All Forum Posts by: Shane Thomas

Cap rates are arguably one of the most fundamental metrics in commercial real estate investing AND probably one of the most debated and misunderstood topics in this space...

Lately, I have heard a lot of discussions around "cap rates don't matter" 

Which was surprising to hear. 

When I started off in this industry, the understanding of cap rates was crucial for garnering any respect in this business.
It is common to think of cap rate as a number represented by the following formula:

But I believe the best way to think about a cap rate is as a measure of risk. All investments involve risk and evaluating risk is what prudent investors do best. 

Most investors are buying property for cash-flow (i.e. income). If you are buying income producing property, then I believe cap rates DO matter and I explain why in the article below. 

I'm interested to hear your thoughts on this!
How do you think about cap rates? Their importance, especially in uber competitive markets?

“One reason people resist change is because they focus on what they have to give up instead of what they have to gain” - Rick Godwin

This is a quote that really struck a chord with me throughout my professional life and I continue to use it every time I come to a fork in the road. It really defines the difference between being complacent versus being growth oriented.

Given all the uncertainty in the world today, I put together an article outlining my journey and I hope it may inspire one person to think differently and take a chance on something they want to do, no matter how big or small.

One more thing I think you’ll get out of this is summed up by the saying “your thoughts become your realities”...

If you think you can’t, you won’t...but if you think you can, you will.

A little cliche but sometimes people (and even myself) need to hear things like this on the weekends when you should keep grinding away at your work!

Have a great weekend!

Happy saturday! 

Comment your background and current real estate investing focus and let's start a networking forum on this post! 

For myself, I am a Canadian-born seasoned real estate entrepreneur and I started my investment career at the age of 23 with single family rentals (classic love story). Since moving to United States in 2010 though, I have been focused completely on multifamily investing. I co-founded Catalyst Equity Partners with my partner Prashant Satoskar where we now invest and manage over $35M in assets in Texas (with goals to hit $50 million here soon), as well as my limited partnership interests in an additional $88M in assets.

For my background, I have 10 years of experience working at PwC, a Big-4 Consulting Firm, where I led large teams in strategically advising large Fortune 500 companies on ways to improve operations, increase revenues and reduce costs. I am a Certified Public Accountant (CPA, Illinois) and Chartered Accountant (CA, Canada), recieved a Bachelor of Mathematics degree, and a Master of Accounting degree from the University of Waterloo located in Ontario, Canada.

What is your background and current real estate focus? 

What do you think?

Is an active operator with less experience, but a strong deal, a better investment than a more experienced, 'mehh' deal? 

For example, if you are a passive investor with 100K liquid and are looking for potential investment vehciles what would you find more important? 

A strong operator is of course important (and you should vet sponsors rigourously), but would you be more inclined to invest in a managing partner with let's say $50 million under management that underwrote a deal for 17%+ IRR (with the numbers to back it up)?

Happy 4th of July (if you are reading this today)!

I wanted to start a discussion on multifamily syndication offerings and maybe shed a little more light on the subject for other multifamily investors.

The initial intention of Reg D was to allow smaller companies, which likely could not afford the standard SEC registration, a chance to access the capital markets. The primary difference in the 2 offerings lies in how the Sponsor can advertise the deal AND what verification/documentation is required.

If I had to answer the question “what is the most common filing status among commercial real estate sponsors?” (which I have, many times), I would answer 506(b). There is much larger audience of potential investors that are non-accredited, but you are limited to the number of non-accredited investors you can bring to your offering so..

If you are a passive investor -- Do you care about if the offering is one or the other?

If you are an active operator -- Do you like to offer one or the other? Do you have plans to offer 506(c) deals in the future?

What are your thoughts?

We are excited to announce our first meetup of 2020! On January 11th, 2020, we'll get together to discuss how to hit the ground running with multifamily investing. Our meetup last January 2019 had a tremendous turnout and the feedback was fantastic. We'll review investing goals, the changing investment landscape and how you can take actionable steps to hit your targets.

There will be plenty of time for networking with new and experienced investors. This is a free event and no experience is required. The restaurant is full service with food and drinks for individual purchase.

Agenda:
11:30-12:00: Welcome and Networking
12:00-12:45: Presentation, Discussion and Q&A
12:45-1:30: Networking

We look forward to seeing you there!
Shane & Mani

Friendly reminder that we have our meetup tomorrow and have over 100 RSVP'd already. 

This meetup will be an exciting one as we'll be joined by Shayan Hasnain, Abe Garza and Jordon Emmott, who are managing partners of National Apartment Advisors (NAA), a leading Houston multifamily investment advisory brokerage. They will share their insights on the state of the market and what it takes to win deals as a buyer in today's competitive market.

Please RSVP at https://www.meetup.com/Apartment-Investor-Mastery-AIM-Sugar-Land-TX/events/htkfnqyzmbsb/

Come join us Saturday, Sept 14th in Sugar Land for our next multifamily meetup! 

We'll have a few top brokers from a local multifamily brokerage firm on a panel discussion, where we will discuss the state of the market, how to get deals as a newbie, what type of deals are getting done in today's market, etc. This will be an interactive session with lots of Q&A and a great opportunity to meet the brokers who are the source of deal flow for investors! You don't want to miss this opportunity!

The restaurant is full service with food and drinks for individual purchase. There will be plenty of time for networking with new and experienced investors. This is a FREE event and no experience is required.

Agenda:
11:30-12:00: Welcome and Networking
12:00-12:45: Presentation, Panel Discussion and Q&A
12:45-1:30: Networking

We look forward to seeing you there!

Shane

We would like to invite you all to the Apartment Investor Mastery (AIM) Meetup that we host in Sugar Land!

On July 13th, we'll get into the basics of underwriting with a special focus on things to consider as a new passive investor. We'll leave plenty of time for Q&A so come with any and all questions. Our goal is for you to all walk away better prepared to evaluate deals as a passive investor.

The restaurant is full service with food and drinks for individual purchase. There will be plenty of time for networking with new and experienced investors. This is a FREE event and no experience is required.

Please register and RSVP for the event here: July 13th Multifamily Meetup Sugar Land

Please register for our meetup group at: Apartment Investor Mastery Sugar Land

Agenda:
11:30-12:00: Welcome and Networking
12:00-12:45: Presentation, Discussion and Q&A
12:45-1:30: Networking

We look forward to seeing you there!
Shane & Mani

@Vadim Fattakhov - Thank you. Hope to see you at the next meetup!

@Ameet Mehta - The event tomorrow won't be streamed but we plan to do so in the future! We'll let you know when we start streaming.