Street Smart Success (Roger Becker )

Is LoopNet the place where all good deals go to die? This may be the case generally, but like most other things, there are exceptions if you’re willing to be diligent. 

Today’s guest, Larry Murray, Founder of Ivory Wolf Properties, a newer entrant into Multifamily syndication, found a great deal in Little Rock on LoopNet that’s in the middle of a successful lighter value add and he utilized a Whole Life insurance policy as a source of his funding.

Learn more at https://www.streetsmartsuccess.com

Believe it or not, there are still markets where you can get great cash-on-cash returns on single family houses and small multi-families. Whether at auctions or sometimes even on on-market deals, Wichita has fit this bill. Mike Heldstab, founder of Michael Morgan Investments, has amassed a significant portfolio of single families, duplexes, triplexes and four plexes that are all cash flowing very well.

Making money in Real Estate requires timing and being able to see what others don’t. Just a few years ago, retail was written off for dead because of e-commerce and Amazon. More recently, office has become a hated asset class because of the work-from-home trend and the problems of urban cores and central business districts across the country. Neighborhood retail, however, has the highest occupancy rates of all time, and select Class A suburban office is doing very well in the right locations. Dennis Cisterna, Co-founder and Chief Investment Officer of Sentinel Net Lease, is acquiring great, single tenant NNN suburban office buildings, retail and industrial properties at attractive prices in his latest fund offering.

Even in a competitive market, there are still great deals if you’re willing to put the time in to follow proven lead generation systems and be patient enough to build relationships with sellers. Today’s guest, Adrian Salazar, Co-founder of Two Ten Management has sourced great deals in McAllen, Tx and San Antonio and is generating outstanding investor returns and creating great places to live for tenants.

The Midwest is prospering as the coasts are facing challenges. Low unemployment and less reliability on industries such as tourism and hospitality plus growth in ecommerce and manufacturing are resulting in more stability and even growth in the Midwest. Today’s guest is based in one of the nation’s most stable markets, Indianapolis and owns over 4000 units. Ivan Barrat, CEO and founder of Barratt Assett Management, has generated incredible returns for his company and his investors.

Traditional financial investments versus alternative investments…. which is better? The answer may be more nuanced when looking at both over a long period of time. Today’s guest, Denis Shapiro, Managing Partner of SIH Capital Group and author of The Alternative Almanac, believes there are pros and cons to both although he’s leaned more towards Multifamily investing over the past few years.

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 maturity, so they will also have to capitulate at a loss. Dan French, 

Managing Director of ATX, sold most of a 15,000-unit multifamily portfolio in 2019 when prices were starting to skyrocket. Now he’s back in the market in search of distressed assets.

Getting high returns is very difficult in Real Estate investing, largely because there are too many people chasing the same deals and sellers want a lot for their properties. If you’re willing to invest in projects that are off most people’s radar, however, there are great deals that can generate double digit cash flow. Mike Holdwick, Co-Founder of Pro Team Commercial, identifies non-residential value-add properties, mostly in the Detroit metro, where he resides. Mike has acquired six commercial buildings with 30 tenants, mostly in the $500,000-$1,000,000 range, all while working a W2 job. Mike has generated enough monthly cash flow to stop working his W2 job.

Over the past several years, it’s been difficult to generate cash flow investing in commercial Real Estate equity. There’s been too much investor demand driving the prices up and the returns down. Investing in debt, however, presents opportunities for strong cash flow with lower risk. As bank lending has gotten less accessible over the past couple years, borrowers have been forced to seek out other sources of capital, which has presented great opportunities for private lenders. Paul Shannon, co-founder of Investwise Collective, has recognized the opportunity of investing on the debt side, and has raised debt funds where investors are generating 13-16% returns. 

In the past several years, hundreds of new operators and capital raisers have emerged into the Commercial Real Estate landscape. Unfortunately, many of these new entrants are out of SEC compliance in how their corporations are structured and the way they raise capital.  Additionally, many of these operators joined with other new operators with a similar lack of experience and are having massive troubles with their deals. They overpaid for properties, took on expensive bridge debt, and have limited operating experience. Seth Bradley, Chief Legal Officer of Tribevest, is helping operators set up and operate Fund of Fund models so General Partners are operating within compliance and implementing best practices within their organizations. 

The rate at which the Real Estate market has unraveled is unprecedented in recent history. The debt and equity markets have all but frozen, which has suspended the market. Many operators and lenders are in trouble because operators are unable to make payments and rate caps are expiring. In the near future, more lenders will be forced to take properties back from borrowers, and prices will continue to contract. This will become an opportune time for investors with access to capital. Matt Burk, Chairman of Fairway America, has consulted hundreds of Real Estate entrepreneurs to create and manage their own funds in addition to running his own funds across most major asset classes. 

Multi-tenant industrial real estate provides a broad tenant base that creates revenue diversification and limits risk. There’s also very little tenant improvement costs, relatively short turnover time, and cap rates that are still more attractive than many other asset classes. 

Kim Hopkins, Principal at Iron Peak Properties, has acquired 15 industrial properties and 350,000 sq feet since 2014, mostly through Loopnet.

Learn more at https://www.streetsmartsuccess.com

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 by adding value. For starters, most laundromats lack the simple technological advances that make these facilities way easier to run and way more profitable. Jordan Berry, Owner of Laundromat Resource, has successfully operated numerous laundromats in Southern California and is now creating a fund that investors can passively invest in.

