 15,000-unit multifamily portfolio in 2019 when prices were starting to skyrocket. Now he’s back in the market in search of distressed assets.
The stock market can be great for long-term appreciation, but it’s unpredictable and doesn’t generate as much passive income as alternative investments like Real Estate, Oil and Gas, Commercial Lending, and others. With alternative investments, you can generate greater than 10% returns on your money paid monthly or quarterly and pave a path to a comfortable retirement. Chris Miles, the anti-Financial Advisor and cash flow expert, consults with clients on how to invest their money in order to earn enough passive income to retire from the 9-5 grind.
In the past couple years, there’s been an unprecedented amount of new multifamily developments under construction. With so many construction loans coming due over the next couple years, there will be many opportunities to provide preferred equity to developers who need gap funding in order to stay alive in their deals. With interest rates having more than doubled, and lenders requiring less leverage, borrowers will need to bring more outside money to the table. Darin Davis, Co-founder and Principal of Presario Ventures, is a seasoned Texas multifamily operator, who is providing preferred equity to builders of new multifamily apartments.
A sector of Real Estate that remains robust is outparcel developments. The demand for great locations exceeds current supply. Outparcels are attractive because they have great visibility, and they don’t compete with dozens of other tenants. Rents are typically higher, but well warranted based on traffic counts and visibility. Typical tenants are fast food, fitness chains, car washes, and gas stations. Josh Weiner, Principal of KLNB Commercial Real Estate Services, based in Northern Virginia, works with developers, investors, and owners throughout Maryland and Virginia.
For predictable and consistent cash flow, it’s hard to beat small neighborhood retail with national credit tenants. Rents are secured by some of the country’s largest corporations, and there’s very little to do to maintain these properties. Like most asset classes, it’s still highly competitive, but there are great deals in the $1 million to $5 million range that are too big for a lot of small investors, and too small for larger institutions. Loren Ziff, a three-decade, seasoned investor with experience in most asset classes, currently specializes in smaller retail properties with great cash flow.
The best Real Estate deals often occur when someone sees what others don’t. In any market, there are always great opportunities. In today’s market, for example, there are especially great deals in suburban office. As workers have left downtown offices, they’ve chosen to work closer to home. As a result, many quality suburban office buildings are at 90% occupancy. Ash Patel, a successful Value-Add investor, invests in office buildings, flex Industrial, strip retail, and ground up construction. Ash doubles his money on most deals in three to five years.
As equity investing in Real Estate has gotten increasingly risky, debt investing has grown rapidly in appeal. One asset class in particular that’s especially lucrative is Specialty Lending against the development of cannabis cultivation facilities. There are currently 27,000 cannabis facilities in the U.S. and the number is growing. Rob Sechrist, Co-Founding President of Pelorus Capital Group, a cannabis-use Private Mortgage REIT, has conducted $500,000,000 in transactions since 2010, which makes him one of the top three lenders in the country. Pelorus provides value-add bridge and stabilized financing to borrowers with first lien positions and has generated excellent returns for retail and institutional investors.
When selling a home, getting the highest price is not always the number one goal for sellers. Sometimes, a seller will forgo the hassle of fixing up a home plus avoid the process of listing and showing the property. Some sellers will exchange the work involved for the certainty and speed of a close, even at a reduced price. Robbie Faithe, CEO & Founder of Faithe Real Estate Group, is a top 1% agency in Albuquerque. In addition to conducting traditional transactions for home buyers and sellers, Robbie wholesales homes to other investors. In situations when the numbers make sense, Robbie acquires homes for his own investment portfolio, often using seller financing.
Having a tight geographic focus, especially in multifamily, combined with an experienced operator, mitigates a lot of risk. There’s also no substitute for when an operator lives in the market they operate in. Local market knowledge, in addition to in-house property management, are a recipe for healthy returns. David Lamatinna, Principal at Arrowhead Properties, has over 18 years’ experience in acquiring, renovating, and managing C class apartment communities throughout greater Boston, and has generated great returns for his investors.
One asset class that’s experiencing particularly high growth is cold storage. The increasing demand for perishable goods, the expansion of the cold supply chain, and the focus on food safety and compliance are driving the need for advanced cold storage facilities. Cliff Booth, Founder and Chairman at Westmount Realty Capital, has invested in cold storage for decades and is developing new facilities to fill this rapidly rising demand. Westmount has been a large investor in value-add warehouses and Multifamily for 35 years, mostly in the sunbelt states and upper Midwest.
In the Multifamily asset class, being vertically integrated is especially important. Managing apartments is very labor intensive with 24-7 residents, so a lot of things can go wrong. With so many people involved, and so moving parts, expense and revenue management is a continuous challenge. Shelley Peterson, President of Kahuna Investments, owner of 3000 apartment units, has migrated from third party management companies to in-house management and is seeing increased effectiveness, significant operational savings, and profitability.
Chasing high yields that never materialize because of unrealistic underwriting is a recipe for major disappointment. The most money in Real Estate is made buying quality assets at the beginning of cycles. Currently, we’re facing an environment where inexperienced operators paid too much for properties with too much leverage, floating rate debt, and unrealistic assumptions. As a result, there will be some form of distress in almost all asset classes. Peter Lewis, Chairman and Founder of Wharton Equity Partners, has 35 years of experience as a real estate owner, developer, and operator. Peter has survived several cycles and predicts great buying opportunities over the next couple years.
Although most asset classes will experience some forms of distress over the next couple years, one asset class that will be less impacted is Self-Storage. Recent prices paid for Self-Storage were less exuberant than Multifamily and other asset classes, so most operators are doing well enough to not have to sell at a discount. As an industry, Self-Storage is still mostly operated by smaller, less sophisticated operators, so opportunities to implement systems and create efficiencies translate into big potential returns for investors. Cliff Minsley, Cofounder of 10 Federal Storage, is acquiring underperforming facilities with almost no debt, thereby generating significant, risk-adjusted returns for investors.
The multifamily sector is facing major headwinds. Not only have interest rates escalated at an unprecedented pace, but operating costs have also soared as well. In certain states, insurance costs alone have increased 100% or even more in the last couple years. With costs rising dramatically and rents plateauing, or even decreasing in some cases, there’s choppy waters that will not end well for many multifamily investors. Chris Grenzig, Owner of Jag Capital Partners, has built a vertically integrated portfolio of smaller properties in Jacksonville, Florida and is successfully navigating this turbulence in the market. Chris has not acquired a new deal in over a year because prices have not yet come down enough to reflect the realities of today’s operating environment.
In secondary and tertiary markets in the Midwest, Multifamily prices have come down 27%-35% since the March 2022 peak and have a way to go. When distressed operators are forced to sell at a loss, the low prices they sell for create new comps in the marketplace. This is why there will be great deals over the next couple years for patient Multifamily investors. Reid Bennett, National Council Chair of Multifamily Properties for SVN International, is a top .02% Multifamily broker, and is an expert in all things Multifamily. Reid believes sellers are well advised to sell now before the market further contracts.
It’s hard to find businesses that consistently generate profit margins in excess of 20%. One such asset class most investors don’t think about is laundromats, but they’re everywhere and simple businesses to run. Over the past couple years, Real Estate investors, in addition to others, have entered the laundromat space because of the strong cash flow and the ability to dramatically increase revenue by adding value. For starters, most laundromats lack the simple technological advances that make these facilities way easier to run and way more profitable. Jordan Berry, Owner of Laundromat Resource, has successfully operated numerous laundromats in Southern California and is now creating a fund that investors can passively invest in.
In the multifamily apartment category, Class B provides the greatest hedge against risk. Renovated Class B apartments often have many of the same amenities as Class A, but cost anywhere from $300-$500 per month less to rent, depending on the market. In a tough economy, a lot of Class A renters move down to Class B properties in order to save money, but Class B renters generally don’t move down to Class C. Lee Harris, President and CEO of Cohen Esrey, has acquired and improved 10,000 Class B apartment units since 2011.
One of the keys to success in multifamily investing is picking a market that’s not fully discovered and still experiencing a lot of growth. Another aspect of this strategy is buying B class properties with huge rental upside without having to pay a lot in unit or exterior upgrades. Christopher Stout, Principal and leader of StoutCap, has selected Northern Alabama, NW Arkansas, and Fayetteville, NC as up and coming markets that are growing, but not yet saturated with other investors. These are fast-growing markets with high rental demand and little new supply.
There aren’t too many asset classes within Commercial Real Estate right now where you can generate a strong cash-on-cash equity return plus great upside. One exception to this is RV Parks. RV Parks are where Self Storage and Mobile Home Parks were ten years ago. There are approximately 15,000 RV Parks in the U.S. and many of them are often filled to capacity. Several of them are owned by ma and pa owners that have not maximized their true revenue potential. Robert Preston, CEO of Climb Capital, is acquiring and improving RV Parks in the sunbelt states and generating great returns for investors.
Although multifamily Real Estate has been a stable, cash-flowing asset class for the past several years, many properties are facing major headwinds. Interest rate hikes, rising expenses, and slower rent growth has presented big challenges. Despite these current market conditions, however, there’s still a significant supply-demand imbalance of housing in the U.S. that portends well for multifamily in the long run. Daniel Holmlund, CEO of Good Samaritan Capital, is helping investors seeking consistent, predictable cash flow navigate this current environment to achieve solid, conservative returns.
If you want to invest in Real Estate, but don’t want to tie your money up for an extended period of time, a great way to do this is through non-bank private lending. When you invest in single family fix and flips in stable markets, for example, it’s a conservative way to generate high yield, consistent passive income. Kevin Amolsch, Founder of Pine Financial Group, owned several of his own single family properties before transitioning into private lending. Kevin now has funds that lend mostly on single family homes in Denver, Washington, DC, Wisconsin and Minnesota.
Other than Class A office space in top-tier markets, the overall office building asset class remains a healthy and viable investment alternative. There are several types of office product, and most are faring well depending on the location. Stewart Heath, CEO of Harvard Grace company, is building a portfolio of properties in the Nashville to Huntsville, Alabama, corridor, including cash-flowing office buildings. This market has seen explosive growth and offers great investing opportunities.
In highly desirable, steady markets not subject to excessive volatility, Real Estate values tend to hold and appreciate consistently over time, and are great, low risk capital preservation assets. One such market that has withstood the test of time is Chicago. Chicago remains a powerful magnet that attracts residents from all over the greater Midwest and beyond. Joe Smazal, Senior Managing Partner of Interra Realty, is one of Chicago’s top-producing Multifamily brokers in the $5-$15 million range and is building his own portfolio of Multifamily assets.
If you’ve been paying attention at all, you know there are clouds on the horizon in Commercial Real Estate. This is caused in no small part to escalating interest rates, which can move even higher. Amongst asset classes facing headwinds is multifamily. Depending on the market, there’s a glut of new construction, rents and occupancy are down, and expenses are up. As a result, many apartment complexes acquired over the past two to three years with floating rate debt will not get refinanced, which will translate into great deals for patient investors. Darin Garman, The Nations Most Trusted No BS Multi-Family Investment Advisor, has been in Multifamily for decades, and predicts great opportunities over the next six to 18 months.
Investing in the right operator is more important than investing in the right deal. A poor operator can make a good deal bad; a good operator can make a bad deal good. When selecting who to invest with, it’s important to vet how often, how much, and what they communicate, in addition to making sure they’ll prioritize the operations of the deal before they move on to other deals just to reap the acquisition fees. Nancy Chillag, Founder of 23rd St. investors, partners with other General Partners that are aligned with her goals, morals, and operating principles to generate consistent returns for investors.
You don’t need to be a direct operator of Real Estate to get a great return on your money. You can invest in the secondary mortgage market and get conservative, mid-high teen returns with almost no leverage against single family homes. Bill Bymel, CEO and fund manager of First Lien Capital, invests in pools of mostly non-performing single-family notes at a discount and a conservative loan- to-value of 60%. First Lien owns over 700 mortgages valued at greater than $100 million. They help borrowers get the loans back into performing status and then resells them to other investors.
It’s hard to find businesses that consistently generate profit margins in excess of 20%. One such asset class most investors don’t think about is laundromats, but they’re everywhere and simple businesses to run. Over the past couple years, Real Estate investors, in addition to others, have entered the laundromat space because of the strong cash flow and the ability to dramatically increase revenue by adding value. For starters, most laundromats lack the simple technological advances that make these facilities way easier to run and way more profitable. Jordan Berry, Owner of Laundromat Resource, has successfully operated numerous laundromats in Southern California and is now creating a fund that investors can passively invest in.
To be successful in the long-term in Real estate, you need to buy things right at today’s value versus hoping the market will carry you, because the market is undependable. The market has carried a lot of investors over the past few years, even when they overpaid for properties, but these days are temporarily over. We’re currently in a Real Estate recession as lending has all but shut down, but great deals are starting to present themselves because of skyrocketing borrowing costs for borrowers with floating rates. AJ Osborne, CEO of Cedar Creek Capital, has built a $300 million-dollar Self Storage portfolio by turning around underperforming assets in high-demand markets with long-term fixed debt. Cedar Creek Capital is completely vertically integrated, buys and holds, and has returns that far exceed 20%.
We’re currently in the longest bull market in U.S. history as the government continues to print trillions of dollars. With this unprecedented situation, continued inflation and rising interest rates is unavoidable. Depending on what happens, it’s possible that rates can go as high as the high teens, like they did in the 80’s. This scenario will spur a declining stock market and depreciation on most assets. Jim Rogers, renown six-decade investor, author, and commentator, predicts choppy waters ahead and suggests that we take precaution. Jim was the co-founder of the Quantum Fund and Soros Fund Management with legendary investor George Soros.
Finding a new niche in an increasingly crowded marketplace is close to impossible. One asset class which has yet to be scaled, however, is laundromats. Laundromats are run mostly by small operators with antiquated systems, often in outdated facilities. Sam Wilson, a successful Real Estate investor and entrepreneur, is acquiring laundromats and modernizing. He’s achieving huge revenue increases and profitability in the process. Sam created a fund where investors can participate in this trajectory of success.
Hyper-focus is a key to success in business. In Real Estate, having a tight geographic and operational focus pays high dividends, especially in the Multifamily sector. There’s no substitute for living in the market you’re operating in, where you have intimate knowledge of the neighborhoods, blocks, and even the streets. On top of this geographic specialization, if you’re truly vertically integrated, the odds are highly stacked in favor of your success. Jered Sturm, Principal and CEO of SNS Capital Group, has had amazing success improving the performance of C and C+ properties in Cincinnati, Ohio where he’s lived his whole life.
One of the critical components in Real Estate acquisitions is the lending piece. The wrong loan can end up dooming a project in the long term. Getting the right loan product with all the right terms and conditions for your investment can make or break the deal when unforeseen circumstances occur. Malcom Turner, President & CEO of Castle Commercial Capital in Detroit, helps commercial borrowers navigate the complex landscape of commercial lending so they can close on the right deal and avoid common pitfalls down the road. Malcolm is also the author of “Financing the Unbankable Deal: How to buy commercial Real Estate with the Bridge Loan Investor Success Strategy”.
Most real estate classes require a lot of hands-on daily management that makes or breaks the success of the investment. Nowhere is this more the case than multifamily apartment communities. When you’re dealing with tenants 24/7, there’s things that need prompt attention at times. Ryan Weiss, Principal Broker and Managing Partner at Blue Door Living, has gone from managing 40 units to over 400 units in just three years and has gotten all his clients by word-of-mouth. Ryan is based in Manchester, New Hampshire, a chronically under-supplied market just an hour north of Boston.
After many years of escalating prices, it’s now a buyer’s market for institutional, quality multi-family assets. Institutions are on the sidelines as they rebalance investment portfolios, and it’s become much harder for newer operators to raise money. As a result, the buyer pool has shrunken, and prices have decreased. Class A, new vintage properties are selling for 10% off their peak in growing secondary markets in the Midwest. Ivan Barratt, Founder of the BAM companies, a fully vertically integrated Private Equity multifamily Real Estate firm, has close to 1 Billion in assets under management and has generated greater than a 35% IRR to investors with an average of a 3.5 year hold time.
Unlike most Real Estate asset classes, the Mobile Home Park industry will not see high levels of distress caused by aggressive, short-term floating rate debt. Lenders of Mobile Home Parks are typically more conservative, and operators are not facing the same level of occupancy and expense challenges of other asset classes. Mobile Home Parks aren’t pretty, but they still consistently cash flow better than many other assets that are traditionally more sought after. Mario Datillo, CEO of Celebrate Communities, is buying Mobile Home Park communities in Florida, where he resides, plus Atlanta, Dallas, Minneapolis and Pittsburgh. Mario also publishes a lot of educational content for new Mobile Home Park investors. Mario targets a 10% cap rate upon stabilization by year two and IRRs in the high teens.
Although the market for Multifamily still remains one of the most competitive asset classes, it still represents one of the best opportunities to add significant, predictable value in a relatively short period of time. Zach Winner, Founding Partner of Prosperity CRE, has had recent success in Kansas City where he 1031 exchanged out of an 80-unit apartment building into a 180 unit building and is brining units up to market rents. Zach is an opportunistic investor who is also undertaking a hotel-to-apartment conversion near Tacoma, Washington.
Many operators over the last couple years paid exorbitant prices for assets and have been unable to increase income as planned. Expenses have also increased significantly more than anticipated. These factors, combined with escalating borrowing costs, will make it very difficult for operators to hold onto certain properties. As rates readjust upwards, there will be distress and opportunities for acquirers. Brian Estes, President of the Estes Group in Jackson Mississippi, has a background in repositioning distressed properties in the Gulf South states and looks forward to capitalizing on interesting opportunities on the horizon, especially Multifamily properties with 20-60 units.
In major markets across the U.S., residential rents have shotten up dramatically over the past 10 years. As a result, many renters have moved further out from urban cores. For operators of apartment complexes, investing in markets outside of the urban cores has made sense because these markets have also seen rental rate increases, but the prices are less, especially for buildings with fewer than 100 units. Mike DesRosiers, CEO at Growth Capital Group, has acquired over 1000 units, mostly in secondary and tertiary markets in Texas. Mike started mostly in single family properties in the Bay Area prior to investing in these great cash-flowing markets.
When it comes to investing, nothing pays off more than patience and discipline. As sellers insist on prices that no longer make sense in this current interest rate environment, it’s gotten increasingly difficult to find deals that pencil out. Even before the interest rate surge, prices were at unprecedented levels because of the incredible amount of competition that were chasing deals. Andrew Cushman, Founder and Principal of Vantage Point Acquisitions, operators of multifamily assets in the Southeast, has adhered to strict acquisition guidelines and therefore has continued to prosper with his portfolio when many others are struggling.
When you invest your hard-earned money, it can make sense to have someone else vet opportunities for you to ensure success and reduce risk. When it comes to investing passively in Real Estate, there’s a lot to know, and there are countless opportunities to invest in. Many of these opportunities are valid, many aren’t. John Rubino, COO, Founder and Partner of JID Investments, helps investors avoid the pitfalls by steering them into well-vetted, trusted operators with strong track records and high ethical standards when it comes to how they handle investor’s money.
Short-Term-Rentals have exploded over the past several years and investors have prospered. Recently, however, several markets have gotten over-saturated, and vacancies have climbed. Appreciation in home values has also made these properties more difficult to cash flow. Kirby Atwell, CEO of Living off Rentals and podcast host of Living off Rentals podcast, has a different strategy for success. Kirby acquires properties in smaller markets. These are smaller, destination markets with far lower home prices, but nightly rates that are almost the same as major markets. Kirby has achieved financial independence for himself and is coaching others to do the same.
Great locations save the day when broader markets go south. High density, infill markets with lots of employers and desirable amenities insulate properties from severe downturns which inevitably occur. Mark Hentemann, Founder of Quantum Capital, started out building a portfolio of 20–30-unit Multifamily buildings in Hollywood, CA and nearby L.A. neighborhoods. These properties appreciated considerably as he was able to bring rent-controlled, below market rents up to market. Mark has subsequently expanded to Austin and Denver with 20–40-unit buildings where he doesn’t compete with institutional investors.
Flipping houses can be a great way to make money, but only a handful of people are truly successful at it. There’s a lot you need to know and there are many ways to make costly mistakes. Roger Blankenship, Founder of FlippingAmerica.net, has successfully flipped over 1500 homes, but lost it all back in 2014 by expanding too fast, overextending himself, and having the wrong employees. Roger’s goal is to prevent others from making some of the same mistakes he made and to provide extremely valuable education on house flipping at an extremely reasonable price for new people getting into the business.
With loan terms maturating and escalating borrowing costs, many Real Estate properties are going to be in trouble. With these escalating costs combined with higher operating expenses and contracting rents, many properties will be sold at deep discounts in the next 6-12 months. This will present great buying opportunities for acquirers. Cameron Pimm, Co-Founder & Principal of Urban Landings, has been investing in multifamily properties in Atlanta, Charleston and Las. Vegas and generating internal rates of return of 23% and equity multiples of 1.9 times for investors in just under three years. Cameron looks forward to the upcoming buying opportunities to enhance his already stellar record of performance.
This country is facing a housing affordability crisis with few foreseeable solutions. Shortage of supply, increased construction costs, and the costs to operate have escalated. If the cost of construction could be reduced, however, it would be the first step to solving the affordable housing conundrum. Mike Kaeding. CEO of Norhart, is innovating the way apartment buildings are being built with more cost efficiency and is incorporating advanced technologies into the day-to-day operations. This innovation is resulting in best-of-class experience for residents and creating a new status quo in the apartment industry that will ultimately result in cost savings for renters.
