Street Smart Success

Many multifamily syndicators are facing major headwinds including interest rate increases, record new supply, escalating expenses, and vacancies. In order to thrive in this environment, you have to have an excellent organization that executes meticulously on business plans and maintains healthy working relationships with their lenders. Bikran Sandhu, Co-Founder of Rise 48, has never made a capital...

Most people who bought multifamily properties back in 2008-2010 wish they had bought more. Since then, multifamily values have soared.  We never know when we’re at the bottom, but it’s possible we’re at a bottom now. Multifamily prices are down over 25% from the peak, and demand will ultimately again exceed supply as new construction projects get absorbed. Also, more people are renting as a lifest...

Investing in large metro markets mitigates a lot of risk compared to smaller markets. In these markets, it’s easier to find tenants, banks, contractors, and other resources necessary to operate Mobile Home Parks. Ryan Narus, co-founder of Archimedes Group, owns 85 Mobile Home Parks in the Southeast. To learn the business, Ryan moved into the first park he bought, and managed the property himself....

Despite the negative press, there have been fewer than 1% of multifamily properties taken back by banks. Even with the tailwinds of late, including declining rents, higher interest rates and higher expenses, most borrowers are servicing their debt. In general, multifamily has proven to be a resilient asset class. With prices having come down 25%, now may be an opportune time to buy. The cost of si...

Transaction volume for multifamily is down 80% from its peak. Distressed owners are holding on as long as they can to prevent selling at a big loss while buyers are waiting for more seller capitulation, and the possibility of imminent rate cuts. In markets like Austin, new supply equals 15% of total inventory, so builders will eventually be forced to sell at steep discounts. For class C properties...

Investors seeking truly passive, mailbox money are gravitating towards Single Tenant Triple Net Lease properties. When you have a credit tenant, and a strong long-term lease, you have very little to worry about when it comes to getting paid. If you’re in a larger metro urban area with limited land, or a growing suburb with high average income, your property will likely appreciate well over time an...

As multifamily and office properties are struggling, more money is flowing into other asset classes, like Single Tenant Net Lease. Over the past decade, STNL has become a specialized asset class as more investors, including 1031 buyers, have sought a safe, predictable refuge for their cash. It’s also an asset class where you can buy institutional quality properties for as little as $2 - $5 million...

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 mos...

Since mid-2022, multifamily prices have plummeted over 30% and transaction volume is down 80%. Class C, in particular, has taken a beating. In the Class A space, sales volume is starting to pick up as owners are being forced to sell by lenders or institutional partners in advance of impending loan maturities. In most markets, rents have stopped their decline and beginning to stabilize. In addition...

The woes of the office sector are pervasive and no secret. The work from home phenomenon, and the technology that enables it are clearly black swan drivers that have negatively impacted the sector. Apart from Class A+, trophy assets, the rest of the market is challenged, and even the market for trophy assets is nuanced. In some markets, where the culture is more supportive of in-person work, the o...

It may sound too good to be true, but it’s possible to become an investor in residential real with no money. If you have no savings but want to start a career in real estate investing, wholesaling houses is a great way to get started. With wholesaling, you can put properties under contract and assign them to fix and flip buyers at a higher price.  Jiries Dawaher, a real estate investor in Cincinna...

Even though B Class apartment prices have come down 20%-30%, sales volume for these properties is still at a ten-year low. Prices are still not low enough in most cases, however, to make sense in today’s interest rate environment. In Class C apartments, this is even more the case. Prices still have a ways to go further contract before they make sense. Andrew Cushman, Founder and Principal of Vanta...

The Private Credit asset class is growing rapidly because investors love the cash yield and the lower risk profile than many equity investments. With first lien lending, you’re first in line to take over a borrower’s asset if they don’t perform. The $5 million to $10 million lower-middle market arena, in particular, is an underserved market because it’s too large for most ma and pa lenders and too...

As people are traveling at record levels, the hotel industry is flourishing with demand that is exceeding 2019. Leisure travel has grown significantly, and corporate travel has growth for several quarters. Since almost no new supply has been constructed in the last five years, there’s a current supply-demand imbalance that’s benefitting hotel operators. Greg Friedman, Managing Principal and Chief...

In order to generate great returns in an otherwise saturated market, identifying asset classes with a higher barrier to entry can be necessary. Affordable Housing, in particular, can be a challenge because of municipal regulatory hurdles and compliance issues that make acquisitions and operations complex. As a result, these properties can be lucrative, and few investors have what it takes to acqui...

As multifamily values continue to plummet, big institutions are jumping back into the game. Companies like Blackrock and KKR have announced plans to invest big in multifamily. In particular, many Class A properties are coming on the market at steep discounts to replacement cost and at prices up to 25% lower than the peak of the market. As the gap between what it costs to own a home and what it cos...

Unlike many Real Estate asset classes that offer low initial cash flow, but promised upside, neighborhood strip centers provide 10% in-place cash flow in addition to healthy upside. By improving a shopping center’s visual appeal and bringing rents to market, great value can be achieved. Additional value can be created by selling off Quick Service Restaurant outparcels on the site, thereby returnin...

In the world of Alternative Investments, there are many ways to achieve cash flow. Bronson Hill, founder of Bronson Equity, has helped passive investors generate cash flow through different asset classes, including multifamily Real Estate. Many of these investments have done quite well, some have had challenges. Regardless of recent challenges, however, now is a great time to invest in multifamily...

There are still thousands of small businesses that require commercial office space to operate. Despite the negative press of office buildings in large downtown markets, many small suburban office buildings are completely occupied. Adam Craig, Founder and CEO of CLE Real Estate Group, shops buildings that have languished on the market, sometimes for up to 18 months, and makes lowball offers to acqu...

Self-Storage has more resilience across different economic cycles. Whether people are downsizing or upsizing, storing expensive toys, or making space for a home office, they need to rent storage space. Increasingly, small businesses are also utilizing self-storage. A third of all Americans utilize self-storage facilities for various needs. In the right markets and the right locations, self-storage...

There’s great money to be made in Section 8, affordable housing. Occupancy is generally very high, and tenancies can last for many years. It’s a recipe for steady, predictable income and high margins. On the management side, however, it can be hard figuring out how to manage lower income, working class tenants, working with local governments to get paid, and doing it at a profit. It takes a specia...

Although there are great benefits to investing in Real Estate equity opportunities for the cash flow, appreciation, and tax advantages, investing in debt can be a great alternative for more immediate, conservative and consistent cash flow. These vehicles generate anywhere from 8% to 10%, or even higher. In addition to Real Estate debt or equity, there are still other ways to invest in lending vehi...

Now may be the best time to buy multifamily in several years.  As long as you can buy properties far below replacement cost with stabilized cap rates less than the cost of financing, you will make a lot of money over time. As the cost to build and the cost of land continues to escalate, inflation will continue to push prices higher and higher. As the prices of homes continue to rise, more people w...

To fully optimize the performance of a multifamily, you need in-house management. No one will fight as hard as you to be discilplined on expense management, tenant satisfaction, and upkeep of the property. It’s a commitment to build an in-house team, but the enhanced profitability makes it worth it. Brooks Mosier, Principal and co-founder of United Point Capital, is one of the largest buyers of si...

Older apartment buildings have perpetual upkeep and high expenses. Appliances, roofs, HVAC systems, plumbing etc. have limited lifespans, so there’s always unanticipated expenses. In new construction, you can control way more of the variables and therefore the costs and the profits. Roger Luri, CEO and President of LD2 Development in Chicago, and author of the book “Don’t Buy Multifamily! BUILD IT...