All Forum Posts by: Ivan Barratt

 Thanks Drew, just focusing on climbing the mountain one step at a time. 

Yes @Percy N., we love deploying our in-house management in these emerging Midwest markets to maximize operational efficiencies while benefiting from the influx of growth.  

We're able to reduce expenses by 2,000/unit/yr in some cases by bringing management in-house.

The real thanks goes to my team and our partners! Without quality people, I'd still be managing a hundred houses by myself instead of 6,000+ apartment units and more than $700 Million in AUM. Great deals are tough to find, but persistence and determination pays off!

Here are some details:

434 Units in Des Moines, IA | Institutional Quality Multifamily Asset

Equity Raise: ~$29 Million

BAM Capital received this compelling opportunity off-market because of BAM’s credible reputation with property owners and investment sale brokers. The asset was acquired ~$80k/unit less than similar vintage deals in the Midwest and well under replacement cost.

We also have a phenomenal debt relationship with a publicly traded bank that provides us with a wide array of financing options better than market rate.

BAM’s holdings are now up to ~1,000+ units in the Des Moines market giving us economies of scale which directly benefits our investors.

Business Plan: BAM Capital acquires an asset with exceptional in-place cash flows that also has a light value-add component. The current in-place rents are below market, and BAM will take advantage of its operating platform to increase operational efficiencies.

Investors have their choice between a 10% annualized monthly distribution or a 7% preferred return with a targeted IRR of 15-20+%.

This is part of the BAM Multifamily Growth & Income Fund III – a $100MM equity Fund

@Jay Hinrichs thank you. @Andrew Hogan see above.

People "given" 1 million dollars often lose it rather quickly. My advice for someone receiving such a gift would be to keep it in the bank and get financial education. But beware; choose your teachers wisely.

@Jonathan Twombly again I thinking you're painting with too big a brush. I'm speaking to A and B apartments in non-boom/non-red hot markets (think most of the rest country outside of CA, NY). If we're talking retail and office commercial real estate I'm with you. :)

2008 WAS a crisis of liquidity. Today it's a healthcare crisis and there's vastly more liquidity than in 08.

Time will tell I guess. In the meantime I'm turning future toilet paper, I mean US currency into income producing, apartments in markets where people need a roof and can pay for it. Return Targets: 2 - 2.5x in 5 to 7 years with conservative underlying leverage to reduce downside risk.

Happy to count our respective chips in 5 years and see who did better. :)

Back in the day I used a lot of hard money to brrr small mfam deals.

Hard Money Formula that works well.    (Max Offer) = ((After Repair Value) x .65%) -minus repairs, holding costs, etc.

It's simple, but not easy (nothing ever is...). You need a big upside project to justify using private debt with little/no money down.

All the best!

@Jonathan Twombly

cc @Ben Leybovich

Question: what happens to cap rates in multifamily that's performing well (occupancy, collections, rent growth) through the pandemic AND interest rates are ~150bps lower AND there's 6 trillion more in currency floating around?? My theory: pricing will actually rise as it will with other assets, the stock market, etc. 

Yes, there will be some opportunities to pick off poorly executed real estate as well but if anyone is waiting to pick up B property at an 8 cap; they're simply playing the game like it's 2008 again. It's not. This black swan is different. There's an ocean of capital in the world looking for a home!

My All Weather Portfolio:

• 3,500 (and likely growing with more deal flow now!) B+/A- Apartments in the Midwest (Tortoise vs Hare markets with steady growth).
• Operating Company: vertically integrated management firm to execute the biz plan on the apartment portfolio
• CASH
• GOLD - insurance hedge
• Crypto - insurance hedge
• Buying into the S&P for the first time in 20 years. Stock Market "melt up" hasn't happened yet.