Street Smart Success

Atlanta is becoming “Hollywood East” as it’s become a hub of film production with over 200 film and TV projects per year. In addition to the film industry, Atlanta has a well diversified and rapidly growing economic base. Over the past several years, Atlanta has boomed in population with now over 6 million residents and housing units aren’t keeping up with population growth. Dr. Jason Balara has started building an impressive multifamily portfolio in Atlanta and is building a formidable team on the ground that’s positioning him for future expansion in this growing market.

The most recession resistant asset class in housing is Mobile Home Parks. It’s the least expensive housing option available, and it’s supply constrained because almost no new parks are being built. As an asset class, it actually appreciated during the financial crises of 2008-2009. Bryce Robertson, Founder of investcultiv8, buys smaller parks in the $2M - $5m range with up to 50% vacancy. Because of the smaller size and the scope of the work that needs to be done to improve these properties, there is far less competition to acquire them. Bryce then turns them around with full in-house construction and management teams, refinances them, and returns capital to investors. His annual returns to investors have been in excess of 50%.

There are many opportunities to by large apartment complexes in the middle of the country but certain coastal markets can have less risk. Large California coastal cities tend to stay consistent with high occupancy levels regardless of economic conditions. Rents can contract, but with conservative leverage, you can hold on to a property for the long run and rents come roaring back and with it massive appreciation. Steven Wasylkiw, CEO and founder of Magna Vita Investments, is building a portfolio of multifamily properties in San Diego in growing sub markets that will dramatically increase in value over the long term with little potential downside.

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.

Operating in your own backyard creates operational scale, competitive local knowledge, and access to better deals. All of these significantly reduce risk for operators and investors. Long-term holds of well-located properties in established markets, as well, adds to mitigating risk and heightening returns. Raj Khatiwala, Principal at Eclat Investments, specializes in New Jersey shore markets near where he grew up and currently resides in the summer months. He operates across several asset classes including hotels, apartments, mixed-use buildings, commercial condos, parking lots and office properties within these supply constrained markets, and has generated outsized returns for his investors.

When it comes to data sources in Real Estate, everyone has access to the same information, but there are ways to optimize utilization of the data to get higher returns. At Cadre, they’ve developed proprietary software that leverages much of the data available in the Real Estate industry to make better risk adjusted investments for their investors. Dan Rosenbloom, Chief Investment Officer of Cadre, is in charge of the overall strategy for Cadre’s funds which have transacted over 4 Billion in Real Estate holdings in major markets and have generated a 27.5% Internal Rate of Return. Cadre is a platform where you can invest in as little as $10,000 in individual deals.

In the Real Estate ecosystem, there are many capital raisers who bring money to developers in order to get projects off the ground. It’s their job to create value for both the developers and for entities such as family offices and Private Equity firms that are looking to deploy capital for strong returns. Nicholas Horsburgh, founder of Weld Capital Partners, helps developers underwrite, strategize, and formulate their presentations in order to attract institutional capital to their projects.

If you want to earn more while working less, passive investing can be a step in the right direction toward earning financial independence. Many people still aren’t aware of the opportunities to invest directly in Real Estate and other related asset classes that provide monthly or quarterly income that have nothing to do with the stock market. Travis Watts, Director of Investor Education at Ashcroft Capital, has invested in over 50 deals himself, and helps educate investors on ways to safely deploy capital by optimizing opportunities and getting consistent distributions plus growth in the form of appreciation.

Many seasoned Real Estate operators attribute their biggest past mistakes to debt. That’s why it’s so important to structure your financing appropriately in order to avoid devastating pitfalls and mitigate undue risk. Vernon Beckford, CEO of Diversified Lending Solutions, advises Real Estate operators in the complex world of debt in order to maximize existing lending opportunities and achieve the highest probability of success in the way deals are structured while minimizing risk. In addition to helping create the most advantageous structures, Diversified Lending Solutions also has helped borrowers 3x their previous highest loan amounts on new deals from lenders.

Leverage has helped a lot of multifamily operators generate great returns over the past five years, but many newer operators are now paying the price for too much leverage and higher interest rates. When underwriting deals, it’s critical do be overly conservative to account for realistic rent growth and growing expenses. Jordan Fisher, Principal of Next Wave Investors, incorporates ruthless conservatism into his underwriting in order to do well by his investors and never lose a penny of their money.