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This may be controversial. Every now and then in CRE there is something we buy that is just wildly mispriced.
We look at 1000's of deals a year & sometimes these gems pop up... it's a bit like micro/small cap investing where a cheap opportunity just hits you over the head
🧵
We look at 1000's of deals a year & sometimes these gems pop up... it's a bit like micro/small cap investing where a cheap opportunity just hits you over the head
🧵
This to me is akin to a relative value or mean reversion trade & we don't underwrite cap rate compression though we're confident we'll achieve it.
Here's a sample of some deals we've done this way.
Ex 1:
Bought assets late last year as a part of a portfolio at a 7.25 cap
Here's a sample of some deals we've done this way.
Ex 1:
Bought assets late last year as a part of a portfolio at a 7.25 cap
& structured our debt so we could sell the assets individually. One of them now has a 6.25 offer (100 bps spread in 4 months).
Ex 2:
Structured SLB of credit tenant STNL whereby in year 3 we would have a UYOC of ~7.5 and ~10 years lease term remaining and have 6 cap offers (125
Ex 2:
Structured SLB of credit tenant STNL whereby in year 3 we would have a UYOC of ~7.5 and ~10 years lease term remaining and have 6 cap offers (125
Some new followers thanks to engagement from some very generous #CRETwit pros. Here is a little about me.
I am a Dallas Apartment guy.
Dallas born/raised. Awesome wife and 6yo daughter. SMU BBA & MBA. Sober since 2003. About to turn 40. Like golf, skiing, scuba, and hiking
I am a Dallas Apartment guy.
Dallas born/raised. Awesome wife and 6yo daughter. SMU BBA & MBA. Sober since 2003. About to turn 40. Like golf, skiing, scuba, and hiking
The "Sober since 2003" part is paramount. I quit drinking 4/28/2003 because I had a problem and my life was going nowhere.
I got help and continue to do so. I am glad to help others.
By continuing to choose sobriety I am able to have a great family, business, and relationships
I got help and continue to do so. I am glad to help others.
By continuing to choose sobriety I am able to have a great family, business, and relationships
I started dating my wife after I got sober once I transferred to SMU. We dated for a long time before we got married and then had an amazing wedding in the Cayman Islands in 2009.
Our only daughter was born in 2015 and she is incredibly smart and gets lots of attention
Our only daughter was born in 2015 and she is incredibly smart and gets lots of attention
#cretwit has talked ad nauseum about the beauty of CRE due to it's simplicity (we aren't that smart) relative to other assets. It's true & part of my heart goes out to that, BUT
I'm a structure/finance guy by neurosis, a 🧵 on common mistakes I see that cost owners MILLIONS💰💵
I'm a structure/finance guy by neurosis, a 🧵 on common mistakes I see that cost owners MILLIONS💰💵
1) Not understanding financing alternatives
Some common mistakes I see here are amongst build to suite developers and groups doing value-add projects
On the BTS side, right now there's plenty of financing alternatives for 95-100% LTC financing. If you're a merchant builder
Some common mistakes I see here are amongst build to suite developers and groups doing value-add projects
On the BTS side, right now there's plenty of financing alternatives for 95-100% LTC financing. If you're a merchant builder
doing STNL deals for a 100-200bps spread, not using this financing and paying an equity promote can dramatically up your cost of capital.
An example on a 1-year hold and $3mm project.
Traditional Financing at 75% LTC and a 4% interest rate I/O:
Loan Proceeds: 2,250,000
An example on a 1-year hold and $3mm project.
Traditional Financing at 75% LTC and a 4% interest rate I/O:
Loan Proceeds: 2,250,000
