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Optimizing Rent Vs Occupancy

Optimizing Rent Vs Occupancy

It is a commonly accepted fact that if a multifamily property is running consistently at 100% occupancy, that means rents are too low. This statement assumes that the appropriate course of action is to raise rents at...

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Promote Crystallization

Promote Crystallization

I recently released a video discussing alignment of interest (or lack thereof) in partnership structures which often incentive the sponsor to sell quickly while investors may prefer to actually stay in the deal for...

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Property Tax Underwriting

Property Tax Underwriting

Property taxes, specifically in a high property tax state such as Texas, can make or break your deal. Property taxes can sometimes make up as much as 30% of your operating expenses so it is extremely important to have...

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The Nuances of Quarterly Reporting

The Nuances of Quarterly Reporting

Quarterly reporting is a staple across almost every business, from public companies reporting to shareholders to multifamily syndications updating investors. First, I want to take a step back and answer the question,...

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Beware of Demographic Promises

Beware of Demographic Promises

A few years ago, Ian Ippolito (whom I had the pleasure of interviewing on the Capital Spotlight podcast) wrote an article called, “Beware of Sponsor Promises of a Demographic Tailwind”. For those that aren’t familiar,...

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Fixed Vs Floating Rate Debt

Fixed Vs Floating Rate Debt

Back in early 2018 we all thought interest rates were rising and so everybody thought they were a genius when they were talking about locking in a fixed rate loan at the time’s “low” interest rates for 10 years....

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Should Sponsors Offer Discounts?

Should Sponsors Offer Discounts?

I am often asked by aspiring sponsors whether they should lower their fees and/or promote in order to attract investors. While I do think it makes sense to have an attractive deal structure so as to not create a...

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Should Sponsors Offer Discounts?

Multifamily War Chest

I recently had a conversation with Neal Bawa about his “War Chest” strategy to protect multifamily assets that he owns from a US recession. The strategy is simply to closely observe US GDP growth and act in the event a...

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Cap Rates Vs Fed Funds

Cap Rates Vs Fed Funds

With the recent rate hikes coming from the Fed, real estate investors are wondering which way capitalization rates (net operating income divided by property value) will move. An oversimplified view is to recognize the...

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US Economic Outlook 2018

US Economic Outlook 2018

Supply and demand always have and always will be the basic levers in the market. Additionally, interest rates temper or imbue demand and inflation is a reflection of raising asset prices. On the demand side, there is...

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Exit Test

Exit Test

Some risks are binary while others are not. Binary risks are ones in which a situation really only has two outcomes, success or failure. For example, entitlement risk is often a binary risk in a development project....

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The Business of Signing Bad Boy Carve-Outs

The Business of Signing Bad Boy Carve-Outs

Almost all commercial loans for multifamily properties are non-recourse yet they require a “warm body” to sign carve-out provisions making the loan recourse subject only to “bad boy” acts. Bad acts are typically...

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Volatility in Public vs. Private Markets

Tertiary Market Strategy

Secondary and tertiary markets have increasingly become a focus for real estate investors of all types as the numbers on deals, especially in primary markets, stray further and further from making sense. Going further...

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Why Houston Multifamily

Why Houston Multifamily

“Why Houston?” – Many people ask Kent and I this question when they find out we are two partners investing in Houston, one from California and another from New York. We feel very confident with our decision to focus on...

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Why Multifamily

Why Multifamily

There are many different ways to invest in real estate as well as a wide range of asset classes within real estate. I believe it is absolutely critical for anyone working towards creating financial freedom and...

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