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RISK ADJUSTED RETURNS
Real estate is less volatile and has historically outperformed the S&P 500.
CASH FLOW
Tenants pay monthly rent which covers all expenses and provides profit to the owners.
DIVERSIFICATION
Totally uncorrelated to the stock market.
TAX BENEFITS
Depreciation is a free tax write-off that allows you to keep more profits.
1031 exchanges allow you to accumulate long-term wealth.
SAFE LEVERAGE
You can leverage real estate, often with non-recourse debt, allowing for the purchase of $10M with only $2.5M.
APPRECIATION
Real estate appreciates in value, both through lease escalations & replacement cost inflation.
LIQUIDITY
Most frequently traded asset class in the US, at 30% of traded market place.
VALUE CREATION
Opportunity to increase value through multiple strategies to improve NOI.
Inflation-Hedge
Leases typically have terms that at a
minimum allow rents to escalate
with inflation.
STABILITY
Contractual leases provide stable, predictable future cash flows
for the asset.
SAFETY
Land barriers to entry & physical replacement cost provide a secure
value basis.
WHY REAL ESTATE?
Brands we work with or guests on the show
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SUBSCRIBE TO THE PODCAST
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Market Value vs Purchase Price - are we buying at a discount?
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Replacement Cost vs Purchase Price
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Current Vs Market Rents - is their room to increase rents?
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Market Vacancy vs Deal Vacancy
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Purchase Cap Rate vs Market Cap Rate
MARKET
COMPARABLES
PURSUE THE DEAL
FINANCIAL METRICS
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Occupancy of the property
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How are their leases structured?
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Are the necessary addendum incl.
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What deposits are being held?
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Who is your target market?
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What credit test are being done etc?
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Do the tenants have renters insurance?
UNDERSTANDING YOUR TENANTS
Continue with 150+ Due Diligence checklist
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More than 200 000 people in the area
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Population Growth
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Income Growth
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Job Growth
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Rent to Income ratio less than 30% - proving affordability
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Crime & School Rating Considerations
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Submarket Trends & HHI
LOCATION
DEAL BASICS
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More than 75 units
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Built in 1970 or newer
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Opportunity to increase income or reduce expenses
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Class B or Class C
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Establish if the property is Stabilised or unstabilised?
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Expense Ratio
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Submarket line item norms & opportunities
- utility bill-backs
- insurance
- association fees etc.
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Spread of at least 250 basis points between stabilized cap rate exit cap rate
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Deal can pay an average cash-on-cash of 10% on equity
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Financing Terms
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Debt Stress Testing & Ability to Refinance after executing the business plan
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Project IRR with sale
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Project IRR with refinance
FUNNEL
Deal Selection by Identifying
Fundamental Criteria
HOW WE WORK
PRIVATE & INSTITUTIONAL CAPITAL
REAL ESTATE FIRMS / SPONSORS / FAMILY OFFICES
$50K - $2M
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Help place your equity as a passive investors into a deal.
$2M+
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Help place your equity as a passive or active partner in a deal.
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Help you find and acquire your own deals.
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Form a JV agreement to work together.
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EQUITY
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DEBT
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SOURCE and UNDERWRITE DEAL FLOW
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ACT as an OWNERS REP/3rd PARTY ASSET MANAGEMENT
STATISTICS
TRAILING 3 MONTHS BY THE DEAL FLOW
FOLLOW ME ON INSTAGRAM
LETS CONNECT
