Street Smart Success

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.

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The cliché of the retail apocalypse is overstated. Retail is far from dead and thriving in the right locations. More than many other asset classes, there are operational inefficiencies in leasing and management that represent greater opportunities to add value. As a result, shopping centers can generate cap rates north of 10% for operators and investors not long after acquisition. 

Phil Block, Founding Partner of LBX Investments, has hit major home runs over the last few years by adding value in local shopping centers.

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A lot of multifamily investors talk about economies of scale one you get to 100+ units, but there’s a lot of money being made in buildings with fewer units. For example, there are many operators who are making great returns on buildings 50-100 units where there’s less competition to acquire them and the cap rates are generally higher. 

Sterling Chapman, President and Managing Director of Crestworth Capital, has acquired some great value-add properties in the 50-100 unit range in the Southeast.

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It’s hard to find the right buy properties to buy these days but if you’re willing to do the heaving lifting with distressed assets, you can still find Class C properties for $45,000-$65,000 door with a lot of rental upside. You just need to be prepared to roll your sleeves up to deal with challenging tenants and properties. 

Tate Siemer, CEO/Managing Partner of GreenLight Equity Group, had acquired over 500 C Class units in Oklahoma City and Columbus and is planning to get to 1000 units by the end of the year.

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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.

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There are many things to consider when determining which property to buy. If you could predict future appreciation and also know downside risks, you’d be well ahead of the game of maximizing profits and avoiding devastating downturns. 

Stefan Tsvetkov, Financial Engineer turned Multifamily Investor and Founder at RealtyQuant, has developed solutions that predict appreciation and also downside risks for apartment syndicators and investors.

Tim Vest, Founder of Harvest Properties Group

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Online research tells you a lot, but nothing equals the value of spending time in a neighborhood. Being on the ground gives you a sense of what the reality is block-to-block that a computer just can’t. 

Tim Vest, Founder of Harvest Properties Group, has confined his searches in the Multifamily space to a four-hour radius of where he lives and grew up in Charlotte, NC. This hyper-focus reduces risk of the unknown for Tim and his investors.

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One of the greatest risks to multifamily investing is financing. Many of today’s newer operators are using heavily leveraged bridge debt to finance deals. If things don’t go according to plan, they can get stuck unable to get extensions or refinance after an initial three-year term. When this happens, sponsors can lose their property. 

Brian Burke, CEO of Praxis Capital, has been in multifamily for over 30 years and shares his experience and wisdom on financing and many other aspects of multifamily investing.

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Real Estate investing is a team sport. You need people to find the deals, raise money, structure the financing, fund risk capital, guarantee the loans, and more. 

Joel Fine of Lakeline Properties has been a limited partner in over 30 deals and is also a General Partner in several deals where he plays critical roles in the acquisition phase of multifamily. Joel is also involved in land and ground up development deals.

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In today’s Real Estate investing world, you will most likely generate from 4%-10% on your money in the first year of an investment depending on the asset. Short Term Rentals, however, are an exception where you can generate 25% on your money. 

Mike Sjogren, CEO of Occupied LLC, is routinely getting these returns on his Short-Term Rental investments. Mike also has his own Master Mind group where he teaches others how to be successful in the Short-Term Rental business.

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