1.5 trillion dollars in Real Estate debt is coming due by 2025. This Is starting to cause major distress across asset classes, markets, and sponsors. On top of increased borrowing costs, expenses such as insurance, taxes, and labor have increased faster than rents and delinquencies are becoming more common. On the other side of the equation, great deals for investors are on the horizon to acquire distressed assets. Patrick Grimes, Founder of Invest on Main Street.com, is taking advantage of this great situation and is offering attractive opportunities for investors to participate in this opportunistic marketplace. Patrick has a recession-resistant Real Estate fund plus funds in other lucrative asset classes that are uncorrelated to the broader market.
Single family homes are the most conservative asset class to both operate and lend against. Right now, inventory levels are the lowest they’ve ever been, so prices have maintained despite dramatic interest rate increases. Matt Owens, CEO and Owner of OCG properties, has bought, renovated, sold or held over 1000 single family properties in the last 15+ years. Matt currently has a debt fund where he lends against single family homes in the Midwest that generates a consistent above market return for his investors. Matt is also starting a fund that provides fractional ownership of a portfolio of 25 homes he has acquired for himself over the past few years.
Although there are multifamily properties of all sizes that are not managed well, smaller buildings without on-site staff and ma and pa owners tend to be more likely to be run unprofessionally. These properties pose opportunity for new buyers with more professional management infrastructure and processes. Will Matheson, Co-founder with his twin brother of Matheson Capital, has had incredible success adding value to smaller properties and generating consistently large returns. In one Class A property in Boone, North Carolina, they’ve increased rents 60% in the last year.
One asset class for passive investors that often gets overlooked is Short-Term Rentals. Like in other asset classes, there are companies that will manage the whole process starting with identifying the properties and managing them from start to scratch. You can get monthly cash flow with properties in great vacation destination markets with a lot of appreciation. Leslie Anne Morris, The Cabin Lady, is the owner of Josh’s Cabins, a company that finds properties for out-of-state investors, and handles all the accommodations so all you have to do is enjoy the passive income.
By controlling all the construction and property management processes, you can successfully operate Multifamily properties, as long as you don’t overpay for the properties and you know how to manage expenses. Matthew Shields, Founder and CEO of Significan, has been buying and operating Multifamily properties mostly in Northeast Ohio and Atlanta since 2017, and generating excellent returns. Matt is a serial entrepreneur who also owns other companies including Virtus Ventures, a software company that creates software solutions for companies with $50-$150 million in revenue.
Passive investing can generate cash flow, appreciation, and tax benefits through depreciation. By investing with others, you don’t have to spend time managing properties which may not even cash flow. They key is finding operators with the right experience and skills to make sure your investment is secure. Whitney Elkins Huttten, Director of Investor Education at Passiveinvesting.com, is a partner in $700M+ of real estate including over 5000+ residential units (Multifamily, Mobile Home Parks, Single Families, and Assisted Living) and more than 1400+ self-storage units.
If you want to invest in Real Estate but don’t want to be a hands-on operator, a great way to participate is through hard money lending. When you invest with the right company, it’s a conservative investment that provides high yield, consistent passive income with better liquidity than hard assets. Brock VandenBerg, President of Talimar Financial, started out lending his own money to house flippers before raising money from other investors. He now has a fund that lends mostly on single family homes in the San Diego market.
40% of floating rate Multifamily projects acquired over the past few years will not be able to get refinanced. This will cause distress for operators and opportunities for acquirers. Additionally, increased insurance costs, especially for older properties, and increased property taxes are further burdening properties’ net operating incomes. As a result of these challenges, experience and the ability to flawlessly execute on business plans has become of paramount importance over the last year as the market has changed. Brennen Degner, Managing Partner of DB Capital management, specializes in Multifamily in suburban submarkets of major metros with high paying technology jobs. DB Capital owns 3000 apartments in the Mountain West and Texas.
As the cost of capital has increased dramatically, and generating yield has gotten more challenging, institutional investors are increasingly looking for specialized niches within sectors to invest in. Outside Storage, Cold Storage, Senior Living, and Affordable Housing are just a few examples of burgeoning niches. Institutions also prefer vertical integration and invest heavily in underwriting the managers of assets to reduce risk. Deborah Smith, Co-Founder and CEO of The CenterCap Group, provides strategic advisory, capital-raising and consulting related services to private and public sector companies and fund managers across the real estate industry.
When it comes to investing, there are always risks. Despite countless resources on how to vet operators and deals, the most important decision you’ll make is who you invest with. Proformas and projections are at best, educated guesses, and things rarely go according to plan, so the differentiator is the operator. The best operators have moral fiber, and as important, successful track records, competence, and an ability to adapt to changing circumstances on the ground. Litan Yahav, an experienced passive investor, invests with either people he knows personally, or is referred by someone he knows personally. Litan believes the operator is more important than the asset class or specific deal.
Increasingly, Real Estate investors on the coasts are deploying money into the Midwest. Not only are these markets less expensive, but many of them are thriving like never before, and are less volatile. Markets like Columbus, Indianapolis, Kansas City and several others are seeing massive job and population growth. People are leaving the coasts and moving to these markets for a higher quality of life. Lee Ripma, a multifamily broker and investor, started investing in Kansas City and moved during covid from L.A. to make KC her primary market for both living and investing. Lee chose Kansas City based on a Google search for the nation’s top 10 most affordable markets and never turned back.
Nothing has caused more heartache and stress in Real Estate than too much debt. Leverage can work great in upmarkets, but it can cut the other way in a downturn. Joel Friedland, Principal of BRIT properties, has been buying infill industrial properties with all cash since learning the hard way during the 2008-09 financial crises. Joel and his investors are seeking very conservative investments with the number one goal of capital preservation. He buys highly sought-after properties that result in average sixteen-year duration tenancies. Joel specializes in industrial properties in Chicago that deliver 8% unleveraged returns.
Nothing ensures success more than focusing on what you love and what you’re truly good at. Real Estate is a multi-trillion-dollar industry with many avenues to pursue, but you’ll thrive the most by identifying your strengths, and as important, your weaknesses. Logan Freeman, Co-founder of FTW Investments, made some costly mistakes early on, but now specializes in select asset classes and markets in the Midwest within driving distance of Kansas City. Logan is now sticking with what he understands and emphasizing his areas of expertise.
Over the past several years, most operators in Real Estate did incredibly well, often regardless of experience. The rising tide lifted all boats. Today, more experience and skill will be required to acquire properties at the right price and operate them successfully. Having an established network of local brokers, local lending sources, and vendor contacts are becoming more critical in a market with far less margin for error. Specific asset class and market focus will also be paramount. Josh Ferrari, founder of Ferrari Capital, specializes in value-add multifamily in Alabama and Southern Mississippi, where he has vertically integrated systems and less competition.
In commercial Real Estate, most asset classes are already saturated with competition. It’s difficult to identify opportunities that are still relatively undiscovered and provide great cash flow at the same time. An exception to this is RV Parks. Over 10,000,000 families in the U.S. own RVs and they’re hitting the road in greater numbers than ever before. As a result, many RV parks are operating at full capacity and raising their Average Daily Rates. There are over ten thousand RV parks in the country, and many are owned by ma and pa operators who’ve not maximized their potential. Dylan Marma, Founder & CEO of The Requity Group, owns several successful parks in the Southeast and is acquiring more as he continues to generate great returns for investors.
One asset class that performs well in any economy is self-storage. When people are downsizing, they need self-storage. When they’re moving, changing relationship status, or running out of space for any reason, they need self-storage. Self-Storage is also great because rents are typically month-to-month, so you can raise rents with relative ease and not a lot of resistance from tenants. Charles Kao is an expert in self-storage development and operations who consults with investors all over the country on project feasibility, design, and technology to achieve the highest levels of profitability. Most importantly, Charles helps clients determine whether a new facility will generate high enough rents to make money.
Finding strong cash flowing properties has become increasingly difficult over the past several years as the amount of money chasing Real Estate has risen dramatically. Most properties typically require a value-add business plan which can take months, if not years, to complete before generating cashflow. In-place cash flow, however, is a rarity. One exception is government-sponsored Section 8 homes, or smaller, 1–4-unit apartments. These properties cash flow right out of the gate. Mat Simmons, Managing Partner and Founder of Simmons & co, is on his way to building a portfolio of 1000 Section 8 properties he can eventually sell to a larger institutional investor. Investors in Mat’s fund are enjoying risk-adjusted, high-teens annual returns that are paid monthly.
The market for multifamily right now is seeing severe headwinds. Escalating insurance costs, rising property taxes, and rising interest rates are just a few. As such, sponsors need to deploy special deftness and adaptability to survive over the next couple years. On the transaction side, sales volume has fallen 70% from last year as the buyer-seller bid/ask delta still remains high. Even though there are danger signs, distress has not yet been ubiquitous and sellers and buyers still have a wide gap in their pricing expectations. Cody Laughlin, co-founder of Blue Oak Investments, has partnered on several multifamily deals with other General Partners and also runs his own deals in Central Texas.
Investing in older, infill markets that are poised for repositioning and growth can be a recipe for huge appreciation. Over the past decade, several cities in Northern New Jersey with easy access to transportation have seen explosive growth in values. Gentrification has led to changes that have made these areas desirable to live in for upscale demographics. Aaron Fragnito, Co-founder of People’s Capital Group, is an apartment syndicator who invests in smaller apartment buildings in Northern New Jersey and rehabs them to optimize their full potential. Aaron is a buy and hold operator who achieves return-of-capital via refinances.
One of the oldest, tried-and-true ways to make money in Real Estate is to flip houses. Although not easy, it can be started with almost no money, just a lot of effort. Most people fail at it, but some do well, a select few make millions. If you don’t have capital, there are hard money lending companies and private individuals who will lend you all the money you need to buy and rehab a house. When it comes to finding the right house to buy, you can buy from a wholesaler who buys the home directly from an owner. In this scenario, you don’t have to hunt the deals down, a lot of the initial work has already been done for you. Sam Primm, co-founder of Faster Freedom, flips hundreds of houses per year and is currently teaching 1100 students to do the same.
When you operate in the market where you live, it reduces a tremendous amount of risk. It takes years to develop relationships and the historical perspective to have a block-by-block familiarity that stacks the deck in your favor. This intimate knowledge enables you to more easily find deals across asset types and identify great local partners to ensure success. Tyler Cauble, Founder of the Cauble Group, a boutique commercial brokerage firm in Nashville, has also done various development projects including value-add C Class suburban office, ground up townhomes, and more recently, large scale multi-use projects.
There tends to be a prevailing focus on markets with growing population and job growth as the places to invest. While this makes obvious sense, these markets are much harder to identify discounted opportunities and often promise lower returns. That’s why smaller, older markets with less competition sometimes offer better returns, especially when you have an operator that specializes in the market. Axel Ragnarsson, Founder of Aligned Real Estate Partners, owns 200 units in Southern New Hampshire with complete vertically integrated property management that translates into lucrative returns. Axel is also specializing in Central Florida between Tampa and Orlando with similar success.
Warren Buffet and Charlie Munger invest on the basis of value, not the economy. Good investing, versus speculating, should be boring, like watching paint dry. You want to protect your capital and get appreciation as a bonus. Chasing unrealistically high returns can cost a lot of money and create a lot of pain. Paul Moore, Managing Partner of Wellings Capital, has an impressive track record in investing in conservative asset classes and assets that are resilient, recession resistant, and stand the test of time. Paul’s latest focus Is on RV Parks. Five times as many people own RV’s today compared to just three years ago.
In the past several years, it got increasingly difficult to find the right deals in Real Estate, especially Multifamily. People were just paying too much across the board. In the past several months, however, the market has turned significantly with far less competition and many more distressed sellers, especially with C class properties. Amy Rubenstein, CEO of Clear Investment Group, has an incredible track record acquiring distressed C class properties 300+ units in secondary and tertiary markets and turning them around with consistent double digit and even triple digit returns for investors.
As an entrepreneur, it often takes a lot of attempts at different things before you find your niche and path to riches. Some key characteristics of many entrepreneurs are the ability to learn from mistakes and the fortitude to bounce back from failures that sometimes cost a lot of money. Peter Vekselman, Real Estate investor and Coach, has done several different things including being a top Amway performer in his early years before getting into Real Estate. Peter shares his story including his current success flipping thousands of single-family homes and coaching others to learn to do the same.
Even though you can buy and operate properties on your own, it can be time consuming and a hassle. Partnering with syndicators in larger deals, however, can generate better returns without the headaches and stresses of managing property. There are quality syndicators that have years of experience in specialized asset classes and markets, and a track record of generating consistently high investor returns. Joe Giuliacci, a Passive Entrepreneurial Investor, has invested in 35 passive deals over the past four years and shares his experience of generating passive income plus capital appreciation on deals that have gone full cycle.
Most new businesses fail within their first five years. That’s why, if you’re considering going into business, investing in a franchise can be the best way to go. Investing in a successful franchise mitigates a lot of risk by aligning yourself with a proven concept and a leadership team that teaches you the operational components of the business and how to become successful. Kim Daly, a franchise consultant with Franchoice, is one of America’s top franchise consultants. Kim matches people with vetted franchises that fit their strengths, experience, and personalities.
Although most asset classes in Real Estate have become saturated, smaller industrial is still wide open with market inefficiencies and fewer investors pursuing it. There are great deals on properties priced under $20,000,000 with credit tenants, in supply constrained markets, and under the radar of larger institutions. Lance Pederson and his partners at Resonance Capital are acquiring solid B class properties in six states across the industrial heartland. They’re implementing simple value-add strategies, mostly around leasing, that are creating huge increases in asset values in a relatively quick period of time.
When it comes to making money, flexibility is a key ingredient because things are always changing and fluid. Right now, despite signs of huge distress, rising interest rates, and economic volatility, prices for most Real Estate assets are still priced too high for experienced, disciplined investors to pay. As a result, there’s a lot of dry powder in the market, especially with smart intuitions and Private Equity. Many are pivoting from acquisitions to ground up development. Omar Kahn, Managing Partner of Boardwalk Wealth, has diversified from multifamily acquisitions to doing a 1200 unit ground up development is Sioux City, South Dakota. He also opened three franchised healthy food restaurants in Central Florida.
Many Real Estate investors who start out in residential properties gravitate to commercial asset classes like office, industrial or self-storage. With these asset classes, you have fewer interactions with tenants because they don’t live in the properties with all the drama that this can entail. Jonathan Hayek, founder of Endurance Properties in Cheyenne, Wyoming, started with single family houses and small multifamily properties before acquiring a vacant small office building which he works in and filled with local tenants. Jonathan is now looking to expand beyond Cheyenne into other commercial assets including warehouses. He’s searching in markets with over 100,000 population.
In order to generate great returns in a saturated market, identifying an asset class with a high barrier to entry can be necessary. Affordable Housing, in particular, can be a challenge because of steep municipal regulatory hurdles and compliance issues that make acquisitions and operations complex and difficult. As a result, few investors have the bandwidth that it takes to operate these properties. Denis Shapiro, Managing Partner of SIH Capital group, is launching his second alternative investment fund which will be comprised largely of Affordable Housing complexes plus debt investments that will generate upwards of 10% cash flow to investors.
In an environment where it’s difficult to achieve significant cash flow with direct equity investments in Real Estate, investing in the debt can be an attractive option. Investing in debt usually has less risk and can generate yields as high as 9%-11%, and sometimes even higher, with the assets as collateral. Carrie Cook, President of Ignite Funding, makes investing in Real Estate available to people who always wanted to invest but didn’t think they could afford it. Through Ignite Funding, individuals can invest in loans against specific pieces of Real Estate in different asset classes for as little as $10,000.
In any business, economies of scale result in more efficiency and profitability. Multifamily investing is no different. Instead of operating in multiple markets and managing several different management companies, you can streamline your efforts while reducing risk and generating better returns by focusing just one of a select few markets. Having a presence in fewer markets can also make acquisitions easier as you establish a stronger presence in the local broker community and gain access to more off-market deals. Mike Roeder, Co-founder of Granite Towers Equity Group, has 2500 units mostly in Dallas Ft Worth and more recently Nashville. Mike’s plans for the next couple years are to double down in these growing markets.
There are many ways to invest in Real Estate successfully, but one often overlooked vehicle is publicly traded REITs. Publicly traded REITs are funds comprised of public Real Estate companies, many focused on one asset class. Whether it’s a Multifamily fund, Cell Towers, Cannabis, Mobile Home Parks, Self-Storage or others, the world of REITs has grown dramatically over the past several years. By investing in these funds, you get access to some of the best Real Estate portfolios in the country with great diversification across asset classes and geographic markets. David Auerbach, Managing Director of Armada ETF Advisors, helps clients invest in publicly-traded Real Estate that provides consistent dividends, appreciation, and the liquidity you get when you invest in public companies.
Getting a high yield on cash flowing residential property has gotten harder, even in secondary and tertiary markets. Even with interest rates climbing over the past year, which makes properties hard to cash flow, sellers have not lowered expectations for what they think their properties are worth. As a result of this and a tighter lending environment, sales volume of commercial properties has contracted 70% in recent months. Mark Updegraff, CEO of Raze Capital, acquires, manages, and develops commercial properties in Rochester, New York where prices are still prohibitive. In order to expand, Mark is starting to raise capital for other asset classes in other markets with co-General Partners.
Wealth Channel is a media company that connects accredited investors to proven sponsors of Alternative Investments. Wealth Channel provides valuable content on the exploding world of alternatives for people who are looking for better returns than the stock market with less volatility. Scott Hawksworth, Chief Marketing Officer, is responsible for expanding the community and creating great opportunities for all stakeholders. Scott is an expert at leveraging the power of traditional organic search marketing (SEO) and social media channels such as LinkedIn, YouTube and Twitter to build the Wealth Channel Brand.
Every fortune 500 company plus thousands of others place employees in corporate housing. From a landlord perspective, the rents that are paid for these properties vastly exceed long-term rentals and have less wear and tear. Angela Healy, CEO and owner of Avenue West Managed Corporate Housing, places corporate employees in fully furnished residential condos and manages the whole process for the owners. These condos are great investments for Real Estate investors who are looking for truly passive income. Avenue West also is a franchisor that offers a great opportunity for individuals looking to start their own business and benefit from the multibillion-dollar corporate housing industry.
Both residential and commercial occupancy rates and rents are contracting in many places and the government remains committed to taming inflation. Additionally, taxes, insurance, and other expenses are increasing. For operators with loans coming due over the next couple years, the combination of less revenue and increased operating and borrowing costs, may make refinancing nearly impossible. As a result, a lot of landlords who acquired properties at record high rents and record low cap rates will be forced to sell at heavily discounted prices. Justin Sloan, President of Sloan Capital, is deploying capital into non-Real Estate, cash flowing, debt free assets. Justin has recently bought the franchise rights to an incredibly successful fruit bowl franchise concept in Texas and Iowa.
With so much disruption in the capital markets, lending today has gotten increasingly complex and difficult to navigate. In order to be successful in the current environment, sponsors need to be more resourceful and creative than at any other time in recent history to get deals funded. In the near term, a lot of distress in the market will provide great opportunities for operators and investors. Adam Finkle, Principal of Tower Capital, is a Phoenix-based mortgage advisor who advises clients across all asset classes on how to best navigate and optimize against the current lending landscape.
The key to success in any Real Estate venture is conservative underwriting. In a super competitive environment, it’s easy to convince yourself to believe unrealistic assumptions in order to bid high enough to win a deal. This can cause major heartache when surprises occur, and the market doesn’t fully cooperate. Zamir Kazi, founder of ZMR Capital, has acquired 33 large multifamily properties over the past few years with private equity. Although Private Equity partners can be more demanding of General Partners, Zamir has welcomed the partnership for the valuable input they provide and the healthy accountability they require.
There’s a need for 7 million more affordable apartment units in the country, but the cost of new construction is so high that it’s hard to build new apartments and rent them out at affordable rents. That’s why municipalities provide tax credits to builders so they can bring these units to market at rents tenants can afford. Lee Harris is President and CEO of Cohen Esrey, a 50 plus year old company that builds affordable apartment buildings in many markets in the U.S. to help fill the insatiable need for affordable housing. Cohen Esrey also acquires existing market rate apartments in growing markets in the Southeast and Midwest. Cohen Esrey operates over 12,000 apartments in the country.
There’s a need for 7 million more affordable apartment units in the country, but the cost of new construction is so high that it’s hard to build new apartments and rent them out at affordable rents. That’s why municipalities provide tax credits to builders so they can bring these units to market at rents tenants can afford. Lee Harris is President and CEO of Cohen Esrey, a 50 plus year old company that builds affordable apartment buildings in many markets in the U.S. to help fill the insatiable need for affordable housing. Cohen Esrey also acquires existing market rate apartments in growing markets in the Southeast and Midwest. Cohen Esrey operates over 12,000 apartments in the country.
Even though interest rates have risen dramatically over the past year, most apartment owners have not adjusted their expectations downwards when it comes to lowering the prices of their assets. This delta in the bid-ask of prices has contributed to a 50%-70% slow-down of transactions over the past several months. Lending standards have also gotten more onerous, so it’s making it more difficult to secure financing for buyers. Caleb Johnson, Founder of Red Sea Capital, has specialized in multifamily over the past few years and is continuing to source deals, but is starting to evaluate other asset classes where the prices are more favorable to achieving solid returns for his investors.
With most existing multifamily properties still priced too high to generate decent cash flow, many operators are turning to ground up development to generate more attractive returns. When these projects go according to plan, investors can get all of their money back or even more upon permanent financing, and achieve an infinite return thereafter. Sam Bates, Founder of Bates Capital Group, has transitioned out of the acquisition of existing properties to exclusively focus on ground up construction. Sam develops in secondary and tertiary markets spreading out from the sprawling Dallas/Ft Worth market where land is still relatively cheap.
