Podcasts about yardi matrix

Tyson Huber, Director of Institutional Research at Yardi Matrix, joins Michael Bull to discuss the self-storage sector and REITs. Topics include the current trends in self-storage performance, including the impact of recent market fluctuations and rental rate strategies. Tyson shares insights on occupancy rates, cap rate trends, and the evolving demand factors that influence this resilient asset class. Whether you are an investor, developer, or operator, this episode provides valuable market intel and strategies to navigate the self-storage landscape effectively.

Before becoming “DATA NERD IN CHARGE” at Yardi Matrix, Jeff Adler was Chief Property Operations Officer for AIMCO and managed a platform of over 160,000 units. At the Old Capital Speaker Series, James Eng with Old Capital dives into the current economic landscape, covering the U.S. growth forecast for 2025, persistent inflation, and a tight labor market. They also discuss the multifamily housing market that is showing mixed performance, with rising rents in some areas and slower construction due to higher costs. Jeff explores geopolitical shifts like reindustrialization, trade policies, and how these factors influence real estate and investment strategies. And then finally discussing the impact of emerging technologies on property management and opportunities in secondary markets. Are you ready to unlock the potential of Multifamily Syndications? Discover how Michael Becker's proven real estate syndication business can open doors to financial growth and your long-term success. Visit SPIADVISORY.COM today and start your journey toward smarter investing!

Is now the time to be bullish or bearish on real estate? In this episode of REady2Scale, host Jeanette Friedrich, Director of Investor Relations at Blue Lake Capital, sits down with Paul Fiorilla, Director of US Research Editorial for Yardi Matrix. Paul brings a wealth of knowledge from his extensive background in real estate research and editorial roles, including his time as Editor-in-Chief of the CRE Finance Council and VP at Prudential Real Estate. Key Takeaways: -Market Trends and Forecasts: Paul shares his insights on where the real estate market is headed, particularly focusing on multifamily properties. He discusses the varying performance of different property types, such as the challenges faced by the office sector versus the booming industrial and resilient retail sectors. -Multifamily Market Analysis: The episode delves into the multifamily market's performance post-pandemic, highlighting significant trends in household formation, migration to the Sunbelt, and rent growth. Paul provides a detailed analysis of current trends and future predictions for rent growth and occupancy rates across various regions. -Impact of Economic Factors: Paul discusses how economic factors, such as job growth, immigration, and supply chain issues, influence real estate markets. He explains how these factors contribute to the current market conditions and what investors can expect moving forward. -Comparing Financial Crises: A comparison between the 2008 financial crisis and the current market situation is made, with Paul explaining why today's market is not headed for a similar systemic crisis. He highlights the differences in leverage, economic performance, and the health of the banking sector. -Geopolitical and Macroeconomic Impacts: The episode touches on the potential impacts of geopolitical events and macroeconomic trends on real estate investing. Paul provides insights into how global trade, political changes, and exogenous events can influence real estate markets. -Investment Strategies: Paul emphasizes the importance of having a well-defined investment strategy. He shares examples of successful investment approaches, such as those used by large operators like Blackstone, and offers advice on identifying and capitalizing on emerging trends and niche property types. Connect with Paul: Listeners can connect with Paul Fiorella through the Yardi website, via email at Paul.Fiorella@yardi.com, or on LinkedIn, where he regularly shares his research and insights. Watch the full episode here. Read the transcript here. Timestamps 00:00 Introduction and Guest Welcome 01:07 Paul's Insights on Real Estate Market Trends 02:52 Deep Dive into Property Types and Performance 21:33 Comparing 2008 Financial Crisis to Today 36:16 Geopolitical Impacts and Future Predictions Are you REady2Scale Your Multifamily Investments? Learn more about growing your wealth, strengthening your portfolio, and scaling to the next level at www.bluelake-capital.com. To reach Ellie & the Blue Lake team, email them at info@bluelake-capital.com or complete our investor form at www.bluelake-capital.com/new-investor-form and they'll connect with you. Credits Producer: Blue Lake Capital Strategist: Syed Mahmood Editor: Emma Walker Opening Music: Pomplamoose Learn more about your ad choices. Visit megaphone.fm/adchoices

Gray Report host Spencer Gray speaks with guest Paul Fiorilla, Director of Research at Yardi Matrix, and reviews the most important trends affecting the multifamily market in 2024. For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠ Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠ Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Welcome to the Best Ever midweek news brief, a new series where we will highlight the top headlines CRE investors should be paying attention to this week, followed by a deep dive on a larger news topic or trend alongside a CRE expert. Today's Headlines: Self-Storage Boom Set to Peak: A recent report from Yardi Matrix predicts a surge in supply for 2024 and 25, followed by a decline in later years, signaling a major shift in what's become an attractive asset class for investors. ‘Cause for Optimism' in NNN?: Triple-net-lease average closing cap rates declined in January while inventory dropped for a second consecutive month, to signs that Chris Lomuto of Northmarq says could be “cause for optimism.” Rents Are Cooling … Sort of: New “luxury” Class A supply is putting downward pressure on rents at all price points. It's a phenomenon called “filtering,” and there are 12 U.S. markets where Class C rents are falling at least 6% year-over-year. All 12 of those markets have supply expansion rates ABOVE the U.S. average.   Today's Guest: Joining host Paul Mueller on the Best Ever Show today is Jay Parsons. Jay is Head of Economics and Industry Principals at RealPage. As a rental housing economist, Jay is one of the leading voices in multifamily real estate. He's an author, speaker, and an expert in market trends and forecasts, rental housing policy issues, property management, and more. If you want to read more from Jay on this story, he's posted on Twitter and LinkedIn about it recently. You can also follow him on LinkedIn and on Twitter @JayParsons.   Sponsors: Monarch Money My1031Pros

In this weeks Kiss My Assets episode, we discuss corporate growth in the Phoenix area, how Dutch Bros is helping the surge in the housing market spike, and what this means for multifamily. We also talk about rent growth across America referencing sources such as Yardi Matrix and Globe Street, not only for 2024, but for several more years to follow.

Recent forecasts and expectations for the 2024 CRE and multifamily markets are not very much different than the discussions heading into 2023: Economic uncertainty, expense burdens, high interest rates, and historic amounts of new apartment supply will be major factors for multifamily asset performance next year the same as they were this year, but interest rate cuts on the horizon, lower inflation, and an uptick in consumer confidence are key differences from last year and possible glimpses of an end to stagnation for the apartment market. Sources discussed in this episode: RealPage: “What We Got Right - and Wrong - About the Apartment Market in 2023” - https://www.realpage.com/analytics/what-we-got-right-2023/ Yardi Matrix: 2024 Forecast: Multifamily Demand to Stay Positive, but Market Faces Hurdles - https://www.yardimatrix.com/publications/download/file/4915-MatrixMultifamilyNationalReport-Winter2024?signup=false&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-_GbAT2FAplKsj8izORE9R-sxnTxPU1EEyhw5Cid8Y1Jqqxgq1vbNojzBzzelmkUpqJHrTd The Conference Board: “Consumers End 2023 with a Surge in Confidence and Restored Optimism For 2024” - https://www.conference-board.org/topics/consumer-confidence University of Michigan: "Surveys of Consumers" - http://www.sca.isr.umich.edu/ For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠ Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠ DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.

