Episode 77 - Learn to grow your portfolio to 10,000 units

John Griggs, with Presidium Group in Dallas, owns over 10,000 apartment units. He co-founded the company in 2002.

John and his business partner Cross Moceri, were unhappy lawyers in California when they got bit by the real estate bug. They first started buying, rehabbing, and selling single family homes and four-plex’s in California. They wanted to expand, and after looking into several markets throughout the country, John and Cross decided on investing in Dallas. 1000 units eventually became 5000 units in just a few years. Presidium stayed on the sidelines, during the recession.
At first, Presidium started buying value added ‘C class’, now they are building large new apartments in good areas and still buying value added ‘B class.’
Tips: In a declining market, you don’t want to be the last guy to change your rent structure. You want to meet the market. Don’t keep your head in the sand; keep the building filled!

Keep your property clean with good maintenance during a down turn.
Buy and renovating apartments still works in Texas. Make sure the neighborhood can support the rent bumps after the rehab. Do your homework. 
Getting started in new apartment development was a very steep learning curve. Mitigate your risk with having the best team (bankers, general contractor, architects) on your side.
When buying a building, make sure that you raise more equity than you need too, because you can always give it back to the investors if you don’t need it. Don’t get caught short with capital at the beginning. Contact John at JGriggs@presidiumre.com

To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please email us at INFO@OldCapitalLending.com

Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.

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ASK MIKE MONDAYS -What can I expect when a building catches on fire?

Episode 76 - You need a Property Management Company that you can TRUST

A professional property management company can make or break your profitability and overall success to your apartment investment. Find a management group you can trust. A property management company should treat their clients money as their own. 

Craig Lashley & Todd Parks are with SIMC Property Management. SIMC is a third party property management company that manages over 7500 apartment units. SIMC focuses on properties with a minimum size of 200+ unit apartments. SIMC likes to find employees outside of the apartment industry to join their team. 

Property Management companies should have a few different divisions. 
Example: 1) accounting, 2) human resources, 3) construction & rehab

ACCOUNTING- is responsible for receiving rental income, paying the expenses and then delivering monthly financial statements to the ownership group. They are also responsible for lender communication for construction draws on rehab and the capital replacement reserves. 

HUMAN RESOURCES- HR overseas the onsite property manager, assistant manager, leasing agent, maintenance manager, assistant manager & porter. 

CONSTRUCTION- Your property management company needs to improve and update your property. They execute your vision. Having an internal construction group controlled by the property management company can be cheaper and more consistent than hiring an outside crew. A large property management company can buy in bulk and import fixtures, flooring and low flow toilets directly from overseas, thus saving huge costs. 

TIPS: When you put a property under contract to buy, make sure that seller does not take their eye off the ball before the property changes hands. If occupancy or NOI fall, your lender may have to reduce your loan dollars. Maximize your rental revenue with LRO. Hotels and airlines use it to get the highest price in the market. Find out if you can use rental optimization for your building.
Huge amenity push in apartments to capture new tenants. Craig likes a ’24 hour-package room’ for boxes delivered by Amazon or UPS. Valet Trash is a great low cost amenity for tenants that will help your bottom line. Todd uses Facebook Messenger to communicate with potential tenants. 
GOOD ADVICE: As an owner, don’t get in the middle between the management company and the on-site employee…or you could get fired. Let them do what they do (operate the building)…and you do what you do. (find the next building to purchase and raise the equity)

To receive our FREE 15 page report on the FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please email us at INFO@OldCapitalLending.com

Interested in learning more about how Multifamily Financing and connecting with Michael Becker and Paul Peebles. Contact: MBecker@spiadvisory.com or PPeebles@oldcapitallending.com

Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC

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ASK MIKE MONDAYS - After you buy an apartment building, rehab it, stabilize it and are now contemplating selling it... What factors should you consider when selling your apartment building?

Episode 75 - Quarterly Lenders Roundtable for First Quarter 2017

The Old Capital team talk about interest rates rising at the end of 2016 and its direct impact on loan proceeds, future of apartment investing throughout Texas and the nation and challenges with underwriting on specific transactions.

Old Capital closed over $420 million in loans in 2016.
DFW will have over 25,000 new unit apartment deliveries for 2017
Still concerns in Houston and west Texas.
Fannie Mae Green Program can reduce your interest rate up to 33 basis points
Challenges with buying apartments in smaller markets with military concentration
Freddie Mac Small Balance loan is now available up to a $6 million loan amount
Cross Collateralization can be a solution in bank financing
Rebuild Ability issues. Can property be rebuilt if more than 50% is destroyed in fire?
Financing Challenges with environmental issues.
Rent growth. Class A rent growth is slowing. Class B & C is much better. 
Houston is a preview market with Fannie Mae and impact on financing apartments
Focus on location and quality of the asset when buying.
Old Capital brings “certainty of execution in lending and closing”.

• Old Capital Speaker Series presents Gregg Willett, Chief Economist with Real Page for March 8th Grapevine Convention Center. RSVP at info@oldcapitallending.com
• Old Capital Speaker Series presents Dr. Mark Dotzour, Former Chief Economist from Texas A & M Real Estate Center on April 26- Grapevine Convention Center. RSVP at info@oldcapitallending.com

To receive our FREE 15 page report on the FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please email us at INFO@OldCapitalLending.com

Interested in learning more about how Multifamily Financing and connecting with Michael Becker and Paul Peebles. Contact: MBecker@spiadvisory.com or PPeebles@oldcapitallending.com

Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.

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Did you know that when you leave a positive review on iTunes it improves our ranking and helps us recruit great guests ? Can you leave us a positive comment at the Old Capital Real Estate Investing Podcast with Michael Becker & Paul Peebles ? Click here to leave a review on iTunes

ASK MIKE MONDAYS - When you buy a VALUE ADD apartment building; where should you invest your rehab dollars to get the largest capital gain?

Episode 74 - Aaron Katz

In 2010, Aaron joined an apartment mentor program & learned about apartment syndication. Now he owns hundreds of units with his equity partners.

Currently owns 3 apartment buildings:
200 unit Fair Meadows
150 unit Rock Island
340 unit La Jolla Terrace

Sold 2 apartment buildings last year:
90 unit Pioneer Villas- Value Added
116 unit Casa Bella- Value Added

His father emigrated from Russia and didn’t speak english. Father created the largest mattress discounters company in county. Aaron worked several years for his father and learned determination, tenacity and to follow one course to success. 

Aaron faced many challenges on his first apartment transaction. His initial management company was not focused and had to be replaced immediately. Putting a transaction together is like putting a puzzle together. 

Aaron discussed the genesis on his latest acquisition- La Jolla Terrace Apartments. Aaron had built a personal relationship with the listing agent for over the last 5 years. The property received over 15 LOI (letter of intent) offers from other potential buyers. He made it to the best and final. His offer was not the highest. The seller requested a personal conference call with the buyer to discuss his purchase game plan. He felt very positive after the call. He wanted to make sure the seller understood his buying passion. Aaron had his financing in place and let his seller know he was prepared. Buyer moved forward with Aaron. Aaron is persistent and has positive expectations of success. Aaron raised $7 million with 70 investors for La Jolla. 

Aaron recommends the book The E-Myth: Working ON your business…instead of IN your business. Aaron started with 7 investors and now has a database of over 100+ investors. He learned that you must be transparent with your investors to succeed. 

To receive our FREE 15 page report on the FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please email us at INFO@OldCapitalLending.com

Interested in learning more about how Multifamily Financing and connecting with Michael Becker and Paul Peebles. Contact: MBecker@spiadvisory.com or PPeebles@oldcapitallending.com

Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.