By ruthlessly managing expenses, you can make C Class properties profitable, but there are ongoing challenges and risks. Even after you’ve stabilized the properties, there are continual maintenance issues and expenses you can’t accurately predict. Issues with outdated plumbing and electrical systems plus other issues erode net operating income. In addition, the possibility of further inflation and unemployment combined with rising expenses pose further risk. Jason Biak, Partner of Compounding Capital Group, has done a great job optimizing C Class assets despite these challenges in the Cincinnati market. Jason also anticipates prices on B class properties to gradually come down over the next several months.
Prices on older buildings can look attractive but you get what you pay for. The biggest challenge with older properties is being able to project expenses. Properties from the 1960’s 70’s, and early 80’s tend to have a lot of deferred maintenance, especially the plumbing systems. Maintaining and replacing old plumbing is very expensive and can negatively impact the financial performance of the property. Lee Yoder, Founder and CEO of Threefold Real Estate, has done a great job acquiring and managing Class C properties in Southwest Ohio but has had to learn some expensive lessons along the way.
The state of Florida is continuing to see exponential growth, especially Central Florida. The markets of Tampa, Orlando, and Sarasota are adding jobs and population at an unprecedented pace. As a result, Real Estate rents and values have held up well, especially compared to other boom and bust markets. Evan Shields, Founder, CEO & Managing Partner of Indelible Capital Partners, started his company in 2022 and is acquiring C to B- value add multifamily properties with 20-100 units. As other operators with heavily leveraged floating debt will be unable to get refinanced over the next year, Evan foresees great opportunity to acquire these properties at prices that will enable him to generate generous returns for his investors.
Even in deep recessions, Class B apartments are stable assets and generally withstand downward economic pressure. Class C apartments, on the other hand, pose significant risk because of unanticipated costs to repair and maintain these properties plus delinquencies that can exceed 20%. As a result of these Class C operational challenges plus higher interest rates, a lot of C Class operators are having major challenges right now that will end up as major losses for investors and operators. Mark Hamilton, Founder of Hamilton Zanze, one of the nation’s top 50 multifamily operators, has been in the business almost 40 years and has seen many market trends and cycles. Mark remains bullish on multifamily and specializes in B to A- properties in secondary markets.
Unlike residential mortgages, commercial loans are vastly more complicated with thousands of different lenders with different lending guidelines and product types. As a result, the process can be overwhelming with a lot of potential pitfalls. Mitch Ginsberg,
CEO of Commloan.com, has created an easy-to-use technology platform which gives borrowers unprecedented access to 700 lenders and thousands of loan products. Borrowers can now seemlessly shop online for the best loan products for their specific needs and get the best service and prices. Commloan.com matches the borrower with the right lender, the right loan product, and the right price.
With the cost of construction and borrowing costs rising, it’s become prohibitive to build new neighborhood strip centers with very few new centers built in the last fifteen years. As a result, occupancy levels at existing properties in growing markets is in the mid-high 90’s and sometimes even 100%. Contributing to recent high occupancy trends are professional service companies like retail insurance agencies and other business-to-consumer companies, plus medical providers like dentists, chiropractors and clinics. Todd Nepola, President of Current Capital Real Estate Group, has been buying retail centers in South Florida for 25 years and has generated great wealth for investors.
40% of multifamily properties bought in Q 3 and Q 4 2020 and 2021 with variable rate debt will likely not get refinanced by their current lenders. In these scenarios, operators will be forced to attempt to raise more money via capital calls from their current investors and/or take on rescue capital from 3rd parties. The last option is to give properties back to the bank. Over the past couple years, the high price of multifamily properties did not pencil without high leverage bridge debt, but as a result of the precipitous rate increases of the last year, operators are now paying the piper for taking the risk. Neal Bawa, Founder of GroCapitus, saw the writing on the wall and only acquired one property during this time, and sold several. As a result, he did incredibly well by his investors. Neal is currently waiting for the market to correct much further before he’ll even consider making another acquisition.
As inflation has taken a big bite out of renter’s pocketbooks, delinquencies on C Class apartments have increased, and prices on these assets have come down. In the next couple years, a lot of inexperienced operators who bought these properties and not significantly improved Net Operating Income, will have trouble getting extensions on their loans. This will result in great buying opportunities for experienced operators to acquire these assets at reduced prices. John Cohen, Founder and owner of Toro Real Estate, has done incredibly well in C Class properties in Columbus, Ohio and the Carolinas, and sold most of these properties over the last couple years. John has recently focused on ground up development.
In most tertiary markets in the Midwest, there’s been very little new building of multifamily housing in many years. Therefore, buildings in many of these markets have very high occupancy levels. These markets also tend to have smaller, ma and pa management, so there’s a lot of opportunity to reduce operational costs and raise rents, thereby improving Net Operating Income and creating great cash flow. Seth Teagle, Principal of The Stream Group, a vertically integrated multi-family operator, has built an impressive portfolio of C and B class properties in Central Ohio. Over the past few years, Seth has learned from mistakes on how to accurately budget for cap-ex on heavy value-add projects, an area where a lot of inexperienced operators go wrong.
When making investments in Real Estate, the most important consideration is who you’re investing with. Proformas are always enticing, but the differentiator is the operator. More than the ability to judge the merits of a specific deal, a successful investors’ most important skill is being able to accurately vet operators. Matt Burk, Chairman of Fairway America, has consulted hundreds of Real Estate entrepreneurs in helping them form their own funds, including how to identify credible sponsors. This experience, plus years of running his own funds, is one of the reasons Matt’s Fairway America funds have been so successful and generated great returns for his investors.
Unlike most other asset classes, Mobile Home Parks and Self-Storage facilities have maintained almost all of their value despite interest rates having skyrocketed over the past year. Rents in both asset classes have stabilized, but not decreased. From an investment perspective, these asset categories are still highly fragmented with greater than 70% owned by individuals or families. Matt Ricciardella, Principal and Managing Partner of Crystal View Capital, has mastered the art of acquiring these asserts off-market in secondary and tertiary markets. Matt has a large in-house team that manages all aspects of operations and has achieved historical internal rates of return greater than 30%.
The most successful Real Estate investors determine when to invest in order to generate the highest returns. In a market where asset prices have skyrocketed, there are greater gains to be made in ground up development and land. In pursuing these opportunities, it’s critical to find the right people to execute the business plans. These projects require problem solving to the extreme, so the people involved make the whole difference. Hemal Badiani, Founder and CEO of Exponential Equity, started acquiring Multifamily assets and has expanded into ground up Multifamily and his favorite asset class, development of raw land.
Investing in single family dwellings and three to four-unit apartments can generate cash flow and appreciation, but they tend to be time consuming to manage. If you want to better leverage your time and your capital, it can be more profitable to invest in larger syndications for economies of scale and better returns. Dan Rowley, a Real Estate principal and passive investor, has invested in over 25 passive deals with a dozen sponsors. The lion share of these deals have performed as expected, or even better. Dan is now beginning to General Partner on deals of his own in the Carolinas where he moved from California in 2020.
No matter what the economic trends, there’s always an opportunity to make money. You just need to see where the market’s heading. It’s not always in synch with the media and where everyone else is investing. Bob Fraser, Founder and Principal at Aspen Funds, has a very successful debt fund which has provided investors predictable, monthly cash flow for several years. Bob is also offering great opportunities for his investors to participate in other attractive asset classes including neighborhood strip centers, new construction industrial, and Oil and Gas.
Contrary to all the success stories, Real Estate is a hard business that requires resilience in order to be successful. It’s not a matter of if things will go wrong, it’s a matter of what will go wrong and when, and how you deal with them. That’s why it requires grit in order to prevail in the long term. David Mcillwain, Founding Partner & Managing Principal of MAC Assets, has learned from hard knocks many of the lessons it takes to be successful and costly mistakes that need to be avoided. MAC Assets specializes in value-add Multifamily investments.
Operating properties directly makes sense for people who want to be hands-on in the daily operations of a property and who have the time and experience to be successful at it. There are many cases, however where people acquire properties and then encounter hidden challenges like bursting pipes, termites, cockroaches and other unforeseen headaches. That’s why many people are better off and able to get better returns investing in other people’s deals. After the due diligence of an operator, and the specific opportunity, the work is done, and the cash comes in. Craig Stevens, Founder of GroundBreaking Real Estate LLC, started out buying small residential units on his own but has transitioned to investing in and raising capital for other syndicator’s deals.
Real Estate is a local business that requires intimate knowledge of a market. This knowledge, plus being an expert on the daily nuts and bolt of operations, mitigates risk. Further risk is mitigated by in-house management to make sure no corners are cut, expenses are managed tightly, and tenant maintenance requests are responded to promptly. With all these things in place, plus assets acquired patiently at the right price with fixed debt, investors will most likely not lose money. Dave Codrea, Partner at Greenleaf Management, has built a vertically-integrated company with incredibly conservative discipline that owns and operates 125 assets across Multifamily, Mobile Home Parks, Medical Office and Flex Industrial.
It’s no secret that precipitously rising interest rates took many Real Estate operators by surprise, especially those who utilized shorter-term floating debt. As their loans are coming due and they’re being confronted with the reality of much higher rates, many operators are lowering or stopping investor distributions. Over the next several months and quarters, there are operators who will have to raise very expensive rescue capital, conduct capital calls from existing investors. or in worse-case scenarios, even foreclose. Rob Beardsley, Founder and Principal of Lone Star Capital, is doing a great job managing a 2300 unit portfolio in Houston, and is navigating this challenging situation responsibly on behalf of his investors and is positioned well to come out way ahead over the next several years.
If you’re willing to be patient and methodical with passive investing, and avoid undue risk, the rewards will compound over time beyond your wildest expectations and change your life. It just takes delaying gratification, keeping your living expenses below your income, investing in quality assets that appreciate over time, and redeploying capital for continued growth. Today’s guest, Jeremy Roll, left his steady corporate job in 2007 to become a full-time passive investor, and has lived 100% off the cash flow ever since and has built his net worth considerably over that time.
Unless you have a very long time horizon, in which case time cures a lot of ills, being right on your timing will make you the most amount of money in Real Estate. Although Light Industrial has been white hot over the past few years with few attractive deals, prices are starting to moderate as loans are maturing, and larger institutions are starting to rebalance their portfolios towards more liquid investments. Rich Kent, President and Managing Principal of Avistone, has a steep track record in the Flex Industrial asset class including two very successful recent funds. One and a half years ago, however, Rich pivoted to hospitality because prices of industrial had become too high to generate enough yield for his investors. Today, with prices coming back down to Earth, he’s pivoting back to Flex Industrial with his third fund in this asset class.
Property management makes or breaks deals in every asset class, but no asset class is more challenging than large multifamily. There are so many people involved, and so many components to the operations, that things are always going wrong, and the risks are high. Surprisingly, there are not a lot of property management technology solutions for multifamily that address all functions within one app. That’s why Daniel Cunningham, CEO and Founder of Leonardo 247, created an app that principals and property managers can run their entire buildings from. Leonardo 247 makes property management easier with smart software that streamlines and simplifies tasks while also lowering costs and risks and generates more profitability.
Many investors over the years have built portfolios of single family rentals that have ultimately enabled them to quit their jobs and build legacy income for their families. Single family homes in the right neighborhoods can always attract good renters and some stay for many years with not a lot of management required. Dustin Heiner, Founder of Master Passive Income, has built a portfolio of single families in Northeastern Ohio, Houston, and Phoenix since 2006 and never sells a home. Dustin also offers a FREE Real Estate investing course online at masterpassiveinvesting.com.
Atlanta is becoming “Hollywood East” as it’s become a hub of film production with over 200 film and TV projects per year. In addition to the film industry, Atlanta has a well diversified and rapidly growing economic base. Over the past several years, Atlanta has boomed in population with now over 6 million residents and housing units aren’t keeping up with population growth. Dr. Jason Balara has started building an impressive multifamily portfolio in Atlanta and is building a formidable team on the ground that’s positioning him for future expansion in this growing market.
The most recession resistant asset class in housing is Mobile Home Parks. It’s the least expensive housing option available, and it’s supply constrained because almost no new parks are being built. As an asset class, it actually appreciated during the financial crises of 2008-2009. Bryce Robertson, Founder of investcultiv8, buys smaller parks in the $2M - $5m range with up to 50% vacancy. Because of the smaller size and the scope of the work that needs to be done to improve these properties, there is far less competition to acquire them. Bryce then turns them around with full in-house construction and management teams, refinances them, and returns capital to investors. His annual returns to investors have been in excess of 50%.
There are many opportunities to by large apartment complexes in the middle of the country but certain coastal markets can have less risk. Large California coastal cities tend to stay consistent with high occupancy levels regardless of economic conditions. Rents can contract, but with conservative leverage, you can hold on to a property for the long run and rents come roaring back and with it massive appreciation. Steven Wasylkiw, CEO and founder of Magna Vita Investments, is building a portfolio of multifamily properties in San Diego in growing sub markets that will dramatically increase in value over the long term with little potential downside.
There are many ways avenues to making money in Real Estate but few require as little capital and take as little time to start generating cash as land flipping. By creating a mailer that goes out to land owners within a certain zip code, you can do your first deal within a matter of weeks, and the margins are typically anywhere from 50% to as high as 300% on smaller size deals. It’s common, for example, to buy a piece of land for $5,000 and sell it for $20,000, or to buy a bigger deal for $150,000 and sell it for $225,000. Pete Reese, President of Reelvest properties, started land flipping two years ago and in his second year flipped over $3.5 million dollars in land. His goal for 2023 is $5 million.
Operating in your own backyard creates operational scale, competitive local knowledge, and access to better deals. All of these significantly reduce risk for operators and investors. Long-term holds of well-located properties in established markets, as well, adds to mitigating risk and heightening returns. Raj Khatiwala, Principal at Eclat Investments, specializes in New Jersey shore markets near where he grew up and currently resides in the summer months. He operates across several asset classes including hotels, apartments, mixed-use buildings, commercial condos, parking lots and office properties within these supply constrained markets, and has generated outsized returns for his investors.
When it comes to data sources in Real Estate, everyone has access to the same information, but there are ways to optimize utilization of the data to get higher returns. At Cadre, they’ve developed proprietary software that leverages much of the data available in the Real Estate industry to make better risk adjusted investments for their investors. Dan Rosenbloom, Chief Investment Officer of Cadre, is in charge of the overall strategy for Cadre’s funds which have transacted over 4 Billion in Real Estate holdings in major markets and have generated a 27.5% Internal Rate of Return. Cadre is a platform where you can invest in as little as $10,000 in individual deals.
In the Real Estate ecosystem, there are many capital raisers who bring money to developers in order to get projects off the ground. It’s their job to create value for both the developers and for entities such as family offices and Private Equity firms that are looking to deploy capital for strong returns. Nicholas Horsburgh, founder of Weld Capital Partners, helps developers underwrite, strategize, and formulate their presentations in order to attract institutional capital to their projects.
If you want to earn more while working less, passive investing can be a step in the right direction toward earning financial independence. Many people still aren’t aware of the opportunities to invest directly in Real Estate and other related asset classes that provide monthly or quarterly income that have nothing to do with the stock market. Travis Watts, Director of Investor Education at Ashcroft Capital, has invested in over 50 deals himself, and helps educate investors on ways to safely deploy capital by optimizing opportunities and getting consistent distributions plus growth in the form of appreciation.
Many seasoned Real Estate operators attribute their biggest past mistakes to debt. That’s why it’s so important to structure your financing appropriately in order to avoid devastating pitfalls and mitigate undue risk. Vernon Beckford, CEO of Diversified Lending Solutions, advises Real Estate operators in the complex world of debt in order to maximize existing lending opportunities and achieve the highest probability of success in the way deals are structured while minimizing risk. In addition to helping create the most advantageous structures, Diversified Lending Solutions also has helped borrowers 3x their previous highest loan amounts on new deals from lenders.
Leverage has helped a lot of multifamily operators generate great returns over the past five years, but many newer operators are now paying the price for too much leverage and higher interest rates. When underwriting deals, it’s critical do be overly conservative to account for realistic rent growth and growing expenses. Jordan Fisher, Principal of Next Wave Investors, incorporates ruthless conservatism into his underwriting in order to do well by his investors and never lose a penny of their money.
Most real estate asset classes are efficiently priced and hard to find great deals. With land investing, however, you can buy land for literally 50 cents on the dollar with little competition. You basically just need to follow a formula that entails marketing and follow through. With very few start-up costs, you can launch a Direct Mail marketing program that gets you a deal in your first couple months. Daniel Apke, Founder of Land Investing Online, has been very successful flipping land on his own and is now teaching others how to do what he’s done with a great, affordable step-by-step online course.
In the world of multifamily, few operators are scaling with 2-15 unit buildings. These are too large for most ma and pa operators and too small for larger syndicators. Ray Heimann, Managing Director of Terra Capital, is acquiring older properties in gentrifying neighborhoods in midwestern cities with strong job and population growth. These properties are more labor intensive from a construction standpoint, yet Terra Capital has mastered this process which has resulted in great returns for investors. Terra Capital is institutionalizing smaller multifamily Real Estate by aggregating portfolios of these properties to sell to larger institutions.
If you’ve been looking to make passive investments in hard assets but are finding it difficult to get the returns you’d expect, there are other great vehicles that can generate 10 % or higher with relatively conservative risk. Business loans made to well-run, established and profitable businesses that are not served by traditional banks can provide an attractive risk adjusted yield. Jamie Shulman founded Meriwether Capital with the purpose of providing short-term financing up to $5 million to businesses with $2 million to $50 million in total revenues. Jamie raises capital from investors and provides a steady 10% return.
There aren’t too many asset classes within Commercial Real Estate right now where you can generate 10% or more cash-on-cash returns before creating extra value and executing a new business plan. One exception to this is campgrounds. There are approximately 15,000 campgrounds in the U.S. and many of them are filled to capacity during peak seasons. Several of these facilities are owned by ma and pa owners that have not maximized their true revenue potential which makes them great opportunities for professional operators to add value. Don Spafford, Partner and Investor Relations Specialist at Happy Camper Capital, is acquiring campgrounds all over the country and generating great returns for investors.
In supply constrained major metro markets with large employment bases, there’s always a strong rental market of young professionals who crave quality amenities. After the first Covid waves, we’ve seen rents come back in major metropolises and even exceed what they were pre-pandemic. Although there can be more brain damage dealing with challenges like regulations in these markets, prices have moderated and there are great buying opportunities for buildings with under market rents. Arie Van Gemeren, Principal and Founder of Lombard Equities, is buying older buildings in the urban cores of the Bay Area and the Pacific Northwest with almost no downside risk and great long-term potential.
When it comes to underwriting, stick to your guns and don’t compromise or you may regret it. Even when you make conservative assumptions, expenses tend to rise and occupancy and rents typically contract when the economy goes South. Despite your best attempts at conservative underwriting, there are always surprises. Tim Bates, Partner at Worth Commercial Real Estate in Ft Worth, has returned an investor level 38% IRR to his investors since 2105 by being incredibly disciplined with his underwriting and very patient with his acquisitions of mostly C Class apartment communities.
Today’s investing environment is fraught with many pitfalls. Over the last couple years, many multifamily sponsors in particular took on super high leverage with variable rate loans. These same sponsors are now encountering stiff challenges getting loan extensions because of lower occupancy and rental rates combined with higher borrowing costs. As a result, many of these sponsors will have to reach out to their investor bases for more capital or obtain rescue capital to keep their deals afloat. Randy Smith, Founder of Impact Equity, helps investors avoid these traps and invest with sponsors with great track records and sound business plans that are positioned to prosper in this challenging environment.
Real Estate can be an amazing investment to grow wealth. It has cash flow, appreciation, and tax advantages, but most Real Estate operators only allow accredited investors and request high minimums to boot. Accredited investors are individuals with gross income exceeding $200,000 or joint income exceeding $300,000 or have a net worth that exceeds $1,000,000 excluding the person's primary residence. Levi Brackman, CEO and Founder of Invown, has created a portal where Real Estate operators post available deals and accept investments from unaccredited investors for as little as $500.
Not every mortgage is held by a traditional bank. There are a number of extenuating circumstances where banks won’t make loans to solid borrowers so borrowers need to find other alternatives. In these cases, there are private money lenders who will make these loans. Retail investors who are looking for yield can invest with these lenders who make loans to the end borrower. In doing so, these retail investors get a conservative and attractive monthly return on their money. Pacific Private money, a lender based in the San Francisco Bay Area, has several loan funds that loans money to end borrowers that you can invest in and get a 7%-9% return on your money.
Many people don’t know you can invest directly into a large cash-flowing apartment building without having to be involved with the operations of the property. Until the past few years and even more recently, several high-income earners were only aware of the stock market as a place to invest money. Thanks to Multifamily Real Estate experts like Bronson Hill of Bronson Equity, however, mainstream investors can participate in large Real Estate syndications by buying fractional shares of buildings while benefitting from cash flow, appreciation, and depreciation.
Not everyone that flips single family homes ends up flipping more than 3000 of them, and not everyone that gets into multifamily acquires over 7000 units within their first five years. Gideon Pfeffer, CEO and Managing Partner at the GSH Group, however, thinks big and has gotten unusual fast traction in the multifamily space, mostly in Michigan where he resides, since 2016. Gideon has built an in-house construction arm for value-add projects and has created a strong track record in acquiring and repositioning apartments into better performing assets with greater profitability.