I n this Real Estate News Brief for the week ending July 22nd, 2023... what economists are expecting from the Fed, why there's so much optimism about a soft landing, and what landlords are seeing for rent growth in today's market.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week, and much of that news has been focused on what economists predict the Fed will do at this week's meeting. There's basically a consensus that the Fed will hike short-term rates another quarter point to squash inflation, and that that will likely be the final rate hike. But at the same time, most economists don't expect Fed Chief Jerome Powell to say that out loud, and he has predicted the need for another two rate hikes. But he's more likely to leave people guessing at this point, as Fed officials evaluate inflation data. And it's been good recently. The consumer price index or CPI dropped to 3.1% in June, but the core rate is still too high at 4.8%. The core rate eliminates food and gas and is considered a better gauge for determining what prices are doing. (1)   Meantime, the job market remains strong, so there's optimism that the Fed is getting inflation under control without a lot of layoffs. Last week, initial claims for unemployment benefits dropped to a two-month low of 228,000. Continuing claims were slightly higher but the data indicates that employees looking for new jobs are finding them quickly. The current unemployment rate has been in the 3.5 to 3.7% range for several months, with companies adding more than 275,000 jobs to the economy every month for the first six months of this year. (2)   Home prices are still rising and contributing to inflation, thanks to a lack of inventory and strong demand. And that's impacting home sales. The National Association of Realtors says that the total number of sales fell 13.6% in June, to an annual rate of 1.08 million units. For previously owned homes, sales fell 3.3% to an annual rate of 4.16 million. That's the slowest rate of existing home sales since June of 2009. (3)   Housing starts were also down in June, by 8%. But that's after a big jump in May. The National Association of Home Builders says that builders are busy finishing up those earlier projects. They are also pulling back due to weaker summer demand. Building permits were also down 3.7%. Despite the pullbacks, MarketWatch reports that builders are optimistic about future sales, thanks to the tight inventory and strong demand. Many feel they don't have to offer buyer incentives, like price cuts, that they were previously offering. (4)   Mortgage Rates   Mortgage rates came down a bit this last week, in step with an inflation slowdown. Freddie Mac says the average 30-year fixed-rate mortgage was down 18 basis points to 6.78%. The 15-year was down 24 points to 6.06%. (5)   In other news making headlines…   Home Turnover the Lowest in a Decade   Homeowners with low mortgage rates continue to postpone their plans for a sale and that's one of big reasons for low inventory levels. Redfin says that just 1% of the nation's homes changed hands during the first half of this year. That's about 14 out of 1,000 homes. During the first half of 2019, before the pandemic, 19 of every 1,000 homes were put up for sale. That means that buyers have 28% fewer homes to choose from now than they did previously.   The data for suburban homes shows an even bigger slowdown. In 2019, 24 out of 1,000 homes were put up for sale. The number drops to 16 for the first half of this year. Redfin says that smaller homes in urban areas are the hardest to find with just 11 out of 1,000 changing hands so far this year. And California has the lowest turnover rate of all with just 6 out of 1,000 homes available for sale in places like San Jose, Oakland, and San Diego. (6)   Single-Family Rent Growth Still Slowing but Positive   Single-family landlords are still seeing slower rent growth, but it's currently back to a pre-pandemic normal. CoreLogic says that single-family rent growth was 3.4% in May as a national average. The numbers vary from market to market.   The Chicago area topped the list for year-over-year rent growth at 6.6%. The Charlotte metro came in second at 5.9%. Boston and New York tied for third and fourth place with rents increasing 5.7%.     CoreLogic economist Molly Baesel says: “High inflation may be affecting renters' abilities to absorb continually higher monthly payments, which could be keeping year-over-year rent increases relatively low.” (7)   Apartment Rents Also Sluggish   Multi-family rents also continue to rise at their slowest pace in more than a decade. Yardi Matrix says that asking rents were up .4% in June for a year-over-year reading of 1.3%. According to calculations by Yardi Matrix, year-over-year rents for single-family homes were only up about the same amount 1.3%, which is lower than the previous CoreLogic report. And again, all the results differ from market to market.    That's it for today. Check the show notes for links at newsforinvestors.com. You can see all the data for rent growth by following a few of those links. And please remember to subscribe to this podcast and leave a review!   You can also join RealWealth by clicking on the “Join for Free” button. As a member, you have access to the Investor Portal where you can look at sample rental properties in various markets. You'll also have access to our experienced investment counselors who can answer questions and the property teams we've been working with.    Thanks for listening. I'm Kathy Fettke.   Links:   1 - https://www.marketwatch.com/story/everyone-thinks-the-feds-rate-hike-next-week-will-be-the-final-one-except-the-fed-dc5fb209?mod=home-page   2 - https://www.marketwatch.com/story/jobless-claims-drop-to-two-month-low-of-228-000-f6709597?mod=economy-politics   3 - https://www.marketwatch.com/story/home-prices-climb-to-highest-level-in-a-year-as-home-listings-dwindle-c49ad934?mod=economy-politics   4 - https://www.marketwatch.com/story/u-s-housing-starts-retreat-in-june-e4a71eaa?mod=economy-politics   5 - https://www.freddiemac.com/pmms   6 - https://www.redfin.com/news/housing-turnover-decline-since-pandemic/   7 - https://www.corelogic.com/intelligence/us-rent-growth-returns-to-pre-pandemic-level-in-may-corelogic-reports/   8 - https://yieldpro.com/2023/07/yardi-matrix-reports-solid-rent-growth-in-june/

Interested in investing in self-storage but don't know where to start?Welcome back, everyone! I am joined by Alex Quezada, a seasoned self-storage investor, who unlocks the secrets and gives you everything you need to know about investing in self-storage!Learn how to locate self-storage deals, leverage data providers, and utilize software like Yardi Matrix to reach out to sellers and maximize your chances of closing profitable deals.From direct mail and property size to strategies for underwriting sellers and analyzing deals. I made sure to ask Alex all the right questions so you can feel confident about self-storage investing!There are so income possibilities with self-storage units and we go over identifying opportunities to add value and increase your income. Learn how to effectively market storage facilities and how to find systems to automate your bookings.Alex explains the major expenses of running a storage facility and shares tips for reducing costs and increasing profit margins. You can also learn about financing options for self-storage investments.If you are interested in self-storage investing this episode is your ultimate guide! Be sure to like and subscribe for more on real estate investing!Check out Alex's Instagram!@Alex.theinvestor.quezada

In the current chilly climate of the commercial real estate market, it's not just about distress but also about understanding the nuances of the market. In this episode, I sit down with Yardi Matrix's Research Editorial Director Paul Fiorilla to discuss the impact of various factors on the market, particularly in the realm of distressed assets. A brief look at some of the insights you can expect in this week's episode: Current concerns are largely driven by the rising interest rates and maturing loans, making it challenging for real estate sponsors, especially those who lack experience in managing through difficult times. This behavior is causing a slowdown in the market, affecting future growth and investment, and leading to distress for some sponsors - but also opening up opportunities for others. Paul predicts a brighter outlook by 2025, with expected interest rate reductions throughout 2024 that will benefit the market. This could potentially trigger a resurgence in investment activity and a more stable market environment. Despite the challenges in obtaining equity, there are still opportunities to be found. Paul highlights the potential in distressed assets, such as mid-construction projects that have stalled due to lack of funding, and real estate holdings of executives from failed banks needing liquidity. There are also opportunities in the form of assets being sold out of bankruptcy to fund cash-flowing shortfalls. These distressed opportunities require a different approach compared to buying marketed properties during an upmarket. Paul also discusses the nuances of the market, highlighting that the discussion around distress is more complex than a simple good or bad dichotomy. He emphasizes that different commercial property types have different drivers and performance. This conversation is your roadmap to a better understanding where the commercial real estate market is headed. Join us in this episode with Paul Fiorilla to get all the insights you need to get you through these tough times in commercial real estate. *** In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in. You'll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype. You'll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn. Subscribe to our YouTube channel here: https://www.youtube.com/gowercrowd?sub_confirmation=1

My podcast guest today, Paul Fiorilla, Director of US Research at Yardi Matrix, discusses how recent banking failures have impacted commercial real estate and concludes that it is not as bad as some pundits seem to believe. Noting that information distributed by otherwise reputable sources has been based on erroneous assumptions, Paul discusses the various ways CRE is financed and the relative impact banks have on providing liquidity. Though the prognosis is not positive, it is not as bad as has been portrayed and in today's podcast you'll learn why from one of the foremost experts in the industry.

Across the country and around the world, housing costs are soaring.Rents rose by 6.2% annually in 2022, after growing by almost 15% in 2021, according to Yardi Matrix.And the impacts of these rising costs are clear: research from the Consumer Financial Protection Bureau shows that nearly one third of renters did not pay or were late with the rent at least once in 2022.For several years, the Bloomberg Associates Sustainability team has worked closely with our client cities to address key housing affordability issues. This effort led to Bloomberg Associates and Bloomberg Philanthropies' partnership with NYU's Furman Center for Housing and Real Estate and Abt Associates to create the Bloomberg Peer Cities Housing Network, funded by the Bloomberg Philanthropies Government Innovation team, in Summer 2020.The Network, a program that worked with a nationwide group of city leaders to address pressing housing-related needs, provided resources and guidance – and the opportunity to exchange learnings with cities facing similar challenges. This met a particularly urgent need during the pandemic as local governments challenged existing thinking and responded rapidly to convert hotels into housing, to provide residents with direct cash assistance, and more.On this episode, Katherine Oliver sits down with Ingrid Gould Ellen, who serves as the Director of the Furman Center for Real Estate and Urban Policy and is on the faculty of the NYU Wagner Graduate School of Public Service; Vero Soto, the former Director of the Neighborhood & Housing Services Department of the City of San Antonio, who now spearheads the U.S. Treasury Department's Emergency Rental Assistance program; and Adam Freed, the Sustainability Principal of Bloomberg Associates. They discuss how cities responded to housing problems posed by COVID-19, and how the Bloomberg Peer Cities Housing Network helped to facilitate these initiatives.

National Property Management software firm Yardi is one of the premier software systems used by the majority of the large scale property management companies. The data is hosted by Yardi on their own servers. As a result, they have access to a lot of data on their servers. Yardi Matrix is their brand name for their data products. Yardi published their National Self Storage report at the end of January. This report focuses on the top 31 metro areas in the US. It mirrors what we have known for some time. Storage in the primary markets is saturated with supply. Supply has exceeded demand. Nationally, Yardi Matrix tracks a total of 4,627 self storage properties in various stages of development, including 812 under construction, 1,789 planned and 669 prospective properties. The share of projects under construction was equivalent to 3.6% of existing stock in December, unchanged from the previous month. Yardi Matrix also maintains operational profiles for 29,032 completed self storage facilities across the U.S., bringing the total data set to 33,659. The average national street rate for all unit sizes dropped again on a year-over-year basis, down 2.8% in December. However, average rates remain above pre-pandemic levels. Rates for standard-size 10x10 units decreased 2.3% for non-climate-controlled (NON CC) units and 3.4% for climate-controlled (CC) units. Meanwhile, rates for larger units outperformed those for smaller units on an annual basis, with rates for 10x30 units down 2.4% over the year and rates for 5x5 units down 3.4% over the same period. So how do you invest in self storage? You pursue secondary markets that are under-supplied. ------------ Host: Victor Menasce email: podcast@victorjm.com

Yardi Matrix Director of U.S. Research, Paul Fiorilla, joins Gray Capital President and CEO Spencer Gray in a conversation about the factors driving the multifamily market and what to expect as the year progresses. Sources discussed in this episode: Yardi Matrix: "December 2023 National Multifamily Report" - https://www.yardimatrix.com/publications/download/file/3335-MatrixMultifamilyNationalReport-December2022 Yardi Matrix: "Winter 2023 U.S. Multifamily Outlook" - https://www.yardimatrix.com/publications/download/File//3345-MatrixMultifamilyNationalReport-Winter2023 Yardi Matrix: "Yardi Matrix U.S. Self-Storage Report, January 2023" - https://www.yardimatrix.com/publications/download/File/3344-MatrixNationalSelfStorageMonthly-January2023 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

