Street Smart Success

Buying sub-institutional size deals entails less competition, and therefore lower prices. In the $3 - $10 million dollar range, competition is mostly local to a specific market with a buyer pool that generally doesn’t include national or regional players. David Hrizak, CEO of The Streamline Companies, buys, builds and manages across various asset classes in Phoenix, the 5th largest market in the country. Over the past three years, ...

Finding an avenue to high returns can be difficult in saturated markets. Certain markets outside of major metros, however, can provide a unique opportunity for great returns as major metros have become exorbitant for large swaths of owners and renters. Colby Swarz, Vice President of Capital Markets & Investment Strategy of Burkentine Real Estate, builds Planned Urban Development communities with garden style apartments and town...

Although retail has been out of favor over the past several years with the threat of ecommerce, it’s gained traction more recently. As opposed to being venues for traditional soft goods stores, retail space is becoming utilized for other purposes such as medical services, boutique gyms, and restaurants. There’s also been negligible new construction since 2008, so demand for space has outgrown supply, which has resulted in mid-90% o...

It’s always difficult finding a deal, even in down markets, but if you’re willing to be contrarian, there may be lucrative opportunities that present themselves. One example is vintage 100+ year old multifamily properties in downtown Portland, Oregon. These properties are trading at 300-400 basis points higher than suburban value-add properties that hardly cash flow, and appeal to a large subset of urban renters. Paul Del Vecchio, ...

Sometimes the best ideas are the simplest and seem the most obvious in hindsight. Co-warehousing is one of these ideas. Co-warehousing was created for small, often start-up businesses to rent smaller spaces for shorter periods of time. These spaces are typically sub-1000 s/ft, as small as 250 s/ft, which are desirable to entrepreneurs who can be moving out of a home office or storage space, or just starting out. Co-warehousing also...

One strategy to get big discounts on multifamily properties is to buy the loans from current lenders at below par. Once a mortgage becomes 60-90 days late, lenders will consider selling the note to de-risk their position and redeploy the capital into other loans. Buying pools of these notes is a strategy deployed by larger funds but can also be used by smaller investors to acquire buildings in smaller to midsize markets for short o...

The single-family housing asset class is the largest in the U.S, valued at $70 billion. In the past few years, however, this asset class has seen some of the same challenges of other commercial real estate classes, such as overleverage, increased interest rates and escalating expenses. As a result, attractive opportunities are starting to emerge that translate into solid investments that can generate a 7% yield. Noel Christopher, M...

Although prices on multifamily have come down, the market still hasn’t stabilized. Rents have come down in many markets and expenses have increased, but prices have still not adjusted accordingly. Additionally, cap rates are still often lower than interest rates. Brian Burke, President and CEO of Praxis Capital, a multi-decade multifamily investor, has transitioned from multifamily to investing in senior living facilities. Brian is...

As major metros have become too expensive, investors are moving to tertiary markets in order to improve yield, thereby driving up prices in these markets. Smaller markets can be attractive because prices can be 50% less and rents not that much lower. Southern New Hampshire is a great example, as buyers from Boston and other markets are entering this market and paying record prices. Axel Ragnarsson, founder of Aligned Real Estate Pa...

In today’s market, investors are finding it difficult to achieve strong, reliable returns. That’s why more investors are acting as the bank, making loans directly to other investors who don’t qualify for shorter-term bank loans despite having excellent borrower qualifications. These loans are shorter-term, real estate-backed loans that often generate low double-digit returns. Fred SaintAmour, Owner and Managing Partner of Boathouse...

As a passive investor, one way to reduce risk and also participate in the upside usually reserved for General Partners, is to invest in a GP fund. By investing in a GP fund, you get to participate in the fee income generated by the fund while also sharing in the upside economics of the individual deals. Instead of achieving mid-teen returns, you can potentially do considerably better, even as high as mid 20’s. John Azar, Founder, C...

One of the most resilient asset classes in commercial real estate is Mobile Home Parks. Almost no new parks have been built in the last couple decades, and many parks are being repurposed for higher and better use. Mobile Home Parks are the most affordable housing option that has wide appeal to renters getting squeezed by inflation. Patrick McDonald, Principal of Community Management Group, owns and operates 26 parks, mostly in the...

After many years of peak prices, distress is starting to appear in multifamily apartments, including newer properties. As debt maturities are looming, operators aren’t able to absorb the new debt costs plus all the other increased costs of the past few years including taxes, insurance, and other operating expenses. As a result, properties are now selling at prices at significant discount to replacement costs, thereby offering a onc...

Investing in older, infill markets that are being repositioned and growing can be a recipe for huge appreciation. Over the past decade, several cities in Northern New Jersey with easy access to transportation have seen explosive growth in values. Gentrification has led to changes that have made these areas desirable to live in for upscale demographics. Aaron Fragnito, Co-founder of People’s Capital Group, is an apartment syndicator...

There are over 20 million rental homes in the U.S. Because of the higher prices of these homes, however, investors are making less on them than they have in decades. These days, investors are making more money by financing the homes than owning and operating them. When you’re the lender, you get monthly payments without having to manage the properties, and you generate higher returns. Eddie Speed, President and Founder of Note Scho...

Single family homes have always been a great way to invest in real estate if you buy them at the right discounted price. If they’re in the right neighborhood in a stable or growing market, you will have no problem renting them, and they have historically appreciated over time. You also can use other people’s money to acquire them. Jay Conner, The Private Money Authority, has flipped over 500 houses using other people’s money with n...

An often overlooked and misunderstood category of Real Estate investing is tax liens. 2% of property taxes annually don’t get paid, which presents an opportunity for investors to invest in tax liens or tax deeds. With tax liens, you can earn interest when the property owner pays off the delinquent taxes up to 18–36% annually, depending on the state. In tax deed sales, you can acquire properties at a heavy discount. Brian Seidenstic...

The largest asset class in the world is single family houses in the U.S., worth a total of $35 trillion. Not only is it the largest asset class, it’s the least risky if you invest with low leverage. One way to participate in the appreciation of this asset class without the potential downside is with Home Equity Agreements. Home Equity Agreements are contracts between investors and homeowners where investors get a percentage of the ...

In order to become an expert in multifamily takes decades. From knowing all aspects of the physical properties and maintenance, to the nuances of property management, and how to buy properties at the right price, requires a lifetime of knowledge. Paul Carassone, The Property Boss, has been acquiring and managing properties in New York for over the past 25 years. Paul started with his father and brother in the Bronx and transitioned...