Finding strong cash flowing properties has become increasingly difficult over the past several years as the amount of money chasing Real Estate has risen dramatically. Most properties typically require a value-add business plan which can take months, if not years, to complete before generating cashflow. In-place cash flow, however, is a rarity. One exception is government-sponsored Section 8 homes, or smaller, 1–4-unit apartments. These properties cash flow right out of the gate. Mat Simmons, Managing Partner and Founder of Simmons & co, is on his way to building a portfolio of 1000 Section 8 properties he can eventually sell to a larger institutional investor. Investors in Mat’s fund are enjoying risk-adjusted, high-teens annual returns that are paid monthly.

Real Estate is a block-to-block business where an intimate lack of local knowledge can be costly. It’s critical to know the nuances of a submarket and the different neighborhoods to mitigate risk. Eddie Ring, Founder and CEO of New Standard Equities, only buys in markets he knows like the back of his hand. Eddie specializes in value-add multifamily on the West Coast and has generated 29% IRR’s and equity multiples of 2.6 over three to five years hold periods. Eddie sticks with what he knows, as opposed to exploring other markets, and has generated incredible returns for his investors.

Many operators over the last couple years paid exorbitant prices for assets and have been unable to increase income as planned. Expenses have also increased significantly more than anticipated. These factors, combined with escalating borrowing costs, will make it very difficult for operators to hold onto certain properties.  As rates readjust upwards, there will be distress and opportunities for acquirers. Brian Estes, President of the Estes Group in Jackson Mississippi, has a background in repositioning distressed properties in the Gulf South states and looks forward to capitalizing on interesting opportunities on the horizon, especially Multifamily properties with 20-60 units. 

When it comes to investing, nothing pays off more than patience and discipline. As sellers insist on prices that no longer make sense in this current interest rate environment, it’s gotten increasingly difficult to find deals that pencil out. Even before the interest rate surge, prices were at unprecedented levels because of the incredible amount of competition that were chasing deals. Andrew Cushman, Founder and Principal of Vantage Point Acquisitions, operators of multifamily assets in the Southeast, has adhered to strict acquisition guidelines and therefore has continued to prosper with his portfolio when many others are struggling.

There are many ways to making money in Real Estate but few require as little capital and take as little time to start generating cash as land flipping. By creating a mailer that goes out to land owners within a certain zip code, you can do your first deal within a matter of weeks, and the margins are typically anywhere from 50% to as high as 300% on smaller size deals. It’s common, for example, to buy a piece of land for $5,000 and sell it for $20,000, or to buy a bigger deal for $150,000 and sell it for $225,000. Pete Reese, President of Reelvest properties, started land flipping two years ago and in his second year flipped over $3.5 million dollars in land. His goal for 2023 is $5 million.

Although it’s getting increasingly difficult to get attractive returns in today’s investing world, it’s still possible to do incredibly well with Short-term Rentals. With Short-term Rentals you can also automate much of the process so you won’t have to spend more than an hour per week managing your property. 

Daniel Rusteen, Author of Optimize YOUR Airbnb, is the world’s preeminent authority on marketing and managing your property on Airbnb.

Learn more at https://www.streetsmartsuccess.com

If you’re looking for an asset class that is recession resistant and poised for huge growth, look no further than Assisted Living. Over 10,000 Baby boomers turn 75 every day. 

Today’s guest, Loe Hornbuckle, CEO of Sage Oak Assisted Living and Memory Care, is passionate about helping seniors and started out by converting a single family home into an Assisted Living facility. Loe now has six, eight bed homes and is doing ground up construction of much larger facilities.

Learn more at https://www.streetsmartsuccess.com

The West Coast is home to several multifamily markets but it’s becoming more onerous to be a landlord in these markets as a result of increasing regulatory restrictions. That’s why Max Sharkansky, Managing Partner of Trion Properties, is diversifying from the West Coast into the Southeast where there continues to be big migration from other parts of the country as a result of job growth, low taxes, and flexible work-from-home employment options. Even though the U.S. economy is in a state of flux and there are domestic and global uncertainties, trends continue to be in favor of growth in the South and Southeast. Trion properties has over 6000 units under management including both funds and individual assets. They’ve routinely generated annual returns in the 20% and even 30% range.

When you have extra things that don’t fit in your home, self-storage is a perfect solution. When you have a car to store, or an RV or Boat, what do you do then? 

Carmelo Mannino, CEO of STOW IT, has the solution. STOW IT is becoming the Airbnb for things on wheels. STOW IT finds hosts who have extra space available and matches them with customers looking for a space to store their vehicle. It’s a brilliant win for hosts who generate extra cash and for customers who don’t have a place to store their vehicle.

Learn more at https://www.streetsmartsuccess.com

In the world of operating property, experience trumps all else. There’s just no substitute for someone who’s been operating apartments for almost 25 years, not to mention transparency in how they deal with investors. 

Today’s guest, Ken Gee, Founder and Managing Partner of KRI Partners, has invested in Florida over the past decade to capitalize on the huge growth of Florida’s employment and population growth.

Learn more at https://www.streetsmartsuccess.com

Ecommerce is changing the playing field in unprecedented ways. As companies need to get their goods into customer hands within hours, the demand for warehouses will continue to expand dramatically all over the country for the foreseeable future. Today’s guest, Peter Lewis, Chairman and Founder of Wharton Equity Partners, sold $500,000,000 in multifamily assets back in 2017 and redeployed the capital into industrial property to catch the huge wave in industrial expansion.

You can get great appreciation in coastal markets like NYC and San Francisco, but it’s virtually impossible to get cash flow. That’s why many investors seek opportunities in other parts of the country. Today’s guest started his real estate career in single family and apartments In Brooklyn before venturing out to other parts of the country. Since then, Mike Zlotnik, Fund Manager of Tempo Growth Management, has run transactional funds, hard money funds and funds that invest in multifamily, office, retail, and hotel conversions.