In this episode, Paul speaks to Jeff Adler about political risk. They go in-depth about his 2020 article “Calculating political risk”, his political risk model and how he came to research and model it, his philosophy towards affordability, predictions for the future, and more. About our guest:Jeff is the Vice President of Yardi Matrix, the data division of Yardi Systems, which is a US multifamily, student housing, office, medical office, industrial, retail, and self-storage asset information toolset for originating, underwriting, and asset managing commercial real estate investments.Jeff's LinkedIn: https://www.linkedin.com/in/jeremy-roll-655107/ “Calculating political risk” 2020 article:https://www.afire.org/summit/calculating-political-risk/ Book recommendations:“Big Debt Crises” and "The Changing World Order" by Author: https://www.principles.com/ “The End of the World is just the Beginning” by Peter Zeihan: https://zeihan.com/end-of-the-world/ “The Road to Serfdom” by Friedrich Hayek: https://www.amazon.com/dp/B0B5FT392J/ref=cm_sw_r_tw_dp_9RH95RJANZAYYKQARB5J “Capitalism and Freedom” by Milton Friedman: https://www.amazon.com/Capitalism-Freedom-Anniversary-Milton-Friedman/dp/0226264211 Video recommendations:“Jocko Willink: Discipline = Freedom”: https://youtu.be/eBmVv2P-v2s “Simon Sinek: Why Leaders Eat Last”: https://youtu.be/ReRcHdeUG9Y Disclaimer: This real estate podcast is for informational and educational purposes only, and does not imply suitability. The views and opinions expressed by the presenters are their own. The information is not intended as investment advice.For any inquiries or comments, you can reach us as info@indepthrealestate.com.

