All Forum Posts by: Chase McArthur

@Ryan Kawash

Like most others have said, take what people say as simply a jumping off point. Opinions about investment potential is subjective and simply gives you a list of things to pay attention to. Run the research and come to your own conclusion.

As @Chase Louderback stated, you decide who your tenants will be. It is ultimately your responsiblity to secure your investment. There are a surprising amount of owners who fail to do their due diligence on their potential tenants. The success of your investment is directly proportional to the quality of tenants that occupy your property. So spend the extra time and money to ensure quality tenants. If you increase the quality of your property you exponentially increase the quality of your tenants. Just be sure that whatever you invest in your property improvements can be supported by the market.

@Ben Gabin

Truth be told, you can spin it to support anything you need, but knowing what they are planning on doing with their net will help you to figure out which direction to spin it. The only option I can foresee that would derail them holding a note would be if they were going to get into another property.

Otherwise, as stated above, the tax man is going to eat them alive if they just pull out and walk away.

Tax reduction is always a safe and solid argument.

@Josh Cochran

If I'm investing with you with that kind of fee structure, this better be one hell of an asset. Is it God's apartment complex?

What is an asset set up fee?

Why are you charging a mortgage guarantee fee? What are you guaranteeing?

Why are you taking 5% of my investment as a "financial services fee" on top of all the other fees? Am I paying you for just taking my money? Whats the purpose of that fee?

I could potentially justify those fees if you were running Bridgewater Associates, but who are you? (No offense, just making a point)

What kind of capital are you pitching into this deal or are you just bringing it to me?

Have you managed multimillion dollar assets before, can you give me a track record of consistent double digit returns?

You see where I'm going?

First thing when syndicating a deal, never include fees that you can't justify. In some aspect your quadruple dipping with this structure. You're taking fees going in, going out, taking equity and cash flow.

Just curious, but how did you come up with this structure?

@Ben Gabin

First, you should ask them what they plan on doing after they sell. Depending on their answer will depend on how you approach asking them to carry the note/s.

Have you ready discussed with them their plans after the sell?

@Alan Eisenberg

What are you looking for as far as investment goals? Are you looking for cash flow, capital gains, preservation? This will determine what kind of strategy you will follow, core, core plus, value add or opportunistic.

If you were looking at $100k-$250k of capital I'd say you could be more liberal in your approach but since you are talking about 7 figures I would be alot more strategic about where you park your capital. You need to really consider your options and long term strategy. PM me and we can discuss it in further detail, if you'd like.

@Jason Merchey

So overall, yes we do hace a tsunami of new MF inventory slated to come online in the next 2 years, however, unlike other asset classes the MF space is going to react differently. The new inventory that will be pumped into the markets are Class A/B assets. Therefore the only MF markets that will be most affected will be those with heavy A/B inventories.

However, given that the demand for Class A is limited, this will have a negative impact on new inventory as well as competing inventory in those markets, essentially creating a concessions amd amenities war between rivaling assets. There has been and will continue to be a surge in Class C and workforce housing demand, which the new A inventories will have little to no affect on. No new C inventory is being created and B- inventory will continue to organically depreciate into C assets.

It is this high demand for value add assets that is fueling the MF markets in this cycle, which is compressing caps in primary markets which in turn is forcing capital to seek investments in secondary and tertiary markets. This migration is causing compression throughout secondary and tertiary markets as well, which is driving smaller investors out of the game.

As I see it, we still have a solid 2 or 3 years before we see any significant corrections in B- and C class assets.

Increasing interests rates may prove to be beneficial for small to midsize investors as the pricing gaps will be forced to compress as large cap investors begin to withdraw from secondary and tertiary markets easing pressure on cap rates.

@Giovanni Luna

You're playing with the big boys on a deal this size. You better have a great team to play with and know your sh*t, if you want to see a piece of the action. Institutions, private equity firms and family offices will be your best best. Make sure you have an immaculate offering put together when you present as well as the right contracts in place with the owner, otherwise it'll be snaked.

@Chihiro Kurokawa

I'm sorry, you paid how much for what?!?

How much money have you spent on mentorship programs?

@Barry Sanders

Yea include it in your total GPI

@Barry Sanders

Physical vacancy is a time value

Economic vacancy is a financial value

Loss to Lease is about financial losses due to concessions.

So for P&L, LtL and EV would be deducted from GPI.