For investors who want to invest passively in Real Estate, it can be hard knowing who to invest with and in what deals. The process can be daunting when there’s a lot of money on the line. Lance Peterson, Founder and Managing Partner at Verivest, has made it easier for investors to find trustworthy syndicators and he’s helped syndicators maintain best practices in how they conduct their business and investor relations.

Although core gateway markets have the highest appreciation for multifamily over time, secondary markets also offer tremendous growth and stability, and they have smaller barriers to entry. Bobby Larsen, Principal and Founder of Vanamor Investments, has invested successfully in submarkets of Portland, Oregon and Tampa, Florida, plus others.  He’s deployed a very conservative approach to acquisitions and operations that’s minimized risk and produced great returns for investors. Vanamor also utilizes 1031 exchanges, so their investors avoid tax consequences when properties are sold and compound gains over years. With huge distress in the market, and even more to come, Bobby anticipates making great acquisitions in the upcoming year. 

If you’ve been paying attention at all, you know there are clouds on the horizon in Commercial Real Estate. This is caused in no small part to escalating interest rates, which can move even higher. Amongst asset classes facing headwinds is multifamily. Depending on the market, there’s a glut of new construction, rents and occupancy are down, and expenses are up. As a result, many apartment complexes acquired over the past two to three years with floating rate debt will not get refinanced, which will translate into great deals for patient investors. Darin Garman, The Nations Most Trusted No BS Multi-Family Investment Advisor, has been in Multifamily for decades, and predicts great opportunities over the next six to 18 months.

A lot of smart people believe we’re headed into a severe economic downturn, maybe as bad as 2008. In Multifamily Real Estate in particular, a lot of operators paid extraordinary amounts for properties in the last couple years with short-term bridge debt. With interest rates and expenses skyrocketing and tenants potentially unable to pay the increased forecasted rents, operators may not be able to secure long-term financing. 

Rod Khleif, who has the # 1 Real Estate podcast on Itunes – The Lifetime Cashflow through Real Estate podcast, plus teacher to thousands, predicts we may be in for very choppy waters. As a result, operators may have amazing opportunities to acquire in the months to come.

Learn more at https://www.streetsmartsuccess.com

The market for multifamily right now is seeing severe headwinds. Escalating insurance costs, rising property taxes, and rising interest rates are just a few. As such, sponsors need to deploy special deftness and adaptability to survive over the next couple years. On the transaction side, sales volume has fallen 70% from last year as the buyer-seller bid/ask delta still remains high. Even though there are danger signs, distress has not yet been ubiquitous and sellers and buyers still have a wide gap in their pricing expectations. Cody Laughlin, co-founder of Blue Oak Investments, has partnered on several multifamily deals with other General Partners and also runs his own deals in Central Texas. 

Maintaining high occupancy levels in apartment complexes can be an ongoing challenge, especially in highly competitive markets. This is why affordable, government subsidized housing can be a great option for investors. If the properties are in the right location, occupancy can consistently run at 100%, with waiting lists for new tenants. Not only are these properties full, but delinquencies are a non-issue because most of the rents are paid by the government. Ira Fisher of North Loop Investments owns over 400 units of affordable housing, mostly in Chicago and the surrounding areas. 

Passive investing can generate cash flow, appreciation, and tax benefits through depreciation. By investing with others, you don’t have to spend time managing properties which may not even cash flow. They key is finding operators with the right experience and skills to make sure your investment is secure. Whitney Elkins Huttten, Director of Investor Education at Passiveinvesting.com, is a partner in $700M+ of real estate including over 5000+ residential units (Multifamily, Mobile Home Parks, Single Families, and Assisted Living) and more than 1400+ self-storage units.

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 acquire them at a low enough basis to make money. These buildings are typically non-financeable, so there are often no competitive offers. Once the properties are improved, and stand out above the competiton, Adam finds tenants with local Facebook ads. 

Investing in a lot of deals with a lot of operators and markets can be quite time consuming. It also requires expertise a lot of passive investors don’t have the time or inclination to develop. Today’s guest, Mark Khuri, is the founder of SKM Capital and Aeiral Capital Management. Mark’s companies manage your investments by placing your hard-earned money with proven, vetted Self-Storage, Mobile Home Park and Multifamily operators.

Single family homes in the U.S. are the largest asset class in the world at $37 trillion dollars. This is why the largest financial institutions on Wall Street have been increasing their investments in this lucrative asset class. There are many ways to make money in single families from flipping, to buying and holding, to lending against them. Jim Manning, CEO of Doorway Properties, started out fix and flipping in his hometown of St Louis and is now specializing in lease purchases where tenants make payments toward the purchase of the properties. Jim has funds of these properties that have generated safe, consistent, passive returns for investors with conservative leverage.

If you’re willing to be patient and methodical with passive investing, and avoid undue risk, the rewards will compound over time beyond your wildest expectations and change your life. It just takes delaying gratification, keeping your living expenses below your income, investing in quality assets that appreciate over time, and redeploying capital for continued growth. Today’s guest, Jeremy Roll, left his steady corporate job in 2007 to become a full-time passive investor, and has lived 100% off the cash flow ever since and has built his net worth considerably over that time.

In highly desirable, steady markets not subject to excessive volatility, Real Estate values tend to hold and appreciate consistently over time, and are great, low risk capital preservation assets. One such market that has withstood the test of time is Chicago. Chicago remains a powerful magnet that attracts residents from all over the greater Midwest and beyond. Joe Smazal, Senior Managing Partner of Interra Realty, is one of Chicago’s top-producing Multifamily brokers in the $5-$15 million range and is building his own portfolio of Multifamily assets.