Bill Fairman (00:01): Greetings, everyone. We are live. Thank you for joining us. Wendy will not be with us today. She is currently at, I don't know, 30,000 feet on, on an airplane. So we're gonna talk about the year end review, even though the year isn't over with yet, but I don't know what much more will transpire between now and the first. So we're gonna, I'm do a, I'm, we're in a review today and we'll get to that right after. It's funny, that graphic we're showing the, the passive income gang. Yeah. With all the money flying. I'm going, that looks kinda active to me. ,   Jonathan Davis (00:59): He makes so much money passively, he just actively throws it away. Is that what Yeah, I guess that's   Bill Fairman (01:03): The, so by the way, welcome to the show. We are what is the name of the show? I keep forgetting? It's real estate. Real Estate Investor Show Hard Money for real estate investors. We are Carolina Capital Management private lenders in the Southeast for real estate professionals. If you have a project that you would like us to take a look at, please go to carolina hard money.com. Click on the apply now tab. If you're a passive investor looking for passive returns, we have a place for you as well. Click on the accredited investor tab. Don't forget to like, share, subscribe, hit the bell. And don't forget about Wednesdays with Wendy, since this is Thursday. She's not here. . So Wendy Dev devotes 30 minutes per person on Wednesdays to talk about anything real estate. Yep. She's usually booked up in advance quite a bit. So there's a link to get on her calendar.   Jonathan Davis (02:07): Yeah. She's usually a month or two out. Yeah.   Bill Fairman (02:09): Yeah. Take advantage of it.   Jonathan Davis (02:11): Mm-Hmm. . Absolutely. Well, a month in review, or a month in review, A year in review, that's even worse. But   Bill Fairman (02:18): First   Jonathan Davis (02:18): Yeah.   Bill Fairman (02:29): I always like freaking out our production group.   Jonathan Davis (02:31): I love that. Yeah. I mean, we'll, we'll get to the, we'll get to the breaking news in a second. But yeah, I mean, just kind of a, an over overarching cap. Like we   Bill Fairman (02:39): Had a lot   Jonathan Davis (02:39): Going on this year has been Wow. It's just, you know,   Bill Fairman (02:44): Yes.   Jonathan Davis (02:45): Not to, you know, the same, the same investor loan that would've captured over 4.1% in January is capturing an 8.7% rate in December. I mean, it's, that's a big swing.   Bill Fairman (02:58): Yeah. And if you're, you know, if you bought a piece of property and before you get it finished and then the numbers don't work out for you mm-hmm. you're gonna have to readjust. Yeah. Obviously.   Jonathan Davis (03:10): Yeah. I mean, I think the, you know, if you, you know, $400,000 investment in house, you know, typically, you know, you need about $1,800 of rental income at a three and a half percent rate to cover it. And with the rates jumping where they are, and now you need $2,700 in rents to cover the, the payment Yeah. Rents while increasing didn't increase that much. Right.   Bill Fairman (03:34): And they will eventually. But, but do, do you wanna lose money until then? No, you always have to have cash. It has to cash. Even if it's only $200 a month.   Jonathan Davis (03:48): Even if it's only $50. I mean something, you know, 200 is better than 50, but Yeah. Don't have a negative cash flow. Yeah.   Bill Fairman (03:55): But like I said, in the long run the rents will eventually outpace. Mm-Hmm. And then, you know, at some point rates should come down and then you can refinance and improve that.   Jonathan Davis (04:09): I love the certainty of the wood. Should makes me not think of that. Never know. What's that phrase? Don't should all over me.   Bill Fairman (04:16): Don't shit all over me. It's nice. All right. But before we get to this year end review we have a little bit of breaking news. I a little, oh, the corner. You guys can't see it from here, but we got an emoji of Oh my gosh. What are you talking about,   Jonathan Davis (04:46): ? Well, so, you know, not necessarily breaking, but you know, it's news nonetheless. What is interesting is the days on market or the inventory market in, in a single family is 1.6 months for October for the prior month, which is almost,   Bill Fairman (05:07): That's not even close to normal,   Jonathan Davis (05:08): Not even, but for the last five years, that is the lowest days on market for the last five years.   Bill Fairman (05:18): Is that nationally?   Jonathan Davis (05:19): Yes. Nationally for the last five years. So that even, even with what we're going through, higher interest rates, low, you know, low supply, we still, you know, loans are, houses are still closing and they're closing fast.   Bill Fairman (05:34): So as we always say here, a stable market is six months worth of inventory. Mm-Hmm. . And so now we're talking about still less than two months. Yeah.   Jonathan Davis (05:42): Yeah. Absolutely. also, you know, you know, just wanna throw out North Carolina, Charlotte, and Raleigh they made it into the top 10 best markets for growth for multifamily and single family. So looks like Raleigh Raleigh came in at nine and Charlotte came in at seven. Wow.   Bill Fairman (06:06): Yeah. Well that just goes to show you all the people that are migrating to these parts.   Jonathan Davis (06:11): Yeah. And notables, you know, Tampa came in in the top 25. So did Atlanta. And those are also places that we lend in. Yeah. so, you know, we love that. And then, you know, the top five multifamily markets to invest in, just released by, who is it? Yardi, Yardi Matrix. Number one is Atlanta. You know, we get that. But number four, Charlotte. Wow. Yeah. So, you know, even, even with everything going on, you know, it still rounds out the top five for markets to invest in a multi-family.   Bill Fairman (06:44): Yeah. I, I lived in Atlanta in the very late seventies and early eighties while I was going to school down there. And I was always told if you can't get a small business off the ground in Atlanta, you'll not be able to get a small business off the ground   Jonathan Davis (07:01): Anywhere. That's true. There's a lot of small businesses in   Bill Fairman (07:03): Atlanta. Cause it was just a market that even in those high I mean that at that time they were high interest rate. We were in the middle of recession as well.   Jonathan Davis (07:14): Yeah.   Bill Fairman (07:15): And people were still very optimistic about you know, business growth in the Atlanta market. Mm-Hmm. . And that has really kind of translated into most of the, the southeast, because Yeah. A lot of people are migrating here. You got anything else?   Jonathan Davis (07:30): Just, you know, I thought it was interesting. Maybe you all will as well. I did not know exactly how many hours the average renter had to work to pay for their rent. Mm-Hmm. it's 62 hours. Yeah. 62 and a half hours.   Bill Fairman (07:44): For the month's rent.   Jonathan Davis (07:45): For the month's rent, they have to work 62 and a half hours to, you know, to pay their month's rent, which is now, which that is up six hours more than it was Yeah. Before the pandemic. So, you know, you have to work six more hours to live in the same place. I, I like, you know, equating those things together, it's like what, you know, we, we can say it costs $200 more, but, you know, or it's, you know, you know, we like, you know, we like the expression of time returning time return on effort. You have to work six more hours to stay in the same place.   Bill Fairman (08:15): Well, you think about that if you're trying to qualify for a mortgage, your housing expense can't be more than what, 28%?   Jonathan Davis (08:26): Yeah. Yeah. 28. Yeah. I think that's right.   Bill Fairman (08:29): Brian, if Brian's listening, he'll   Jonathan Davis (08:31): Go correct it. Yeah.   Bill Fairman (08:32): He'll chime in. But I, I think it's in the 28% range, so mm-hmm. that's much higher. 62 hours is much higher than what it's gonna be to qualify for a mortgage. Yeah. So rents are going up higher than your affordability for Oh yeah. Buying a home.   Jonathan Davis (08:52): Yeah. You know, and they'll say like, rents have, you know, have slowed down. They have the rate of appreciation or arising has, has slowed down, but they still rose seven over 7% year over year for October. Yeah. Which is, you know, yeah. You know, more than average, but, but slowing down.   Bill Fairman (09:12): Okay. So let's talk about the, and I'm gonna talk about single family prices first or home appreciation for the year in review.   Jonathan Davis (09:23): This is the year in review. ,   Bill Fairman (09:34): It looks like a heavy metal here in   Jonathan Davis (09:36): Review. I love it. I only did that cuz I like to throw bill off.   Bill Fairman (09:39): That's okay. It's easy to do. So peak home appreciation hit in June of 2022 at an annualized rate of 20%.   Jonathan Davis (09:56): Did you round I think it was 19.8.   Bill Fairman (09:58): Yeah, I rounded it. Yeah. 20%. That's incredibly high. And as we always talk about here, unsustainable   Jonathan Davis (10:07): , 20% growth. Yeah. Was is unsustainable.   Bill Fairman (10:11): So what what's funny, I, I hear a lot of the, the pundits talk about this and how all the markets are overvalued, which they are for the most part. And as the things shake out, they believe that appreciation will drop all the way down to between two and a half and three and a half percent.   Jonathan Davis (10:31): You mean to normal,   Bill Fairman (10:32): Which is been the normal rate of appreciations. It's the fifties.   Jonathan Davis (10:36): It's terrible. It's going to, it's gonna just crash. The market's gonna crash, it's gonna get down back to normal appreciation.   Bill Fairman (10:43): 2022, I also saw record energy prices.   Jonathan Davis (10:48): That is true. Yeah.   Bill Fairman (10:50): Our fuel has gone through the roof, which means that's gonna add pain to everything that we do. Yep. Everything.   Jonathan Davis (10:59): Everything.   Bill Fairman (10:59): Yep. That's one. I mean, we had inflation because of supply chain, which was, you know, kind of a short term thing.   Jonathan Davis (11:07): Yeah. I I didn't, it was supply chain. It had nothing to do with four, you know, what was it trillions of dollars? Was it 4.2 trillion being printed? Well, that didn't help.   Bill Fairman (11:16): Yeah. But I mean, we did have inflation because we, we had a lot of people demanding stuff. We couldn't get it. Yeah. So if you could get it, you were gonna pay more for it.   Jonathan Davis (11:25): Sure. But you had 4 trillion more dollars.   Bill Fairman (11:27): No, I, I get all that. I'm not saying that's not the only thing, but that would've been temporary. But the, the cost of energy going up keeps it going even longer. Yeah. And then the Fed, in my opinion, it's not the rates that were so low that caused a lot of this and then the free money that the government was giving out, but the balance sheet of the Fed mm-hmm. . I just wanna, they weren't reigning that   Jonathan Davis (11:55): In. Just wanna point out, bill said, you know, the free money that the government was handing out, as you all know now, there is no such thing as free money. You're feeling, everyone's been feeling for how long? Yeah.   Bill Fairman (12:07): It's free to some people.   Jonathan Davis (12:10): Not to us. Yeah.   Bill Fairman (12:12): And here's another thing that's been kind of an issue. We have the lowest employment participation rate since the oh eight crash.   Jonathan Davis (12:22): Yeah.   Bill Fairman (12:23): And that's also causing inflation, but it's, it's more of a employment inflation because you're, you have a shortage of of workers. Yep. And so you have to pay more to get 'em there. And then a lot of them are, you know, playing that off and just going from one place to another.   Jonathan Davis (12:41): mm-hmm.   Bill Fairman (12:42): .   Jonathan Davis (12:42): And, you know, you, you know, record energy prices you brought up. And it's not just here, it's in Europe and everywhere abroad. But I thought it was notable. I remember mentioning this way back after, you know, right after the pandemic. Do you, do you all remember what the first business or first thing that Warren Buffet bought coming outta the pandemic?   Bill Fairman (13:07): Oh,   Jonathan Davis (13:08): An energy company. Oh, no. Smart guy.   Bill Fairman (13:11): Yeah. That's why he was the, what do they call him? The something of Omaha, the,   Jonathan Davis (13:18): Oh, I don't know.   Bill Fairman (13:19): No. Anyway, something important of Omaha. The Oracle. Jonathan Davis (13:25): The   Bill Fairman (13:26): Oracle. The Oracle of   Jonathan Davis (13:27): Omaha. I had no sir Dam in my head. I couldn't, couldn't get   Bill Fairman (13:30): It out. Yeah. No, he, he's a smart guy. , let's go to how things have changed. So 2020 OB or 2021, we obviously had inventory issues with single family housing. Yeah. So in, in order to keep up with that change a lot of investors started moving into smaller and multifamily and self storage. Yep. Those are two property types that are still recession resistant. Sure. the multifamily, you still have to have a place to live mm-hmm. . And while the, you know, the zero, there's a few more zeros on 'em, there's still great investment opportunities. Yeah. so what do you think about that? From an investor's perspective? People get a little concerned about the extra zeros that makes them a little afraid. It makes, it's easier to do the single family homes because it makes you feel better. You can get rid of one. If you run into trouble, if you have an apartment complex or a self storage facility you're dealing in a lot higher dollar amounts and people get a little nervous about that.   Jonathan Davis (14:43): Oh, that's true. You know, there's a whole lot of different ways to look at it. So we, we know that in like sales and cap rates, multifamily was the big winner in 2021. Mm-Hmm. . And it looked like in 2022 for the first half of the year, they were going to be as well. And then, you know, then the interest rates and inflation and everything happened. But with single family, you are tied solely to the conditions of the market to that ebb and flow, to demand supply interest rates. You are tied solely to those things. And there's not much you can do to increase your value beyond market. You know, unless there's just, you know, no supply. And, and then we've seen that what's, you know, 20% appreciation in multifamily. While there are more zeros, you have more control. And you can, you know, with the rising or rising rents, you know, rents are, are, are rising.   (15:48): So you can increase your net operating income. And that is based off of the capitalization rate of whatever the market is in that area. We know how much demand is. But you know, you're kind of stuck with that. And so now what do you do? Well, you can create a shared laundry room where you create additional, you know, income or you can create other avenues of income for this property or, or take away expenses from the property and you can, and you can inflate or deflate that price or that value accordingly. So it just gives you a little more control. So we're still seeing multi-family selling. Not like it was, you know, six months ago and definitely not like it was a year ago. You know, October, November and December of last year. I mean, we saw record sales and multi-family. The interest rates are, you know, are hurting a bit of that cuz you know, you have to buy in at a much lower operating capitalization rate, which just means how much you're gonna make off of it.   (16:55):  So that's really compressing the market for a lot of people. Those additional zeros. Most people kind of get around that additional risk factor by bringing other people in, whether it's equity investors or partners in the llc, what have you to kind of share that risk across the board. Which you don't really, you see it in single family, but the, the, you know, to buy a hundred thousand dollars house or a million dollar multi-family, I mean, you know, you can, you can make the risk more palatable on a hundred thousand. You can a million for one person. Yeah.   Bill Fairman (17:30): There. And there's differences in commercial financing. It finances differently in a lot of cases. You can't get 30 year fixed rate. You have to go to more of a a on multifamily 20. I mean there are some available, it's not,   Jonathan Davis (17:47): We do 30 year fixed on multifamily.   Bill Fairman (17:50): The way to value of property is based on the income that it receives. Mm-Hmm. , you can add value to the property, raise rents and then, or lower expenses or a combination of the two. Mm-Hmm. and you will add value to the property, which is not gonna happen on a single family home. No. It's just gonna go based on what home down the street sold for.   Jonathan Davis (18:15): Exactly. Exactly.   Bill Fairman (18:16): So there's a lot more you can do with those that you can with a single family home. That said, if you need to move it quick, single family homes are the most liquid   Jonathan Davis (18:27): . That's true. There are more buyers in that. And it's, it's a faster move. It's a, yeah.   Bill Fairman (18:32): It's   Jonathan Davis (18:32): Easier financing, lower due diligence period. You know, all those things. Yeah. Wendell asked, will appreciation go below inflation? Well, I like that you didn't put a time period on that, so I'm gonna say yes.   Bill Fairman (18:46): Well, the numbers for appreciation will go be below the current inflation rate, but I don't know if they go below the inflation rate at the time they, they drop down to the lower single digits.   Jonathan Davis (19:04): Say that again to me. I'm not sure. I   Bill Fairman (19:06): Don't know that we'll have high, that high of inflation when I'm expecting appreciation at some point to be in the five to six range. Yeah. We may not have inflation at five or 6% when that occurs. Well, we could, but that's okay. It, it's   Jonathan Davis (19:24): Are you saying it be above or   Bill Fairman (19:26): Below? But what I'm saying is inflation may be in the fours when we have appreciation in the sixes, but it could be that it goes into the threes and we still have inflation in the sixes.   Jonathan Davis (19:38): Mm-Hmm. ,   Bill Fairman (19:39): It's not gonna stay that way for long.   Jonathan Davis (19:41): Yeah.   Bill Fairman (19:42): It will eventually bottom out. And again, if, if the homes appreciation rate, if you're buying single family homes for rental, it doesn't matter because it's about the cash   Jonathan Davis (19:54): Flow. It's about the cash flow and what you bought in at.   Bill Fairman (19:56): Yeah. And you know, and Wendell, you already know this, the house does not care what it's worth. Mm-Hmm. , it depends on the income that's coming in. It's all about the money coming   Jonathan Davis (20:05): In. But yeah, I mean, in short, yes. Appreciation will go below inflation. I mean, you know, they ebb and flow as Wendell knows. That was a great question.   Bill Fairman (20:15): Yeah, that was awesome   Jonathan Davis (20:16): Question. But, you know, win win is always, it's, it's not, you know, it's not really if it's, you know, it's win and no one really knows that.   Bill Fairman (20:24): I'm also seeing, and this is just from me noticing this is not scientific data , I've noticed a few self storage facilities, the a class property types, I'm noticing a lot more available tags on the doors versus locks.   Jonathan Davis (20:44): Mm. Okay.   Bill Fairman (20:45): So vacancy rates are getting a little, little bit higher.   Jonathan Davis (20:48): I always wondered where you win in the afternoons. I guess you're just, you know,   Bill Fairman (20:51): I'm just perusing self storage facilities. I'm gaping through the fence.   Jonathan Davis (20:56): Ooh. Available .   Bill Fairman (20:58): But I am seeing occupancy rates starting to drop a little bit in the cell storage. But that's,   Jonathan Davis (21:07): And that's, and that's okay because they've been, you know, if doing, they're, they're class A and if they're doing what they're supposed to do, they're, they've been pushing those rents Yeah. Month after month pushing them up and now they have to bring 'em back down a little   Bill Fairman (21:19): Bit. Right? Yeah. People will not change facilities if you move it up 10 or 20 bucks a year. Mm-Hmm. . But when you move it up 10 or 20 bucks every quarter   Jonathan Davis (21:32): Or every month, some of them have gone, I've seen some dollar, like five, $10 a   Bill Fairman (21:35): Month. Yeah. They'll, people say my $500 worth of stuff needs to go somewhere else. Mm-Hmm.   Jonathan Davis (21:41): . Yep. Absolutely.   Bill Fairman (21:43): But those are great markets to be in. I am, well we are going, it's all about me. We are we're gonna discuss Carolina Capital now for the end of the year.   Jonathan Davis (21:57): Everything that happened to Carolina Capital was all because of Bill   Bill Fairman (22:01): . Yeah. we had record dollars funded for the years since we've been in business thanks to this man.   Jonathan Davis (22:09): Right. All it was a team effort, but all of us, yeah. So we, you know, as we set right now we're at 71 and a half million dollars out the door this year, year to date. So   Bill Fairman (22:22): What was our, what was our biggest year?   Jonathan Davis (22:24): The biggest year before that Yeah. Was like 36 million. Yeah.   Bill Fairman (22:29): Yeah. So that was a big jump in a year. Yeah. So 2022 was really good to us. We also had the highest fund returns since 2017. And, and Ysa since 2017. Or why is it different? Why the returns higher? Well, in 2017 we were charging a lot more for loans.   Jonathan Davis (22:51): , you were charging a lot more and you had less assets under management. That's true. So the, the fewer assets you have under management, the easier it is to organically produce higher returns. Right. The more money and more assets you have under management, the more difficult it becomes to produce those higher returns.   Bill Fairman (23:14): And and back then we didn't have a lot of competition. And during the end of 17 and the 18 and the 19 you had a lot more Wall Street firms coming into the hard money space. Yeah. And, you know, we obviously had to get competitive cuz they were charging a lot lower rates because money cost them nothing.   Jonathan Davis (23:34): I remember seeing someone advertising hard money at five and a half or 5.75. It's like, wow,   Bill Fairman (23:42): That right there is not very good management of your client's money.   Jonathan Davis (23:48): Well, and the thing is,   Bill Fairman (23:49): The risk, the risk is so much higher than a 5%   Jonathan Davis (23:53): Interest. Well, and, and here's the thing. They were probably returning through investors a high single low double digit return, but they had that money levered four or five times. So when things, you know, when things change, like we just saw change their investors are last in line to get their money and all the creditors that they levered their money with are first. So   Bill Fairman (24:14): Now that said, with the proper leverage, you can have, and I'll give you a quick example. You have a fund that is loaning money on an apartment complex, right? Mm-Hmm. . And they can be giving the apartment complex market rates and still return their investors well above   Jonathan Davis (24:34): Market. And if you wanna find out about that, schedule a call with Bill. Cause this is the year in review.   Bill Fairman (24:39): That's right. I won't get into it. . All right. And then we lastly we have the highest amount of money under management now that we've had since we've been in business,   Jonathan Davis (24:49): Correct?   Bill Fairman (24:50): Yes. And this is not a sales pitch, but we could always use more.   Jonathan Davis (24:54): Yeah. Always more So, you know, give the disclaimer real quick before I start throwing out some numbers.   Bill Fairman (25:01): Yes. your mileage may vary. This is consult your attorney, read the PPM before you invest and invest wisely.   Jonathan Davis (25:10): Invest wisely. Yes. so last year our fund averaged 10 and a half percent return to the investors. This year through three quarters. It's done the same and it's done the same with more money under management or more assets under management. So we have as a team been able to absorb that money, additional capital, place it, and manage it, and still meet or exceed the returns we were doing with less money. And, you know, if you know anything about managing a fund, that is, that, that's the difficult part. That is the very hard part of this. And you know, Wendy, you, me and then our team here, like everyone has done such a great job helping us, you know, manage and place money. It's it's,   Bill Fairman (26:04): And, and we and we do it without leverage.   Jonathan Davis (26:08): Correct. So we do not lever our fund at all. If something happens and investors in our fund need their money, they are the first in line to get it. There's no one in front of them. Right.   Bill Fairman (26:20): And that, that's key. There's two reasons you don't wanna lever your money. And one is that, that your investors are in second position essentially. Yeah. And number two, if you're investing with an ira, the IRS doesn't like your IRA being levered and they could charge you a EBIT tax on that as well.   Jonathan Davis (26:42): But if you're making high enough returns, you don't really care. It's just the filing that really gets you Yeah. It's a pain. It's a pain, you know.   Bill Fairman (26:48): Well,   Jonathan Davis (26:49): But, but no, it's, it's been a great year. Yeah. We started out, like I said at the very beginning of this, you know, we could do loans at 4.1% on a 30 year fixed. And now, you know, we're, we're looking at, you know, mid to high eights. There's some people even doing nines and tens on, on investor loans bridge loans and, and like fix and flip and new construction, you're still seeing, there's a few guys out there doing it. Probably, what, eight to 10%? Probably not many. Most people are going to be in that 10 to 14% range right now. Just, just because, you know, like we have cost of funds and then every, every risk profile above zero gets assigned an interest rate above that. And, you know Sure. So as you move down the line, you know, you, you, you know, you get new construction right now, new construction is, you know, unpredictable at best, , and definitely especially on the timeframe.   Bill Fairman (27:47): All right. So as an investor, I'm not worried at all in this market. We needed things to slow down because they were unsustainable. Mm-Hmm. . There's still plenty of opportunities out there. And another thing this type of market does is it shakes out the trees. It takes the people that were doing it part-time, the folks that were just looking at hgtv. Yeah. it takes the real estate agents and brokers that were essentially part-time and it allows the real professionals to handle the customers because   Jonathan Davis (28:19): Like Don Harris. Yeah.   Bill Fairman (28:22): It, it's a shame that the people that are just doing it part-time, a lot of times they don't, they don't have the number of transactions that they have gone through to get the experience, not to make mistakes. Mm-Hmm. and what it does, it reflects badly on the industry. Same thing would happen to, you know, a new fix and flip person who gets into the industry and hasn't had the bumps and bruises, or worked with a mentor to understand some of the mistakes that can happen. Mm-Hmm. . And it can give that industry, you know, a bad name as well. Yeah, very true. So what's gonna happen now, because things are a little bit tighter, it's the professionals that are gonna be maintaining and they're still, like I said, there's always gonna be deals in any market. Mm-Hmm.   Jonathan Davis (29:07): And the professionals know that whether the interest rate is 8% or 15%, it doesn't matter. It's how much, you know, how much risk can I tolerate and how much money will I make? And that's all that matters.   Bill Fairman (29:19): And you make your money on the buy.   Jonathan Davis (29:21): Yep. Absolutely   Bill Fairman (29:22): Not the   Jonathan Davis (29:23): Sale. And if you can't make it on the buy, well, you try to make up for it on the rehab and then that doesn't really work. And   Bill Fairman (29:29): . All right. So before we go Wendy is gonna be speaking at a few places. I don't wanna run through that real quick. And the first one is Quest Expo.   (29:44): Oh, I'm sorry. Quest Con . It is online version, and it starts on December 9th. There is a discount code. Carolina 15 gets you $15 off, unlike the Fairman 30 that got you. $30 off, but it's not as expensive. So take the break. What else we got coming up for Wendy. Okay. Invest her. Wendy is actually doing a, she's hosting a, a webinar on December 14th. We don't have a link for that yet, but we'll make sure we get it in the notes. Yeah. What else we have? Oh, and then the Raleigh tria, that's the greater triangle area of High Point. Winston-Salem, Greensboro Raleigh, or no, maybe that's Carrie Durham, chapel Hill, I don't know, but she'll be speaking at   Jonathan Davis (30:42): Somewhere in North Carolina,   Bill Fairman (30:44): January the 12th. We'll get you some information on that too. They have a great R group up there. They really do. Mm-Hmm. . Anything else inside cell storage? Wendy is actually, yeah. Gonna be a featured speaker in Las Vegas. Do you see how she elbows her way into speaking positions? We've owned a self storage facility for like six months and she's already a featured speaker at Self Storage do it nationally. So we'll make sure that if you can't attend, we'll do our best to get some video of it. Yeah. All right. Are we good? All right. Excellent. Folks, thank you so much for joining us. I hope your year was as good as ours and as blessed as ours has been,   Jonathan Davis (31:41): Those are my favorite moments.   Bill Fairman (31:42): He, he has got to get that thing   Jonathan Davis (31:44): In there, didn't he? I think he's just messing with you right now. .   Bill Fairman (31:48): So, thank you so much for joining us on The Real Estate Investor, show Hard Money for Real Estate and Investors. We are Carolina Capital Management. We are private lenders for real estate professionals. If you'd like us to take a look at one of your projects, go to carolina hard money.com and click on the Apply Now tab. If you are a passive investor looking for passive returns   Jonathan Davis (32:07): And, and you wanna, you know, join the other investors that we have, that outpaced inflation.   Bill Fairman (32:12): Yep. Go to the accredited investor tab. Don't forget the like, share, subscribe, hit the bell, all that good stuff. Next week.