Everyone has a plan, but rarely do things go exactly the way we expect them to go. In multifamily Real Estate, there are so many variables when it comes to financing, interest rate fluctuations, property management, capital structure and so much more. In today’s environment in particular, there’s less margin for error with contracting rents and occupancy, higher operating expenses, and more expensive debt. Vessi Kapoulian, a newer investor, has learned a ton about all facets of the acquisitions and operations of a multifamily property from recently buying an 11 unit building earlier this year in Tampa.
After many years of a massive upward trajectory, multifamily real estate is facing headwinds, especially for older C and B class properties. In many markets, occupancy is starting to fall and rents along with it. In addition, many operators have taken on risky debt that they may not be able to service. As such, these operators may get into hot water in the upcoming months and be at jeopardy of having to sell their properties at a loss and lose their investor’s money. Jimmy Edwards, Owner and Director of acquisitions at High Five Group, has done heavier value-add projects in Dallas with conservative underwriting and debt over the past five years and done extremely well. He sold a number of properties this past year and is poised to make great acquisitions in 2023.
Many operators specialize in a specific asset class, some operators specialize in a given geographic market, but invest across different asset classes. When you focus on one geographic area, it’s easier to build out a network of brokers and other contacts that consistently funnel you legitimate off-market deals where you can make real money. Rob Anderson, President at BV Capital in Dallas, invests in Texas. BV has done mostly multifamily where they’ve gotten very high returns for investors and is currently focusing on ground up development as the cap rates and returns on existing properties have fallen in more recent years. BV also does sale leaseback industrial deals and student housing projects.
Interest rates are higher than anyone expected a year ago and they’re continuing to rise. As a result, many purchasers of multifamily properties with high leverage bridge debt will not be able to get the extensions on their loans they anticipated and will be forced to refinance at rates the properties can’t support without injecting more capital. At this point, they’ll have to reach out to their investors to request more capital or sell at a loss. Either way, the outlook is not good. Brian Burke, CEO Praxis Capital and Author of the Hands-Off Investor, has been a real estate investor for over 30 years and says the debt component of these transactions will make or break these deals and that a lot of newer operators will have to face tough choices in the months to come.
The West Coast is home to several multifamily markets but it’s becoming more onerous to be a landlord in these markets as a result of increasing regulatory restrictions. That’s why Max Sharkansky, Managing Partner of Trion Properties, is diversifying from the West Coast into the Southeast where there continues to be big migration from other parts of the country as a result of job growth, low taxes, and flexible work-from-home employment options. Even though the U.S. economy is in a state of flux and there are domestic and global uncertainties, trends continue to be in favor of growth in the South and Southeast. Trion properties has over 6000 units under management including both funds and individual assets. They’ve routinely generated annual returns in the 20% and even 30% range.
Taking a piece of land, envisioning a purpose for it, and bringing that vision to fruition is a large but exhilarating undertaking that also entails real risks. Even before you get the land entitled, you have to invest money in the zoning approval process, environmental studies, engineering feasibility, and other aspects that entail risk. Cowboy Joe Marquez has been involved in all stages of development from the initial evaluation of property to the final certificate of occupancy and everything in between on numerous real estate development projects across the United States including turnkey subdivisions, multifamily, 5,000 bed crew lodges, Gulf front condo’s, resorts, commercial buildings, mixed use, and marinas.
The biggest inhibitor to growing wealth is taxes. That’s why the best investing opportunity to-date is in Opportunity Zones where you can defer capital gains taxes plus avoid depreciation recapture, not to mention making great investments in transitioning neighborhoods with huge upside. Jimmy Atkinson, Founder of Opportunity Zone Database, created a database of over 300 Opportunity funds where investors can compare and choose different investment options when they’re coming out of a tax-deferred exchange. Jimmy also holds many online events where investors can see presentations from participating sponsors.
As interest rates have risen, prices have come down, sometimes significantly. Although sellers were initially reluctant to lower prices, they’re getting more realistic over time and concessions in the millions \ are being made on larger projects. Ryan Webster, Managing Partner of Equity Yield group, a multifamily operator with properties concentrated in the Florida Gold Coast, has been patiently making offers at prices that make sense for an investment that sellers are now responding to. The Golf Coast is a strong market with growing population and employment growth with rents that are still rising. Ryan’s investments in these markets have done exceedingly well for his investors and he anticipates more great deals in the next couple years.
90% of Alternative Investments are directly or indirectly placed in Real Estate. They can be great cash-flowing investments with high long-term appreciation. What they don’t provide is liquidity. You can’t get your money out whenever you want like a publicly traded stock. That’s why most financial advisors don’t recommend more than 20% of their client’s portfolios to be invested in alternative investments. Most advisors also don’t have as much knowledge of alternative investments as they do about traditional investments like individual stocks and bonds and fund vehicles. Stacy Chitty, Co-founder and Managing Partner of Blue Vault Partners, educates advisors on alternative investments and provides them with invaluable data metrics on which alternative investments to recommend to their clients.
In the world of Real Estate finance, property owners can end up in arrears on their existing payments. In these cases their debt may be sold off to other lenders. In other cases, borrowers may not be able to obtain conventional financing for various reasons. In either of these cases, borrowers may wind up utilizing specialty lenders who help them solve their problems. Carson Rasmussen, Principal at Fairview Partners, lends money to borrowers who don’t have access to traditional banks. He buys non-performing loans from traditional lenders at a heavy discount and also originates his own loans to borrowers in special needs situations. Carson makes very conservative first lien loans to his borrowers and has generated returns as high as 20% to his investors.
Even with the market changing with respect to debt challenges and interest rate increases, there’s still opportunities in the Value-Add apartment space long-term prosperity. As prices come down 10-15% and possibly even more over the next several months, there will be great opportunities to buy right and generate big value. The demand for rental housing persists, so the prognosis for multifamily buildings in the sunbelt and other growing markets remains viable. Chris Roberts, CEO – Founder of Sterling Rhino Capital, is both acquiring and developing ground-up multifamily that’s generating strong risk-adjusted returns for his investors.
Higher quality assets appreciate more in the long run, especially in supply constrained markets where it’s hard to build and there’s no more developable land. It’s simple, scarcity produces value. Even in recessions, quality construction assets hold their value better lesser assets in worse locations. Lior Rozhansky, Founder of Flora Capital, has pivoted from working class neighborhoods in Boston to multi-family in Class A neighborhoods as a pathway to “indestructible wealth.” It’s easier to manage property in these markets and they appreciate considerably more over time.
There’s no secret we have a housing shortage in this county and the problem will persist as it stays prohibitive to build new housing units for a number of reasons. This is one of the factors that’s contributed to the trend towards converting older motels into garden style apartments. Ross Hubbard, Co-founder of Sage Investment Group, has been acquiring older motels from the 80’s and 90’s and converting them into studio apartments with hotel-like amenity packages for people who sometimes have difficulty affording basic workforce housing. He’s been successful creating partnerships with agencies who subsidize housing for different groups of dispossessed citizens. Ross is repositioning these assets and achieving 90% + occupancy rates and cash-on-cash returns in the mid-teens. He’s helping solve the problem of an affordable housing shortage and also getting big returns for his investors.
The biggest aggregate asset class in the world is the U.S. single family housing market. That’s why the health of this asset class has such a large impact on the broader U.S. economy. Over time, single family homes in most markets have been one of the most predictable, conservative investments you can make. In most ten-year periods of time, home values have almost always gone up in value. Rich Fettke, Co-founder at Real Wealth.com and Author of The Wise Investor, has helped thousands of investors buy single family homes in growing markets all over the country. He finds affordable and growing markets and also identifies property management companies to manage your investment.
As interest rates have risen dramatically, asset prices have declined. The question on everyone’s’ mind is how much more they’ll fall and what’s the best investment strategy to be positioned for capital preservation and growth. One strategy that’s gaining more traction is investing in debt. Debt typically pays a predictable preferred return and is a conservative way to keep pace with inflation and preserve capital to set aside for future equity investments as the market further corrects. Will Powers, CEO/Founder of Urban Gate Capital, has a debt fund that loans money to single family flippers in Nashville and has a growing pool of borrowers and investors.
For investors in single family homes, auctions can be a great place to find deals. When homeowners can’t pay their mortgages, lenders will take back the properties and often put them up for sale at auction where investors can pay 25% less than the estimated value of the home, and sometimes even less. Daren Blomquist, VP of Market economics at Auction.com, discusses the macro state of the market and what to expect in 2023. Auction.com currently puts 3,000-5,000 on their site per month and that amount is likely to increase. Darin anticipates a recession in 2023 and an increase in foreclosed homes and great opportunities for investors.
Real Estate tends to go up over time and most newer investors have never experienced a downturn. There are periods, however, when Real Estate has come down in value and we’re quite possibly heading into a contracting environment currently. Joel Friedland, Principal of BRIT properties, only buys properties with all cash. Most of the challenges he had in 2008-2011 was the result of debt and declining values, and even then, he was not aggressively leveraged. That’s why he currently only does all cash deals. He and his investors are seeking very conservative investments with strong downside hedges. Joel specializes in manufacturer – user industrial properties in Chicago and delivers 8% unleveraged returns for his investors.
The short-term rental space has exploded and turned into a formidable industry. Many successful owners are getting cash-on-cash returns in excess of 20%. At the same time, some markets have gotten over saturated, especially with two-to-three-bedroom dwellings. In the luxury end of the market, by contrast, there’s way less competition and many different uses for the properties like golf buddy outings, high-end bachelorette parties, to multi-generation family reunions and other uses. Lance Pederson, CEO at Parsons Villas, has started a fund to acquire high-end, luxury short-term rentals in Scottsdale/Paradise Valley which will result in great returns for investors.
In the world of multifamily Real Estate, the returns can be lucrative in heavy value-add projects. These opportunities also comprise the highest level of risk. Sometimes, the best opportunities are steady, workforce Class B apartments with high occupancy levels that will be resilient in economic downturns. Camilla Jeffs, Founder and CEO of Steady Steam investments, is a long-time real estate investor and teacher who helps her students find great risk adjusted investments where they can generate passive cash flow and build their net worth. She looks for stabilized assets in growing markets to limit downside exposure.
When looking for yield, money from the coasts often winds up in other parts of the country. Great markets like Chicago offer better yields, and still offer very strong fundamentals for investors that provide cash flow and appreciation. Danny Spitz, CEO and Managing Partner at Greenstone Partners, helps serve the needs of private and institutional investors with a focus on $2,000,000 to $40,000,000 deals in retail, apartments, office and industrial properties. Danny has focused mostly on Chicago, where he lives and works. He is also expanding into downtown Milwaukee, which is an hour and a half north of Chicago on Lake Michigan and shares many of the same characteristics of Chicago.
A 3 or a 4 cap in one market is not always equal to a 3 or 4 cap in another market. The risk profile is greater in markets where there’s fewer regulatory challenges and lower barriers to entry in developing new projects. In California, and other West Coast markets, on the other hand, regulations and restrictions are far more onerous, so these markets are perpetually supply challenged, and therefore higher and more consistent rental demand. Eddie Ring, Founder and CEO of New Standard Equities, specializes in value-add multifamily on the West Coast and has generated 29% IRR’s and equity multiples of 2.6 over three to five years hold periods for his investors. Eddie sticks with what he knows, as opposed to exploring other markets, and has generated incredible returns for his investors.
If you know how to manage lower income tenants and how to optimize the management of older properties, you can do extremely well. Many of these properties have ma and pa owners with under market rents and bloated expenses. On the supply side, there just aren’t enough of these properties for tenants to live in and there’s been very little new construction in many markets. As a result, occupancy levels can be well over 90%. Richard Simtob, Partner at Simtob Management and Investments, has acquired over 700 Class C apartment units in Lansing and Kalamazoo, Michigan with his son, and they’re doubling down on acquiring more as other buyers are moving to the sidelines.
In the last five years, value add multifamily deals have abounded where you can buy a building at under significantly market rent, put $5,000- $10,000/unit into rehab, and sell within 12-24 months at a huge profit. As more and newer competition has entered the market, and as prices dramatically increased, these opportunities have become much harder to find. In addition, renters in these properties are particularly burdened by inflation and other economic factors. Will Matheson, Co-founder with his twin brother of Matheson Capital, had incredible success repositioning class C and B properties over the last four years and is now transitioning into Class A buildings in the Southeast where the tenant base is far less rent burdened so the overall rent upside and ultimate investor returns has the potential to be considerable higher over time.
When things go wrong in a smaller apartment deal, it can wipe out all the Net Operating Income and profit in the deal. On bigger deals over 100 units, the property can absorb a lot more unexpected costs or mistakes before it erodes all the profit. Augostino Pintus, founder of Realty Dynamics Equity Partners in Cleveland, realized early on that it was much easier for him to operate bigger buildings. He also chose the Cleveland market because it didn’t have the crazy competition of many markets in the South and Southwest and he could get better returns. Now that even Cleveland has gotten more expensive, Agostino is doing ground up multifamily development in urban infill areas where young professionals are moving into. He’s also started a fund of NNN lease properties where he’s generating monthly checks for his investors.
After owning three Assisted Living homes in Phoenix, entrepreneur Gene Guarino created the Residential Assisted Living Academy in 2013 to train others to prosper like he had from the mega-trend of senior Assisted Living. The Residential Assisted Living Academy has since trained thousands of individuals to either start their own facility or acquire existing facilities in towns across the U.S. Last year, Gene unfortunately passed away, and his daughter Isabelle, who started The Residential Assisted Living Academy with him, officially took over the business. Isabelle Guarino Smith is now leading the company and further building upon Genes’ legacy by helping small entrepreneurs get into this growing business. The training from The Residential Assisted Living Academy prepares students to run higher-end facilities that cost an average of $6,000/month per resident and ultimately run as many as three or more facilities.
With all asset classes priced at historically high levels, you may need to be open to different opportunities to find the right deal. When you expand your criteria, you’ll have more deals presented to you. The more deals that come across your desk, the more good deals you’ll find. Keith Nelson, Managing partner of Dual City investments Greenville, SC, started in multifamily back in 2014, but has pivoted to other asset classes across several markets in order to find great deals. In Keith’s latest fund, he has a profitable boutique hotel, an A Class Office Building, multifamily, and single family assets. The fund is also an evergreen fund, which means there’s no set close date that can force him to sell at an inopportune time in the market.
According to The Family Office Real Estate Institute, a Family Office is a family with $250 Million to deploy in investable assets. There are 7500 in the U.S. and 16,000 in the world. 70% of families lose their money by the second generation and 90% lose it by the third. This is why family offices need expert advice on how to preserve and grow their capital. DJ Van Keuren created the The Family Office Real Estate Institute in order to provide Family Offices with Best in Class education and resources to help them preserve wealth and achieve their goals. He’s also Co-managing member of Evergreen Property Managers where he helps Family Offices get strong risk adjusted returns in various Real Estate Asset classes with some of the country’s best operators.
It’s hard to achieve economies of scale operating multifamily apartments with fewer than 100 units, but if you buy smaller buildings close to each other, you can gain operational efficiencies that translates into more profit. There’s also far less competition when buying these properties that bigger properties so you can often get better deals. Mark Weinstein, President of MJW investments, has acquired many smaller properties in close proximity and amortized management functions and operating expenses to make these buildings very profitable. Over the course if his career, Mark has acquired over $1,500,000,000 of apartments, student housing, commercial buildings, industrial, and self-storage facilities.
What is a Family Office? The term “Family Office” has become more common over the past decade and the number of Family Offices is growing at a fast clip. A Family Office is a private wealth management advisory firm founded by an ultra-high-net-worth individual or family to manage their assets. Ultra-high-net-worth families or individuals (UHNWIs) are people with at least $30 million in investable assets. Richard Wilson, CEO of the Family Office Club, has helped 200 families create their own Family Offices in addition to creating 20 “live” events that Family Offices can attend where they learn Best Practices of investing and structuring portfolios plus learn about different investment opportunities and strategies.
In this environment, certain multifamily housing markets are seeing an 80% decrease in transaction volume vs. a year ago. Even though interest rates have increased way more than anyone predicted as recent as 6 months ago and operating expenses are increasing, sellers are still holding out for what they could have gotten in previous months. Eventually, some sellers will have a more pressing need to sell and pricing expectations will become more realistic. At this point, more sensible deals will materialize that experienced operators with the right lender relationships and track records will be able to capitalize on. Patience will pay off handsomely for seasoned operators and investors who are sitting on cash.
Although interest rates are on the rise at a faster clip than at any other time in recent history, the fed has historically lowered rates within two years following the past ten rate hike peaks. This is one of the reasons that over a long period of time, multifamily apartments are a resilient and safe asset class to invest in, especially in growing markets. J Scott, a multifamily investor, owns six apartment buildings across 800 units in Houston with fixed, long-term debt. J loves Houston for its immense population expansion (the second fastest in the country), job growth and diversity of industry and jobs.
Sometimes adding value to properties has more to do with intangibles such as improving resident culture and building a sense of community than merely improving the physical assets of a property. When residents derive quality of life benefits from residing at a community and take pride in where they live, they’ll see more value in the experience and be willing to pay more to live there and take better care of their property. Demetre Booker, Managing Director at Elevate Commercial, is investing in Manufactured Housing communities in different parts of the country. Demetre’s changing his resident’s lives by helping improve their financial literacy and overall quality of life, and in so doing, he's increasing the profit of the properties and doing very well by his investors.
In this investing environment, it’s difficult to get an 8% to 10% yield on your cash and still achieve appreciation, without taking a lot of risk. With stabilized neighborhood retail, however, and office buildings in certain markets, this is still possible with the right deal, and especially the right operator. Nate Melchior, Principal at Dunton Commercial, manages a portfolio of 70 mid-size retail and office properties throughout the state of Colorado where they’re based. Nate and his partner also own and syndicate properties which generate high, risk-adjusted returns. Since their primary business is property management in these asset classes, the vertical integration enables them to maximize the returns on these properties and gain efficiencies that translate into great profits for their investors.
You hear a lot about value add Real Estate in terms of creating value in acquisitions these days, especially as prices have skyrocketed over the past few years. Although there’s great gains to be made with the right value add improvements to a property, the most expedient value add is buying the property for significantly less than it’s worth. Ben Kogut, partner at HJH Investments, has been having great success buying office buildings, shopping centers, and single tenant retail properties from motivated sellers at prices below considerable below market. These properties do not have big improvement needs to achieve stabilization and therefore are generating impressive cash flow at the onset of the investments so investors start getting their distributions right away.
There’s great money to be made in government subsidized, affordable housing. Occupancy is generally high and tenancies can last for years. It’s a recipe for steady, predictable income and high margins. On the management side, however, there can be challenges figuring out how to manage lower income, working class tenants and do it at a profit. Mike Bonadies, Co-Owner and Managing Partner at TerraVestra properties in Southern New Jersey, owns his own rental portfolio and also manages 500 units for other landlords. The properties are in rural South Jersey and are typically older, so in-house maintenance and construction are keys to Mike’s success.
The world of alternative investments holds the promise of outsized gains and returns that exceed the public stock and bond markets. They also entail great risks. When investing in alternative investment funds, you need to make sure the management team has a great reputation, a great track record, and a fee structure that’s aligned with their investors. Kelly Ann Winget, Founder of Alternative Wealth Partners, has raised $1B in private capital in her career from individual investors looking for investments outside of the stock market. Prior to founding Alternative Wealth Partners, Kelly Ann worked at another firm and became disgruntled at how investors were being treated and the poor communications. That’s why she founded Alternative Wealth Partners. Kelly has started her first fund and is already generating significant dividends for her investors with some potential lucrative exits. Kelly Ann is focused on smaller, entrepreneurial companies to help them grow their companies through debt or equity.
Even though the U.S. economy is in a state of flux and there are other domestic and global uncertainties, trends continue to be in favor of growth in the South and Southeast in terms of population job growth and migration. The rate at which this is occurring is unparalleled and opportunities for solid investments in multifamily real estate will continue to present themselves. Charlie Young, Partner at Madera Residential, has been in the business for over three decades and has over 12,000 units in his portfolio. Charlie believes we’ll be in a recession by the end of the year, but that will present great buying opportunities in 2023 and 2024. There’s 5 trillion dollars in Private Equity in this country waiting to be deployed and digital Real Estate planforms like Crowd Street is bringing new investors to the table that will continue to put upward pressure on prices in the years to come.
Most people aren’t even familiar with the term “Alternative Investments.” That’s because until a decade ago, operators of apartment buildings and other Real Estate assets, Private Equity funds, or private companies couldn’t legally market these assets to the public to raise money. Ever since the creation of the 506c code a decade ago, however, these operators can now legally market to retail investors so the general public can more easily access and invest in them. Alternative Investments provide investors opportunities to invest outside of publicly traded stocks and bonds and often times with better yields and returns. Dana Cornell, Chief Executive Officer at Cornell Holdings, was a top-producing Wealth Advisor at Morgan Stanley before founding Cornell Capital Holdings. At Cornell Capital Holdings, Dana helps place clients in great cash-flowing, appreciating, tax efficient Alternative Investments vehicles.
In multifamily properties, it can be a challenge to manage buildings with fewer than 50-100 units. Third party property management companies cost a lot of money and having an in-house employee live on-site can be too expensive without enough units to amortize their cost. Additionally, it’s difficult to manage these smaller apartment buildings from afar, especially if you’re adding value to them with rehabs. Samuel Sells, CEO of Wild Mountain Capital, has acquired over 20 buildings over the past few years. Now he’s selling them and redeploying the capital into bigger buildings. He’s also shrinking his geographic footprint down from six to two states because he’s vertically integrated and it’s become to difficult to efficiently manage these properties from too far away.
There’s nothing passive about investing in older apartment buildings. Appliances, roofs, HVAC systems, plumbing etc. have limited lifespans so there’s perpetual upkeep and surprising expenses are far from uncommon. In new construction, by comparison, you can control all the variables and therefore the costs can be more predictable and therefore the profits. Roger Luri, CEO and President of LD2 Development in Chicago, and author of the new book “Don’t Buy Multifamily! BUILD IT,” has been in construction since the late 80’s and has seen several huge challenges in older multifamily buildings and has experience several market cycles. Roger is an expert and understands the risks of both older multifamily projects and new construction.
If you pay close attention and evaluate what’s going around you, you can see opportunities and markets to be served that others don’t. It just requires continual awareness and objectivity and an honest appraisal of what you’re good at and want to spend time doing. After being in Investor Relations and a co-GP on a number of apartment deals. Matthew Baltzell founded Elite Podcast Bookings to connect sponsors and capital raisers with great Real Estate podcasts. There are literally thousands of commercial Real Estate operators looking to build exposure and raise money but don’t have the time nor the expertise to get on podcasts to build their brand and raise capital. This is where Matthew and Elite Podcast Bookings come in. They are the only podcast booking company for Real Estate professionals that’s run by a Real Estate professional himself.
If you ever think of cell phone towers and rooftop antennas that transmit wireless usage, you might think the owners of these properties would have all the leverage in lease agreements with major carriers like TMobile, Verizon, and ATT because the insatiable need for increasing and better signal coverage. However, this isn’t entirely true. The carriers have more options than you would think on where to transit their signals from and can be brutal in their lease negotiations with landlords. Meir Waldman, Chairman and CEO of Nexus Towers, represents landlords in these complicated lease negotiations with the major carriers and helps owners maximize their leasing revenues via better negotiations or sales of the entities to larger acquirers.
With cap rates having gone as low as they arguably can go, multifamily operators are going to have to add deep value to properties moving forward to meaningfully increase their asset value. They can no longer rely on cap rate compression to generate high IRRs and returns for their investors. At this point, only the strongest operators will generate the kind of profits we’ve seen over the past few years. Steven Gesis, COO at Smartland, started in Northeast Ohio rehabbing, modernizing, and standardizing old D – C+ apartments that blew their competition out of the water. Smartland innovated the approach to renovations in this class of properties including the installation of wireless packages, putting in EV charging stations, renovating pools & gyms, planting gardens, even opening on-property convenience stores, Subway sandwich shops, and more. They’ve recently expanded to Miami with the same formula but with higher upside because of the exploding rents in South Florida. As a result of Smartland’s approach, they’ve generated consistently outsized returns for their investors.
There’s been so much growth in Multi Family investing over the past few years it can make you wonder if it’s too late in the cycle to get into good deals. Yes, a lot of people are overpaying for properties, especially newer, inexperienced syndicators. There’s also risk that rents contract in an upcoming recession coupled with higher borrowing costs when floating rates adjust upwards. The fact remains, however, that 50% of the country are renters, and there’s still a big undersupply of B Class workforce housing, especially in the suburbs. There’s just not enough of this inventory and you can’t build it. Mitch Siegler, Co-founder and Senior Managing Director at Pathfinder Partners, finds deals underneath the radar of larger institutions with an average of 100 units in growing markets with value-add opportunities. This is how he’s mitigating risk and continuing to provide great returns for investors in this increasingly competitive market.
Sometimes great entrepreneurship is just applying common sense and having your eyes open to great opportunities. Brandon Schwab, Founder and CEO of Shepherd Premier Senior Living, owned 23 single family rental houses that were making $200-$300 per month per house when he stumbled upon the idea of lucrative Senior Living Facilities. Instead of making $200-$300 per home in monthly profit, he realized he could make over $10,000 per month with one single Senior Living facility. At the same time, he knew the level of care was way better in smaller facilities after he saw the horrendous experience his grandfather endured as a resident at a large, corporate senior living facility. After opening and operating his first successful Assisted Living home, Brandon acquired four more homes and is now raising a $50,000,000 fund to acquire 10-20 bed facilities all over the Midwest.
If you’re willing to do what other aren’t, you may stand to benefit immensely. Jorge Newbery, Founder, Chairman and CEO of AHP servicing, has made a career out of inventing himself out of thin air. Jorge’s first big deal was a 298 unit apartment building in downtown Los Angeles in Skid Row for less than $3000/door in the late nineties. The prior three owners had been thrown in jail for violations, but Jorge saw immense value and had the confidence and bravado to take the project on. He ended up evicting those he needed to evict and fixing up the building and eventually make a $1,000,000 profit. Jorge went on to do an even bigger project with similar demographics and challenges in Kansas City and then a monstrous 1100 unit complex in Columbus, Ohio that was called Uzi Alley for all the gang warfare. Jorge ended up in an unwinnable situation to no fault of his own, where he became saddled with $26,000,000 in debt and hitting rock bottom before reinventing himself and creating American Homeowner Preservation, a company that has bought 1000’s of single family non-performing notes from banks.
Private Equity and Alternative investments have outperformed the public markets 35 out of the last 35 years. However, few people are aware of investing in alternative investments such as Real Estate syndications in apartment buildings, Self-Storage facilities, and Mobile Home Parks, not to mention a plethora of other alternative opportunities like life insurance settlements, litigation finance, cannabis, and so many other ways to invest. As it stands, alternative investments only command 13% of U.S. invested capital. Chris Odegard – the Prolific Investor, Author, Alternative Investment Blogger and Educator, got away from “the 401K highway to mediocrity” and has deployed his money into alternative investments and has prospered incredibly well as a result.
One of the great advantages of investing in Real Estate is the ability to shelter or defer paying taxes so you generate a higher return in the short-term and your money works harder for you and generates great wealth over time. Thomas Castelli, Partner at Hall CPA firm, has been a direct investor and also a limited partner in syndication deals so he believes in the value of Real Estate not only from a cash flow and appreciation perspective but also from a tax perspective. There are few other ways to compound money as well as Real Estate and Thomas discusses the nuts and bolts of how it works.
If you’re not careful, you can lose a lot of money investing with the wrong people and the wrong deals. As human beings, we’re inclined to trust others and it’s difficult to discern dishonesty because we don’t expect it. Jack Gibson, a successful businessman, Real Estate investor, and Wealth building Strategist, lost a lot of money in tech stocks at a young age following the advice of a financial planner. Later, he was a victim of a Real Estate ponzi scheme. These costly mistakes taught Jack valuable lessons in business that he’s leveraged to enable him to build and manage his own residential Real Estate portfolio that most recently includes managing and owning Short-term-Rentals.
Austin is one of the hottest Real Estate markets in the country. In order to be competitive and get the edge in this market, being there in person and having longstanding relationships has tremendous benefits. Andrew Campbell, Managing Partner of Wildhorn Capital, has built an impressive 4000 unit portfolio mostly in Austin that’s produced consistent strong returns for investors through cash flow and robust appreciation. He plans on making Austin his primary focus as long high-paying employment grows and the population continues to grow with it.
The prices on multifamily apartment buildings have risen meteorically over the past 3 -5 years. In some cases, however, between the cost-per-unit to acquire the properties plus the amount per-unit to renovate them, the all-in price has exceeded the cost to build new complexes from the ground up. That’s why Michael Episcope, co-CEO of Origin Investments, has been only doing ground up deals for the past three years. Origin has a number of funds that are invested across eight fast-growing markets throughout the U.S. and they’ve been ranked in the top 10% decile of performance, outperforming 90% of other funds of the same vintage, strategy and size.
A great way to reduce risk when investing in private placement alternative assets is to join an investment group. Investment groups give you access to other investors who you can compare notes with on successful investments and reputable sponsors you meet and start building relationships with. David Shirkey founded the Michigan Investor Group to help educate friends and family to help guide them through the complex maze of alternative investments and to introduce them to investment opportunities with strong cash flow and appreciation with little downside risk.
There’s no better way to vet someone you’re going to invest with than getting to know them personally. There are thousands of investment opportunities available and they all look great on paper, but the differentiator is the people because the proformas are generic. It’s the number of years of experience and the number of deals in the asset class of the deal the operator is raising money for, and equally as important, their personal character, that matters. Jeff Anzalone, Periodontist, Author, and founder of Debtfreedr.com, is a passive investor who helps other doctors and Health Care professionals create passive income through alternative investments.
When investing in Value Add Real Estate, construction knowledge is critical to avoiding costly mistakes that can ruin an investment. Dealing with contractors, engineers, architects, etc. can be a shark tank because they’re all trying to get your money. Also, if vendors don’t know what they’re doing or don’t have aligned interest with you, it can turn into an incredibly difficult situation. Van Sturgeon, seasoned Real Estate investor and principal of Greywood Restoration Ltd, has an extensive multi-decade career in construction and property rehab, so he knows how to maximize his investments and avoid common costly mistakes that others make when dealing with heavy value-add properties.
Alternative investments such as Real Estate and other private investment opportunities are becoming more favored as the stock market has had the worst first half of a year in 50 years. Whether it’s Real Estate, ATM funds, Venture Capital funds, Litigation finance, Life Insurance settlements, to name a few, more money is flowing into these assets because they’re less volatile and can generate better cash yield than traditional stocks. Denis Shapiro, Managing Partner of SIH Capital Group, invests in Real Estate and other assets that generate strong cash flow and appreciation.
In the Real Estate syndication ecosystem, one of the key roles is capital raising. Operators are always in need of capital to fund their pipeline of deals. One great way to get involved in syndications is to partner with operators by bringing them capital to their deals. Charlie Rushton, partner at Saber Equity, has partnered with experience operators in Value Add hotel-to-multifamily conversions, multifamily, self-storage, and short term rentals by bringing them investor capital to their projects. Saber Equity finds opportunistic deals and local sponsors that run the deals. Saber Equity invests in these deals themselves and brings other investors alongside them as Limited Partners.
Ever since the creation of the 506c code a decade ago, which permitted operators to market to the public, alternative investing in Real Estate and other asset categories has grown dramatically. Whereas a decade ago it was virtually impossible, for example, to invest in early-stage technology companies if you were a retail investor, now you can invest in these companies through private placement funds. There are many different ways to invest outside of traditional stocks and bonds and get better yields and potentially better returns. Andy Hagans, Co-founder of the Alternative investment Database, has created great content for investors on the Alternative Investment Database website and a great service that matches accredited investors with qualified sponsors.
Operating Multifamily properties can be more difficult than it seems, and no one will care about your properties as much as you do. Whether it’s staying on top of expenses line by line or making sure tenants’ maintenance needs are being responded to quickly, there are tons of things in the execution that need to be attended to in order to maximize a property’s potential value and generate the highest returns. Ryan Nunes, Founder of LifeChanging Capital, has been acquiring Multifamily properties over the last few years and has learned fast how to oversee third party managers and vendors and asset manage properties effectively.
As markets are changing, it’s critical to stay on top of trends to maximize your investment returns and minimize risk. For example, you’re starting to hearing more about Build-to-Rent communities as alternative living solutions for renters who no longer want to live in Multi-family complexes. They want more space, a two car garage, a lawn, and they don’t need the amenities of multifamily properties that a lot of people don’t use anyway. Brian Spear, Co-founder of Sunrise Capital Investors, started out buying mobile home parks a decade ago and in recent years has expanded into lucrative Parking Lot deals and most recently Build-to-Rent communities.
Real Estate has made many people rich, but there are other opportunities where the returns can be much higher and not necessarily with more risk than an average apartment building. Adam Jason, Partner in Legacy Group, manages Alternative Investment companies in Columbia with high upside and strong downside protection. His largest asset, The Green Coffee Company, is secured mostly by land acquired with cash or seller financing so there’s virtually no debt and therefore very little risk. The Green Coffee company is rapidly growing an investment at this point can result in an 8 times investor return over the next 4 years and possibly more. Prior to founding Legacy with a partner, Adam advised the world’s leading investment banks including JP Morgan, Morgan Stanley, Citibank and Goldman Sachs. Adam also served as outside counsel for some of the world’s most recognizable brands, such as The Sherwin-Williams Company, R.J. Reynolds Tobacco, Procter & Gamble, Macy’s and Yeti Coolers.
The profits on land investing can be stratospheric. Brent Bowers, Land Coach at The Land Sharks, makes outsized returns on buying land and he a ton of monthly passive income without having to deal with tenants or maintenance. Brent has merely learned and followed a repeatable process and discipline that has yielded consistent, predictable results. It all starts with acquiring lists of tax delinquent land owners and sending offer letters with a specific dollar amount that compel recipients to respond.
As the economy contracts, the need for affordable housing will be greater than ever. That’s why consumer demand for Mobile Home Parks will continue to expand. Max Dowd is Director of Acquisitions & Investor Relations at Cook Properties, the largest owner of Mobile Home Parks in the state of New York that recently acquired a $124 Million portfolio of 2300 pads across over 100 communities.
In order to be successful in Real Estate, you need to understand markets and trends. When certain asset classes get too frothy, you need to look for other opportunities to get the best returns. Ken Naim, a successful Real Estate investor, doesn’t try to fit a square peg into a round hole in late cycle markets. Instead, Ken looks for opportunistic deals across asset classes as long as the prices are low enough that he can’t possibly lose money. Recently, Ken has made highly lucrative deals in off-market warehouse space and office. He’s now looking at a land deal in a path-of-progress market where he’s going to entitle the land and get It rezoned. This project can potentially result in an increase in value 3 to 4x in 12-18 months.
Whether it’s flipping, buying-and-holding, holding notes, or investing in syndications, there are countless ways to get great returns on capital. Today’s guest, Matthew Owens, is doing pretty much all of these things. Matt has bought, renovated & sold or held over 1000 properties in the last 15+ years and has raised over $75 million in private capital to accomplish this feat.
In any economy, there are some homeowners in various stages of distress and not current on their mortgages. Even though this can feel overwhelming to the homeowner, there are constructive ways to minimize the fallout of this situation, including short sales. For investors, short sale properties can be a great way to find a property at an attractive discount. Matt Merenoff, Owner / Operator at Real Estate Recovery Group, helps sellers, buyers and lenders create solutions where all parties benefit. Matt has is also the author of Amazon best seller Short Sale Savage.
Getting started is the hardest part of anything you’ll do in life. Once you get over the fear and take the first step, things tend to fall in place. Bennett Schwartz, Performance + Executive Coach, Real Estate Investor, and Speaker, has started out by converting a large single family home into four units and also converting a duplex into an AirBnb. He’s now pursuing larger deals where he lives in Philadelphia.
When it comes to multifamily investing in particular, property manager is where the rubber meets the road. Especially with bigger properties, there are too many things at an apartment complex that can go wrong on a daily basis. Alex Rogers, Principal at Gray Duck companies in Duluth, has a sizable property management company that makes him qualified to operate multifamily properties on a larger scale and generate great returns for investors.
Even with inflation and rising interest rates, there are still major tailwinds for Multifamily properties in the right markets. There is still a large undersupply of housing, especially in growth markets, and many first time homeowners can’t afford to buy new homes, all of which is creating a supply/demand imbalance. Today’s guest, Eric Sussman, is a Founding Partner at Clear Capital. Clear Capital has invested in, remodeled, and managed more than 50 multifamily properties across the Sunbelt and Mountain regions of the US since 2007.
In this market, finding an asset class not priced through the roof is incredibly difficult. RV resorts, however, are being priced attractively. These aren’t RV Parks, but actual RV Resorts with classic comforts and amenities where families can enjoy activities like swimming, fishing, or eating at an onsite café or restaurant. Sam Wilson, Founder of Bricken Investment Group, is lately focusing on RV Resorts that provide great risk adjusted returns for his investors.
When you’re starting out, you don’t always have money to work with. If you’re willing to be resourceful, you can find partners to find deals for and participate in the upside. Additionally, you can find sellers willing to carry paper so you can do your own deals.
Bailey Kramer, Real Estate Investor, Airbnb Host & Co-Host, and Entrepreneur, got off to a great start finding deals for another investor and is now generating cashflow as an AirBnb host and also managing other people’s AirBnb’s.
Learn more at https://www.streetsmartsuccess.com
A lot of smart people believe we’re headed into a severe economic downturn, maybe as bad as 2008. In Multifamily Real Estate in particular, a lot of operators paid extraordinary amounts for properties in the last couple years with short-term bridge debt. With interest rates and expenses skyrocketing and tenants potentially unable to pay the increased forecasted rents, operators may not be able to secure long-term financing.
Rod Khleif, who has the # 1 Real Estate podcast on Itunes – The Lifetime Cashflow through Real Estate podcast, plus teacher to thousands, predicts we may be in for very choppy waters. As a result, operators may have amazing opportunities to acquire in the months to come.
Learn more at https://www.streetsmartsuccess.com
Focusing on a tertiary market that you know incredibly well can pay great dividends. You eliminate a lot of risks when you’re that familiar with a market and the buildings in it. Tertiary markets historically have also had less competition in acquiring commercial Real Estate.
Bob Couture, Managing Partner Broker at CP Group, lives in Hermosa Beach, CA but syndicates in Springfield, Massachusetts where he grew up, and has great contacts.
Learn more at https://www.streetsmartsuccess.com
Many growing markets in the U.S. still have more rental demand than supply. Tucson in particular has more population growth than housing which has resulted in market-wide vacancy of less than 2%. This is a recipe for increasing rents and successful multifamily investment.
Gary Lipsky, President and CEO of Break of Day Capital, has done several lucrative deals in Tucson and is continuing to enhance his presence there.
Learn more at https://www.streetsmartsuccess.com
There’s no substitute for experience and focus. A lot of risk is mitigated by becoming an expert in one thing and doing it over and over. As an investor, you want to invest with people that have mastered one thing.
Ivan Barratt, Founder of BAM, a fully vertically integrated multifamily syndicator out of Indianapolis, has dominated his local market and has generated exceptional returns for his investors.
Learn more at https://www.streetsmartsuccess.com
Real Estate investing can generate great cash flow, and personal freedom. With enough cash flow you can choose where you want to live and when you want to work.
Derek Clifford, Founder and CEO of Elevate Equity, bought several single-family homes in Indianapolis before graduating to multifamily properties with better cash flow. He’s now enjoying a several month stay in European destinations as he runs his real estate business remotely.
Learn more at https://www.streetsmartsuccess.com
Prices on quality Multifamily assets are holding firm. Although there are significant price reductions in older properties, Class B+ and A- in growth markets are holding firm because of the huge amount of capital still flowing into this stable asset class. These days you can expect a 4% annual return on your money and an IRR of 10-12% on these deals.
Mark Hamilton, Founder of Hamilton Zanze in San Francisco, owns over 23,000 units, and has over three decades of multifamily experience.
Learn more at https://www.streetsmartsuccess.com
Ma and Pa operators all over the country are selling their Mobile Home parks to investors as they reach retirement age, and there’s lots of great Value-Add deals to be had. When you have limited supply, an increase in demand, and the most affordable housing option available, you have an incredibly attractive asset class.
Todd Sulzinger, Founder of Blue Elm Investments, is acquiring Mobile Home parks in smaller markets outside growing metro areas.
Learn more at https://www.streetsmartsuccess.com
In major markets, the competition in self-storage is fierce with REITS and other institutional players competing for customers. In smaller markets, however, there are ma-and-pa owners who have not maximized their operations and therefore represent great opportunities for professional operators to invest.
Mark McGuire, Chief Investment Officer of Hearthfire Holdings is finding these opportunities and is generating compelling returns.
Learn more at https://www.streetsmartsuccess.com
The biggest inhibitor to growing wealth is taxes. That’s why the best investing opportunity over the past few years is Opportunity Zones where you can defer capital gains and avoid depreciation recapture, plus other great benefits.
Ashley Tison, Founder and President of OZPros.com, is an expert in structuring Opportunity Zone opportunities for entrepreneurs to make great Opportunity Zone investments or create Opportunity Zone funds in underserved areas all over the country.
Learn more at https://www.streetsmartsuccess.com
No matter what the economic trends, there’s always an opportunity to make money. You just need to see where the market’s heading. It’s not always in synch with the media and where everyone else is investing.
Bob Fraser, Founder and Principal at Aspen Funds, has a very successful debt fund which has provided investors predictable, monthly cash flow for several years. Bob is also offering great opportunities for his investors to participate in syndications in other attractive asset classes, including a recent acquisition in Oil and Gas.
Learn more at https://www.streetsmartsuccess.com
As interest rates have climbed, the multifamily market has started to slow down for the first time in years. Cap rates for C class multifamily properties are on the rise so there may be buying opportunities ahead. Institutional buyers are sticking to Class A properties in high growth markets. Ben Leybovich, Principal of White Haven Capital in Phoenix, started with 80’s vintage properties but has transitioned to 2000’s properties over the last year.
As interest rates have climbed, the multifamily market has started to slow down for the first time in years. Cap rates for C class multifamily properties are on the rise so there may be buying opportunities ahead. Institutional buyers are sticking to Class A properties in high growth markets.
Ben Leybovich, Principal of White Haven Capital in Phoenix, started with 80’s vintage properties but has transitioned to 2000’s properties over the last year.
Learn more at https://www.streetsmartsuccess.com
When you have extra things that don’t fit in your home, self-storage is a perfect solution. When you have a car to store, or an RV or Boat, what do you do then?
Carmelo Mannino, CEO of STOW IT, has the solution. STOW IT is becoming the Airbnb for things on wheels. STOW IT finds hosts who have extra space available and matches them with customers looking for a space to store their vehicle. It’s a brilliant win for hosts who generate extra cash and for customers who don’t have a place to store their vehicle.
