All Forum Posts by: Account Closed

Determine your cash flows on a yearly basis, including your acquisition at year 0 and your disposition at year x. 

The amount of equity put in a deal is your beginning capital. The amount after distribution in a year is ending capital.

Your first hurdle is your preferred equity. It's simply your preferred return multiplied by the beginning capital. For year one, multiply your pref times the beginning capital. If your cash flow available for distribution for that year is greater than the product of (pref x beginning capital), you'll subtract it from your beginning capital. If you don't have enough cash to distribute to hit the pref in that year, you add the (pref x beginning capital) + cash available for distribution to the beginning capital for the next year. When your ending capital is 0, you can move on to your next IRR hurdle.

Hope this helps a bit. 

I don't want to be in brokerage whatsoever. Agents do this kind of thing and throw a 3% fee throughout the entire deal. Just seeing if any investors outsource their underwriting. 

Hi all,

I've been interested in real estate since first lurking these forums in high school. I had countless hours of real estate coursework in college and five internships in brokerage, capital markets, and private equity. I recently graduated and am now an analyst at a commercial real estate private equity firm that focuses on value-add investments of $1mm-$20mm in southwest markets. In my position, I source deals, underwrite them, make offers, and handle all aspects of due diligence till close. I absolutely love my job and the foundation its laying in eventually owning my own real estate. 

My question is for those of you who own or invest in commercial assets. It seems like there's an opportunity for me to lend my skills in underwriting and analyzing deals to those without an extensive background in commercial real estate. I'm thinking of testing this market, as I truly enjoy doing this kind of thing. I know there're companies out there who'll do this, but end up charging hundreds, if not thousands of dollars, for what I see as simple analysis on a deal-by-deal basis. For those of you who have outsourced your underwriting, analysis, etc, what incentivized you to do this? Was it worth it? Would you do it again?

Thanks for any feedback.

How'd you manage to make a pre-auction offer? 

Ahh. I see. In that case, I can see the coming uncertainty in the economy in the next few years causing a move of powder, institutional/HNW/family money, from REITs to more "private" equity RE investments. There's a large access gap between the syndication/crowdfunding space and funds/private equity. That'll narrow as opportunity arises in secondary and tertiary markets in a slowing economy. 

Hi Tom,

Lots to unpack here but there are several ways to invest "privately" with real estate companies. REPE shops can have "funds" that you invest in prior to their beginning to deploy that capital. These funds can vary from value-add product to more core, stabilized assets. Obviously, the value-add funds have higher potential upside but more risk. The core funds are more of a guarantee but lower returns. You can also partner with smaller REPE shops by being an equity partner in an individual property. Some shops require accreditation because less partners equals easier disbursement of funds, models, etc but it's not a must. It's all a matter of how you want to diversify. Just have to do your homework on the company you're giving your money to. I work for a real estate private equity firm so can answer any other questions you might have. 

Thank you!

Meant to post in the commercial section - my apologies. 

Can anyone tell me how the Denver market is doing commercially? From multifamily to retail, just wanna get as much info as I can about it.