Episodes

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 multifami...

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 constructio...

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 Issues with outdated plumbing and electrical systems plus other issues erode net operating income.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 Ca...

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 managi...

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 opera...

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 Ha...

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 spec...

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, chiropr...

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 ...

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 ...

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 ...

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. T...

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...

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 ac...

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 e...

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 ...

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 ...

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 th...

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, P...

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-cas...

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 ...

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 ...

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 p...

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...