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Value add B and C class industrial is a great way to generate high double digit returns. When you can buy a building with lower-than-market lease rates and vacancies, you can increase revenue and create great value.
Jeremy Mercer, CEO of Matador Capital, has been acquiring commercial properties with friends and family for the past 13 years and since 2020, has started raising outside money to expand upon a winning formula.
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Finding an undiscovered niche in the Real Estate market is not an easy thing to do.
Jeremy Goff, CEO of Hiram Capital, identified a niche serving developers of industrial property in secondary and terciary markets that are building infrastructure to accommodate the growth of ecommerce. Jeremy is providing debt to this sector to fill the gap of what banks will lend versus how much capital is needed and is providing his investors solid, low risk returns.
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Leverage has helped a lot of multifamily operators generate great returns over the past decade, but too much leverage and an uncooperative market can cut the other way and end up badly. When underwriting deals, it’s critical do be overly conservative to account for realistic rent growth and growingexpenses.
Jordan Fisher, Principal of Next Wave Investors, incorporates ruthless conservatism into his underwriting in order to do well by investors and never lose a penny of their money.
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There’s an unprecedented amount of money going into Real Estate right now, so It’s become increasingly difficult to get yield. If you’re willing to look where others aren’t, however, and scour opportunities in smaller markets for different asset classes, you may be surprised by what you find and the returns you can get. Ash Patel, Value Add Real Estate and business investor and a host of the Best Ever Real Estate advice podcast, has had great success finding deals where others aren’t looking that generate 20% or higher returns.
Manufacturing constitutes the holy grail of job growth and Phoenix has become a tier-one city for manufacturing. Craig Coppola, the top earning broker in the history of Lee and Associates, believes Phoenix will continue on its torrid trajectory as Phoenix produces incredible job growth that will continue to support the in-migration that comes with it.
Real Estate is a vehicle to get extremely rich, but slowly. If you own the right property in growth markets, your returns and your net worth will grow beyond your imagination over the years.
Todd Nepola – President at Current Capital Real Estate Group in South Florida, started out when he was 25 and has bought industrial and retail centers from less than $1,000,000 to $25,000,000 with conservative leverage and very hands-on management. Todd is an expert in these asset classes and only buys properties he can drive to.
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What happens when your small commercial Real Estate investment appreciates like crazy, but your rents don’t keep up. If you’ve had your property for a long time in a coastal market, you’re cash-on-cash returns against your equity can go down to as low as 2%. That’s when it’s time to exchange into another commercial property where your monthly cash flow is a lot higher.
Nick Lamagna, Real estate investor and podcast host, can help you find a replacement property, especially a small to mid-size Mobile Home Park or multifamily.
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When it comes to investing, we all want outsized returns. This is possible to achieve in the right industries with the best-in-class operators. Cash flow is king, appreciation can be incredible, and smart tax strategies compound the velocity of money.
Dave Zook, Founder of The Real Asset Investors, is a savvy investor who’s created lucrative partnerships with proven, vetted, experienced operators in ATM’s, Multifamily, Self-Storage, and other assets including his latest foray into Car Washes.
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Retail strip centers, Medical Office, Land, Debt funds, Multifamily, there are a lot of ways to generate passive cash flow in Real Estate. It all comes down to finding the right sponsor.
Trevor Thompson got laid off during the pandemic from a job he had for twenty years and has since been passively investing in Real Estate. Trevor has also been actively involved on a couple of deals as well.
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It takes a different level of skill, expertise, and experience to manage Class C apartments, but the cash flow generally exceeds Class B and Class A properties. You just need to know how to manage the tenants and have the right processes and procedures. At $50,000-$70,000 per door with $5,000-$10,000/unit in rehab, the cash flow is attractive for investors.
Matt Faircloth, Owner of the DeRosa Group, is an expert at C Class properties and has gotten great returns for his investors.
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There’s no such thing as the “Real Estate market.” Regardless of macroeconomic trends, even in recessions, each market is different and there are always great opportunities if you have the ability to see them.
Jason Yarusi, of Yarusi Holdings, and ex-college football player, is based in Nashville and is doing ground up residential projects, a motel-to-Short-Term rental conversion, plus under-performing Value Add multifamily. Jason also hosts the Multifamily Live podcast.
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When it comes to value-add projects, knowing the construction process, including accurate costs, is essential. A sponsor can get in over their heads quickly if they don’t know how to manage construction.
Jeff Rosenfeld, Executive Vice President and Chief Business Development Officer of Adivo Construction, a national General Contracting company, specializes in value-add multifamily. He discusses the different aspects of rehab projects and why it makes sense to deal directly with a General Contractor.
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As a young residential realtor in Ann Arbor, Michigan making over $1,000,000/yr in the late 90s, to large ground up Multifamily and Condo projects he’s currently doing, John Bogdasarian has done it all.
Founder, President, and CEO of Promanas, John raises the capital and handles the back end for different developers who have proven track records in the country’s fastest growing markets where demand far exceeds supply. John also invests in other businesses where the returns can be extraordinary.
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Compared to some other Real Estate classes, Self-Storage has steadier income, smaller expenses, and greater operating margins. Self-Storage is also a great recession-resistant investment.
Tom Dunkel, Managing Director of Belrose Storage, is acquiring self-storage facilities directly from sellers in the mid-Atlantic region and the Southeast with big value-add opportunities. Tom has successfully increased income and lowered expenses to achieve great returns for his investors.
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In Real Estate you can achieve a lot on your own, but you can scale a lot faster and more successfully with the right partnerships. There are too many functions required in Real Estate to scale efficiently on your own.
Jerome Maldonado, Founder/Managing Principal of Quad J Capital Holdings, LLC, Real Estate investor and developer, built a great portfolio of homes, retail, and warehouses, but has really scaled his business to new heights since 2018 with several lucrative partnerships across several asset classes and markets.
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The ROI on land flipping is unparalleled. You can make 300% on your money or even more by buying a piece of land and selling it to the owner of a neighboring property, a developer, or someone else who wants to own the property. You can find great deals with simple and affordable direct mail campaigns. The same marketing tactics can also apply to commercial properties for hundreds of thousands in profits.
Tim Krause, land investor, has been flipping land for only two years and has already done over 50 deals. Now he’s taken what he’s learned in residential land and applying it to commercial deals.
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An often overlooked, but critical piece of the equation in underwriting multifamily Real Estate, is insurance. When not handled appropriately, it can cost operators and investors millions. In the last 20 years, between natural disasters and an increasing litigious environment, the process of insuring a property has gotten more complex and requires more expertise.
Robert Band, Vice President of Commercial Insurance and Real Estate Risk Specialist at Assured Partners, helps multifamily operators optimize their coverage for both cost and protection.
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When it comes to Real Estate investing, you can be a borrower or you can be a lender. When you’re the lender, you get monthly payments without having to actually manage the property and you can generate disproportionate returns.
Fred Moskowitz, Fund Manager and Investor, quit his job in 2015 to become a full-time note investor and has turned it into a great business. Fred is an Alternative Investment Expert and also the Author of The Little Green Book of Note Investing.
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Weddings are a huge industry and a lucrative niche for the hospitality business. Wedding parties routinely pay upwards of $50,000 and even more for a venue plus guests spend a lot more on eating, drinking, and shopping while on premise. Accountable Equity buys distressed historical hospitality properties and repositions them into premier wedding destinations.
Josh McCallen, Co-founder of Accountable Equity, has created an amazing culture of customer service that is resulting in incredible returns for investors.
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Multifamily, Self-Storage, Mobile Home Parks, industrial and retail generally produce 4%-10% returns on your money the first couple years of a project. Short Term Rentals, on the other hand, can generate 25% or even more on your money right out of the gate.
Dr. Rachel Gainsbrugh, Founder of Short-Term Gems, is getting these returns in houses across four select markets.
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In the world of Real Estate investing, it takes a lot of skill sets to make a deal run smoothly. From acquisitions and underwriting, to operations, Investor Relations and even marketing, a lot of roles are required.
Ruth Hiller, Multifamily Syndicator atYESMF, has recently gotten involved with a mentorship program, met several other quality operators, and is now acquiring C+ and B class Multifamily properties 60 units and above.
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When it comes to putting larger real estate deals together, a lot of different roles are necessary. One of the most important roles is raising money and dealing with investors. As operators are scaling their businesses, they may need to bring in co-GP’s (General Partners) to raise money.
Andrew Schutsky, Founder of Redline Equity, partners with other operators to find the right deals, help with due diligence, and bring capital raising and Investor Relations expertise to the table.
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There are great values in the Heartland, although it’s being discovered by big out-of-town money.
Darin Garman, Owner at Heartland Real Estate Companies, has been investing in apartment buildings in Iowa over the past 15 years and has done very well. He believes in low leverage and low risk. Darin borrows at 60% LTV and is underwriting expenses to grow at a rate of 2 to 3x higher than income growth as a result of high inflation of labor and material costs.
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Class C apartment buildings can have amazing upside, but buyer beware when it comes to operating them. The tenants can be incredibly difficult and expenses tend to be a lot higher than what you underwrite.
John Cohen, Founder and Owner of Toro Real Estate Partners and JC Property Group, started with C Class deals no one else would touch and is moving up the food chain to newer properties built in the 2000’s or later. John is also buying land to subdivide or develop and also Mobile Home Parks.
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There are many people buying raw land and flipping it, but there can be even more profit when you buy the land, entitle it for another use, and then reselll it. There are a lot on infill properties to add incredible value to by entitling it for another use and then selling to a developer.
Mike Marshall, Owner of Tolosa Property Group, was a city planner who learned the ropes of the entitlement process and is now helping others with the process and creating partnerships with other investors.
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In today’s market with an enormous amount of capital chasing few deals, it’s harder to find a great deal than ever before. Yet you can still get a great return on industrial properties if you knock on owner’s doors. Single tenant properties or properties with just a couple tenants are easy to operate with a limited amount of management required.
Darren Smith, successful Real Estate investor, is acquiring industrial properties and growing his portfolio in South-Central and South-Eastern Pennsylvania.
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Multi-tenant industrial real estate provides a broad tenant base that creates revenue diversification and limits risk. There’s also very little tenant improvement costs, relatively short turnover time, and cap rates that are still more attractive than many other asset classes.
Kim Hopkins, Principal at Iron Peak Properties, has acquired 15 industrial properties and 350,000 sq feet since 2014, mostly through Loopnet.
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The cliché of the retail apocalypse is overstated. Retail is far from dead and thriving in the right locations. More than many other asset classes, there are operational inefficiencies in leasing and management that represent greater opportunities to add value. As a result, shopping centers can generate cap rates north of 10% for operators and investors not long after acquisition.
Phil Block, Founding Partner of LBX Investments, has hit major home runs over the last few years by adding value in local shopping centers.
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A lot of multifamily investors talk about economies of scale one you get to 100+ units, but there’s a lot of money being made in buildings with fewer units. For example, there are many operators who are making great returns on buildings 50-100 units where there’s less competition to acquire them and the cap rates are generally higher.
Sterling Chapman, President and Managing Director of Crestworth Capital, has acquired some great value-add properties in the 50-100 unit range in the Southeast.
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It’s hard to find the right buy properties to buy these days but if you’re willing to do the heaving lifting with distressed assets, you can still find Class C properties for $45,000-$65,000 door with a lot of rental upside. You just need to be prepared to roll your sleeves up to deal with challenging tenants and properties.
Tate Siemer, CEO/Managing Partner of GreenLight Equity Group, had acquired over 500 C Class units in Oklahoma City and Columbus and is planning to get to 1000 units by the end of the year.
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Although it’s getting increasingly difficult to get attractive returns in today’s investing world, it’s still possible to do incredibly well with Short-term Rentals. With Short-term Rentals you can also automate much of the process so you won’t have to spend more than an hour per week managing your property.
Daniel Rusteen, Author of Optimize YOUR Airbnb, is the world’s preeminent authority on marketing and managing your property on Airbnb.
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There are many things to consider when determining which property to buy. If you could predict future appreciation and also know downside risks, you’d be well ahead of the game of maximizing profits and avoiding devastating downturns.
Stefan Tsvetkov, Financial Engineer turned Multifamily Investor and Founder at RealtyQuant, has developed solutions that predict appreciation and also downside risks for apartment syndicators and investors.
Tim Vest, Founder of Harvest Properties Group
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Online research tells you a lot, but nothing equals the value of spending time in a neighborhood. Being on the ground gives you a sense of what the reality is block-to-block that a computer just can’t.
Tim Vest, Founder of Harvest Properties Group, has confined his searches in the Multifamily space to a four-hour radius of where he lives and grew up in Charlotte, NC. This hyper-focus reduces risk of the unknown for Tim and his investors.
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One of the greatest risks to multifamily investing is financing. Many of today’s newer operators are using heavily leveraged bridge debt to finance deals. If things don’t go according to plan, they can get stuck unable to get extensions or refinance after an initial three-year term. When this happens, sponsors can lose their property.
Brian Burke, CEO of Praxis Capital, has been in multifamily for over 30 years and shares his experience and wisdom on financing and many other aspects of multifamily investing.
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Real Estate investing is a team sport. You need people to find the deals, raise money, structure the financing, fund risk capital, guarantee the loans, and more.
Joel Fine of Lakeline Properties has been a limited partner in over 30 deals and is also a General Partner in several deals where he plays critical roles in the acquisition phase of multifamily. Joel is also involved in land and ground up development deals.
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In today’s Real Estate investing world, you will most likely generate from 4%-10% on your money in the first year of an investment depending on the asset. Short Term Rentals, however, are an exception where you can generate 25% on your money.
Mike Sjogren, CEO of Occupied LLC, is routinely getting these returns on his Short-Term Rental investments. Mike also has his own Master Mind group where he teaches others how to be successful in the Short-Term Rental business.
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Buying real estate requires a lot of money, but you can buy parcels of land in growing areas for less than $500. There are millions of acres of land that you can buy for any reasonable offer as a result of tax liens, inheritances, or any number of reasons.
Mike Deaton, Co-Founder and President of Deaton Equity Partners, has been buying and selling land for the past five years and parlaying his earnings into cash flowing multifamily assets.
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In the last couple years, recreational land has become incredibly popular and seen major appreciation. Land has gotten the attention of both bigger investors and also individuals in larger metros who are buying acreage they can use for hunting and second homes. Land also has numerous ways of producing income.
Jake Hofer, Real Estate broker at LandProz, works in Peoria, Ill and helps mostly suburban Chicagoans acquire recreational land.
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Hiring the right sponsor is like hiring a CEO of a company. Everything rides on the decision and very few people are actually qualified to do the job.
Dovid Preil, Principal of YDLP Investments Group, has a formal process that helps him find the right sponsors with the right deals to mitigate risk and maximize returns. Some of his recent deals have generated over 40% returns for his pool of investors.
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Location, location, location. The ultimate Real Estate cliché, but it stands the test of time. That’s why it’s a huge advantage to have boots on the ground in a market you’re investing in. It’s an enormous benefit if someone knows a market block-to-block. First-hand knowledge of a market reduces risk.
Keith Meyer, a Principal of Symphony Capital Group, identifies local operators in select markets and co-GP’s with them to create highly effective operating teams and reduce operational risk.
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The multifamily market has been so hot in recent years that pretty much everyone has prospered. These days, however, many newer operators are so hungry to get deals that they’re grossly overpaying and often times undercapitalized. If history repeats itself, a lot of these operators will be underwater and they’ll take their investors with them.
Today’s guest, Neil Bertrand, Executive VP of REIT Group Ventures, has been in the business for almost 25 years and seen numerous cycles. Right now, Neil knows of forty deals in Texas that are either in arrears or in foreclosure.
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Major metro markets like Atlanta, Phoenix and Dallas are seeing huge employment and population growth, but there are much smaller markets that are also growing. Some markets with fewer than 500,000 people have almost no supply of available apartments with near 100% occupancy and therefore represent great opportunities for investors.
Today’s guest, Nathan Clayberg is Assistant VP of MLG Capital in Milwaukee. MLG is raising a $350 million fund that invests directly or JV’s in 200+ unit apartment buildings in growing markets.
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Investing in hard Real Estate assets can be great for appreciation, but getting cash flow Is harder than ever and your investment is illiquid. Investing in notes, however, can be a way to generate great cash flow and super high returns without having to tie your money up for years.
Today’s guest, Jay Tenenbaum, Co-Founder & President Of Capital Development at Scottsdale Real Estate Investments, is building a great business in the note space and is offering great returns for investors.
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Multifamily values have accelerated over the past few years. A huge increase in household formation, Baby Boomers choosing to rent, 70 million millennials of whom choose to rent…all bodes well for multifamily. Investing in multifamily, however, still has its’ risks.
Today’s guest, Lee Harris, President and CEO of Cohen Esrey, an apartment acquisition, development, and management company, has seen multiple cycles over 45 years and knows how to avoid risk.
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Most real estate asset classes are efficiently priced. With raw land, however, you can buy lots at literally 30 cents on the dollar. With very few start-up costs you can launch a Direct Mail marketing program that gets you a deal in your first month.
Today’s guest, Dan Haberkost, Owner of Front Range Land LLC, is in his mid-twenties and buying and selling land quite profitably in the state of Colorado. He’s also building single family homes.
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The economy has been in bull territory for over a decade, but this will not last forever. One Real Estate asset class, however, will not only sustain, but will thrive in recessionary times. This is Mobile Home Parks.
Today’s guest, Jeff Cook, Managing General Partner at Cook Properties, is the largest owner of Mobile Home Parks in the state of New York and recently acquired a $124 Million portfolio.
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Having a great niche results in making more money because of better operating margins, a competitive advantage, more efficient processes, and a more streamlined business development effort.
Today’s guest, Chris Winterhalter, CEO and Co-Founder of Hotel Rehabs, specializes in hotel rehabs all over the country. His clients are the world’s biggest hotel brands and his business is growing at an impressive clip.
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When it comes to investing in Real Estate, there’s more ways to do it than directly buying properties. One way is to invest in notes and not have to deal with renting out and maintaining properties and dealing with tenants.
Today’s guest, Scott Carson, Owner and Managing Member of WeCloseNotes.com, an Austin based, defaulted note buying company, has made a phenomenal career out of investing in notes since 2008 and has helped thousands of others learn about the note business. Scott is also a nationally known radio personality and podcast host.
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There’s an exodus of people escaping cities in search of more space, tranquility, lower taxes, and they want to own tangible assets. As a result, rural land is appreciating outside of major metros at all-time highs.
Today’s guest, Neil Hauger, of Whitetail Properties, is a high-performing land broker in the Upper Midwest who’s distilled land marketing down to an art form.
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Investing your hard-earned money is a risky business. There’s no such thing as an unattractive proforma, but a lot of things can go wrong. With interest rates rising and operational expenses on the rise, NOI’s may decrease and cap rates may increase.
Today's guest, Jeremy Roll, President of Roll Investment Group, has been a conservative investor for several years and continues to see caution signs in today’s market.
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There are literally hundreds, if not thousands of Real Estate syndicators you can invest with. But how do you know which ones you can trust and which deals to invest in? There’s a lot of risk in these deals so it’s good to have a system.
Today’s guest, Sam Giordano, a New Jersey physician and Co-Founder of PassiveAdvantage.com, has developed a system for evaluating Multi-family deals that will help you mitigate risk and avoid common mistakes.
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If you’re looking for an asset class that is recession resistant and poised for huge growth, look no further than Assisted Living. Over 10,000 Baby boomers turn 75 every day.
Today’s guest, Loe Hornbuckle, CEO of Sage Oak Assisted Living and Memory Care, is passionate about helping seniors and started out by converting a single family home into an Assisted Living facility. Loe now has six, eight bed homes and is doing ground up construction of much larger facilities.
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A lot of focus in Real Estate has been on Multifamily, Self-Storage, Mobile Home Parks, Industrial, and other like asset classes. But one asset class you don’t hear about very often is land. Yet the opportunities to buy and hold or to flip land are immense. There are 1.9 billion acres of land in the US and only 6% of it is developed. Billionaires like Ted Turner, the Ford family and Jeff Bezos are buying as much as they can.
Today’s guest, Jeanette Amayo, went from a being a manager at Starbucks to getting into the land business and is doing exceptionally well in just two years.
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Even through covid, some hotels have performed well, especially ones with great locations, like being near a busy highway. Ecommerce kept truckers on the roads and they needed places to stay. The same thing applied to traveling sports teams and other groups who continued to travel as part of their lifestyle.
Today’s guest, Mike Stohler, Managing Partner of Gateway Private Equity Group, transitioned out of multifamily in Phoenix back in 2017 into hotels and has been building a successful hotel portfolio since then. Mike is starting a hotel fund that will capitalize on the opportunities that will present themselves in this industry over the next few years.
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When buying existing properties becomes too cost prohibitive, you may need to pivot to new development. Whereas cap rates on existing properties in desirable markets may have plummeted to as low as sub 4%, cap rates on ground up development can be as high as 10%, even in growing markets.
Today’s guest, David Kislin, Owner at JEL Development, is doing small, infill residential ground up projects in South Florida and is generating great returns.
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Is LoopNet the place where all good deals go to die? This may be the case generally, but like most other things, there are exceptions if you’re willing to be diligent.
Today’s guest, Larry Murray, Founder of Ivory Wolf Properties, a newer entrant into Multifamily syndication, found a great deal in Little Rock on LoopNet that’s in the middle of a successful lighter value add and he utilized a Whole Life insurance policy as a source of his funding.
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Investing in Real Estate can be very profitable. It can also be very risky. A lot of people have lost money over the years, especially when they’ve gotten involved with the wrong people.
