It’s actually pretty simple. Over the last 3 years, a lot of inexperienced operators got in over their skis. So you’re simply going to target them:
1. Position yourself in lower liquidity markets (markets where owners will have trouble selling an underperforming asset quickly – that likely means a discount for you as the buyer) 2. Look for properties with a loan maturity coming up in the next 6-12 months 3. Look for
For example, the below property was being sold by a hospital in a town of less than 20,000 people - Inexperienced seller? Check - Low-in place income? Check - Lower liquidity market? Check - Buyer has to do the work (renovations) to realize the value? Check
Obviously hospitals aren’t in the real estate business and this deal was no exception. Property hadn’t been touched for years and rents were almost 50% below market. Business plan execution wouldn’t be too difficult, just cosmetic renovations So what’s the main issue with
Overall, a lot of money to be made if you can figure out how to appropriately finance the deal Smaller deals don’t make much sense for me anymore, but these type of deals are very doable for people getting into the industry if you’re willing to stomach the elevated risk profile
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@JoeBlowPremium Yeah need bridge debt for a deal like this
@TheRealEstateG6 How are you screening for properties with near term debt maturities? Cstar hasn’t been reliable
@TheRealEstateG6 Now I see why they call you a real estate god - you’ve got to pray your projections aren’t delusional.
Throwback to ~2 yrs ago, when we discovered we wired $250k to the wrong account, bc hackers had broken into our investor's email system & sent us dummy wire info. Through dumb luck (the hackers' sloth), we got the $$ back. Don't be like us; always verbally confirm wire info.
Never in my life have I seen a broker headshot with this much swagger
Closing on 350 units in a few days. Underwrote the deal at 6.75% fixed bank debt 6 months ago. Looks like we’ll rate lock today or tomorrow at 6.25%. $70,000/year of interest right off the top. We’ll take it.
Most multifamily decks miss the basics I don’t mean the fancy pro forma or IRR targets - I mean the fundamentals that actually help an LP decide whether to invest. Here’s what I think every multifamily (and frankly, any private real estate) deck should include: