As passive investors in real estate syndications, the amount of jargon can be overwhelming. Specifically, when it comes to investment returns, there are multiple ways to measure the potential wealth creation from an opportunity. Most commonly are three metrics: Cash on Cash Return (CoC), Average Annual Return (AAR) and the Internal Rate of Return (IRR). […]
When seeking to passively invest in multifamily assets, one will have to pay special attention to the property characteristics. Recognize that not all multifamily properties are created equal, and as such, based on these characteristics, demand, improvement opportunities and future values will vary accordingly. Below are just three prominent features of multifamily housing that make […]
Just as with any large or small decision in life, when it comes to investing, there are so many choices to choose from and variables to consider. Which asset class to choose; which type of asset within that class; what are your goals and strategies? The list of questions can seem daunting and never ending. […]
Capital expenditures is as much a part of doing business as changing diapers is a part of being a parent. Capex, short for Capital Expenditures, are expenditures made are required to improve a property or maintain its useful life. They are different from operating expenses, which include maintenance and repairs. Whereas operating expenses can be […]
When investing in apartments, the one thing that matters, after the health, safety and welfare of your residents, is income. Income is fundamental to multifamily investing and without it, there is no value or reason to own these types of assets. During the holding period, the ability to increase income through maximizing rental income and […]
For anyone familiar with Dave Ramsey’s teachings, a very core area of his financial peace guidance is to get out of debt. The strategy and phenomenon he uses to describe this is the Debt Snowball. Here’s how it works. Debt Snowball When you commit to paying of your personal debt, start by paying the lowest […]
I have interacted with many people who have been interested in learning about the wealth-building power of real estate and means by which they can invest. Since having begun my education journey in 2013, I have utilized various resources – 99% percent of them are free – to catapult my knowledge and allow me to […]
Competition for Real Assets This is certainly a competitive time for multifamily investors. During this inflationary period where prices are rising on everything from groceries to used cars, investors are seeking assets that can beat inflation. As a result, the multifamily space is doused with competition from investors who want better returns and downside risk […]
In today’s multifamily space, you have to look at twice as many apartment offerings to find one that pencils out. Whereas in the past where 1 out of a handful may check out, today, it could be 1 out of 100 deals and beyond that actually make sense. This is due to the competitiveness of […]
The insurance business is a great business model. In fact, it is so good from an investment standpoint that it is one of Warren Buffet’s favorite industries. Now, if the greatest investor of all time has a passionate favor of the insurance industry’s business model, then we should pay attention. And as I have studied […]
Whereas in the the single-family space, owners get a general gauge on going rents for like properties, In the multifamily asset class, it is essential to ensure that current rents are in alignment with that of the market. What is Loss to Lease? When current rates are lower than market rates for units in areas […]
I am super thankful to have had the opportunity to join Brian Briscoe and Guest Tim Bratz on the Diary of Investor podcast. This podcast is truly like no other. Brian, the host, brings an experienced apartment investor on the show and one with less experience to discuss the industry, lessons learned and the best […]
Any great real estate investment market needs this one thing. Without it, there is no long term sustainable growth. It is evidence of other important fundamentals. What I am referring to is population growth. Population Growth Without population growth, your selected market is at risk of decline as well as your investment. There are plenty […]
One of the primary reasons that people invest in real estate is for the reward of appreciation. The pay day from appreciation is the sweetest part of every deal. But it is important to understand that while the end result of appreciation may be the same, the causes can be vastly different; therefore, not all […]
If you are not familiar with the attraction to real estate and the reason why most of the wealthy own it, this information will be insightful. Having read the 4 Wealth-Builders of Real Estate, you will learn that Cash Flow is one of those key wealth builders. Cash flow primarily comes from income generated from […]
There are so many ways to build wealth – certainly some are much riskier than others. The best type of investments are those that can withstand the cyclical nature of economics, those that do not take rare genius and impeccable timing and those whose returns are based on proven models and a track record of […]
The due diligence process is the time to ensure that rents are as advertised and the potential for rent growth is as expected. Not doing so sufficiently can lead to the following problems: Having higher than anticipated unpaid rents Not receiving the rent values expected on day one Not achieving the anticipated rent growth Devastating […]
As working professionals, we have much to manage: our current work responsibilities, staying on top of our professional growth, family life at home and a changing world. Most of us work daily as a means to provide for our families and living needs. Especially now, due to rising values and surplus money we may feel […]
Income is so essential to multi-family investments that without it, there is no return. The primary source of income in multi-family operations is rent. In many cases there are other smaller sources of income such as storage, laundry use and other add-on luxuries. It is great to identify additional sources of income where possible. However, […]
When it comes to multifamily operations, management of net operating income is key to creating value. Aside from optimizing income by increasing occupancy and getting to market rent levels, management of expenses is also key. Below are the three largest expenses in management of multifamily assets. Repairs/Maintenance Repairs and maintenance can be costly, especially when […]
I like Robert Kiyosaki. I also like Dave Ramsey. Both want you to be successful, but share very different definitions and paths to that success. Most people need to hear Dave Ramsey’s message. It is one of discipline, getting out of debt and living life unconstrained to financial burden. To accomplish this is to live […]
Cash We have often heard it stated that “Cash is King.” This is logical thinking in that cash is a resource that allows us to obtain other resources that are essential for life: food, shelter and other needs. Without this liquid resource, we cannot quickly trade for other important life essentials. If all of our […]
As a real estate investor, one should appreciate and desire both appreciation and cash flow, two powerful wealth-building tools of real estate. Often times, in your investing you will notice a trade off between the two and it is wise to identify which takes priority as part of your investment strategy. Appreciation and Cash flow […]
What is the IRR? The Internal Rate of Return (IRR) is widely used as a metric in Apartment Syndications as a common way to describe the returns to both active and limited partner investors. Similar to the Average Annual Return (AAR), IRR takes into account the sale/refinance of the property asset and measures the return […]
Any experienced investor knows the importance of having and maintaining an investment criteria. If you ask ten people, they may have ten different metrics and even more variation among with regards to what is minimally acceptable.Even as as a working professional who seeks to passively invest in real estate opportunities, it is extremely important to […]