Today’s guest, Jim Pfeifer, Founder of Left Field Investors, has created a networking group that provides excellent education and resources to help people avoid common pitfalls and mistakes that can cost them a lot of money.
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How high can Real Estate go? With inflation and rents climbing, and interest rates still at historic lows, prices continue to climb. Even after a torrid first half of 2021, prices continue to climb and there’s been compression between C, B, and A classes.
Today’s guest, Todd Dexheimer, Co-Founder of Endurus, has had great success over the past few years and still firmly believes in cash flowing, Value Add Real Estate as long it’s the right opportunity.
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The short-term rental market has exploded and investment returns in this asset class can be much higher than other residential real estate.
Today’s guest, Ryan Scott, Managing Director of Aspire Fund, is developing tiny home communities in Opportunity Zones with short-term rentals. It’s an incredible way for investors in 1031 exchanges to defer taxes and get incredible returns on their investment.
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You can live like a king on as little as $1,500/mo in a tropical paradise if you’re willing to experience a little adventure. Now that people are working from anywhere, they’re moving to places where they can live pennies on the dollar compared to the U.S.
Today’s guest, Mike Cobb, Chairman of ECI Development, builds and finances homes countries such as Costa Rica, Nicaragua, Panama, Belize and El Salvador.
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If you’re willing to do what others aren’t, there can be gold in them hills.
Today’s guest, Arthur Drozd, has found incredible value with multifamily properties that have complex challenges. Arthur is highly skilled at finding opportunities and finding the right teams. Arthur is also the founder of ReadyLendGo.com., a one stop website aggregator of commercial Real Estate loans.
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There’s stable cash-on-cash returns in many real estate assets, but returns on car washes can be extraordinarily high. You just need the right car wash, in the right location, with the right management.
Today’s guest, Steff Boldrini, Principal at Monte Carlo Real Estate Investments, purchased three car washes in a portfolio that included a self-storage facility in Amarillo, Texas. She’s doing extremely well despite some bumps and bruises along the way.
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When buildings are being priced at above replacement cost, that’s when it’s time to build.
Today’s guest, Michael Episcope, Principal at Origin Investments, is focusing on ground up multifamily development in the country’s top growth markets. He has a long-term hold strategy to help investors achieve tax efficiency and help them avoid the risk when having to find replacement properties.
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With asset prices climbing, getting the right financing is becoming a greater challenge. With so little daylight in deals, it’s harder for institutions to finance multifamily apartments.
Today’s guest, Terry Painter, President of The Apartment Loan Store, discusses current lending practices and also common mistakes new multifamily investors make when buying their first properties.
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In the world of operating property, experience trumps all else. There’s just no substitute for someone who’s been operating apartments for almost 25 years, not to mention transparency in how they deal with investors.
Today’s guest, Ken Gee, Founder and Managing Partner of KRI Partners, has invested in Florida over the past decade to capitalize on the huge growth of Florida’s employment and population growth.
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In this era of inflation, hard assets are a way to prevent falling behind. That’s where Real Estate comes into play. Multifamily, in particular, is a great inflation hedge because you can raise rents every year, except in cities with rent control.
Today’s guest, Tracy Hubbard, Managing Partner of Hubbard Capital Group, had been in the financial world for many years before identifying Multifamily as a way to generate aggressive returns with a built in hedge against inflation.
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Although institutional money is chasing multifamily in most markets in the country and paying unprecedented low cap rates, there are still viable, smaller markets you can buy properties for $30,000-$40,000/door in good neighborhoods.
Todays’ guest, Seth Teagle, Partner and Director of Operations of The Stream Group, has bought several bigger multifamily properties in the Midwest with great cash flow.
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Good Multifamily deals are getting harder to find as operators are lowering their expectations and willing to overpay for properties. They’re offering higher prices and justifying them because of lower interest rates and the anticipation of continued inflation of rents.
Today’s guest, Sterling White, CEO of Sonder Investment Group, is being more selective and patient in his approach to finding the right deals that can cash flow 8-11% and generate mid to higher teen IRR’s.
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In the world of multifamily, things change from block-to-block. That’s why hyperfocus on not just a market, but a neighborhood, can generate risk-adjusted ,outsized returns over time. Simply put, all Real Estate is local.
Today’s guest, Anthony Vicino, Co-Founder of Invictus Capital, is building an impressive portfolio of properties in the Twin Cities in great infill locations that he’s vertically managing.
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In the 100+ Multifamily universe, it’s become increasingly difficult to find value regardless of market or asset class. There’s just too much money chasing too few deals. With smaller buildings, however, there’s less competition and way more opportunity for creativity and value-add solutions that generate more attractive returns.
Today’s guest, Chris Grenzig, Owner of JAG communities in Jacksonville, Florida, is buying smaller buildings with great returns and plans to gradually scale to larger properties.
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When unprecedented amounts of money are chasing so few assets, the result is inflated asset prices like never before. As a result, ground up construction can be a better way to get decent returns.
Today’s guest, Jake Harris, Founder and Managing Partner of Harris Bay, looks for unique infill development opportunities in secondary or tertiary markets with the right fundamentals. Jake focuses more on the market versus the asset class in determining which opportunities to pursue.
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Successful investing requires planning for economic downturns. When the economy takes a hit, more people go to college to prepare for careers. That’s why student housing is a recession proof asset class. Current occupancy levels for student housing in the country’s top university towns is well over 95%.
Today’s guest, Fred Pierce, President and CEO of Pierce Education Properties, is one of the country’s top student housing operators with over 30,000 beds. He’s acquiring more in popular college towns with super high demand that far exceeds supply.
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When you have a reduction in supply, an increase in demand, and the most affordable housing option, you have an incredibly durable asset class. Ma and Pa operators all over the country are selling their parks as they reach retirement age. Since 3rd party management hardly exists in Mobile Home Parks, there’s lots of great Value-Add deals to be had.
Today’s guest, Mario Dattilo, Co-Founder of Real Estate Acquisitions USA, is acquiring an impressive portfolio of Mobile Home parks in Florida and other states.
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Over 25 years ago, you had to send your loved one to a nursing home if they could no longer care for themselves. Today, you can send them to an Assisted Living facility with a much more current approach to lower-level care. This area of housing area has continued to face increased demand. The population is aging and more seniors need assistance with day-to-day functions they can no longer perform at home.
Today’s guest, Justin Burke, is building a portfolio of Assisted Living facilities in the upper Midwest.
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Knowing when to buy can make all the difference between average and incredible returns. In today’s world there’s distress in office, retail and hotels.
Today’s guest, Nate Barger, started out flipping homes and apartments but has slowed down adding multifamily to his portfolio and is pivoting instead to value-add hotels with great upside potential as the market for hospitality rebounds. His website is https://www.natebarger.com/
Learn more at https://www.streetsmartsuccess.com
Not all retail is the same. Many mid-market, grocery-anchored centers are doing very well and other tenants are benefitting from the traffic. Among other e-commerce resistant tenants, Health Care providers are starting to lease space in neighborhood centers.
Today’s guest, Scott Tiano, Founder of JS Western, and more recently, Portal Investment Management, is implementing highly successful value-add strategies in mid-market retail centers in the Western U.S.
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With C class properties selling for cap rates equivalent to B and A class properties, a number of operators are exchanging into A class. These properties are easier to hold for the long-term because they don’t have the same looming cap-ex to deal with over the next several years.
Today’s guest, Keith Wasserman, Co-Founder of Gelt Inc. in Southern California, started out with heavier value-add projects in Bakersfield, then Phoenix, plus other Western markets. More recently, he’s been trading up to newer vintage properties for longer-term holds.
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10,000 people are turning 75 every day in this country. There are currently more people in their 70’s 80’ and 90’s than ever before. The demand for Assisted Living is just at the tip of the iceberg and operators are poised to do well if they can serve this population responsibly.
Today’s guest, Joe Pohlen, Principal of Cardinal Senior Management, is having great success buying underperforming assets and repositioning them by treating residents and employees the way they should be treated.
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Few asset classes have both increased consumer demand and not only limited, but reduced supply. That’s what makes Mobile Home Parks such a great investment. Mobile Home Parks are also the ultimate in affordable housing and a great hedge against economic downturns.
The category also remains highly fractured so the opportunities for acquisition continue to abound. Today’s guest, Jefferson Lilly, Founder of Park Avenue Partners, has been buying Mobile Home Parks since 2007 and has generated great returns for his investors.
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Out of favor asset classes can yield great investor returns, especially when they’re growing in occupancy and are in limited supply. Flex industrial used to be underneath the radar until a decade ago.
Avistone LLC has specialized in this asset class since 2012 but is now pivoting to hospitality. Today’s guest, Richard Kent, President of Avistone, talks about why flex industrial made so much sense ten years ago and why hospitality makes so much sense right now.
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Even in this super hot market, you can still generate strong cash flow. Whether it’s from utility bill backs to tenants that make a huge impact on cash flow or buying from long-time ma and pa owners with units that are way under market rent, the opportunities are there to get 10% cash-on-cash returns.
Today’s guest, Steven Pesavento, President of VonFinch Capital, is finding these opportunities and making them available to his investors.
Learn more at https://www.streetsmartsuccess.com
It’s never too late to get started in Real Estate Syndication. It just takes the right mentoring and the right team. It’s amazing what just a proven process can yield.
Today’s guest, Brain Noel, CEO of Ascot Equity Partners, has gotten started over the past couple years and is already a GP on a couple of excellent B and C class value-add deals in Houston that have already appraised well above the purchase price.
Learn more at https://www.streetsmartsuccess.com
From converting distressed hotels into Assisted Living facilities to Value-Add apartments, there are many ways to generate great investor returns. It just requires rigor and creativity to see what others don’t. Today’s guest, Prashant Kumar, CEO of Myrealtygains, quickly learned that the single family game was an uphill battle and that bigger projects was the only way to go. He’s since done several multifamily and Assisted Living deals and targets 20% IRRs for his investors.
When it comes to multifamily, it seems like no good deals are to be had. Even in smaller markets, cap rates have compressed so much and the competition keeps getting fiercer. But today’s guest, Joshua Ferarra of Ferrara Capital, has been buying 7 and 8 cap deals in Mobile, Alabama where he currently lives. These have been C and B class deals with recent renovations completed by previous owners and therefore did not require heavy-lift rehabs or unusually high cap-ex.
Ecommerce is changing the playing field in unprecedented ways. As companies need to get their goods into customer hands within hours, the demand for warehouses will continue to expand dramatically all over the country for the foreseeable future. Today’s guest, Peter Lewis, Chairman and Founder of Wharton Equity Partners, sold $500,000,000 in multifamily assets back in 2017 and redeployed the capital into industrial property to catch the huge wave in industrial expansion.
When it comes to choosing what to invest in, 80% of the decision comes down to the team. There’s no substitute for experience and roles within the team should be clearly defined, otherwise teams can implode and investor capital is at great risk. Today’s guest, Spencer Hilligoss, Founder of Madison Investing, fully vets sponsors and deals for his investors and invests as an LP himself prior to bringing a sponsor into his portfolio.
When it comes to multifamily, it seems like no good deals are to be had. Even in smaller markets, cap rates have compressed so much and the competition keeps getting fiercer. But today’s guest, Joshua Ferarra of Ferrara Capital, has been buying 7 and 8 cap deals in Mobile, Alabama where he currently lives. These have been C and B class deals with recent renovations completed by previous owners and therefore did not require heavy-lift rehabs or unusually high cap-ex.
Is the Texas market going to stall, or is it just beginning a longer-term growth trajectory? According to today’s guest, the chronic housing shortage will not abate as people and jobs keep pouring into the Lone Star State. Jack Langenberg, a seasoned CFO and COO of several large companies, and previous head of mergers and acquisitions of a Fortune 500 company, is syndicating multifamily deals out of the Dallas-Ft Worth market and has a recipe for success.
Although the multifamily market is on fire, there’s still a chronic housing shortage that will persist for several years. In many markets, job and population growth is far outpacing existing inventory and new construction. As a result, opportunities still abound in many submarkets in the country. Today’s guest, Matt Picheny, has successfully found opportunities in great markets with B and C value-add properties.
In this exuberant environment for Multifamily, the returns for ground up construction can be more compelling than usual. Although the risk profile is steeper, the rewards can more than justify the risk with an experienced operator. Today’s guest, Sam Bates, Founder of Bates Capital Group, has recently done both ground up construction and acquisitions of existing properties, the deals just have to make sense.
Traditional financial investments versus alternative investments…. which is better? The answer may be more nuanced when looking at both over a long period of time. Today’s guest, Denis Shapiro, Managing Partner of SIH Capital Group and author of The Alternative Almanac, believes there are pros and cons to both although he’s leaned more towards Multifamily investing over the past few years.
Is there a downturn coming? Either way, you have to plan on it, according to today’s guest, Whitney Sewell. Whitney is the founder of Lifebridge Capital. Lifebridge is acquiring properties in the Mountain West states of Idaho and Colorado. Everyone is talking about the South and Southeast, but the Mountain West is also growing rapidly with great job growth and strong demographic trends.
Cap rates on most real estate asset classes have dropped 40% over the past five years. This has made cash flow very hard to achieve. Ground up construction, on the other hand, has much higher cap rates. The key is mitigating risk by being in the right markets with the right assets. Today’s guest, Neal Bawa, the Mad Scientist of Multifamily, has been doing ground up construction in smaller markets in several different asset classes in order to generate attractive returns for investors.
Great Multifamily deals are a needle in a haystack these days, but great deals are still to be had if you’re willing to be patient and methodical. Today’s guest, Sam Wilson, founder of Bricken Investment Group, has found great Value-Add deals in the Southeast with rental upsides over $300 per unit. Sam also has a Self-Storage fund and has invested in parking garages.
In today’s multifamily market, you need to buy deals with as much rental and operational upside as possible to make sense for investors. Today’s guest, Nathan Cloud, Founder and CEO of Cloud Capital, has built out systems with stringent buying criteria to meet these goals. Nathan’s bought C class deals in Houston below market and has had great success. He’s in the right submarkets with the right properties to maximize returns.
Even though Austin is the hottest multifamily market in the country, lifelong relationships and a great reputation yields great deals, even when they’re fewer and further between. Today’s guest, Andrew Campbell, Managing Partner of Wildhorn Capital, has built an impressive 3000 unit portfolio in Austin and San Antonio that’s produced consistently strong returns for investors through cash flow and appreciation.
Even in historically low appreciation markets, single family homes are appreciating at unprecedented rates. New household formation and historically low interest rates has spurred renters to leave apartments and buy their first homes. Today’s guest, Eric Martel, Founder of MartelTurnkey, has been buying, rehabbing, and selling homes to investors who are getting 10% returns on their money.
Market cycles ultimately determine the potential of an investment. Markets and asset classes are always in different phases of development. Today’s guest, Serge Shukhat, Principal of Zonal Capital, started out buying houses for $50,000 in a suburb in Phoenix during the Great Recession and has leveraged these early successes into a multi-asset class empire including multi-family, hotels, and other assets.
Starting out from scratch can be really hard. In this case, two partners in Northern New Jersey have leveraged their unique experience and skill sets to found a Real Estate Investment company. Zack Shulruff and Chris Rizzo founded Clear Mountain Properties and are buying smaller properties in Greensville, South Carolina with great value-add strategies that are working very well in one of the fasted growing markets in the country.
In the world of multifamily, first-hand knowledge of a market, property management and construction can make or break a deal. This is where the money is made or lost. Today’s guest, Terrance Doyle, Founding and Managing Partner of Vareco, specializes in multifamily in Des Moines and Denver. He grew up in Des Moines and lives in Denver. Extensive knowledge of these markets is what gives him a competitive edge.
For investors who want to invest passively in Real Estate, it can be hard knowing who to invest with and in what deals. The process can be daunting when there’s a lot of money on the line. Lance Peterson, Founder and Managing Partner at Verivest, has made it easier for investors to find trustworthy syndicators and he’s helped syndicators maintain best practices in how they conduct their business and investor relations.
Believe it or not, there are still markets where you can get great cash-on-cash returns on single family houses and small multi-families. Whether at auctions or sometimes even on on-market deals, Wichita has fit this bill. Mike Heldstab, founder of Michael Morgan Investments, has amassed a significant portfolio of single families, duplexes, triplexes and four plexes that are all cash flowing very well.
There’s no two ways about it. Getting into the Real Estate business is hard. Finding people to mentor you, getting brokers to take you seriously, and raising capital are just some of the challenges to starting out. Today’s guest, Craig Berger, CEO and Founder of Avid Real Estate Partners, started full-time in Real Estate in 2014 and has learned a lot of valuable lessons.
In every market, there’s always a deal. Somewhere, there’s an older landlord that’s self-managed his own property and just wants to get out. These are often buildings with under market rents and unnecessarily, high expenses. Today’s guest Robert Rixer, co-founder of EJ Investment Group and CitiPoint, has found incredible off-market deals in Chicago with cap rates in excess of 8%- 10%.
Even in a competitive market, there are still great deals if you’re willing to put the time in to follow proven lead generation systems and be patient enough to build relationships with sellers. Today’s guest, Adrian Salazar, Co-founder of Two Ten Management has sourced great deals in McAllen, Tx and San Antonio and is generating outstanding investor returns and creating great places to live for tenants.
In this overheated Real Estate environment, you may need to find smaller, growing markets to find the right deals. Depending on where you look, it’s still possible to find cap rates of 5% or slightly higher for Class C buildings in decent condition in gentrifying B class areas. Today‘s guest, Jonathan Barr, founder of JB2 Investments, puts a lot of his own capital in play alongside a handful of selected investors in deals that cash flow very well.
From flipping single family houses all the way to building high-rises in New York, there’s countless approaches to making money in Real Estate. Today’s guest, Ken Van Liew, Founder and CEO of Global Real Estate Strategies and Chairman of Advanced Capital Funding has pretty much done it all. Ken has syndicated or developed over 1.3 billion in various Real Estate classes. Ken recently wrote The Modern Wealth Building formula, his current mission is to help others achieve their potential and find meaning in their lives.
Whereas 93% of large multifamily properties are owned by larger professional investors, Mobile Home Parks and Self-Storage facilities are still mostly owned by smaller and less sophisticated operators. That’s why you can still find significant operational inefficiencies and opportunity to create incredible value in these assets. Today’s guest, Paul Moore, Managing Partner and Founder of Wellings Capital, has raised funds comprised of value-add Mobile Home Park and Self-Storage facilities that are generating outstanding returns for his investors.
These days it’s become virtually impossible to get an attractive, conservative yield on commercial Real Estate. Cap rates have gone down and prices have gone way up. There’s one asset class, however, that’s held up comparatively well. That’s Sale/Leaseback industrial properties in secondary or terciary markets. Neil Wahlgren, COO of MAG Capital, is acquiring eight to ten properties a year with cap rates in the 7 to 8 range with long-term NNN leases.
Amongst other positive aspects of Real Estate, depreciation is a phenomenon that makes it like no other investment. Especially with recent changes around bonus depreciation, you can depreciate 100% of certain costs in the first year of ownership. This provides an exceptional opportunity to demonstrate big paper losses year one. Today’s guest, Yonah Weiss of Madison Specs, the largest real estate tax firm in the country, has a great way of simplifying how depreciation and cost segregation works.
Everyone who’s invested in real estate knows that the success of a deal can come down to property management. Today’s guest, Peter Lohmann, co-owner of RL Property Management, has built up a portfolio of almost 500 units in the Columbus, Ohio market by charging a flat fee to manage properties and providing proactive management and communication with landlords.
Starting out in Real Estate can be the hardest part, but once you do, good things can come your way fast. Today’s guest, Lee Yoder, of Threefold Real Estate Investing, started out by scouring old deals on LoopNet and ended up making great profits. When other deals fall apart, prices can come down significantly. Lee is now buying bigger cash flowing deals in the greater Dayton area.
Unlike many other asset classes, Real Estate is a hard asset with conservative, long-term predicable utility that also provides cash flow. That’s why so much money in other asset classes has moved into Real Estate in the last few years. Today’s guest, Scott Kurland, co-founder of Acuity Partners, has a successful background on Wall Street and has applied that expertise successfully into investing in the Multifamily sector over the past five years.
This is episode two of a great conversation with super star investor, Nathan Petrowsky.
If you’re based in an incredibly expensive coastal market, looking inland may be your best option to get great returns. This thesis has made all the difference in the world for several operators with the vision to look beyond their backyard for more immediate, lucrative returns. Today’s guest, Nathan Petrowsky, ventured out of the SF Bay Area and acquired office buildings in Dallas right after the deep recession. This was the beginning of a quantum expansion into offices and warehouses that continues to this day.
A key to safe investing is finding the absolute best-in-class operators. Don’t just take someone’s word directly, but find others who’ve done business with them and can report success over a significant period of time. Today’s guest, Dave Zook, founder of The Real Asset Investors, is a successful business owner and savvy investor who’s created lucrative partnerships with proven, vetted, experienced operators.
Taking down 15 large multifamily deals in less than two years is no easy task, especially when you’ve just started out. But tirelessly doing all the right things like contacting brokers, sellers, lenders and lawyers and building the right teams can pay off if you’re relentless enough and willing to put in the hours. Zack Haptonstall, founder of Rise48Equity, started his multifamily trajectory in Phoenix in 2018 and has had major wins.
Having a niche is always an advantage. Having a niche within a niche is even better. Today’s guest, John McNellis, built his fortune with 100,000 sft neighborhood shopping centers. Founder of McNellis Partners, John is a Bay Area developer who believes in staying within a two-hour radius of where you live and has been incredibly successful with a repeatable, predicable formula that he’s perfected over three decades.
