Rodney Robinson
Real estate investing, like any other form of investing, can be risky. But not all risk is created equally. Some risks can be managed. Fortunately, for real estate investing, much of the greatest risks are mitigated with sound investment practices. These certainly include conservative underwriting, but also achieving flexibility from having multiple options. Multiple Exit […]
It is widely known that the top income source of multifamily investments is rental income. Without the ability to achieve high occupancy and rent growth, many investment opportunities would not otherwise make sense. Aside from rent collections, multiple streams of income only helps the valuation of the property as the investment team positions it for […]
What is a T-12? When underwriting a multi-family real estate investment, one of the common documents expected is the Trailing 12-months report, also known as the T-12. This document, provided by the seller, illustrates the the income, expenses and net operating income that the property has generated within the previous 12 months. This information is […]
When listing multi-family real estate investment opportunities, brokers will often provide the Offering Memorandum (OM) which includes details about the market, property, selling points and financials. As part of those financials, the broker will include financials from the current and/or previous year as well as the pro-forma. What is a Pro-Forma? The pro-forma is simply […]
What is a T12? Effective underwriting is the foundation of multi-family investing. Without good underwriting, any operator is sure to go in blind, betting with hope for positive results and returns for investors. One of the essential documents needed in order to effectively underwrite a real estate asset is the Trailing 12, also known as […]
In the article Physical vs. Economical Vacancy, we explained that not having tenants in the units (vacancy) is not the only impact to income. If residents are not paying, then that is an economic loss referred to as bad debt. Bad debt, or uncollectible rent, is a line item to understand on the P&L of […]
Buying large commercial multi-families can be different from buying in the residential sector (2-4 units). Once you start looking in the five units or more range, you are in commercial territory which involves using commercial loans. Commercial real estate is underwritten differently than residential; whereas residential is valued based upon comparable sales, commercial assets are […]
What is an Off-Market Deal? As real estate syndicators develop broker relationships in key markets, sometimes true off-market deals are presented. This means that the property is not listed or being marketed to the general public. The reason that I specify “true off-market” is because sometimes what is communicated as an off-market deal is not […]
I was recently thinking to myself about operating my personal investments as a business: maintaining systems, gaining efficiencies, automating as much as possible…customer service…. And then I thought, who are the customers in a real estate business? As an individual investor, it seems to be easier to answer, since there are fewer parties involved. When […]
For those who are new to private investing and passive investing in syndications, it can be overwhelming to consider each of the steps to position yourself to make your first investment: the mindset shift to passive income, getting educated on diversification and the attraction to multifamily real estate, networking with others in the space, lining […]
What is GRM? A common metric in multi-family investing is Gross Rent Multiplier (GRM), which measures the price being paid for the rent the asset produces. The lower the GRM, the more favorable. This signifies that the buyer is paying a relatively lower price for the rental income produced. A simple example: if a buyer […]
On this investment journey, we encounter many obstacles, ranging from speed bumps to mountains. To overcome takes knowledge and experience, a good network and most importantly, a persistent approach to problem-solving. In the multifamily investment business active investors must wear many hats: The list goes on. Any firm that actively syndicates great multifamily investments needs […]
One key fundamental of multi-family syndications is rent growth. The appeal to investors of a new acquisition is the potential to ultimately grow rental income and, subsequently, net operating income and value. Ideally, this rental growth happens as soon as possible so that the operators are in the best position to sell sooner. However, there […]
What is the Equity Multiplier? As passive investors, it pays to have a complete understanding of the menu of metrics provided to you by deal sponsors for multi-family assets. One of those metrics is the equity multiplier. This simply measures the percentage of the assets value that is equity. Calculation The equity multiplier is calculated […]
We wrote about it in The Greater Responsibility of Multifamily Investing because we see this topic hardly discussed: the importance of our residents who live in our apartment communities. Yes, we invest in multifamily for wealth creation, but we love the communities in which we invest and our other reward is knowing that we are […]
You may already be familiar with the concept of apartment syndication. Investing in these multi-family assets has so many moving parts. As a passive investor, it is good to know about these moving parts and the hard work your syndicator or sponsor is doing to both protect and grow your investment dollars. One of the […]
As passive investors, it pays to know what to expect from a high performing private equity firm. When placing your hard-earned capital into an investment opportunity, you are essentially trusting that the firm will manage the money and the asset well in order to achieve the desired results. Not all investments or money managers are […]
The idea of becoming a passive investor in a real estate syndication is attractive for many who seek to diversify, save on taxes, have more money than time and work in their professional job and have no desire to become full-time real estate investors. Many professionals are attracted to passively investing in syndications because of […]
Real estate Syndications are the pooling of funds to buy real estate assets – in our case, our favorite is Multifamily – much larger than an individual can do on his or her own. Although all involved in the syndication, sponsors and limited partners, benefit from cash flow distributions, whether monthly, quarterly or semiannually, the […]
As passive investors, it is important to know and familiarize yourself with the structure of the deal in which you are presented. One of the important areas to understand is within the financing terms. Financing, or leverage, creates additional risk for the investor and must be managed appropriately. One financial consideration is the terms associated […]
Apartment investing is a great way for working professionals to diversify, beat inflation and grow wealth. It is not as difficult to get into this realm or as exclusive as many like to think. (See ‘Do I have to be Accredited to Invest in Real Estate). What it does take is mindset, education and good […]
There are a 3 general business models to multi-family investing. One of which, Value-Add, is very popular for its ability to create great wealth for investors. What is Value-Add?Value-add describes methods used to create equity by improving a property’s income. In multi-family, unlike residential, a property’s value is based on the income it produces. So, […]
When passive investors are seeking to invest in syndications, it helps to know how the deal is structured. After doing any sort of research or reviewing any investment opportunity offered by a syndicator, you will see a line item called “asset management fee.” What Is Asset Management?Asset management describes sponsor’s efforts in supporting the business […]
I am excited to share that I will am participating in my first multi-family real estate investment as a Limited Partner in a Real Estate Fund. Investing as a passive investor is a great way to learn the apartment syndication business and grow wealth at the same time. After months of searching for the right […]
Dumb Money?Forgive me for calling money dumb, but not all dollars are created equally. What am I talking about? Investing Without FundamentalsWhat I mean is even though each dollar is worth the same, how it is earned from “investing” can be very different with varying levels of risk and stability. Let me explain. Just because […]