Street Smart Success

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 materiali...

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 qualit...

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...

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 mul...

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...

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...

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.,...

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 unpreceden...

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...

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 maturi...

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-Financ...

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 levera...

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 stati...

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 inv...

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...

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 c...

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%...

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 acq...

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 facilitie...

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 pa...

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...

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 s...

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 man...

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 o...

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...