In order to get the best deals, the-old fashioned way still works the best, mailing and calling owners directly. There are no shortcuts. Today’s guest, Zach Quick, an Owner-Operator of 2300 Self-Storage units, buys his properties at the right prices and continues to fine-tune a disciplined, focused system of acquiring and operating Self-Storage facilities with great profits.
The discipline required to pass up deals in an overheated market can be rare. Everyone says they have conservative underwriting and that they’ve found a unique deal, but today’s guest has really walked the walk and done it the old-fashioned way. Hadar Orkibi, Principal of MHI Holding and Co-facilitator and founder of Make it Happen Mastermind Group, has generated huge returns in multifamily units he’s acquired in Little Rock, Arkansas.
There can still be great deals in sub-100-unit buildings with C class Value Add in the right markets. Like any other deals, it helps to have boots on the ground and the ability to create the right teams to manage the rehab and ongoing operations. Today’ guest, Ismael “Rey” Reyes, best-selling author, and founder of MI Real Estate, has been part of several Class C deals in the Southeast and is doing extremely well.
This is episode one of a great conversation with super star investor, Nathan Petrowsky.
If you’re based in an incredibly expensive coastal market, looking inland may be your best option to get great returns. This thesis has made all the difference in the world for several operators with the vision to look beyond their backyard for more immediate, lucrative returns. Today’s guest, Nathan Petrowsky, ventured out of the SF Bay Area and acquired office buildings in Dallas right after the deep recession. This was the beginning of a quantum expansion into offices and warehouses that continues to this day.
It’s never too late to get started in Multifamily. You just need to get in the game with that first deal. Today’s guest, Jeff Greenberg, CEO and Managing Member of Synergetic Investment Group, did his first deal when he was in his mid-50’s and learned quickly what and what not to do. He has had amazing success with C class value add deals in Texas and he’s now moving on to help other investors vet sponsors and deals to leverage the attributes of real estate for their own financial stability.
When it comes to someone else’s underwriting, there’s often a lot more than meets the eye, so buyer beware. There’s often any number of items that get left out in a broker or sellers P & L’s. That’s where years of experience comes into play. Today’s guest, Mark Hamilton, founder of Bay Area-based Hamilton Zanze, shares invaluable lessons from a 30+ year operator of over 20,000 units.
Many things can go wrong with Real Estate syndications. There’s more to the game than just the numbers and managing properties. Today’s guest, Gene Trowbridge, is co-founding partner at Trowbridge Law Group and has been a part of 5 Billion in real estate transactions. Gene has been a broker, a syndicator and an attorney to syndicators. No one knows more about the legal aspects of syndication and what to avoid that Gene.
In real estate investing, having a proven, repeatable formula is highly conducive to succeeding in the long run. Getting to be an expert in a specific niche will make you more competitive, relevant, and sustainable in your efforts. Today’s guest, Willie Mandrel, founder of The Mandrell group and the Wealth Builder Nation, does all three- and four-unit residential properties, all in designated neighborhoods in Boston, where he’s lived practically his entire life. Willie has the relationships, the rehab, and the financing down to a process that has made him a multimillionaire in the last 15 years.
What does it take to be a number one commercial broker? It takes ridiculous hard work and an ability to create lasting and meaningful relationships. Today’s guest, Craig Coppola, is the top earning broker in the history of Lee and Associates, the national commercial brokerage firm. Craig’s also been the top broker in Phoenix for 24 of the last 31 years. Craig’s also been an active investor and knows how to find the “great deals.”
The part of multifamily that no one talks about is construction. Yet, your approach to construction can make or break the deal. Whether you hire third party property management to manage the process, or you try to manage subcontractors on your own, the process is fraught with potential pitfalls. Today’ guest, Jeff Rosenfeld, Executive Vice President and Chief Business Development Officer is a partner in Adivo Construction, a national General Contracting company that specializes in value-add multifamily.
There are many ways to engage in multifamily investing, it just depends on what you want to bring to the table. It just takes a team to make a deal happen. Today’s guest, Rick Martin, founder of Fortress Federation, started out buying single family houses before getting into syndication as a Limited Partner. Over time and after making some valuable connections, Rick’s become a General Partner in a number of deals in Texas and the Southeast.
The largest asset class in the world is single family homes in the United States. It represents over $200 Trillion dollars. That’s a lot of money. Today’s guest, Dani Beit-Or, founder of Simply Do It Real Estate Investments, owns several of his own single family rentals and has helped advise hundreds of his clients in investing in single family homes in some of the country’s best rental markets for buy-and-hold, long-term investors.
After several years of consistent growth in the multi-family market, several markets continue to have strong projected gains in population growth, job growth, and appreciation. This growth, combined with rapidly increasing building costs, can be the perfect storm for even greater rent growth and appreciation in the years to come. Brian Burke, CEO and President of Praxis Capital, is always cautious, but remains bullish for multi-family at the right price, in the right markets, and with the right opportunities.
With over 11 million families behind on rent or mortgage payments and the fed pumping six trillion into the economy, today’s guest has a wait-and-see perspective on investing in today’s Real Estate market. There’s just too much uncertainty on top of already historically low cap rates and inflated prices. That’s why Jeremy Roll, President of Roll Investment Group has lots of cash on the side and is waiting patiently to see how things pan out over the next couple years.
You can get great appreciation in coastal markets like NYC and San Francisco, but it’s virtually impossible to get cash flow. That’s why many investors seek opportunities in other parts of the country. Today’s guest started his real estate career in single family and apartments In Brooklyn before venturing out to other parts of the country. Since then, Mike Zlotnik, Fund Manager of Tempo Growth Management, has run transactional funds, hard money funds and funds that invest in multifamily, office, retail, and hotel conversions.
No matter what a situation looks like from the outside, you can’t know everything until after you get the keys. Today’s guests’ second multifamily deal was a 37-unit he bought with his dad. After some painstaking years at the beginning with a lot of unexpected Capex, the property has performed incredibly well. Since then. Brian Hamrick, CEO of Hamrick Investment Group, has gone on to syndicate larger deals and has invested in Self-Storage, Office and non -performing notes. His most recent project is a 100 unit ground up apartment project he’s doing in downtown Grand Rapids.
In this hot Real Estate market, you need to be extra careful how much you pay for properties. Some experts think there's extra risk in Class C right now because the valuations don't support the risk. A lot of these properties have functional obsolesce that some operators aren’t prepared for. Today’s guest, Bill Ham, is COO of Broadwell Property Group in Atlanta. Bill invests in and syndicates properties within an hour plane ride of Atlanta that provide at least 6% cash-on-cash on the front end of the deals.
When the market is overheated, it takes unusual discipline to be patient and only insist on getting great deals. Today’s guest will still only buy deals at a deep discount. As such, he’s still doing multifamily, but he’s also doing a hotel conversion to multifamily and also ground-up construction. James Kandasamy, CEO of Achieve Investment Group, has done incredibly well with off-market, heavy value ad deals in San Antonio, TX, one of the most recession-proof markets in the country.
Many syndicators favor the reliability of Class B properties because of their performance in all economic cycles. When the economy turns, Class A tenants move down to Class B but Class B tenants mostly stay put. Although the properties are older, they’re still relatively current and nice places to live, especially after value-add upgrades have been made. Today’s guest Ellie Pearlman, Founder and CEO of Blue Lake Capitol, has built a great portfolio of B class properties in great markets.
When starting out in Real Estate, it’s hard to underestimate the value of education and the people you meet. By persistent networking, today’s guest found a great mentor and he also found a business partner who he’s building a great company with. Reed Goossens, co-founder of Wildhorn Capital, has syndicated eleven large, multi-family value-add properties and has a new offering in the red-hot Austin, Texas market. Reed has become an expert at creating business systems and operational efficiencies that enhance NOI and the value of properties.
Slow and steady wins the race. That’s why it’s been great to invest in stable markets in the Midwest. Today’s guest is based in Cedar Rapids, Iowa and has generated great returns for his investors for many years. Darin Garman, founder of Heartland Real Estate companies, is a conservative and paranoid investor who knows how to mitigate risk and optimize the operations of his properties to get the highest cash-on-cash and internal rate of return for his investors.
There’s a niche in the market below 100 units where there’s less competition. You just need to know how to pick the right markets and figure out the off-site management piece. Today’s guest discovered Tucson as an affordable market five years ago when Phoenix was already getting pricy, and he’s done quite well by his investors and himself. Today’s guest, Bruce Woullet, Founder, Visionary, and Owner of Bakerson, is a Phoenix-based real estate veteran who's stood the test of time.
As people are spending more time at home, they’re developing a need for more space. As a result, there’s a growing need for self-storage. The expense ratios for running self-storage are relatively low and the operating margins reflect that. Today’s guest has specialized in converting old warehouse space into Class A, climate controlled self-storage units. Scott Krone, Principal of Coda Management Group, has a fine-tuned formula which has served him and his investors well.
When it comes to managing multi-family apartments, no one will care as much about your property as you do. Today’s guest has learned the hard way how to nail down this key ingredient. Kyle Jones, a multi-family entrepreneur, is building an impressive portfolio comprised of both existing apartments and ground up projects in markets like Huntsville, Alabama, Gulfport Mississippi and other growing markets.
There’s something to be said for specialization and a singular focus. When you do one thing over and over, you tend to do it well. A lot of multifamily operators are spread out all over the country, but today’s guest stays in the town he grew up in and has lived in almost his entire life. Devin Elder, Principal of DJE Texas Management Group, knows San Antonio like the back of his hand and has built an impressive portfolio there. He stays away from the glitzier markets of Austin and Dallas and gains a competitive advantage by focusing exclusively on what he knows and does best.
Having a mentor, reading the books, listening to podcasts…it’s all great, but at some point, you need to take the plunge. Today’s guest jumped into larger multi-family with a 22-unit class C building in Indianapolis for $350,000 and he did it all the way from Orange County CA. Since then, Bill Manassero has launched the Old Dawg's REI Network - a real estate blog, newsletter and podcast. Bill is also the founder of Manaserro Properties, a Real Estate syndicator of multifamily properties and developer of senior living communities.
In today’s multifamily market finding a great deal is harder than ever, even for the super heavy value ad deals many investors used to shy away from. There’s so many investors chasing the same deals. Today’s guest is incredibly disciplined about finding the needle in the haystack where he’s been able to generate IRR’s as high as the high 20’s and sometimes even the low 30’s. John Cohen, founder of Toro Real Estate Properties, is based on Long Island. John only does deals where there’s a big problem that needs to be solved. He’s looking to expand in the Midwest and the Southeast.
Sticking with large metro markets and heavy value-add properties mitigates a lot of risk. Even when you make mistakes, being in a large market makes it easier to find tenants and if things really go wrong, it will be easier to find a bigger operator to acquire the property. Today’s guest has built an impressive 18 property Mobile Home Park portfolio since 2015, Ryan Narus, of Archimedes Group, learned from the ground up by moving into and living in the first park he acquired.
There’s a lot to learn when it comes to multifamily apartments. You have to know how to buy them right but even more important, you need to operate them efficiently. Today’s guest, Drew Whitson, a former Target Corp executive, has figured it out from the ground up. He started out buying single family houses before buying smaller multifamilies and ultimately syndicating larger deals in Memphis, Little Rock, Atlanta, Huntsville, and other emerging markets.
Investing in a lot of deals with a lot of operators and markets can be quite time consuming. It also requires expertise a lot of passive investors don’t have the time or inclination to develop. Today’s guest, Mark Khuri, is the founder of SKM Capital and Aeiral Capital Management. Mark’s companies manage your investments by placing your hard-earned money with proven, vetted Self-Storage, Mobile Home Park and Multifamily operators.
There are so many ways to make money in real estate. Whether it’s wholesaling, flipping, buy-and-hold, holding notes, investing in syndications, there are countless ways to get great returns on capital. Today’s guest, Matthew Owens, has done pretty much all of these things. Matt has bought, renovated & sold or held over 1000 properties in the last 15+ years and is currently buying five or more properties per month and has raised over $75 million in private investor capital.
It doesn’t take that long to get traction in Real Estate if you doggedly follow a process. Today’s guest has acquired 3000 multifamily units in just three years and just closed on his first Self-Storage deal. He also founded the Multifamily Investor Nation and Self-Storage Investor Nation bringing incredible knowledge and investment opportunities to investors. Dan Handford, of Columbia South Carolina, started out as a Chiropractor and started four successful medical clinics before getting into Real Estate full-time in 2018.
Has the pandemic killed student housing? Far from it. ACC, the largest owner of Student Housing in the country, is at 93% occupancy. Even if students are studying online, most would rather do it away at college than being stuck at home. Today’s guest, Nick Simpson, Founder and CEO of Mentis Capital partners, is a strong believer in Student Housing and is in the middle of an exciting student housing development in downtown Salisbury Md where he attended college himself.
You don’t need to be involved in syndication and doing huge deals to make money in real estate. There are smaller deals to be found underneath the radar if you know your market. Today’s guest, Sean Morrisey, of Chicagoland Realty, has done a great job identifying properties with obvious potential for real value add. On his first multifamily acquisition he doubled the value of his acquisition in just two years before refinancing and acquiring his second property.
The Midwest is prospering as the coasts are facing challenges. Low unemployment and less reliability on industries such as tourism and hospitality plus growth in ecommerce and manufacturing are resulting in more stability and even growth in the Midwest. Today’s guest is based in one of the nation’s most stable markets, Indianapolis and owns over 4000 units. Ivan Barrat, CEO and founder of Barratt Assett Management, has generated incredible returns for his company and his investors.
All things being equal, relationships can make the difference especially in Real Estate.Today’s guest started out by getting to know brokers on a personal basis by taking them to lunch and staying in touch, then benefitted as opportunities arose, Dustin Miles, of Momentum Multifamily, has built his small empire on relationships and paying it forward. He’s also learned the hard way that property management is the key.
The world of multifamily apartment investing has gotten crowded. There’s infinitely more demand than supply and there’s little differentiation in the marketplace. After buying an online real estate course three years ago, today’s guest took 18 months to find his first deal. It was in Tucson and he ended up hitting it out of the park by almost doubling the value of a 42-unit apartment building in less than two years. Tyler Mitchell, Multifamily apartment investor, has subsequently bought three more deals in Arizona and is doing incredibly well.
Like everything else in business, real estate is all about timing. Starting back in the 80’s outlet malls were popping up all over the country. Then, in the 90’s, Self-Storage started to grow. Today’s guest is truly a Real Estate visionary and has been able to capitalize on trends before the rest of the market has caught up. Adam Gordon is based in New York City and is the President of Wildflower LTD, Madison Development and Adam Gordon Holdings. His latest project is a 750,000 Square project he’s doing with Robert De Niro in Queens.
Will people go back to offices, or will they continue to work from home? Facebook, Google, Microsoft and other tech companies are gobbling up as much office space as they can. Today’s guest believes employees will want to return to offices. Brian Adams is founder of Excelsior Capitol, a private equity real estate company based in Nashville. Brian buys great properties in great markets that have had no delinquencies during Covid.
These days there are hundreds of syndicators buying multi-family properties in growth markets with the same value-add strategies. As prices for existing multi-family have gone through the roof, today’s guest has pivoted to ground up development of super high end Class A Multi-family buildings in infill locations in large, mature markets in the NorthEast. Matt Pestronk is President of Post Brothers Apartments, based in Philadelphia and is doing amazing things.
Sometimes happiness can lead to success more than success leads to happiness. Today’s guest encountered challenges early on in life but always stayed happy to accept responsibility and succeed in life. He started out flipping houses but eventually realised that he could impact more people by investing in multi-family apartments. Tyler Devraux, co-founder of the Multifamily Mindset, started his multifamily career with a 20 unit building in Birmingham, Alabama and now has almost 2000 units in several states with a special emphasis in the Carolinas.
If you’re in a career you hate, you don’t have to stay stuck. You can do something about it to change your life. From big box retail store manager to multi-family apartments, today’s guest started with no knowledge of real estate back in 2007 and is now managing over 1100 apartment units. Bruce Peterson, the Apartment Guy, is based in Austin Texas and has a completely vertically integrated company that buys, renovates, and manages apartments under one roof.
Some people like to buy properties that they don’t have to do too much work on. Other people see big opportunity in older properties with much more upside. Today’s guest is buying older, C class apartment buildings in great markets that can be improved in order to increase rents and the value of the buildings. Justin Fraser, an account Apartment Syndicator at 88 Real Estate Capital, shares his story.
Starting out as a Real Estate syndicator is no easy task. Finding your first property and then raising money from investors can be daunting and scary. Today’s guest is a newer syndicator who bought a 76 Unit townhome complex in the Dallas Ft Worth Metroplex and has done well for his investors and himself. Darin Batchelder tells his story from starting in corporate America all the way to syndicating his first apartment deal.
The real estate market has been on fire for the last several years. Today, investors seem to be buying just based on the come. But today’s guest only does deals if there’s enough existing cash flow in addition to the projected upside. Tim Bates, founder of Worth Commercial Real Estate, only buys special opportunities that most people don’t know about. Tim’s based in the Dallas-Ft Worth metroplex.
The more you do, the more you can do. And today’s guest has done a lot. Karen Briscoe is Principal of the Huckaby Briscoe Conroy Real Estate Group (HBC) in Northern Virginia. Over the years, the group has sold over 1,000 homes valued at over $1 billion. Karen is also the author of "Real Estate Success in 5 Minutes a Day”, she’s a podcast host, and also a life coach.
There are many ways to invest in Real Estate and Self-Storage in particular has gotten to be popular in the last few years as investors have taken notice. Self-storage is easy to operate and you don’t have to deal with fixing toilets. Today’s guest, Scott Lewis, is founder of Spartan Investment Group. Spartan is an Inc 500 fastest-growing company that operates and develops self-storage facilities.
Going from zero to owning and managing over 100 homes, especially section 8, isn’t for the faint of heart. But starting back in the early 2000’s, today’s guest, Emerich Herbst, started buying foreclosures in Cleveland, Ohio and has amassed an impressive portfolio of single-families and small apartment buildings. Emerich is a master at buying properties at the right price, rehabbing, and renting them out for cash flow.
Flipping houses can generate big profits. Today’s guest started buying houses and small apartment buildings in the Twin Cities before graduating to large multifamily complexes in other markets. He now is the General Partner in over 800 properties in the Midwest and mid-South regions of the country. Todd Dexheimer of Venture D Properties, started with nothing and is building an incredible portfolio of multi-family properties.
Being a top 1% Real Estate agent takes incredible talent and resourcefulness. With every market saturated with agents, standing out from the crowd takes unparalled marketing and hard work. Today’s guest, Krista Mashore, sold 69 homes her first year and went on to a record-breaking career before starting Krista Mashore coaching.
Krista helps other real estate agents all over the country build their businesses and she is the author of four best selling books focusing on digital marketing.
Every day 10,000 people turn 75 in this country. And there are more people in their 80’s and 90’s than at any other point in history. That’s why there’s an insatiable demand for senior housing, especially quality senior housing. Today’s guest, Paul Griffin, is CEO of Griffin Living, a national developer of quality senior living that builds great communities that are also safe for residents given todays health concerns around Covid 19.
Investing in real estate can be lucrative and now you can become a philanthroinvestor. A philanthroinvestor changes the world through their investments. Todays guest, Ivan Anz, is founder of Equity & Help, a company that puts lower to middle income families on their way to homeownership and at the same time creates hefty returns for investors. Equity & Help is also an Inc 100 fastest growing company.
Many people are dying to quit their 9-5 job but they never do it. Well, today’s guest started flipping houses while working full-time. He eventually created a system that was so successful that he quit his job and went into Real Estate full-time. Today’s guest, Haim Mamane Palman, is a successful Real Estate Investor and coach who can teach you his system on how to succeed in Real Estate investing.
People that own luxury vacation homes can rent them out when they’re not there. That way they can offset their costs and maybe even turn a profit. Today’s guest founded a company that makes it easier for luxury vacation homeowners to maximize their investment and reduce the time and hassle it takes to manage it. Andrew McConnell, co-founder and CEO of Rented.inc is a self-made entrepreneur who’s identified an incredible niche.
The profits to be made on land investing can be stratospheric. Today’s guest makes anywhere from 300 to 1000 percent returns on buying and selling land. Mark J. Podolsky (AKA The Land Geek) is widely considered the country’s most trusted and foremost authority on buying and selling raw, undeveloped land within the United States. He has been actively investing in Real Estate and Raw Land since 2001, and has completed over 5,000 unique transactions.
Literal fortunes have been make in multi-family real estate. Seasoned investors live off the monthly cash and the appreciation can be tremendous. But like anything else, you need to know what you’re doing. Today’s guest is a founding principal of one of the nations largest privately held multi-family syndication companies with over 20,000 apartment units under management across almost 90 properties. Mark Hamilton, founder of Hamilton Zanze, explains the ins and outs of multi-family investing.
One of the hardest parts of property management is dealing with contractors. And one of the hardest parts of being a contractor is finding steady work and getting paid. Today’s guest has developed technology that connects property managers with reliable contractors in real-time. Bo Lais is founder and CEO of Lula, a Kansas City-based company that provides on-demand maintenance for property managers.
More people have gotten rich in this country from Real Estate than any other way and today’s guest is one of them. After seven years in the corporate consulting world, Gabe Petersenventured out on his own and made his mark as a successful real estate investor. Gabe used his digital marketing expertise and street smarts to find great deals that’s made him a lot of money. He’s done single family homes, multi-family, and is now investing in Mobile Home and RV parks. Gabe has a great story to tell that you’ll enjoy hearing.