Investing in private credit is growing at a rapid clip as traditional lenders are getting increasingly restrictive in their lending practices and investors are looking for safe havens for their money. One of the most conservative Hard Money lending spaces is against single family homes in non-coastal markets because the home values are relatively predictable without dramatic fluctuations. Will Coleman, CEO and Founder of Urban Gate Capital, has a debt fund that loans money to single family flippers in Nashville with a growing pool of borrowers and investors. Will is currently paying investors 10%.

In today’s market with an enormous amount of capital chasing few deals, it’s harder to find a great deal than ever before. Yet you can still get a great return on industrial properties if you knock on owner’s doors. Single tenant properties or properties with just a couple tenants are easy to operate with a limited amount of management required. 

Darren Smith, successful Real Estate investor, is acquiring industrial properties and growing his portfolio in South-Central and South-Eastern Pennsylvania.

Learn more at https://www.streetsmartsuccess.com

Knowing how to buy right is the key to not losing money. When you paid the right price in the first place, you can better weather mistakes and sustain unaccounted for market conditions. One of the ways to achieve this is to buy off-market, direct-to-seller deals from ma and pa sellers. Whether you’re buying single family homes or commercial properties, direct-to-seller deals are the way to avoid overpaying in a competitive marketplace. Gabe Petersen, Founder of Kaizen properties, owns Mobile Home Parks, Self-Storage facilities and single families. Most recently, Gabe is focusing on wholesaling single family homes in Indianapolis and Gainesville. 

Higher quality assets appreciate more in the long run, especially in supply constrained markets where it’s hard to build and there’s no more developable land. It’s simple, scarcity produces value. Even in recessions, quality construction assets hold their value better lesser assets in worse locations. Lior Rozhansky, Founder of Flora Capital, has pivoted from working class neighborhoods in Boston to multi-family in Class A neighborhoods as a pathway to “indestructible wealth.” It’s easier to manage property in these markets and they appreciate considerably more over time.

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 party management companies to in-house management and is seeing increased effectiveness, significant operational savings, and profitability.

A great way to reduce risk when investing in private placement alternative assets is to join an investment group. Investment groups give you access to other investors who you can compare notes with on successful investments and reputable sponsors you meet and start building relationships with. David Shirkey founded the Michigan Investor Group to help educate friends and family to help guide them through the complex maze of alternative investments and to introduce them to investment opportunities with strong cash flow and appreciation with little downside risk.

Private Equity and Alternative investments have outperformed the public markets 35 out of the last 35 years. However, few people are aware of investing in alternative investments such as Real Estate syndications in apartment buildings, Self-Storage facilities, and Mobile Home Parks, not to mention a plethora of other alternative opportunities like life insurance settlements, litigation finance, cannabis, and so many other ways to invest. As it stands, alternative investments only command 13% of U.S. invested capital. Chris Odegard – the Prolific Investor, Author, Alternative Investment Blogger and Educator, got away from “the 401K highway to mediocrity” and has deployed his money into alternative investments and has prospered incredibly well as a result.

Investing in older, infill markets that are poised for repositioning and growth can be a recipe for huge appreciation. Over the past decade, several cities in Northern New Jersey with easy access to transportation have seen explosive growth in values. Gentrification has led to changes that have made these areas desirable to live in for upscale demographics. Aaron Fragnito, Co-founder of People’s Capital Group, is an apartment syndicator who invests in smaller apartment buildings in Northern New Jersey and rehabs them to optimize their full potential. Aaron is a buy and hold operator who achieves return-of-capital via refinances.

The biggest inhibitor to growing wealth is taxes. That’s why the best investing opportunity to-date is in Opportunity Zones where you can defer capital gains taxes plus avoid depreciation recapture, not to mention making great investments in transitioning neighborhoods with huge upside. Jimmy Atkinson, Founder of Opportunity Zone Database, created a database of over 300 Opportunity funds where investors can compare and choose different investment options when they’re coming out of a tax-deferred exchange. Jimmy also holds many online events where investors can see presentations from participating sponsors.

Manufacturing constitutes the holy grail of job growth and Phoenix has become a tier-one city for manufacturing. 

Craig Coppola, Commercial Real Estate Broker and Advisor, and the top earning broker in the history of Lee and Associates, believes Phoenix will continue on its torrid trajectory as Phoenix produces incredible job growth that will continue to support the in-migration that comes with it.

Learn more at https://www.streetsmartsuccess.com

Finding a niche within a niche can provide extraordinary returns by reducing risk and insuring repeated success. 

Sean Katona, Landlord and Commercial Real Estate Investor at Simplified Properties, specializes in value-add strip centers in Phoenix and focuses on B- to A- class assets in specific neighborhoods. This strategy helps him get better deals on the acquisition side and great connections on the leasing side.

Learn more at https://www.streetsmartsuccess.com

The discipline required to pass up deals in an overheated market can be rare. Everyone says they have conservative underwriting and that they’ve found a unique deal, but today’s guest has really walked the walk and done it the old-fashioned way. Hadar Orkibi, Principal of MHI Holding and Co-facilitator and founder of Make it Happen Mastermind Group, has generated huge returns in multifamily units he’s acquired in Little Rock, Arkansas.

Many operators specialize in a specific asset class, some operators specialize in a given geographic market, but invest across different asset classes. When you focus on one geographic area, it’s easier to build out a network of brokers and other contacts that consistently funnel you legitimate off-market deals where you can make real money. Rob Anderson, President at BV Capital in Dallas, invests in Texas. BV has done mostly multifamily where they’ve gotten very high returns for investors and is currently focusing on ground up development as the cap rates and returns on existing properties have fallen in more recent years. BV also does sale leaseback industrial deals and student housing projects.

