All Forum Posts by: Geoff Stuhr

Hi Gary - I would second what @Marcus Auerbach said above. That said, there are still deals to be found in the Milwaukee area with solid cashflow. Feel free to reach out and connect if you're interested in discussing further. Happy to help!

Vidal - you would want to go to a lender and have the properties appraised (different from the city assessment). If there is enough equity within the properties based on their appraised value, you may be able to do a packaged loan for these two properties and then have enough equity for a down payment on another property. Obviously you want to pay attention to your interest rates, cost of appraisals, and fees for refinancing. I wish there was an easier way. You could also potentially look at a line of credit if you have enough equity in the properties, but again that would require appraisals. 

I have just gone through the process of setting up a fund and would definitely recommend that aspiring fund managers work with someone that has a ton of experience in this space. Prior to our fund I've done 13 different syndication deals, a lot of JV's, and a bunch of purchases in my personal portfolio - and the fund was a whole different beast. Thanks for being here to support Austin!

Hey Paul - I agree with many of the reply posts - regarding clarifying. I am a big fan of Ohio markets (Cleveland and Columbus) but am certainly bias towards Milwaukee. Those markets are each pretty similar in that they are linear markets with a more smooth and steady growth curve over time, and typically better cash-on-cash returns. I absolutely agree with the reply above that mentioned it is critical to find the right team - brokerage/agent, property management, lenders, etc. to start with. Feel free to reach out if I can help you look into the Milwaukee market further.

Our main 2023 goal is to acquire $30M worth of value-add commercial real estate with strong predictable cashflow from day 1. To achieve this goal, we had  to break it down into smaller steps. First, we had to get very specific around the type of assets that we are targeting, which is Class B Industrial properties between 50k-200k sq ft, located in great areas around Milwaukee and Madison, WI. From there we are building out what we are calling our "Deal Machine" - which is a direct to seller outreach strategy, and we are also going to build our "Capital Machine" focused on finding additional capital partners to add into our network that may be interested in participating in the deal flow that we have. Through our deal machine outreach and traditional broker relationships, we are aiming to offer on $300M worth of deals in 2023, and through our enhanced capital raising efforts we are aiming to raise $10M in 2023.

To date we have offered on about $36M worth of real estate, and have raised over $1M to acquire one asset. We need to ramp up our efforts here in Q2 and Q3 to get back on track and meet our goals.

Great question, thanks for posting this! Goals, built on a sound plan and followed up with relentless action and execution is how anyone can make their dreams a reality!

Just wanted to share my perspective as to why we are focusing our efforts on Class B Industrial Real Estate. For those that don't know, class B properties are generally older and have some degree of wear and tear, but they are still well-maintained and functional. Industrial properties, meaning buildings that are designed for manufacturing, storage, or distribution purposes - which includes warehouses, factories, and industrial parks, are phenomenal value-add plays. Our experience was generally in B/C class multifamily, and we have taken that value add strategy into the Industrial asset class because of the following key reasons:

1. -Lower Acquisition Costs: Class B industrial properties are typically less expensive than Class A properties, which are newer, high-end buildings with the latest technology and amenities. This lower acquisition cost can make it easier to get started with real estate investing and can also provide a higher potential return on investment.
2. -Stable Cash Flow: Industrial properties tend to have longer lease terms than other types of properties, which can provide more stability in terms of cash flow. Class B industrial properties also tend to have lower vacancy rates than Class C properties, which can help ensure a steady stream of rental income.
3. -Diverse Tenant Base: Industrial properties tend to attract a diverse tenant base, including manufacturing companies, logistics and distribution firms, and e-commerce businesses. This diversity can help protect against fluctuations in any one industry and can provide more stability in terms of tenant occupancy.
4. -Strong Demand: With the rise of e-commerce and the increasing importance of logistics and supply chain management, there is a strong demand for industrial properties in the United States. This demand is likely to continue in the coming years, which can provide a steady stream of potential tenants and rental income.
5. -Value-Add Opportunities: this is perhaps our favorite reason for looking for Class B Industrial deals, because Class B industrial properties are older and may have some wear and tear, there are often opportunities for value-add investments. This can include renovations, upgrades, or repositioning the property to attract higher-quality tenants and increase rental income.

The risks associated with Class B industrial properties are generally tied to the broader economy, changes in tenant demand, and unexpected maintenance or repair costs, but we feel that if we conduct thorough due diligence and carefully evaluate potential opportunities, investing in Class B industrial real estate offers a range of advantages and opportunities. 

Really depends on the asset/project/business plan but I love the linear markets such as Wisconsin or Ohio. Linear markets have a more flat growth curve and are not "boom and bust" type markets. I live in Reno NV and Milwaukee WI - I would consider Reno to be a very hot boom/bust market, while Milwaukee is a very steady eddy predictable linear market with great cashflow. Our business focuses primarily on industrial real estate throughout Southeastern Wisconsin - some people call it the "Machine Shop of the World". I like it because we have a solid blue-collar employment base that is specialized in manufacturing, we can buy properties at cap rates that allow for strong predictable cashflow, and then we can execute our business plan to pull some value-add levers and increase the net operating income. Note - as I mentioned at the beginning, it's all about the project and business that you want to be in - if I was going to buy a short-term rental I would look at areas that have year-round desirability such as Arizona, Tennessee, and Florida. 

Hey Vince - I'm from Wisconsin and played small ball D3 football back in the day. Would be happy to connect as I've purchased a lot of small multifamily properties over the years. At a very high level, the properties that I have bought that turned out the best for me had the best locations and tenant base - "location, location, location" is real. For a while I was chasing yield/cash-on-cash return, and it usually just means more hassles. The best location with solid working class tenants will perform the best over time and be the least amount of headaches. 

Happy to help ya in any way I can, and can talk through many different strategies as you're getting started. Feel free to reach out any time brother!

Hello there BP Community - can anyone give me the low down on South Dallas? I have an opportunity to partner in a large scale A-class multifamily / mixed use development. I know that DFW and TX in general is booming and have great underlying fundamentals with population growth, however I am specifically interested in understanding perspectives as to whether or not South Dallas would be considered a "path of progress". 

Thank you in advance for any insight!

-Geoff

Buying in the wrong location (the hood) unless you have a very good understanding of what managing that asset is going to be like. I know a number of guys that specialize in section 8 housing, and they have a system that really works for them. Unless you are willing to put in the time to build out that system, and have the nuts to execute it - I would stay away.

Overpaying and assuming rent appreciation will magically carry your proforma.

Not budgeting enough for remodel/unit turns.

Not planning to enact as many strategies as possible to increase NOI and truly understanding if at least a few of those strategies will really work at the specific property you're purchasing.