Episode 173 - Applying Warren Buffett’s investing knowledge to Multifamily

Every year, Warren Buffett, writes his Berkshire Hathaway shareholders a letter. This eagerly anticipated letter from the ‘Oracle from Omaha’ gives rich insights, from the greatest investor, on what has happen in the last 12 months for Berkshire and what he sees on the horizon for their owned businesses. Everyone (investors and non-investors) can learn life lessons from his common sense approach to investing in businesses and people.
Old Capital’s James Eng has taken Buffett’s 2019 annual report and deciphers several nuggets for the multifamily investor. There are several parallels in investing in apartments and investing like Warren Buffett.

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

ASK MIKE MONDAYS - Michael, how do you deal with difficult or unreasonable limited partners AFTER we close?

Real estate is easy; people can be hard. In apartment syndications, general partners need equity. That equity comes from limited partners. Not all limited partners are going to be easy to work with AFTER you close. Setting the correct investment expectations with the limited partners at the beginning of the transaction is very important. Michael also discusses how he has dealt with a challenging investor.

Episode 172 - Why COST SEGREGATION will give you tremendous tax advantages when owning apartments

Cost segregation identifies building costs that would typically be depreciated over a 27.5 period and reclassifies them to permit a shorter, accelerated method of depreciation for certain building costs. Your apartment building is made up of thousands, maybe millions of parts. Flooring, cabinets, lighting, stoves are examples of items that can have different and shorter depreciation schedules. A cost segregation study identifies and reclassifies those assets to shorten the depreciation time for taxation purposes, which reduces current income tax obligations. This is one of the biggest reasons on why we buy real estate. Tax advantages!!
BBG is a nationwide commercial appraisal group that not only completes valuation, but helps real estate investors recognize rapid depreciation on their asset. Louis Yorey is a COST SEGREGATION expert with BBG. His group creates the cost segregation analysis/ report that assists you with tax savings.

To contact Louis Yorey: lyorey@bbgres.com

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

ASK MIKE MONDAYS - Michael, what should an ASSET MANAGER do?

An asset manager oversees the property on behalf of the investors. They report any financial or physical changes (good or bad) to the general partner. They help in managing a solution. When you own a small property (10-30 units) you are the ASSET MANAGER…. When you purchase a larger property or own more apartment communities, you may need to hire an asset manager. Remember, your job, as a general partner is to find more apartment purchase opportunities and find more equity. An asset manager will need help run the operational side of the business.

Episode 171 - Coaching and Counseling: What?? I didn’t realize that!! That’s not right!

Independence is leaving the commercial real estate business. Listing agents are being hired by commercial apartment lenders. Yes…they now work for the lender!
Gone are the independent real estate agents that represented the seller only. Today, listing agents have two bosses, 1) the apartment seller/owner and 2) the apartment mortgage company they are employed with. How do you serve two masters? The listing agent is almost forcing the buyer to use their commercial mortgage company; IF they want to be considered in “best and final.”

What this means to you… is that the buyer is NOW handcuffed to the listing agents’ lender…and will not get the best financing available. Your listing agent is now a mortgage originator and getting paid to push mortgages to the buyer, too! How is that possible? The listing agents mortgage company will not shop other agency lenders. The listing agent’s lender… will not get you the best interest rate, best leverage, and best terms available. In today’s podcast, Paul and James bring you up to speed on how and why this is happening and how it will impact you in the future.

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

ASK MIKE MONDAYS - Michael, what do you read?

Michael discusses what he reads on a daily basis and what helps him understand the big picture in apartment investing. If you come across interesting and supportive investing articles; share some of those articles with your investors. Michael, uses the example of Apple adding thousands of jobs in the same submarket of an apartment building that he owns. He also makes comments after the article on how this will impact their investment with a brand new campus a few miles away. Communicating that information to your investors, helps reinforce a good investing decision by them.

Episode 170 - How to Achieve More Success by Teaming up with a “talented partner”

Justin Martinez and Matt Picheny are business partners in a 132 unit, two property portfolio in Lawrence, Kansas. Justin lives in Dallas, and Matt lives in Boston, we discuss how they found this opportunity near the University of Kansas.
Success in real estate just doesn’t happen overnight. You must take action! Many new investors go to real estate conferences to get educated and networked with like minded folks. Matt met Justin at an educational and mentoring conference and found they had common ground. Prior to meeting Justin, Matt had only purchased single family homes and had never purchased an apartment building. Matt leveraged Justin’s past ownership and management experience in over 1200 units to help him purchase a large apartment building. If you DO NOT have current multifamily ownership real experience; you will need to find a partner that brings a set of skills that you are lacking. Listen to how Matt and Justin came together to purchase a large apartment building. Teaming up can bring success faster.

Property website: sunriseapartments.com
To contact Justin Martinez: SkyCastleProperties.net
To contact Matt Picheny: Matt@MJPPG.com

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.