In this episode of Purpose-Driven Wealth, Mo Bina and Doug Ressler talk about why investors are turning to Build-to-Rent Homes. As manager of Business Intelligence at Yardi Matrix, Doug shares the real-time data acquisition and how these data show the significance of Build-to-Rent Homes in investments as people consider the current market status, consumer purchasing power, and lifestyle choices of each generation. Tune in to learn more!   In this episode, Doug talks about…   Yardi Matrix and its real-time data acquisition Difference between single-family rentals and Build-to-Rent Homes Perceptions about large rental population properties The significance of Build-to-Rent Homes Yardie Matrix's goal of providing data to users to make intelligent and informed choices   About Doug Ressler…   Doug is a manager of Business Intelligence at Yardi Matrix, a commercial real estate platform that collects and organizes data on various commercial real estate industries. Doug has over 12 years of industry experience in commercial real estate. Previously, Doug worked as an intelligence analyst for Pierce-Eislen.   Catch Doug Ressler on…   https://www.yardimatrix.com/blog/ https://www.commercialcafe.com/blog/ https://www.rentcafe.com/blog/   Connect with Mo Bina on…   Website:          https://www.high-risecapital.com/ Medium:          https://mobina.medium.com/ YouTube:        https://www.youtube.com/channel/UC5ISsEKBHlkX7lk9b68SKLA/featured Instagram:      https://www.instagram.com/highrisecapital/   For more information on passive investing in commercial real estate, please check out our free eBook — More Doors, More Profits — by clicking here: https://www.high-risecapital.com/resources-index        

