All Forum Posts by: Michael Le

They are all over the place. You might even find as many great underwriters as you do deals that are conservatively underwritten! :)

You should almost always do it. It's not expensive, about $3500.

Depending on the area, the maximum rents for the LURA often exceed the market rents anyway so it's not a hinderance from that aspect. But it does take more paper work when leasing out units (and also ongoing yearly checks) so it can be harder to lease up because some people don't want to be bothered and would rather go down the street and talk to a leasing agent who is not asking them for all this documentation. But with proper management you shouldn't be having ongoing occupancy issues.

Off the top of my head are

- Are there any restrictions for renting?

- Beyond the HOA fees, you can have surprise special assessments if the HOA decides they need to replace roofs. That could kill your profits for the year or beyond.

- You don't have control of the HOA so they can make rule changes that are opposed to your business plans.

I'm not in that space but from what I've read industrial can't be built quick enough right now. There's activity all over town. Hines is building 150-acre, 1.5M sq ft project out in Katy for Amazon and Igloo. Another 1M sq ft is getting built near Barbours Cut Terminal on the east side. I think demand specifically for light industrial is high too. Latest market breakdown I saw showed industrial as the best performing asset class right now during Covid.

@Jimmy Le I'm not in that space but that looks very thorough and thought out. Thanks for sharing.

Totally agree. And subordinate nonrecourse debt at that.

Personally I think so. There's a lot of momentum on that side of town. And it's surrounded by EADO, Great East End, Midtown, and Musuem District.

I don't countersign my deals until after the deal is closed because the syndication is not technically completed until we break impound on the those funds on closing day. Prior to that happening the deal could fall through and the money would just be sent back.

You need to understand the market and what your competition is seeing/experiencing. Also, is your number just the physical vacancy or are you including other economic vacancy items such as bad debt, concessions, and loss to lease? Overall it sounds a tad high but could be right for that market.