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9 Dec, 4 tweets, 3 min read
"The Cycles of 'Leverage'":

How to increase your efficiency, the most common mistakes people make when trying to scale, and how to avoid those mistakes (and make way more money)
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More from @TheRealEstateG6

The Real Estate God Profile picture
1 Dec
// HOW TO FIND AN "EDGE" WHILE KEEPING YOUR BUSINESS MODEL SIMPLE //

A lot of people watch Billions or Suits and get conned into thinking they need to come up with some incredibly clever business strategy to succeed

Couldn't be farther from the truth

My mentor started off...
...investing in office buildings. Purely by happenstance he ended up buying a medical office building

During this acquisition and subsequent asset management process, he realized there was an under-served market
Many doctors were dissatisfied with their current real estate situation. They were tired of landlords and wanted to own their buildings.

However, they were severely capital-constrained (many of them still with medical school debt) and knew next to nothing about real estate
Read 8 tweets
The Real Estate God Profile picture
25 Nov
HOW TO GET A MENTOR:

I was a junior in college

And I knew absolutely nothing about real estate

While at a meet-and-greet for my upcoming summer internship,

I met a successful local RE developer/operator (worth $10MM+ in his 30s)
I could tell immediately he was the real deal so after talking to him for a while and really hitting it off,

I asked him for his business card

Told him I really wanted to learn and that he could send me any extra work or anything he didn't want to do and I'd do it for free
Since he liked me and had nothing to lose, he agreed

He started off by sending me all kinds of menial tasks that would be "below" most interns

(formatting word docs, checking 50+ page documents for errors, and even one time manually downloading 3,000+ contacts in excel)
Read 14 tweets
The Real Estate God Profile picture
23 Nov
// EXCITING ANNOUNCEMENT //

Since I’ve started this twitter account, blog and email list, I’ve received tons of requests on a weekly basis to assist you guys with everything ranging from buying your first property to starting a career. Previously I’ve declined all phone call...
requests since they’re incredibly time-intensive, but have answered (nearly) all serious DMs. Even the DMs, however, are taking up a large portion of my time and I’ve spent a while thinking of a better way to handle it. I decided on a structure that answers most of the questions
you all have been asking me on a daily basis. Starting this Sunday (the 22nd), I’ll be offering a monthly course that includes a phone call with me that addresses the most common questions I've received as well as a tons of other real estate info (full breakout is below)
Read 22 tweets
The Real Estate God Profile picture
10 Jul
DEAL STRUCTURE - HOW TO ANALYZE A DEAL LIKE THIS:

Deals like this are all about:

1. How quickly you can get your money out
2. How "secure" the cashflow is

We'll go through both of these in order
1. How quick you can get your $$ out

A 10% cap rate on $1.3MM is $130k of NOI. Since this is a retail deal, I probably won't leverage above 60%

60% * $1.3MM = $780k. Assuming a 5% interest rate (interest-only debt, your debt payment would be ~$40k, leaving you ~$90k of cashflow
$90k * 5 years = $450k of cashflow over 5 years

Initial equity in the deal is:

$1.3MM PP + $50k deal costs = $1.35MM

$1.35MM - $780k debt = $570k of initial equity

So over the 5 years of the lease, you would be able to pull out $450k of $570k (~80%) in cashflow alone
Read 17 tweets
The Real Estate God Profile picture
30 Jun
THREAD: HOW TO FIND AN "EDGE" WHILE KEEPING YOUR BUSINESS MODEL SIMPLE

A lot of people watch Billions or Suits and get conned into thinking they need to come up with some incredibly clever business strategy to succeed

Couldn't be farther from the truth

My mentor started off...
investing in office buildings. Purely by happenstance he ended up buying a medical office building

During this acquisition and subsequent asset management process, he realized there was an under-served market
Many doctors were dissatisfied with their current real estate situation. They were tired of landlords and wanted to own their buildings.

However, they were severely capital-constrained (many of them still with medical school debt) and knew next to nothing about real estate
Read 7 tweets
The Real Estate God Profile picture
5 May
3. Stabilized cap rate (yield):

Since we focus on value add, the entry cap doesn’t matter at all, as long as we can service our debt

We typically need to get to a 6.5%+ stabilized for a deal to pencil. How quickly we get there plays a role as well (quicker the better for IRR)
4. Unlevered vs levered returns:

This is basically just a gut check to make sure that our leverage isn’t out of control

5. Equity Multiple:

We only check this to make sure that they’ll be enough promote for the deal to be worth our time (no point in 20% IRR and 1.2x EM)
6. Cash-on-cash:

We essentially ignore this metric and expect cashflow to be very low during the hold period (unless we’re working with a specific LP who needs cashflow). Often even have to make (planned) capital calls and have earn-outs built into debt covenants to inject
Read 5 tweets

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