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blog Jul 09, 2020

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What's My Exit Strategy in a Multifamily Deal?

blog May 05, 2020

Questions to Make Before Making
a Multifamily Offer


by Charles Dobens on March 25th, 2019

What two questions must you be able to answer before you make an offer on any multifamily deal? When my students bring me a deal to review, I always ask these two questions. If they know the answers without giving it a second thought, make the offer. If they can't - MOVE ON!

Here are the two questions you've got to ask yourself when you're analyzing any deal. 

When I get into the Cash Flow Analyzer software and receive the offering memorandum from students, I start looking at it and call them up. As soon as we discuss it, they can't even answer the first question. If they can't answer the first question, most likely they can't even get to the second question. So let me tell you what it is that I'm talking about. 

The first question is, what's my exit strategy? Why am I buying this property? What is it about this property that excites me? If I'm going to sit in front of a group of...

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Power of the Cap Rate in Multifamily

blog May 05, 2020

Power of the Cap Rate

There is one thing that sets the multifamily investing business apart from all others. That one thing is 'The Power of the Cap Rate'. 

by Charles Dobens on November 16, 2019

The way I teach multifamily is different than everything else, everyone else. Because what I say is, multifamily is not real estate. It is not real estate. Let me put it to you this way. 

Let's say Dave owns a 100 apartment complex built in 1986. It has 60 one-bedrooms, 40 two-bedrooms, it has pitched roofs, separate entrances, individually metered. Great property. And Link owns an identical property across the street. Absolutely identical, built by the same builder. The fact that they're across the street has absolutely no meaning whatsoever on the difference in any value, okay? Location is the same. Whose property is more valuable? Link's, or Dave's? 

So we're talking about real estate here guys. So, they're right across the street from each other, which one's more...

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blog Apr 20, 2020

 

 

Understanding Multifamily Lingo

 “Absorption Rate”

This is what we need to take into consideration when we are doing a value add, kicking people out, cleaning up the units, increasing the rents and putting it back on the market. Find out how to get the absorption rate in that marketplace. You better know what you're talking about especially when you are speaking to your investors!

 

by Charles Dobens on February 17th, 2020

 

You need to know, in your calculations for determining the cost of this value add proposition, what is the absorption rate in that particular community. That's the amount of time it takes for a new unit to be absorbed into the market and by a tenant. 

You have to determine how long it takes for a new unit to be leased up by another tenant. If it sits on the market for four months or if it is showing a four month absorption rate, you've got to figure that into your calculation. 

Once the deal is closed and once...

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