All Forum Posts by: Ryan Tuttle

That IRR seems somewhat unreal, in all honesty. We structure equity with IRRs in the 15%-20% range.

Would love to see the deck and model

@David W.

That's definitely a tough ask on analyzing LA multifamily as it's been in flux over the past 2 years. I'd turn to CBRE cap rate surveys or Marcus Milichap's MFR circular for 2022. Even then, these are lagging behind the current market out here. Happy to send you links if you PM me. If you're looking for greater returns while staying somewhat local, try going south more.

I will say that the 45%-50% down payment is far below market. We're still underwriting deals at 80% and up to 90% LTC for value-add or construction for multifamily.

We do quite a bit of traffic for spec builds on the west coast. PM me if still need a hand on this. 

Happy to assist or point you in the right direction

@Steve Tucker You could also scour Loopnet for the OM's linked to CRE properties. Given you're in Oakland, you should see plenty. Stick to the majors - CBRE/MM/W&D/Cushman

Gives you some degree of a template

@Scott Dalziel Just PMed you

@Account Closed I'd recommend doing your calculations in the context of cash-on-cash return after factoring in the leverage. Given the right market (especially Florida metros over the past 2 years with rent growth), you would find your returns are strong with the MFR purchase w/ leverage.

Beyond the numbers, it's your cash. Stick to where your tastes lie and comfort level stands. 

@Tyler French You'd push to have them sit in 2nd lien position on the currently-owned properties. It would bring your effective interest rate up, but you'd still retain your conventional 1st interest rate. 

Something to be weighed against the returns the new purchase would bring to the table

Hi Ryan,

Generally a tough ask. Granted it's a chicken before the egg type deal on getting financing for ground-up w/o having ground-up experience.

Is your GC willing to be a guarantor on the loan or take an ownership % so that his experience could be looked at?

Feel free to PM me and we could set up a call.

Saw heavy traffic funnel down to SD from 2020 to the end of 2021. Margins are getting tighter down there. Would ultimately depend on your lot buy-price. I'd opt for a parcel with plans in place to shorten your lead time until you build. Wouldn't want your as-complete value to drop below break-even after you'd sunk in 40k+ in soft costs. 

Don't have building cost data. 

We've financed these before, generally see structuring as Comm Condos given the flex usage and sqft you're looking at. Greater exit value and PSF. 

Within our client base, I've seen various exits. For single-investors, I'm mainly seeing these as 3-5 year holds post-construction. Would come down to you current portfolio and diversity.