Rent growth is cooling off a bit for both apartments and single-family rentals. New data from Yardi Matrix shows that national rent growth declined slightly in August. That could be a sign of the housing market slowdown, but for landlords who are worried about their ROI - the year-over-year rent growth is still close to 10% for both asset classes. (1)Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Yardi data shows that average asking rent for single-family homes was down $2 a month in August, to $2,090. The year-over-year growth percentage was 9.5% or about 170 basis points less than July. In July, rents were up an average of $7 a month for an annual growth rate of 11.2%. So you can see, single-family rent growth has pulled back a little, but it's still showing strong growth. (2)(3)For apartments, the average asking rent was down $1 a month in August, to $1,718 with a year-over-year growth rate of 10.9%. That's also 170 basis points lower than July, and is down from an annual rate of 12.6%. In Yardi's most recent report, analysts say: “Rent growth tends to slow in the fall, but this year comes at the tail end of unprecedented increases. The deceleration in August was strongest in many of the markets that have had the most growth over the past two years, a sign that affordability is becoming an issue.” The report says that rent growth could continue “decelerating” for the rest of the year. Among the markets seeing the biggest declines is Orlando, Florida, where rents have skyrocketed. Year-over-year rent growth for apartments was 20.2% in July and dropped to 16.9% in August. Both numbers are well above the national average. Another example, which is also in Florida, is the rent growth for Tampa. It was 17.5% year-over-year in July, and dropped to 14.0% in August. Even some of the pricest rental markets are still seeing rent growth, despite the pullback. San Francisco's year-over-year rent growth was 9.0% in July and dropped to 8.5% in August. In Phoenix, annual rent growth was 13.3% in July, and fell to 9.6% in August. The report also says that rents declined the most for high-end rental housing. In fact, rent growth was negative for high-end rentals in 21 of Yardi's top 30 metros. Apartments.com also reports a slowdown in rent growth for apartments. It says that rents were down .1% across the biggest metros, which is the first time in 20 months that rents have gone down. It says that annual rent growth was 7.1% in August which is down from 8.4% in July. (4)The report says that rents were down the most in Sunbelt cities because rents haveen soaring in those areas throughout the pandemic. Out of 40 markets tracked by Apartments.com, 13 saw rent growth. Orange County, California is at the top of the rent growth list for August, with rents up 1%. Saint Louis, San Diego, Columbus, Cleveland, Salt Lake City, Los Angeles, and Portland were also on the positive rent growth side.You can check for more rent growth data by following links in the show notes at newsforinvestors.com. You will also find tons of information on our website about investing wisely in the real estate market, despite all the challenges we face today. Please hit the join link on our website to become a free member. And please remember to subscribe to our podcast, and leave a review!Thank you! And thanks for listening. I'm Kathy Fettke.Links:1 -https://yieldpro.com/2022/09/annual-rent-growth-rate-falls-as-rents-decline/2 -https://www.yardi.com/news/press-releases/national-average-asking-rents-stopped-growing-in-august-according-to-yardi-matrix/3 -https://www.yardi.com/news/press-releases/multifamily-rent-increases-decelerate-according-to-yardi-matrix/4 -https://www.businessinsider.com/rent-prices-fell-august-first-time-in-20-months-2022-9

Tenant advocates are asking the White House for help in curbing what they call “rent inflation.” A coalition of tenant unions, community organizations, and legal groups is asking the Biden administration to declare a state of emergency and investigate ways to regulate rents. As reported by the Washington Post, these groups want the government to address rent growth with the same urgency as it has with high gas prices. (1)Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The coalition sent a proposal that would involve six government agencies for an “all-out government intervention” on rent inflation. The Consumer Price Index shows that overall annual inflation hit 9.1% in June, which is a 40-year high. That includes food and energy, which helped drive that number to a record high, along with housing costs.According to data firm Yardi Matrix, the year-over-year rate of inflation for multi-family rents was 12.6% in July. For single-family detached homes, CoreLogic reports that the annual rate was 12.8% in June. And some hot rental markets have seen much higher rates of rent growth, such as Miami with a June year-over-year reading of 35.5% for single-family homes. On economist told the Post that it's important that policymakers address the issue of high prices for necessities. He says: “At this point, we're talking about food, gasoline, and housing.”Call for Immediate ActionJust recently, the Biden administration addressed the high price of gas with a release of oil from the national reserve. Congress was also asked to consider a gas tax holiday, but that hasn't materialized. The coalition says the high price for housing is also an economic crisis and needs the same kind of attention.It wrote in a memo: “We urge the President to act immediately to regulate rents, as part of the Administration's efforts to curb inflation, and as a critical foundation for long term protections to correct the imbalance of power between tenants and their landlords.”The appeal is part of an effort called “Homes Guarantee” which has a website. You'll find a link in the show notes. The main message is: “Everyone living in the United States should have safe, accessible, sustainable, and permanently affordable housing: A Homes Guarantee.” It says that “currently, a team of 75 directly impacted tenant leaders representing over 25 organizations are building our federal campaign with a focus on executive and agency actions to regulate rents and address the rent inflation crisis.”Potential Rent RegulationsIn addition to the emergency declaration, the coalition wants President Biden to convene a cabinet-level interagency task force to identify possible rent regulations. The document mentions enforceable affordability, quality housing standards, and legal representation for tenants facing eviction. The agencies it calls upon to help impose these regulations include the Federal Housing Finance Agency, the Federal Trade Commission, HUD, the Securities and Exchange Commission, The Department of the Treasury, and The Consumer Financial Protection Bureau.High Rents Due to Housing ShortageAlthough there are some landlords who impose unreasonable rent increases, it's not just greedy landlords who are at fault. As the Post reports, one of the big reasons for the high cost of housing is the housing shortage. The U.S. needs as many as five million more residential units to meet demand.The White House has introduced a “Housing Supply Action Plan” which would close the gap in another five years. But that doesn't help tenants right now. The Federal Reserve is the one that is tasked with bringing down inflation, and it's doing that with incremental interest rate hikes which don't target the housing market specifically. The Value of a Good TenantMany of the mom and pop investors we work with at RealWealth know the value of a good tenant and the results of fair rent levels. Although rent increases are often necessary for a rental business to remain in operation, it's not wise or even ethical to impose unrealistically high rents on tenants. We just put together a Conscious Capitalism statement at RealWealth that addresses that issue. Conscious Capitalism refers to a socially responsible economic and political philosophy. At RealWealth, we believe that landlords need to be sensitive to tenant needs, and that above market rent increases do not show sensitivity.They can also lead to highly restrictive rent controls which is what this coalition would like to see at the federal level. If you are a landlord, or even a tenant, you must know that rent control is bad for everyone because it limits what landlords can do to maintain their properties for the tenants' wellbeing. And it discourages landlords from wanting to remain in business, which is bad for the housing supply.As RealWealth Investment Counselor, Joe Torre, said in our Conscious Capitalism statement: “If you try to squeeze every last dollar of rent from them, the good tenants will leave, and you'll be stuck with the tenants who don't have any other options.You'll find a link to the Washington Post article, and the Home Guarantee website in the show notes at newsforinvestors.com. If you'd like to learn more about owning single-family rentals, please hit the join link at the website. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.washingtonpost.com/business/2022/08/09/rent-inflation-biden/2 -https://peoplesaction.org/wp-content/uploads/2022/08/Federal-Actions-to-Regulate-Rents_V3a.pdf