Unless you have a very long time horizon, in which case time cures a lot of ills, being right on your timing will make you the most amount of money in Real Estate. Although Light Industrial has been white hot over the past few years with few attractive deals, prices are starting to moderate as loans are maturing, and larger institutions are starting to rebalance their portfolios towards more liquid investments. Rich Kent, President and Managing Principal of Avistone, has a steep track record in the Flex Industrial asset class including two very successful recent funds. One and a half years ago, however, Rich pivoted to hospitality because prices of industrial had become too high to generate enough yield for his investors. Today, with prices coming back down to Earth, he’s pivoting back to Flex Industrial with his third fund in this asset class.

Today’s investing environment is fraught with many pitfalls. Over the last couple years, many multifamily sponsors in particular took on super high leverage with variable rate loans. These same sponsors are now encountering stiff challenges getting loan extensions because of lower occupancy and rental rates combined with higher borrowing costs. As a result, many of these sponsors will have to reach out to their investor bases for more capital or obtain rescue capital to keep their deals afloat. Randy Smith, Founder of Impact Equity, helps investors avoid these traps and invest with sponsors with great track records and sound business plans that are positioned to prosper in this challenging environment.

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 Executive Officer of Peachtree Group in Atlanta, owns 70 select service hotels, mostly in the Southeast, and is a lender to other operators. Greg currently has 130 first lien loans out to other operators. Peachtree is a vertically integrated firm that develops, acquires, manages, and finances hotels. 

Interest rates are higher than anyone expected a year ago and they’re continuing to rise. As a result, many purchasers of multifamily properties with high leverage bridge debt will not be able to get the extensions on their loans they anticipated and will be forced to refinance at rates the properties can’t support without injecting more capital. At this point, they’ll have to reach out to their investors to request more capital or sell at a loss. Either way, the outlook is not good. Brian Burke, CEO Praxis Capital and Author of the Hands-Off Investor, has been a real estate investor for over 30 years and says the debt component of these transactions will make or break these deals and that a lot of newer operators will have to face tough choices in the months to come.

When things go wrong in a smaller apartment deal, it can wipe out all the Net Operating Income and profit in the deal. On bigger deals over 100 units, the property can absorb a lot more unexpected costs or mistakes before it erodes all the profit. Augostino Pintus, founder of Realty Dynamics Equity Partners in Cleveland, realized early on that it was much easier for him to operate bigger buildings. He also chose the Cleveland market because it didn’t have the crazy competition of many markets in the South and Southwest and he could get better returns. Now that even Cleveland has gotten more expensive, Agostino is doing ground up multifamily development in urban infill areas where young professionals are moving into. He’s also started a fund of NNN lease properties where he’s generating monthly checks for his investors.

Most real estate asset classes are efficiently priced and hard to find great deals. With land investing, however, you can buy land for literally 50 cents on the dollar with little competition. You basically just need to follow a formula that entails marketing and follow through. With very few start-up costs, you can launch a Direct Mail marketing program that gets you a deal in your first couple months. Daniel Apke, Founder of Land Investing Online, has been very successful flipping land on his own and is now teaching others how to do what he’s done with a great, affordable step-by-step online course.

Getting started is the hardest part of anything you’ll do in life. Once you get over the fear and take the first step, things tend to fall in place. Bennett Schwartz, Performance + Executive Coach, Real Estate Investor, and Speaker, has started out by converting a large single family home into four units and also converting a duplex into an AirBnb. He’s now pursuing larger deals where he lives in Philadelphia.

Industrial properties were at 80% occupancy and selling at 5 cap rates pre-pandemic. Now they’re over 90% occupancy and selling at 8.5% cap rates. With interest rates most likely coming down, this represents a great opportunity to invest in industrial. Warren Buffet says never bet against America, now is a great time to invest in industrial properties. Judd Dunning, President of DWG Capital Partners, is raising a fund to acquire single tenant Sale Lease Backs from profitable companies with strong balance sheets and excellent credit. Conservative asset level underwriting, plus the diversification of a fund make this a safe investment with long-term leases and predictable returns. 

It’s never too late to get started in Real Estate Syndication. It just takes the right mentoring and the right team. It’s amazing what just a proven process can yield. 

Today’s guest, Brain Noel, CEO of Ascot Equity Partners, has gotten started over the past couple years and is already a GP on a couple of excellent B and C class value-add deals in Houston that have already appraised well above the purchase price.

Learn more at https://www.streetsmartsuccess.com

Ever since the creation of the 506c code a decade ago, which permitted operators to market to the public, alternative investing in Real Estate and other asset categories has grown dramatically. Whereas a decade ago it was virtually impossible, for example, to invest in early-stage technology companies if you were a retail investor, now you can invest in these companies through private placement funds. There are many different ways to invest outside of traditional stocks and bonds and get better yields and potentially better returns. Andy Hagans, Co-founder of the Alternative investment Database, has created great content for investors on the Alternative Investment Database website and a great service that matches accredited investors with qualified sponsors.

As markets are changing, it’s critical to stay on top of trends to maximize your investment returns and minimize risk. For example, you’re starting to hearing more about Build-to-Rent communities as alternative living solutions for renters who no longer want to live in Multi-family complexes. They want more space, a two car garage, a lawn, and they don’t need the amenities of multifamily properties that a lot of people don’t use anyway. Brian Spear, Co-founder of Sunrise Capital Investors, started out buying mobile home parks a decade ago and in recent years has expanded into lucrative Parking Lot deals and most recently Build-to-Rent communities.

A key to safe investing is finding the absolute best-in-class operators. Don’t just take someone’s word directly, but find others who’ve done business with them and can report success over a significant period of time. Today’s guest, Dave Zook, founder of The Real Asset Investors, is a successful business owner and savvy investor who’s created lucrative partnerships with proven, vetted, experienced operators.

