All Forum Posts by: Nick Yates

Quote from @Bjorn Ahlblad:

Stick with it Nick your next deal could be right around the corner. Look into a local REI or Landlord Association and network with the local investors as well as hanging out here. All the best!

 Thank you Bjorn.

Quote from @Evan Polaski:

@Nick Yates, finding deals today is challenging for the same reason you mention.  Sellers are still wanting "too much" as they typically think their deals should still be trading in the 4-5% cap rate range.

While I won't pretend to have a crystal ball, I generally think: 

a) if you want to get a deal today, you are going to need to be more aggressive then you probably are comfortable with in your assumptions.  I don't mean this in plugging in that rents will grow 10% year over year forever, but in some markets, is 5% somewhat reasonable, even though it is more aggressive than 3%?  Or everyone's favorite: "expand your cap rate 10bps every year you plan on owning".  Well if you are buying at an 8% going in today, I could argue that compressing it over 5 yrs (again depending on asset and market) to 7% is still a realistic expectation, especially if your sensitivity shows you can still make an okay return if cap rates do continue to expand.

b) you need to be more patient. I had a seller come back to my broker on my LOI this week that "I am not a serious buyer" because I didn't want to pay a 5% cap rate on annualized T1 numbers, since I was 10% below his desired price. He has a 3.5% assumable loan in place, but it only has 20 months of term left. The moral is: he is not in imminent pain. He can wait. Maybe things turn his direction and I realize I could have made a lot of money at his price today. Or maybe rates stay high and he starts feeling the squeeze with his investors if/when he has to refi at 6% or sell at a price I would have paid today.

Back to Bjorn's point, keep reviewing and underwriting deals.  Overtime, you will start to develop an intuition of price very quickly.  While this won't help you necessarily be awarded more deals, it will certainly help limit how much time you are spending on most deals.  And I always recommend you keep an eye on the deals you have already underwritten.  If you got a deck from a broker 6 months ago and the deal is still showing available on their website, it is worth a follow-up call to see where things are.

 I appreciate the response Evan. Those are good points to think on. Also, that "not being a serious buyer" comment the seller made is funny.

I am going to try to articulate my curiosity the best I can, so here we go...

I am young but have been blessed to be surrounded by a few good sponsors with their own teams in place, and they have told me when I come across a "good Deal" I can send it to them and be a part of the deal (75unit+ apartments). I am yet to get one though, but I am eager to get my first and be there every step of the way so eventually I can be the head honcho aka the sponsor of these deals.

I am getting a bunch of leads every week, through brokers, lenders, PM's, etc but mainly through brokers. Yes I am trying to build the relationship with brokers to get "better leads" but what I am finding through underwriting 2-3 properties a day is that our price would need to be sometimes 15%+ under what the whisper price is and I am told that is too big of a gap to submit and LOI. I am curious though, after seeing a ton of these properties that fits our criteria fly through my inbox, there has to be creative ways to make deals work even though the price is higher than what my underwriting says i should be at, correct? Also, i dont want to constantly send these sponsors my underwriting and let them take it over from there, I want to be more valuable then that, hence why I am curious how to spot a good deal or i guess create one?

This is just my thoughts on a Friday morning, I am always trying to learn, surround myself with new people, and become better in every area of my life. Maybe(probably) In some areas I am naive within this business, and I just don't know what I don't know, so thank you in advance for the responses. I would love to connect with anyone open to it.

Quote from @Robert Rixer:

Cold calling owners. Ask them if they're open to selling. If not, hang up and move on to the next one.

 I agree, I will expand on cold calling just a bit as well by cold calling the owners who own multiple large properties and try to build a relationship with them. Have a deep conversation, and maybe even grab coffee, and then stay in touch with them. These owners have friends who own real estate and if you have built trust with them, they could send leads your way tomorrow, or 2 years from now.

Quote from @Evan Polaski:

@Nick Yates, honestly there are lots of ways to add value and be involved.

But, just like wholesaling, it is all about connecting the dots:

There are typically three main components to any deal:

Sourcing a deal
Sourcing the financing (typically the equity needed)
Executing on a business plan

As a wholesaler, the deal and the financing may be easier, since you are effectively playing matchmaker.  This is not to say it is "easy", but at the highest level it is networking and building relationships.

As Bob gets into, if you don't really have any real deals and you don't have a network of investors that would be interested in either partnering on bigger deals and/or becoming an LP in deals, then your value starts to diminish.

Another way to learn the ropes is to get a job with a larger company that operates in that space.  Anything from property management to construction superintendent, or underwriting analyst, etc.  Some companies are great at providing all roles exposure throughout the company to learn more about real estate investing than just the specific role you are working.

Thank you for taking the time to respond evan. Everything you said makes sense, I am curious though, how did you get involved in your first deal and also, if you could go back to being 20yrs old knowing what you know today how would you get started in Multifamily?

Quote from @Bob Stevens:

Quote from @Nick Yates:

Whatsup Everyone! I am currently based in Saint Louis, I wholesale at the moment, but I am looking to get Involved In 20+ Unit apartments, even 100+. 

What are a few ways I could provide value to someone else with a deal? 

Also, If I find a deal how do I go about getting with the right people to get it closed? 

Essentially I am just trying to find ways to get involved with apartments and provide value that helps make money, because I don't have a ton of capital myself but that shouldn't stop me from achieving what I want.

Thanks guys (P.S. If anyone is in Stl and has a flip opportunity I will buy it)

 Providing value its what its all about, So what value do you bring? Do you have deals, money, buyers, sellers ? If not of the above, then tell me/ us what value you provide ? 

 I appreciate your response Bob, this biggest thing I Have is Time/Energy, And I want to be a GP on large deals so I am trying focus my energy into activities that can get me into that position(Sourcing deals, Raising capital) and then from there I guess I can take on more day to day activities within the deal as a GP- I am assuming those two things can get me GP Position btw.

 Furthermore, I have raised money on a small scale(flips), I have sourced off market single family houses, I have found buyers for deals. that is a good start to being valuable in the marketplace and from what I mentioned above, I think those are some of the same skills to get me where I want in the large multifamily space but obviously just on a bigger scale.

Is there more ways to become a GP on a deal Besides sourcing deals or raising money? Or is that the best use of my time?

Whatsup Everyone! I am currently based in Saint Louis, I wholesale at the moment, but I am looking to get Involved In 20+ Unit apartments, even 100+. 

What are a few ways I could provide value to someone else with a deal? 

Also, If I find a deal how do I go about getting with the right people to get it closed? 

Essentially I am just trying to find ways to get involved with apartments and provide value that helps make money, because I don't have a ton of capital myself but that shouldn't stop me from achieving what I want.

Thanks guys (P.S. If anyone is in Stl and has a flip opportunity I will buy it)