In this Real Estate News Brief for the week ending August 6th, 2022... the Fed's next move, a mortgage rate rollback for home buyers, and a new all-time high for single-family rents.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. Federal Reserve policymakers say they are “nowhere near” the end of their fight against inflation. Four Fed Presidents spoke out on Tuesday, August 2nd, about their resolve to get inflation back down to 2%. San Francisco Fed Chief Mary Daly said that she is currently seeing a 50 basis point rate hike as appropriate in September, but she says: “If we just see inflation roaring ahead undauntedly, the labor market showing no signs of slowing, then we'll be in a different position where a 75-basis-point increase might be more appropriate.” Comments from the other three Fed Presidents were similar. (1)And then there was a screamingly strong jobs report a few days later. The Bureau of Labor Statistics reported on Friday that hiring in July exceeded expectations. Nonfarm payrolls were up 528,000, and the unemployment rate dipped lower, to 3.5%. To put this in perspective, in the years leading up to 2020 when the economy was robust, job creation was closer to 195,000 per month on average.The unemployment rate is now back to its pre-pandemic level. As reported by MarketWatch, it's tied for the lowest level since 1969. (2) Some economists see the strong jobs report as signs that the Federal Reserve will lean toward a more aggressive rate hike in September. KPMG Chief Economist Diane Swonk said in a CNBC report: “This is hot. For the Fed, this is another 75 basis point hike.” (3)The unemployment report shows a slightly elevated level of new claims. During the last week of July, 260,000 people applied for benefits which is an increase of 6,000 from the week before. The number of continuing claims was also higher by about 48,000. That brings the total number of continuing claims up to about 1.42 million, which is the highest level since April. (4)A new report on home price growth shows that year-over-year prices were up 18.2% in June. On a month-to-month basis, the CoreLogic report says they were up .6% for the 125th consecutive month of higher prices. This is more inflationary news that may convince the Fed to be more aggressive with rate future hikes. However, the report does shows that price growth is slowing down. CoreLogic expects it to drop to 4.3% by next June. (5)Higher home prices also increase homeowner equity. CoreLogic says the average borrower had $280,000 in home equity at the end of the first quarter. That's a gain of about $64,000 over the past year, and a gain of about $125,000 over five years. (6) Those folks expecting a housing crash will have to consider why homeowners with so much equity and low fixed rate mortgage payments would suddenly abandon their homes. Higher home prices are slowing sales, and that's driving up inventory levels, but they are still nowhere they need to be. According to Realtor.com, active listings are about 30% higher than they were a year ago but are less than half of what they were in June of 2019 and about two-thirds of where they were in June of 2020. The good news is that homebuyers have a few more homes to choose from and a little extra time to make a decision, but only a little extra time. The Realtor.com trends report says that homes are spending just ONE extra day on the market compared to last year.(7)New home builders are also experiencing a sales slowdown and higher inventory levels. According to the Federal Reserve Bank of St. Louis, there are more than nine months supply of newly-built homes on the market. However, it can be difficult to gauge new home inventory because many of those homes are experiencing construction delays and not sales delays. (8)Another sign of the housing market slowdown is a sharp drop in construction spending. The Commerce Department reported a 1.1% decrease in June. Private residential construction took the biggest hit. It was down 1.6%. (9) Ironically, the construction of new homes is what's needed to increase supply, yet builders are generally the first to get hit with higher interest rates. A slow down in new home construction could mean continued bidding wars on existing homes in growth markets.Mortgage RatesHome buyers are getting a break right now on their mortgage rates. Freddie Mac says the average 30-year fixed-rate mortgage dipped below 4% for the week ending August 4th. They dropped 31 basis points to an average of 4.99%. The 15-year dropped 32 points to 4.26%. Freddie Mac's Chief Economist, Sam Khater, says: “Mortgage rates remain volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth.” (10)You may be wondering why mortgage rates have gone down when the Fed fund rate is going up. Mortgage rates are generally tied to the 10-year Treasury as mortgage backed securities attract the same type of investor. With the Fed raising rates aggressively, big investors are worried it will create a recession, so they seek the safety of bonds and MBS's. These investors also may believe that we've hit a peak in inflation. Otherwise they would invest in inflationary stocks instead of bonds. In other news making headlines... Single-Family Rent GrowthDemand continues to grow for single-family rentals as more and more potential homebuyers are priced out of the market. And that's pushing rents higher. A new report from Yardi Matrix says the average single-family asking rent rose $23 in June, to an all-time high of $2,071. (11)Rent growth is slowing for both single-family and multi-family rentals. The report says that year-over-year single-family rent growth has dropped 90 basis points, to an annual rate of 11.8%.House Approves Remote NotarizationThe U.S. House approved legislation that would make remote online notarizations possible in all 50 states. The bill will make it easier to close a deal without having the notary and the person signing the agreement in the same room. During the pandemic, agents in many states had to arrange for drive-by closings, with social distancing. (12) The pandemic also inspired almost half the states to allow for remote notarizations. The National Association of Realtors pushed for a national bill to support the demand for virtual sales and closings in all 50 states, even though there's less concern now about pandemic-related safety measures. The bill is now pending consideration in the Senate. That's it for today. Check the show notes for links at newsforinvestors.com. I would also like to share some other exciting news. Within the last few weeks, we hit a big milestone for Real Estate News for Investors. It's been six-and-a-half years since our first news podcast, and we have now posted our 1200th show! We are currently posting two or three podcasts a week for real estate professionals. Set your podcast player to have them automatically downloaded, so you don't miss any! And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.bloomberg.com/news/articles/2022-08-02/daly-says-fed-nowhere-near-done-on-curbing-high-infation-rate2 -https://www.reuters.com/markets/us/feds-daly-34-reasonable-place-get-by-year-end-rates-2022-08-03/3 -https://www.cnbc.com/2022/08/05/jobs-report-july-2022-528000.html4 -https://www.marketwatch.com/story/u-s-unemployment-claims-climb-to-260-000-and-stick-near-nine-month-high-11659616784?mod=economy-politics5 -https://www.corelogic.com/intelligence/u-s-home-price-insights/6 -https://www.corelogic.com/intelligence/podcast-vodcast/oce-monthly/homeowner-equity-reached-record-level-in-early-2022/7 -https://www.realtor.com/research/weekly-housing-trends-view-data-week-july-30-2022/8 -https://fred.stlouisfed.org/series/MSACSR9 -https://www.marketwatch.com/story/construction-spending-fell-sharply-in-june-11659363237?mod=economic-report10 -https://www.freddiemac.com/pmms11 -https://rentalhousingjournal.com/average-rents-rise-to-all-time-high-in-june/?utm_source=Master+Vendors&utm_campaign=a590da3d77-EMAIL_CAMPAIGN_2022_07_20_02_10&utm_medium=email&utm_term=0_4780df7d33-a590da3d77-11392877312 -https://magazine.realtor/daily-news/2022/07/28/remote-online-notarization-is-one-step-closer

John Casmon is a real estate entrepreneur, who has partnered with busy professionals to invest in over $100 million worth of apartments. John also consults active multifamily investors to help them start or grow their business. He hosts the Multifamily Insights podcast (formerly Target Market Insights) and is the co-creator of the Midwest Real Estate Networking Summit. Prior to becoming a full-time investor, John worked in corporate America, overseeing marketing campaigns for General Motors, Nike and Coors Light. Mentioned Resources: CBRE, Marcus&Millichap, Yardi Matrix, Colliers, census.gov, justicemaps.org, IRR Viewpoint, datausa.io Email: john@casmoncapital.com https://www.linkedin.com/in/john-casmon-7942454/ (LinkedIn: John Casmon) https://www.instagram.com/jcasmon/ (Instagram: @jcasmon) https://twitter.com/jcasmon (Twitter: @jcasmon)

With the stock market in retreat in 2022, the concept of a bear market has been very much on the minds of investors. While a bear market in equities is well defined, the concept is not so clear for commercial real estate. In fact, the phrase ‘bear market' is not typically used to describe a decrease in commercial real estate values. Investors more commonly refer to a ‘downturn' in property values, or to the end of a real estate bubble. Listen to this June 2, 2022, roundtable discussion as Dr. Adam Gower asks 'What is a bear market in real estate and are we in one?' with special guest Orest Mandzy, Managing Editor at Commercial Real Estate Direct (CRENews.com), featuring appearances from Chris Finlay, Founder and CEO at Lloyd Jones in Florida, Chris Rising, Founder and CEO of Rising Realty Partners in Los Angeles, Paul Fiorilla, Director of US Research at Yardi Matrix and other contributors from the live audience. And read the full article on this topic here: https://gowercrowd.com/podcast/what-is-a-bear-market-in-real-estate  

With the stock market in retreat in 2022, the concept of a bear market has been very much on the minds of investors. While a bear market in equities is well defined, the concept is not so clear for commercial real estate. In fact, the phrase ‘bear market' is not typically used to describe a decrease in commercial real estate values. Investors more commonly refer to a ‘downturn' in property values, or to the end of a real estate bubble. In this podcast with Paul Fiorilla and the article on the podcast page here, learn more about rea estate bear markets.

In the second part of this series, we'll discuss the last three steps to securing good real estate deals and what happens after you've established yourself in the market. Don't miss the chance to activate your inner real estate mogul today!WHAT YOU'LL LEARN FROM THIS EPISODE A quick rundown of the first three steps to landing your first dealEfficient ways to start raising capital2 strategies for locating the best market dealsReasons to write ‘letter of intent'Why building long-term relationships in real estate is importantRESOURCES/LINKS MENTIONEDHow to Make Big Money in Small Apartments: Paperback https://amzn.to/3vVHGND and Kindle https://amzn.to/37by09oBest Ever Apartment Syndication Book: Paperback https://amzn.to/38Ghrmi and Kindle https://amzn.to/3LFEsECGoodegg Investments: https://goodegginvestments.com/Reonomy: https://www.reonomy.com/Yardi Matrix: https://www.yardimatrix.com/CONNECT WITH USGreen Light Equity Group - http://www.investwithgreenlight.com/For a list of Virtual Meetups - Email:tate@glequitygroup.com | chelsea@glequitygroup.com Special Announcement! Tate's brand-new audiobook "F.I.R.E.-Financial Independence Retire Early Through Apartment Investing" is downloadable! Go to: Green Light Equity Group: http://www.investwithgreenlight.com/

In this podcast today, I will discuss the company Yardi Matrix! Listen to the podcast for details! --- Support this podcast: https://anchor.fm/thressa-sweat/support

While not brand new, the built-to-rent sector is growing fast, and the number of homes under construction has doubled in one year. Doug Ressler with Yardi Matrix joins show host Michael Bull to discuss the emerging built-to-rent sector.