In the world of Real Estate finance, property owners can end up in arrears on their existing payments. In these cases their debt may be sold off to other lenders. In other cases, borrowers may not be able to obtain conventional financing for various reasons. In either of these cases, borrowers may wind up utilizing specialty lenders who help them solve their problems. Carson Rasmussen, Principal at Fairview Partners, lends money to borrowers who don’t have access to traditional banks. He buys non-performing loans from traditional lenders at a heavy discount and also originates his own loans to borrowers in special needs situations. Carson makes very conservative first lien loans to his borrowers and has generated returns as high as 20% to his investors.

Many people are dying to quit their 9-5 job but they never do it. Well, today’s guest started flipping houses while working full-time. He eventually created a system that was so successful that he quit his job and went into Real Estate full-time. Today’s guest, Haim Mamane Palman, is a successful Real Estate Investor and coach who can teach you his system on how to succeed in Real Estate investing.

Although the multifamily market is on fire, there’s still a chronic housing shortage that will persist for several years. In many markets, job and population growth is far outpacing existing inventory and new construction. As a result, opportunities still abound in many submarkets in the country. Today’s guest, Matt Picheny, has successfully found opportunities in great markets with B and C value-add properties.

Will people go back to offices, or will they continue to work from home? Facebook, Google, Microsoft and other tech companies are gobbling up as much office space as they can. Today’s guest believes employees will want to return to offices. Brian Adams is founder of Excelsior Capitol, a private equity real estate company based in Nashville. Brian buys great properties in great markets that have had no delinquencies during Covid.

When it comes to someone else’s underwriting, there’s often a lot more than meets the eye, so buyer beware. There’s often any number of items that get left out in a broker or sellers P & L’s. That’s where years of experience comes into play. Today’s guest, Mark Hamilton, founder of Bay Area-based Hamilton Zanze, shares invaluable lessons from a 30+ year operator of over 20,000 units.

It’s hard to achieve economies of scale operating multifamily apartments with fewer than 100 units, but if you buy smaller buildings close to each other, you can gain operational efficiencies that translates into more profit. There’s also far less competition when buying these properties that bigger properties so you can often get better deals. Mark Weinstein, President of MJW investments, has acquired many smaller properties in close proximity and amortized management functions and operating expenses to make these buildings very profitable. Over the course if his career, Mark has acquired over $1,500,000,000 of apartments, student housing, commercial buildings, industrial, and self-storage facilities.

There’s an exodus of people escaping cities in search of more space, tranquility, lower taxes, and they want to own tangible assets. As a result, rural land is appreciating outside of major metros at all-time highs.  

Today’s guest, Neil Hauger, of Whitetail Properties, is a high-performing land broker in the Upper Midwest who’s distilled land marketing down to an art form.

Learn more at https://www.streetsmartsuccess.com

Successful investing requires planning for economic downturns. When the economy takes a hit, more people go to college to prepare for careers. That’s why student housing is a recession proof asset class. Current occupancy levels for student housing in the country’s top university towns is well over 95%. 

Today’s guest, Fred Pierce, President and CEO of Pierce Education Properties, is one of the country’s top student housing operators with over 30,000 beds. He’s acquiring more in popular college towns with super high demand that far exceeds supply.

Learn more at https://www.streetsmartsuccess.com

Few asset classes have both increased consumer demand and not only limited, but reduced supply. That’s what makes Mobile Home Parks such a great investment. Mobile Home Parks are also the ultimate in affordable housing and a great hedge against economic downturns. 

The category also remains highly fractured so the opportunities for acquisition continue to abound. Today’s guest, Jefferson Lilly, Founder of Park Avenue Partners, has been buying Mobile Home Parks since 2007 and has generated great returns for his investors.

Learn more at https://www.streetsmartsuccess.com

By controlling all the construction and property management processes, you can successfully operate Multifamily properties, as long as you don’t overpay for the properties and you know how to manage expenses. Matthew Shields, Founder and CEO of Significan, has been buying and operating Multifamily properties mostly in Northeast Ohio and Atlanta since 2017, and generating excellent returns. Matt is a serial entrepreneur who also owns other companies including Virtus Ventures, a software company that creates software solutions for companies with $50-$150 million in revenue.

There’s nothing passive about investing in older apartment buildings. Appliances, roofs, HVAC systems, plumbing etc. have limited lifespans so there’s perpetual upkeep and surprising expenses are far from uncommon. In new construction, by comparison, you can control all the variables and therefore the costs can be more predictable and therefore the profits. Roger Luri, CEO and President of LD2 Development in Chicago, and author of the new book “Don’t Buy Multifamily! BUILD IT,” has been in construction since the late 80’s and has seen several huge challenges in older multifamily buildings and has experience several market cycles. Roger is an expert and understands the risks of both older multifamily projects and new construction.

Many things can go wrong with Real Estate syndications. There’s more to the game than just the numbers and managing properties. Today’s guest, Gene Trowbridge, is co-founding partner at Trowbridge Law Group and has been a part of 5 Billion in real estate transactions. Gene has been a broker, a syndicator and an attorney to syndicators. No one knows more about the legal aspects of syndication and what to avoid that Gene.

When buying existing properties becomes too cost prohibitive, you may need to pivot to new development. Whereas cap rates on existing properties in desirable markets may have plummeted to as low as sub 4%, cap rates on ground up development can be as high as 10%, even in growing markets. 

Today’s guest, David Kislin, Owner at JEL Development, is doing small, infill residential ground up projects in South Florida and is generating great returns.

Learn more at https://www.streetsmartsuccess.com

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 way to go. 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. Kim Daly, a franchise consultant with Franchoice, is one of America’s top franchise consultants. Kim matches people with vetted franchises that fit their strengths, experience, and personalities.

