All Forum Posts by: Ryan Webster

@Chris Salerno

All of those are great markets. Pricing is increasing and bidding is extremely competitive, but there are still deals to be found if you are willing to put the work in.

In my opinion multifamily assets will continue to perform across the US. Cap rates will continue to compress, and the exodus of investor capital from retail, and hospitality will continue to drive investor demand. Also debt is extremely atractive for multifamily right now.

As far as markets go there is somebody making money from multifamily assets in every market. The strategy will vary from market to market deal to deal, but money is being made.

Sticking to primary and secondary markets will make debt and capital more accessible.

Stick to the key market Indicators when de termining target markets and you'll stay out of trouble.

Population growth

Job growth

Median income to rents ratio

Cost to own vs cost to rent

Deliveries to absorption ratio

Cap rate trends

It all boils down to supply and demand.

Cashflow=COC return

Consumer demand will determine rents, rent growth, and vacancy

Tenants= demand.

# of Units in market and comp set =supply

Appriciation=total return, and IRR

Investor demand. Investor demand will determine cap rates, corporate trend, and sales pricing.

Investors/buyers=demand.

# of marketed Deals= supply

every m

@Charles Seaman

Thanks Charles,

Its good to here I'm not alone. We would like to grow are portfolio, but I'm not ready to abandon our conservative underwritting to facilitate the growth.

Hey other sydicators,

Is anyone else having trouble with underwrtting deals and meeting return requirements, with P&I reserves being required by lenders, and sellers unwilling to negociate?

Is anyone currently utilizing a capital stack with subordinate private debt, as well as class A and B shares for LP investors?( ie: class A shares recieve 9%-12% coc and return of capital but do not participate in further upside from appriciation and net proceeds from sale. Class B shares recieve little to no cash flow but fully participate in upside and net proceeds from sale) basically preferred return stock and preferred equity stock.

If so what sources are some sources for subordinate debt, and has the increased leverage helped returns in a meaningful way? How has you inventor network responded to the class a/class b share structure?

Thanks

@Steve Rugg

Things have changed for sure. I would take a second look at the deal. Decide of you still want it, and retrade if nessasary.

The big issues are:

Lender reserves P&I, T&I this is a new requirement from lenders post covid

Stay on evictions

Recent rent collections

Your yr1 projections I would not assume any income growth in yr1. This is conservative but will keep you out of trouble.

Raising capital. If you need to raise capital, keep in mind many investors are sitting on the side lines.

@Lamont Marable

You should have a firm understanding of the partnership structure and the responsibilities of each partner, but you dont need any particulars in the loi. We use the language "entity to be determined" in our loi. As often times you will not be able to form the appropriate entity until you get under contract, have started dd, and recieved guidance from the lender on how they want the entity structured.

@Daniel Alzate

Always use your new property tax assessment based on purchase price. Make a call to the assessor office in the local area and ask what the new property tax bill would be. Also get a quote for insurance as it will likely go up from what is shown in the t12.

@Grayson Spittel

What questions are you looking to have answered in this book?

@Chevy Goff

I'd be happy to jump on a phone call with you and discuss your investment goals, strategy, and criteria. After which I can present you with some diferent options on how and where to get started.

@Kelly Wiggs

Talk to Craig he'll get you set up with the appropriate debt for your project.

@Tony Wallis

Hey Tony

We have a screening spread sheet we use to quickly qualify or disqualify a deal before doing full analysis and under writting. Message me your email and I'd be happy to send it to you.