Street Smart Success

Investing in real estate syndications from 2015 – 2018 resulted in highly positive outcomes, including major appreciation and double-digit returns, often times as high as 30%-40%, or even higher. Investing in 2020 to 2022, however, may have yielded vastly different results, especially if you invested in Multifamily. Too many sponsors took on highly leveraged bridge debt and got buried when rates e...

There are many alternative investments you can invest in, but one centuries-old asset class almost no one knows about is claims investing. When companies such as Sears, American Airlines, Big Lots, or even Madoff Investment Securities owe billions of dollars, investors can invest in the claims against these entities and generate outsized returns without excessive risk. Joe Sarachek, a successful a...

Most of the problems in multifamily right now are related to debt. Many operators are in their second extension phase and not making payments. Several of these are giving their properties back to the lender. These lenders in turn are looking for experienced operators to take over the properties.  James Eng, “The Professor” of multifamily financing, is the National Director at Old Capital in Dallas...

How deals are capitalized can make the difference between success and failure. This is why there’s a need for loan consultants. The process of determining and sourcing the right financing can be complex, so the services of loan consultants can be critical. Tripp Greene, Founding Member of Trinity Capital, helps investors navigate the lending landscape to identify the right source of financing that...

The growth of private market investing has taken off over the past few decades as returns have proven to be better over the long term. Fewer companies are going public these days and they’re staying private longer. Part of this growth of private market investing has been driven by large family offices. The number of family offices has increased ten-fold since 2008 and now stands at around 10,000....

Many people are taught that the best way to achieve financial security is to build a nest egg through stocks and mutual funds. Most Americans, however, even after following this advice, do not have enough money to retire and achieve financial independence. This is because the returns on these vehicles is lower than 10% on average per annum, and they generally don’t produce income apart from low si...

So many people are chasing value-add multifamily deals, that the deals rarely pencil. On the construction side, it’s also become difficult to achieve profitability because of prohibitive costs including higher interest rates. At the same time, the need for housing continues to outpace supply in many markets. One way to be successful in this environment is to partner with municipalities in Tax Incr...

The multifamily business is a people business that is operationally intensive and requires experienced business acumen. To be successful entails great systems, winning teams, excellent customer service, and a disciplined marketing strategy. Ral West, serial entrepreneur and business mentor, has invested as an LP and co-GP with other sponsors in over 6000 units across 23 deals. Some of these proper...

Success is a poor teacher, we learn more from our failures than our successes, The key is to be resilient and adaptable. After starting over 70 companies, most of which didn’t make money, Damion Lupo is experienced with the ups and downs of entrepreneurship. His latest endeavor, Frametech, is streamlining and revolutionizing the home construction industry in order to solve the housing shortage. Da...

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 option. 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. There are over 3000 franch...

The multifamily sector is facing major headwinds. Not only have interest rates escalated at an unprecedented pace, and are not going down, but operating costs have also soared. In certain states, insurance costs have increased 100%, or even more in the last few years. Chris Grenzig, Owner of Jag Capital Partners, has built a vertically integrated portfolio of smaller properties in Jacksonville, an...

Investing in single family dwellings and three to four-unit apartments can generate cash flow and appreciation, but it’s become more difficult over time to find good deals, and they tend to be time consuming to manage.  If you want to better leverage your time and capital, it can be more profitable to invest in larger syndications. Dan Rowley, General Partner of Spark Multifamily Investment Group,...

A great sector of Real Estate investing with a low barrier to entry is land flipping. Land flipping requires little start-up money, and the profits can be incredibly lucrative, with very little downside. There are millions of vacant land parcels in the United States. Mike Deaton, a successful land investor, generates as much income from land investing as he and his wife made combined in high-payin...

A new apartment building is at its highest value upon completion of construction. Like a new car, it’s a depreciating asset. That’s why you need to invest with operators who have a lot of experience with all aspects of the business to make money.  Most syndicators are finance professionals, not operators.  Most of the appreciation of multifamily over the past couple decades has been the result of...

Aside from the merits of the real estate itself, financing is the other critical component that makes or breaks deals. Securing capital, and how it’s structured, is the underpinning of the deal, and can determine whether the property will be able to withstand fluctuations in the operations, market, and unforeseen economic occurrences. Eric Brody, Founder & Principal at ANAX Realty Partners, ut...

Although there are challenges in the multifamily space in certain markets, some markets are still flourishing, and the longer-term fundamentals are strong. Demand is still growing, and supply Is not keeping up with demand. Currently, there are great deals being sold by developers on newly constructed properties at below construction cost. This is a once in a decade to fifteen-year opportunity. Mic...

Although the stock market is trading at all-time highs, it can go higher as investors reallocate money from underperforming bonds and Commercial Real Estate in particular. Many investors specifically prefer allocating much of their portfolio to the S & P 500. Warren Buffett, one of the greatest investors of all time, instructed a trustee to invest 90% of his cash in an S&P 500 index fund a...

With new multifamily supply coming to a standstill, occupancy rates will rise over the next few years and assets will appreciate. In the meantime, multifamily is rife with challenges in most markets. Interest rates have risen dramatically, expenses have skyrocketed, and occupancy has fallen. Despite this downward pressure, prices have still not contracted enough for experienced operators to want t...

Compared to most other asset classes, Self-Storage has more resilience across different economic cycles. Self-Storage has a steadier revenue stream and low operating expense ratios that produce 70% margins. Additionally, over the last two years, very few people have moved, thereby suppressing the demand for self-storage. As a result, 12 month trailing Net Operating Incomes have suffered, and price...

What happens onsite on a daily basis at apartment complexes is what makes or breaks the deal. The relationship with management personnel largely determines whether or not a tenants renew. That’s why every interaction matters. The other aspect that impacts success in running apartments is the speed and effectiveness of unit turns. Nothing bleeds a property more than delayed unit turns. These are ju...

Despite the negative media coverage, both outdoor and enclosed shopping centers in vibrant markets are viable assets to invest in and are being offered at highly discounted prices. Although the proliferation of discount stores like TJ Max, Ross, and Nordstrom Rack, combined with the Amazon effect and Covid, have put a lot of retailers out of business, there are several retail survivors who are thr...

Short term loan maturities are a death sentence in a down market, which is causing major pain for sponsors and Limited Partners. Since mid-2022, multifamily prices have plummeted as high as 40%, and transaction volume is down 80%. Class C, in particular, has taken the largest beating. Currently, lenders are giving loan extensions to sponsors who can raise more money, thereby reducing their exposur...

Finding investments with in-place double digit cash flow as a Limited Partner is rare, but one exception is Water Parks. Water Parks are a high margin business that generate lucrative returns once they achieve a certain revenue threshold. James Harhi, CEO of Innovative Attractive Management, is acquiring Water Parks and adding significant value through operational efficiency and economic scale via...

When evaluating opportunities to invest in, it’s natural to trust the person you’re investing with, especially if you know the person, or were referred. It’s critical, however, to understand all the different components of what you’re investing in, otherwise you take on undue risk. Regardless of who you’re investing with, they need to make the investment look enticing enough to attract investors,...

Real Estate is a block-to-block business, especially multifamily. That’s why a highly targeted strategy is desirable when choosing an operator to invest in. Tight geographic and asset class focus mitigates a lot of risk. Michael Voulgarakis, COO of Southgate Ventures, buys class B and C multifamily properties in Seattle in the sub-middle market $10 million, 20-30 unit range from owners who’ve owne...