All Forum Posts by: Douglas Dowell

imho lock up the deal with an option contract and then seek an experienced multifamily developer to joint venture with. The time to raise capital for this deal is before now. Your best bet will find someone with access to capital currently. A piece of this deal will be better than losing it entirely. REIA groups are a waste of time in this context. Contact multifamily brokers and see if they can recommend developers.

I am in the interest rate bear camp.  I believe the sub-prime crises broke a fairly stable machine.  

So what factors and trends are the components of the new regime?  Permit me to speculate:

1.  Automation will cheapen products.  and capital equipment will be 3D printed and much cheaper to make.  Ergo dramatic reduction in loan funds needed to buy equipment.

2.  Labor will be increasingly gravitate to STEM.  The vast majority of the rest....watch Jerry Springer? Ergo consumer debt will plummet?

3.  UBER effect.  Self Driving cars dramatically reduce the amount of vehicle loan demand.

4.   BREXIT or GREXIT...fuggedaboutit... eventually, EU is finally taken behind the barn and shot.  EU is a mess and the conditions of serious return for the above reasons seem doubtful to me.

In the end, global demand for loans appears to be forever altered. A lot of uncertainty still in the collective conscious over the 5 to 10-year time horizon. I have read a fair amount of commentary that suggests that central banks are about out of ideas.  The next hero is Congress passed a 5 Trillion infrastructure plan. (Then I woke up.)

Hello Rick,

The term venture capital is a narrow subset of the institutional capital universe.  I think your idea of working with institutional capital is good but when you have have established a solid track record or marry into the family. 

 Venture Capital money is looking for 10x plus moonshot investments.  They generally are not interested in real estate as a whole.   True you might find a partner of a vc that likes to deploy her own capital in real estate but that is more a function of my suggested targert.  

The biggest problem of working with institutional capital is that they find investment chunks under $10M to be bothersome in that they have that opportunity all day long so why bother with the real estate start up firms that work generally in th $1M to $5M space.   Firms like Family Offices and pensions do love to invest in real estate but not start ups absent an unusual relationship.

I would build your proposed pitch deck of what your model will look like and then start meeting people in your network who are interested in real estate and also ask then who they know. The best way to win in CRE is to leverage the six degrees of Kevin Bacon.

Consider partnering with a track record sponsor in the process to hyper accelerate your objectives as well.

I am going to give my favourite lawyer answer.  It depends. 

The real question number one is what is your passion? If your 100% committed to development  it wouldn't hurt.  However if your not sure yet the economics with heavy finance will give you a broader skillset especially if you go heavy on the quant. (prob stats/econometrics).

The real question is what type of development?  Entrepreneurship or corporate first?  

If you want to go straight at entrepreneurship out of school than a bachelor's in RED would be handy in doing spec homes.  It is very common for developers to snowball the homebuilding into larger deals latter.  I would find a local experienced mentor and offer to apprentice for a while.  I believe the University of Denver has an undergrad program not sure about others.

If you are looking for a corporate CRE gig think the MS RED at USC is likely bigger bang for the buck. Corporate CRE gigs can be very selective and the network of USC, if California is where you want to be, is tough to beat. Perhaps economics first then MS RED?

I would also take a look and the Urban Land Institue and NAIOP for networking opportunities.

I

I would give a gander at the Real Estate Development workbook and website of Howard Zuckerman Institute of Real Estate Development (coaching offered but I am not affiliated). I recommend the ULI education as first rate.   The two best books they offer imho were the Guide to Professional Development and The Market Analysis book.  The Multifamily book was meh.  

I haven't taken the ULI proforma courses but they look outstanding if you want more insight into the financial side.

I think you are in a tremendous position in that having experienced mentors an important piece.

Consider also finding a piece of dirt that looks potentially suitable and then put together a pitch deck/feasibility study to get feedback from your mentors perhaps.   

@Karen Margrave  @J Scott  @Bryan Hancock  @Nick L.  @Kenneth Bell

@Tom G.  I would check out loopnet for brokers in your target market but avoid buying a loopnet deal as they are notoriously overpriced.  I must also caution you to be very careful in underwriting as the multifamily market is post-rational right now.  

You  bet.  I would  score the Way Trowbridge book for the equity piece in addition to commercial mortgage 101.   Bruegman has a textbook that might fit the bill as well.

I can highly recommend Mark Huff in Overland Park.  I will DM his contact info.

Permit me to suggest Blab.im.  It was an interesting tool that Howard Kline used for an Epic interview of Albert Berriz at McKinley.  It seems like it might have some utility for pitching deals.

http://creradio.com/videos/multi-family-update-20152016-whats-the-future-of-apartments-with-albert-berriz-and-daryl-carter-live-december-8-2015-1100-am-pst/

• I have found that How to Buy and Sell Apartments by Steve Berges is really excellent. It lays out the case for value add plays that apply's to all food groups IMHO.
• Its a Whole New Business by Gene Trowbridge is essential.
• The Dummies book is actually good with Peter Conti and Peter Harris
• Commercial Real Estate Investing with Dolf De Roos was pretty good
• What Every Real Estate Investor Needs to Know by Frank Gallinelli
• Avoid Lindhal beyond his books which are great i.e. his guru model is full on.
• Deal Makers Guide by Ray Alcorn is EPIC but pricey.