Investing in the right operator is more important than investing in the right deal. A poor operator can make a good deal bad; a good operator can make a bad deal good.  When selecting who to invest with, it’s important to vet how often, how much, and what they communicate, in addition to making sure they’ll prioritize the operations of the deal before they move on to other deals just to reap the acquisition fees. Nancy Chillag, Founder of 23rd St. investors, partners with other General Partners that are aligned with her goals, morals, and operating principles to generate consistent returns for investors. 

Sometimes happiness can lead to success more than success leads to happiness. Today’s guest encountered challenges early on in life but always stayed happy to accept responsibility and succeed in life. He started out flipping houses but eventually realised that he could impact more people by investing in multi-family apartments. Tyler Devraux, co-founder of the Multifamily Mindset, started his multifamily career with a 20 unit building in Birmingham, Alabama and now has almost 2000 units in several states with a special emphasis in the Carolinas.

What is a Family Office? The term “Family Office” has become more common over the past decade and the number of Family Offices is growing at a fast clip. A Family Office is a private wealth management advisory firm founded by an ultra-high-net-worth individual or family to manage their assets. Ultra-high-net-worth families or individuals (UHNWIs) are people with at least $30 million in investable assets. Richard Wilson, CEO of the Family Office Club, has helped 200 families create their own Family Offices in addition to creating 20 “live” events that Family Offices can attend where they learn Best Practices of investing and structuring portfolios plus learn about different investment opportunities and strategies.

Going from zero to owning and managing over 100 homes, especially section 8,  isn’t for the faint of heart. But starting back in the early 2000’s, today’s guest, Emerich Herbst, started buying foreclosures in Cleveland, Ohio and has amassed an impressive portfolio of single-families and small apartment buildings. Emerich is a master at buying properties at the right price, rehabbing, and renting them out for cash flow.

Most multifamily syndicators are facing major headwinds including interest rate increases, new supply, and escalating expenses. In order to thrive in this environment, you have to have an excellent organization that executes on business plans and maintains healthy working relationships with their lenders. Zack Haptonstall, Founder of Rise 48, has never made a capital call or missed a debt payment. For the properties he acquired in 2021, Zach’s now making distributions to investors. In the face of unprecedented rate increases, Zach accelerated the pace of renovations in 2023 and completed almost 2000 units. This enabled him to increase net operating income enough to continue making debt payments and distribute cash to investors. 

One of the great advantages of investing in Real Estate is the ability to shelter or defer paying taxes so you generate a higher return in the short-term and your money works harder for you and generates great wealth over time. Thomas Castelli, Partner at Hall CPA firm, has been a direct investor and also a limited partner in syndication deals so he believes in the value of Real Estate not only from a cash flow and appreciation perspective but also from a tax perspective. There are few other ways to compound money as well as Real Estate and Thomas discusses the nuts and bolts of how it works.

It’s impossible to time the market, so it makes sense to buy at the right price relative to current markets. If you don’t stay active, you can miss out on great opportunities. It also makes sense to hold for long periods of time, because five years or less is often not enough time to expect precise execution of a business plan given the vagaries that are entailed. Peter Linneman, Principal of Linneman Associates, is a prolific multi-decade investor and founder of Wharton's Real Estate Department and the Zell-Lurie Real Estate Center. Peter Is bullish on Multifamily, despite short term headwinds in many markets.

Weddings are a huge industry and a lucrative niche for the hospitality business. Wedding parties routinely pay upwards of $50,000 and even more for a venue plus guests spend a lot more on eating, drinking, and shopping while on premise. Accountable Equity buys distressed historical hospitality properties and repositions them into premier wedding destinations. 

Josh McCallen, Co-founder of Accountable Equity, has created an amazing culture of customer service that is resulting in incredible returns for investors.

Learn more at https://www.streetsmartsuccess.com

Flipping houses can generate big profits. Today’s guest started buying houses and small apartment buildings in the Twin Cities before graduating to large multifamily complexes in other markets. He now is the General Partner in over 800 properties in the Midwest and mid-South regions of the country. Todd Dexheimer of Venture D Properties, started with nothing and is building an incredible portfolio of multi-family properties.

There can still be great deals in sub-100-unit buildings with C class Value Add in the right markets. Like any other deals, it helps to have boots on the ground and the ability to create the right teams to manage the rehab and ongoing operations. Today’ guest, Ismael “Rey” Reyes, best-selling author, and founder of MI Real Estate, has been part of several Class C deals in the Southeast and is doing extremely well.

In the past several years, it got increasingly difficult to find the right deals in Real Estate, especially Multifamily. People were just paying too much across the board. In the past several months, however, the market has turned significantly with far less competition and many more distressed sellers, especially with C class properties. Amy Rubenstein, CEO of Clear Investment Group, has an incredible track record acquiring distressed C class properties 300+ units in secondary and tertiary markets and turning them around with consistent double digit and even triple digit returns for investors.

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 small for larger lenders. Beau Hale, Founder and Managing Partner of Pine Peak Partners, lends to borrowers in the lower to middle market space as a GP and raises capital from investors. Beau generates returns for his investors in excess of 10%.

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 cannabis-use Private Mortgage REIT, has conducted $500,000,000 in transactions since 2010, which makes him one of the top three lenders in the country. Pelorus provides value-add bridge and stabilized financing to borrowers with first lien positions and has generated excellent returns for retail and institutional investors. 

It’s hard to time the bottom of a market but real signs of distress are starting to appear in multifamily. Because of financing issues in addition to operational challenges, the market is starting to see forced sellers with lower prices. It’s once again becoming possible to acquire properties with positive leverage and potential upside over the next couple years as new inventory gets absorbed, occupancy increases, and rents rise. There are certain markets where job and population growth continue to serge and property values along with it. Dallas, for example, has 100,000 new residents still arriving per year, which will continue to put pressure on housing inventory. Daniel Farber, CEO of HLC Equity, has made significant investments in Dallas since 2012, and after an acquisition hiatus in 2021-2023, is starting to get back into the market. 

