With Paul Peebles & Michael Becker
The Old Capital Podcast is aimed at Real Estate Investors - both new and experienced.
Hosts Michael Becker and Paul Peebles deliver no-hype education and expert perspectives.
You will gain valuable insights from interviews with actual real life investors who are active in acquiring and operating apartment complexes. You will discover how they are identifying, financing and operating apartment complexes, as well as helpful advice on how to get started and avoid common mistakes.
70% of the lending decision is based on the building operations (historical and future) and 30% is based on the sponsor (liquidity, net worth, past ownership experience of apartments) Listen to Michael explain what’s important in apartment financing.
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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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
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
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”.
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.
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
