All Forum Posts by: Robert Saunders

Congrats on your early successes and lesson! I'm working hard to get to your level myself. Keep up the good work.

You're absolutely right @Jake S.! For the past few years since completing my masters in real estate development, I've been fine-tuning my skills as a real estate investment analyst for private equity and brokerage companies. I've analyzed the investment potential for hundreds of millions of dollars worth of deals and I've learned so much about what makes a good investment; all without putting my money at risk. It's made me very confident in myself as an investor and as an investment consultant. I'm also always interested in learning from my peers as well. You and your wife seem to be doing an amazing job in your market and I'd be very interested in learning how it's all come together for you two.

Thanks for your responses @Jake S. and @Michael O.. I am still extremely motivated with my intentions to become an integral part of the real estate industry. I know that as long as I continue to trust and appreciate the process then I will be rewarded for my effort and consistency. I may not have closed on my own first deal but it made me feel good to use my professional experience to meet another investor's needs. It was a good milestone to cross and it's opened my eyes to how else I can be effective in this industry. I'm still very focused on finding a quality investment for my first deal. Thanks again guys.

[Insert Sign of Relief Here] I've been actively searching for my first real estate investment for well over a year now. I've been looking for a 4-unit apartment building to "Househack", occupying one unit while renting out the other three. I have a masters in real estate development and an undergrad in business & finance. I've been working in the real estate industry for about 4 years now as an investment analyst. I even decided to become a Realtor to get access to the MLS. It's been very frustrating and a little disheartening trying to find a house that requires my contribution to be less than what I pay now in rent while paying a 10% cash on cash return. I've been far outbid by cash buyers with quick closings. I've even been under contract and it fell through during due diligence. I've gone as far as to open up my investment criteria to include townhomes as a live-in investment option; but to no avail.

After all that, I can FINALLY say that I've closed on my first REI transaction... It still wasn't mine though. I coincidentally ended up representing a like-minded client in HIS first real estate investment. I was able to help him find an asset that met his investment needs within just 30 days. It wasn't MY first investment but I was able to experience that moment as a professional, and it felt good. The search continues; on to the next one.

Excellent idea @Michael Carbonare! But who's going to serve the Drinks?!?! LOL.

Hey @RJ Figueroa! Welcome to REI. We have had one meetup so far and it went Great! We should be putting another one together in the coming weeks. We had some pretty good informal conversations the last time so I'd expect nothing less from the next. I hope to see you and everyone else really soon. Stay tuned and suggest the next time and place.

Hahaha! That will take you a long way then @Autumn Alexander! This is an industry where creativity is a key component in all aspects of how you approach your business. Hopefully some of that spills over on me lol.

As far as tools, I am a Real Estate Investment Analyst by day, a Realtor for investors on the side, I'm working towards a CCIM certification, and I have a Masters in Real Estate Development. This combination gives me a unique blend of relatable skills and access to some great data/software. For instance, the CCIM program gives me access to ESRI which is an amazing demographics software that I use to track economic and population stats anywhere in the US. As a Realtor, I have access to the MLS which allows me to track what sells, what doesn't, what falls out of contract, etc. My degree gives me access to some of the top industry professionals at every level of the investment cycle. Finally, my job gives me access to repetition. It allows me to consistently refine my ability to analyze different types of commercial deals and understand how important every little assumption impacts value.

Honestly though, the most important tool that I use (other than my passion for the industry) is a spreadsheet. I build a spreadsheet for EVERYTHING. I'm a real dork when it comes to financial modeling and building custom spreadsheets on either Excel or Google Sheets. The key is to build a really dynamic spreadsheet that allows you to change your assumptions on the fly to see how those assumptions impact your deal. This allows you to put your assumptions through a stress-test based on different potential outcomes. I believe @Scott Trench said it best on the BP podcast when he was the guest: You've got to be able to win if the market rises, win if the market stabilizes, and win if the market declines (I'm sure I butchered that lol). A dynamic pro forma (financial model) will help you test your deal against all scenarios.

P.S. Always substantiate your assumptions with market data or hands-on knowledge from you or someone you know.

You're welcome @Autumn Alexander. That falls along the old saying that it's "More of an Art than a Science". There's no official scale for adjusting comp values; it's very subjective. Your best bet is to first gain an understanding of the market by taking a sample set of similar properties and determining how the different features impacted the overall value of each property. If you study enough properties, you'll be able to identify an average value to different features. Once you do that, then you'll have the general knowledge needed to make more accurate adjustment to property values. 

The goal is to look at properties that are very similar to each other but have slightly different features. For instance, consider two properties on the same block that are virtually identical but one has a carport. If the one with the carport sold for $10,000 more than the other, then that is the value you can apply to carports in the area. However, it is better to look at a few properties and take an average because there are always other things that can influence the value of a property. It's the same concept if you compare a 3/2 home to a 3/1 home. If all else is equal, then you can generally assume the difference in value is attributed to the extra bathroom.

@Autumn Alexander From what I've seen, Little Havana has been exploding in regards to investor-interest since about 2015. Most of it comes from natural sprawl due to its position between the hot markets of Wynwood, the Design District, and Coral Gables. Naturally, as people have gotten priced out of those markets, they've migrated towards Little Havana. It also doesn't hurt that the area has so much cultural history attached to it. Little Havana has a strong tourism pull to it because of the culture. It's definitely a city that should continue to see appreciation as investors and developers come in and put their money to work.

I wouldn't do any land-banking there if you don't have patient capital though.But if the properties you're analyzing are cash flowing now then I would definitely say pull the trigger.

Thank you everyone for your quick responses to my question. I can clearly see now that this is not an industry norm. Moving forward I know that I can talk to a few HMLs so that I find one that fits my investment needs. I really appreciate it everyone.