All Forum Posts by: Steven Gesis

I think you should focus on cash on cash. Also,truly understand and see what rent collections have been for the last 120 days. I would also be careful of a project where there is a lot of rehab or construction work.

Roni, what's the hesitation for projects requiring a lot of rehab or work, those are the most interesting as they present the largest value gain opportunity and likely have the lowest competition as investors not many want to do the tough work, everyone just wants to the lipstick, but do you really squeeze all the value in that case? Are you able to set yourself apart form the completion with just lipstick?

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Originally posted by @Brian Burke:

Investing in real estate during a recession makes many people feel like a long-tailed cat in a room full of rocking chairs. For others, it’s an exciting opportunity.

In my 30 years of real estate investing, I’ve seen my share of market cycles and felt the pain they deliver, but I managed to get through all of them without losing any of my investor’s money. Losing my own, on the other hand—well, that’s a different story!

Most at-risk during times like this are the investments you’ve already made. If you are invested with the right sponsor, who implemented the right structure, you’ll stack the deck in your favor for a good outcome. Thanks to recent economic events, it probably won’t be the outcome you planned for, but one that you can live with, all things considered.

But what about new investments? I’ve found that the best investments are ones made at the trough of an adverse cycle, and ones made during the initial climb back up. A notable example is when I bought 120 houses in the San Francisco Bay Area from 2010 to 2012 at the depth of the last cycle. When I sold them 5-6 years later, they had gone up in value by 2-1/2 times. That trade underscores the importance of timing. This cycle isn’t likely to duplicate that result, but it could present some interesting opportunities.

So, what about investing in a passive real estate syndication now? Making the right decision is more important than ever. That means that BiggerPockets’ launch of my new book is perfect timing (The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications). It is critical that you invest with the right syndication sponsors and in the right real estate. This book will show you how to do both.

In talking with our investors about the current state of affairs and how they are planning their investment strategy from the short to medium term, we’ve heard responses ranging from hoarding cash out of absolute fear to those who view this as a chance to take advantage of opportunities that arise from the ashes, to just about everywhere in between. Where do you find yourself on that spectrum?

Brian, I think you make some great points, I also believe syndication can be good during any time, it depends on the sponsor, discipline, and underwriting if you are a heavy value-add guy (Me) - I think deals are out in the marketplace all the time, it requires more searching more due diligence, but they exist in good and bad times. The key is to be relentless in the pursuit of your goal and deals will always be there. Now in less fortunate times are more deals available? Maybe? I think in the coming months to half-year we will certainly see more deals hit the market as owners deal with bad buys overvalued purchases, heavy competition in development (ground-up) - mass unemployment - if you do not follow the trends but stick to the fundamentals of a deal structure you should fair well.

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Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $850,000
Cash invested: $600,000

A success story for Multi-Family, repositioned the asset, modernized with new kitchens, bathrooms, flooring, paint and much more. Pet-friendly community right outside of the urban core.

What made you interested in investing in this type of deal?

Was seeking to begin to 10x portfolio

How did you find this deal and how did you negotiate it?

On-Market Deal - price was right and underwriting matched our criteria

How did you finance this deal?

Local Bank - they were an amazing partner for us

How did you add value to the deal?

We renovated all the apartments:
Kitchen: New Cabinets and Quartz Tops, Stainless Steel Appliances, New Tiled Bathrooms, New LVT Flooring, New Paint, New Fixtures and LED lighting, USB Outlets.
Added a dog park, EV Car Charging Station, Created a community space - much more

What was the outcome?

Demand soared, as this is right outside of the urban core with all the latest upgrades and best amenities.

Lessons learned? Challenges?

Old buildings are tough and budgets are even tougher - hard work is the ultimate requirement for best results. No easy path.

1 Vote

Originally posted by @Luke Sass:

@Steven Gesis

Love the question I think everyone tackles this question as to how they might increase their NOI

Have you tried the bulk internet agreement ? It’s a good way to make additional money off of something your tenants are going to have anyways. Comcast and other providers let apartment owners buy internet/video in bulk so you can resell to tenants at or a little below retail. It’s usually good for $10-$40 per unit each month if you set it up right.

Car wash station is another where you have a dedicated spot with water and power and sell cleaning supplies/rent a Vaccum

Have your tried renting out your model unit as a short term rental as an amenity for tenants that have family visiting and don’t have the room to accommodate

Luke, we are actually selling our own Smartland Internet to residents in high rise properties, we manage our own network, residents don't need to ATT, Spectrum, Wow, Comcast - they buy it direct and can choose 1 of 3 packages, we offer a more cost-effective solution, our CAPEX will return 10x on investment with 20% saturation.

We are working on car wash station now.

Genius idea on the model unit - as short term rental!!!

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Originally posted by @Evan Polaski:

@Steven Gesis this may be too out of the box, but solar panels, composting, expanding recycling centers.

Depending on market, millennials are much more environmentally conscious.

Evan, I agree, we did rentable gardens to dip our toe in the water

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Originally posted by @Michael Le:

High rise in downtown Houston has a drone that will take pizza delivery from bottom floor to the roof top :) I guess that saves the 5 minutes of elevator trip? lol

Thats awesome! Its the futrue!

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Greg, great idea, Parcel Lockers is something we are looking at it, Amazon has a nice solution

Originally posted by @Greg Dickerson:

Originally posted by @Steven Gesis:

Looking to get ideas from the BP community on some new ammenity ideas for multi family properties, real out of the box stuff, not the run of the mill stuff like pool, gym, secure parking ......

Would love to hear success and fails equally-

Currently, I implement a plethora of varying ammenities at the multi family communities: pet park, EV station, bike station, vending, on-site laundry, rentable garden space, digital locks, USB Outlets, community lounge/entertainment area, on-site porter service, 24/7 maintenance, wifi, digital thermostat, UBER Home......

What other creative ideas do people have and enjoy or have great feedback from residents

These don't have to be free of expensive just creative ......

Parcel lockers for package delivery and package management systems.

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Originally posted by @Kay Kay Singh:

@Steven Gesis gazebos with wifi and electric outlets for charging phones and laptops because a lot of people are working from home these days and get get tired of sitting in the house so they can enjoy the outside weather and work as well.

Great idea, I love the Gazebo venue, we did something way smaller, with rentable gardens.

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@Jaysen Medhurst - i think it's hard to define smart during this time

Payment suspension is if you over leveraged and happy a bad tenant pool - yes 16m+ unemployment but the unemployment benefits are in some cases more than people were making

There are products to help prop them up due to rent loss

I think it's a bit early on not paying your distributions if you have where to pay from

Has anyone discussed what the collection defeciency is in this event for rent (we are well below 7% and month not over) feeling fairly confident will walk out of April with a fairly normal and consistent rent collection

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@Scott S. I suppose everyone got own reasons for how they operate - our #1 rule is investors always get paid first no matter what

If this is going on so early into to this pandemic how healthy are those positions??

That was a quick liquidity squeeze ???

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All Forum Posts by: Steven Gesis

Steven Gesis has started 30 posts and replied 866 times.

Post: Syndication Investing During a Recession

Post: Syndication Investing During a Recession

Post: Value Add Multi-Family Cleveland, Ohio - Success Story

Post: Apartment (multi family) ammenity ideas

Post: Apartment (multi family) ammenity ideas

Post: Apartment (multi family) ammenity ideas

Post: Apartment (multi family) ammenity ideas

Post: Apartment (multi family) ammenity ideas

Post: Grant Cardone Capital suspending distributions to all investors

Post: Grant Cardone Capital suspending distributions to all investors