All Forum Posts by: Chris Grenzig

@Jack B. I’m not sure I agree it’s that risky. Usually funds like that are extremely diverse and tend to invest in properties that are less risk averse which is why they offer projections of 7%. Vs a deal like we do which has more risk and offers returns of 18%+ or in that range. Or a flip deal which can offer 10-12%. I think more research needs to be done before assessing the risk imo.

@Jack B. Not sure who JRW investments is, but this is a blind real estate fund for ExchangeRight that you would be investing in. They have sole discretion how the money is used and where it is placed and for how long. 

This is very different from a single deal in that you won't know what deals they're going to purchase before you invest. If it's a rolling offering they may have already acquired a few properties and you can look at those, but theres nothing saying they're going to buy similar or same stuff. And just because a fund says they're going to target triple net leases in the southeast USA, doesn't mean they can't go buy a ground up development in Seattle or something like that.

There is nothing wrong with it, it really just depends on what your goals are personally and what type of risk/returns you want to achieve when investing your money.

@Vanesa Gonzalez my pleasure, you do still have to be selective because sometimes block by block can vary greatly. You also need to have a manager willing to work in some of these areas that are lower income area or be willing to do it yourself. Not necessarily because it's a bad area, just takes a different type of person to manage a $600 avg rent 1965 building vs a $1500 avg rent 2018, you know?

@Brandon Hicks I'm not familiar with the laws and regulations and such, but from what I've heard for others that is the loophole around being registered. Anyone obviously should make sure to do their own research or talk to the right professional before going down that path.

@Joe Ebanks It all depends on what your end goal is. If you want to cash flow as you are, like your tenants, and want minimal headaches, either don't increase or do it much less. If you want to push the value, and NOI you may want to look at increasing rents. That being said, you should look at what the market is and what you think it will cost you to turn the unit and calculate whether that is worth it for you. If there's little to no increase in rents and it will cost more than you would make, I would lean towards less rental increase.

@Michael Jones we love Jacksonville, we own 200+ units and have another 320 under contract set to close in 1-2 months. I don't believe axes and insurance for MF are that high, and are lower than some other competing markets depending upon where you are in a flood zone.

@Deepanshu Madan@Vanesa Gonzalez I agree with Vanesa on 32209 area code we avoid it entirely, but I disagree on 32210. There are some nice areas of 32210 like Ortega, and also some not so great areas. It all depends upon your stomach for lower income areas, and where in the zip code you're looking.

@Christian Rodriguez Happy to connect with others from Long Island, I currently live in Brooklyn and work in Jericho, NY. We also run a free meetup every month in Westbury, NY if you're interested as well. We don't do coaching or sell anything, just looking for a way to network with people outside of the different REIA's. But if you want to get together outside of the meetup also down to do that as well.

@Brian Burke Damn 40, thats a crazy amount. I think T-3 over tax adjusted T-12 is a great one to look at, but I have to disagree slightly because I can think of a few scenarios where it might not be a great indicator. Like if they're running their current expenses way low or high to what the market is/what you will run it at. Also, it could be that a line item or some could have been low/high for only a certain period of time and has only been corrected/fixed int he last couple of months (ex. leaking pipes leading to higher utilities, renovating every unit with budgeted capital so turns are artificially low). 

However, I agree with your assessment of that being one of, if not the best way to run cap rates, pending no other circumstances are surrounding the property that might not be accurately reflected.

@Zevi Arem basically you're talking about being an an equity raiser for syndicators and collecting a fee or % ownership because of raising the money from a person or company. This is a very serious grey area because technically your need to be a registered broker dealer to raise money for investments, but plenty of people do it without having it. You should really google and read up on the laws and rules surrounding it and talk to a professional. What is you exposure if the deal you raised money for is a scam or the person messes the deal up royally and loses the equity all their money? No one gets in trouble when things are going well, but someone who loses money will start to point fingers. 

@Susan O. I think a problem people have with cap rates also is it's so much more subjective than people realize. For example we're buying a 320 unit and the cap rate is a 5.25% on T-12, but 5.94% on T-3. Then they're also running they're payroll almost 80% higher than we will or the market is, so if you adjust for that we're at a mid to high 6 cap. However,  they've also owned it for 20+ years so there's a large tax adjustment which then would lower it to a 6/6.25 cap rate. So you can look at the "cap rate" 10+ different ways.

Everybody wants to wants to talk cap rates and justify it for being higher or for it being lower depending upon their motives, but at the end of the day it's just one of several different indicators to evaluate a property.