In order to be successful in Real Estate, you need to understand markets and trends. When certain asset classes get too frothy, you need to look for other opportunities to get the best returns. Ken Naim, a successful Real Estate investor, doesn’t try to fit a square peg into a round hole in late cycle markets. Instead, Ken looks for opportunistic deals across asset classes as long as the prices are low enough that he can’t possibly lose money. Recently, Ken has made highly lucrative deals in off-market warehouse space and office. He’s now looking at a land deal in a path-of-progress market where he’s going to entitle the land and get It rezoned. This project can potentially result in an increase in value 3 to 4x in 12-18 months.

There’s stable cash-on-cash returns in many real estate assets, but returns on car washes can be extraordinarily high. You just need the right car wash, in the right location, with the right management. 

Today’s guest, Steff Boldrini, Principal at Monte Carlo Real Estate Investments, purchased three car washes in a portfolio that included a self-storage facility in Amarillo, Texas. She’s doing extremely well despite some bumps and bruises along the way.

Learn more at https://www.streetsmartsuccess.com

David Saxe is Co-founder and Managing Principal at Calvera Partners.  His company started out by buying small value-add multifamily properties in the San Francisco Bay Area and has grown to acquiring larger properties in Austin, Dallas-Fort Worth and Raleigh-Durham. Calvera invests in markets with strong health care and technology industries, often in places to which Californians are relocating. His company has recently launched an evergreen fund where they are creating a diversified multifamily portfolio focused on tax efficient cash at a highly opportune time, starting with their first acquisition in high-growth Dallas.

40% of multifamily properties bought in Q 3 and Q 4 2020 and 2021 with variable rate debt will likely not get refinanced by their current lenders. In these scenarios, operators will be forced to attempt to raise more money via capital calls from their current investors and/or take on rescue capital from 3rd parties. The last option is to give properties back to the bank. Over the past couple years, the high price of multifamily properties did not pencil without high leverage bridge debt, but as a result of the precipitous rate increases of the last year, operators are now paying the piper for taking the risk. Neal Bawa, Founder of GroCapitus, saw the writing on the wall and only acquired one property during this time, and sold several. As a result, he did incredibly well by his investors. Neal is currently waiting for the market to correct much further before he’ll even consider making another acquisition. 

A well refined market niche for real estate entrepreneurs can deliver outsized returns, but it’s easier said than done. It takes a lot to discover a niche in a crowded marketplace, and it requires discipline to stick with it without getting distracted by other shiny objects. Axel Ragnarsson, founder of Aligned Real Estate Partners, buys 10–50-unit value-add apartment buildings in Southern New Hampshire directly from sellers. Axel’s completely vertically integrated and knows the market incredibly well. Southern New Hampshire is a supply constrained, stable market with population and rent growth as residents are moving there from more expensive markets in the Northeast.

One asset class that has stood the test of time is Mobile Home Parks. As the housing shortage in this country persists, and the price of single-family homes continues to rise, mobile homes remain the most affordable housing option for many people. Additionally, the number of Mobile Home communities is not only not growing but is actually shrinking in many markets. Derek Vickers, Owner of Vicktory Real Estate Group, has acquired 38 Mobile Home communities since 2021. Derek is buying value-add properties and creating value by fixing them up and attracting more desirable tenants. He has also transitioned several of communities from park-owned homes to tenant-owned homes, which makes them easier and more profitable to manage.

Consistently passing on deals requires unusual discipline. It’s too easy to rationalize they work when they really don’t. It’s this lack of discipline and lack of underwriting knowledge that’s currently costing a lot of operators and their investors a lot of money.   It also helps when sponsors manage properties in-house to avoid excess costs, slow and expensive unit turns, and ineffective leasing efforts.  Wyatt Simon, Founder and Principal of Full Circle Real Estate, steadfastly adheres to his underwriting standards and has built an in-house management team to make sure his properties are fully optimized to achieve projected returns.

Currently, there are great deals being sold by developers on newly constructed properties at below construction cost. As institutions have been on the sidelines, this is a once in a decade to fifteen-year opportunity. In the right submarkets with job and population growth, rents will continue to escalate and Multifamily will continue to see a supply/demand imbalance for the foreseeable future. New construction has simply not kept pace, especially in the last couple years with high interest rates and soaring construction costs. Michael Zaransky, Founding and Managing Principal of MZ Capital Partners, has been acquiring newer properties in Texas, Tennessee, and his home state of Illinois and capitalizing on this rare opportunity for friends and family investors. 

If you want consistent, predictable cash flow and easy-to-manage property, you should consider single tenant retail. There’s currently an insatiable demand for quality locations in this property type relative to the amount of supply. It’s an attractive asset class because you have long lease terms with strong tenants and very little maintenance. Aaron Zucker, CEO of Zucker Investment Group (ZIG), specializes in the acquisition of retail properties throughout the country. ZIG works strategically with property owners, brokers, tenants, and vendors to create value. Aaron is also a successful franchisee in a growing number of Urgent Care centers in North Carolina.

Both residential and commercial Real Estate occupancy rates and rents are contracting in many markets in combination with higher expenses. When investing in the right part of the cycle, however, Real Estate can generate attractive cash flow. Aside from Real Estate, there are other great cash-flowing businesses that can scale efficiently and generate consistent, high double-digit returns. Justin Sloan, a successful Real Estate entrepreneur and President of Sloan Capital, is also deploying capital into non-Real Estate, cash flowing, debt- free assets. Justin recently bought the franchise rights to Ever Bowl in Texas and Iowa, a successful smoothie franchise.