Build-to-rent communities are one of the hottest trends in rental real estate right now! Many people who can't own their own homes still want to live the single-family lifestyle. Demand is so hot, almost 80% of the renters participating in a RentCafe survey said they were “interested in living in a community of single-family homes.” (1) And with such a tight supply of existing homes, newly constructed rental homes are getting the attention of investors. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The RentCafe survey includes responses from 3,300 renters, and 78% of them confirmed that interest is growing in single-family rentals. Rentcafe.com says that last year, in 2021, there were three times the number of searches for rental homes as there were the year before, in 2020.Demand Grows for Single-Family RentalsSingle-family rentals have been a hot investment choice for more than a decade, so it's not a new concept. The first big surge happened after the 2008 housing crisis when millions of homes were foreclosed but the former owners still wanted to live in detached homes. Investors bought the foreclosed homes and turned them into rentals. The pandemic has accelerated this demand once again because people want more privacy and more space, but there aren't enough existing properties to meet the demand so many investors and developers are building new rental homes.Last year, builders pumped 6,740 new build-to-rent homes into the market. This year, that number is expected to double to almost 14,000 newly constructed single-family rentals. These figures refer to rental homes that are built within communities, which some people are calling horizontal apartment communities. But the rental units are stand-alone homes, with yards.According to Shannon Hersker at Walker a Dunlop: “The pandemic just increased demand at a faster pace. People want to live in areas that are less dense, in communities that offer more space.” And, it isn't just Millennials who are attracted to this kind of rental. Hersker says: “In reality, you have everyone – including college students, empty nesters, families with kids, pet owners, and those wanting to downsize.”Urban vs. Suburban SFR LocationsSo where are all these built-to-rent homes located? RentCafe says that 61% of them are in suburban areas, and 39% are in urban areas. The website's analysis shows that most of the communities in the Southwest are in urban areas while those in the Midwest and Northeast are in suburban areas. RentCafe has come up with two lists. One is for new single-family rentals in the suburbs of larger metro areas. The other is for cities that have the room for build-to-rent communities within city limits. Phoenix tops the list for metros with a total of 6,420 new single-family rentals in communities that are dedicated to rentals. It's also a top metro for new apartment buildings, so there's a big demand in Phoenix for rentals of all types.RentCafe used data from its sister company, Yardi Matrix for this analysis. There are 20 metros on the list with Columbus, Dallas, and Houston in second, third and fourth positions.On the list of cities, Las Vegas is number one with 2,520 new single-family rentals. Houston, Tucson, and Phoenix are in second, third, and fourth place on that list. We'll have a link to the report in the show notes so you can check all the cities on both lists.RentCafe also identifies the largest built-to-rent communities. And, it has state maps showing which cities have the most single-family rentals. The report says there are currently about 90,000 single-family homes in the U.S. within about 720 communities. That includes all kinds of detached homes as well as townhomes and buildings with up to four units that also have yards and garages.Strong demand and higher home prices are also pushing rents higher, which is increasing investment value. CoreLogic says that single-family rents were up 11.5% year-over-year in November.And, landlords are having no trouble finding tenants. RentCafe says the occupancy rate was 97% for single-family rentals last year. That's 2% higher than it was for apartments. Check the show notes for links to the full report at newsforinvestors.com. You can also find out more about investing in newly constructed rental homes at our website. It's free to join, and free to access hundreds of webinars and articles on real estate investing. You'll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.rentcafe.com/blog/rental-market/market-snapshots/built-to-rent-single-family-homes-double-in-2022/

In this podcast today, I will discuss the company Yardi Matrix! Listen to the podcast for details! --- Support this podcast: https://anchor.fm/thressa-sweat/support

The last 18 months or so have been the proverbial roller coaster for the real estate industry. COVID-19 wreaked havoc on the nation but unlocked tremendous latent demand, changed where and how people lived, and left dramatically rising prices in its wake. Jeff Adler, Vice President of Yardi Matrix, has a measure of the pulse of just about all real estate sectors (retail, office, self-storage, but especially apartments and build-for-rent).

On this episode, Doug joins us to discuss drivers behind the rising demand for multifamily, the cities experiencing the fastest rent growth, and opportunities in growing markets. Yardi MatrixYardi® Matrix offers the industry's most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in multifamily, student housing, industrial, office and self storage property types. We provide nationwide market and institutional research reports that leverage property-level details of multifamily properties. Yardi Matrix also uses data in the Yardi property management system stack to create aggregated and anonymized operating expense, revenue, and operational metric data that improves underwriting analysis and competitive benchmarking.LinksMultifamily Outlook Report, click hereLearn more about Yardi Matrix, click herehttps://www.linkedin.com/in/doug-ressler-7b20968/https://www.yardimatrix.com/https://www.rentcafe.com/

The eviction moratorium roller coaster continues. The U.S. Supreme Court ruled against the moratorium, saying: “it is up to Congress, not the CDC, to decide whether the public interest merits further action here.” And now, three federal agencies are asking state and local governments to implement eviction moratoriums or extend the ones they currently have.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The Supreme Court issued an eight-page ruling on August 26th. (1) Realtor associations and landlords in Alabama and Georgia had sued, saying the CDC had gone beyond the reach of its authority.Scotus Rules Against MoratoriumIn the ruling, the justices said: “The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC's determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.” (2)But they went beyond that saying that rental assistance funding has been made available but very little of it has been distributed. So what's the problem? According to the ruling: “The Government has had three additional months to distribute rental-assistance funds to help ease the transition away from the moratorium.” Congress has also had time to put together new legislation, but has failed to do so. And now the moratorium is set to expire on October 3rd.Where Are the Rental Relief Funds?Why have emergency rental funds not already been distributed as landlords suffer the brunt of the moratorium? We reached out to Director of Business Intelligence, Doug Ressler, at Yardi Matrix about the delay. He told us:“In most of the country: As of Aug. 26, state and local programs had (received) a little more than $5 billion of more than $46 billion in federal rent relief money out the door. Only about 10% of that money has reached renters and landlords. It's slowed from the federal government to states and counties and cities. There are over 500 different State and City programs and procedures. Some are doing a good job. They've gotten more than half the first round of money out the door. Others are having issues and have provided less than 5% of the monies available.”States, Cities Asked to Implement MoratoriumsNow, there's a call for moratoriums at the state, city, and local court levels. (3) The Secretary of Housing and Urban Development, Marcia Fudge, the Secretary of the Treasury, Janet Yellen, and Attorney General, Justice Merrick Garland sent a letter to state and local governments about the eviction moratorium. They say they are working together and with other agencies to “make rental assistance available to households in need.” And they are asking for help in several ways. They want state and local governments to:1 - Enact eviction moratoriums for the rest of the health emergency.2 - Encourage local courts to make it a requirement that landlords apply for Emergency Rental Assistance before they begin eviction proceedings.3 - Prevent eviction proceedings to continue while the ERAs are being considered.4 - Use ERA and other emergency funding to pay for tenant legal representation and eviction-diversion strategies.5 - Help tenants through this whole process.California has already extended its moratorium. According to the Rental Housing Journal, some judges are “slow-walking” eviction cases, while this situation plays out.In a perfect world, rental relief funds would be coming through at a much faster pace, and both tenants and landlords would be getting relief, right now. Evictions are never something a landlord wants to do. But the moratorium strategy is not working -- for landlords. Something else needs to be done to address the issue of back-rent, and continued lack of rent payments from some tenants.It's Time for a New Rent Relief StrategyPresident of the California Rental Association, Christine Kevane LaMarca, feels that legislators are not recognizing the financial burden that's crushing some housing providers. In reference to the extension of California's eviction moratorium, she told the Rental Housing Journal: “The state continues to extend the eviction moratorium with no distinction between residents who cannot afford to pay due to the pandemic and residents who can afford to pay their rent but are using the moratorium to violate their rental agreements.” (4)These moratoriums have been going on for close to a year-and-a-half. President of the National Apartment Association, Bob Pinnegar, told the Journal: “The government must move past failed policies and begin to seriously address the nation's debt tsunami, which is crippling both renters and housing providers alike.”For many landlords, this isn't a problem. They have tenants that are paying rents, especially those with single-family rentals. But for those who are, something needs to be done to make them whole.If you'd like to read more about this, check for links in the show notes at newsforinvestors.comAnd please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.supremecourt.gov/opinions/20pdf/21a23_ap6c.pdf2 - https://rentalhousingjournal.com/u-s-supreme-court-ends-nation-wide-eviction-moratorium/3 - https://rentalhousingjournal.com/governors-mayors-courts-urged-to-stop-evictions-until-emergency-rental-assistance-is-processed/4 - https://rentalhousingjournal.com/california-rental-housing-association-sues-state-over-eviction-moratorium/

Doug Ressler with Yardi Matrix joins Michael to discuss industrial demand and performance during the post-COVID economic recovery.

Are you up to date on multifamily? Doug Ressler, Senior Research Officer with Yardi Matrix, joins us to discuss trends and key market factors for multifamily investing. Yardi Matrix Yardi® Matrix offers the industry's most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in multifamily, student housing, industrial, office and self storage property types. We provide nationwide market and institutional research reports that leverage property-level details of multifamily properties. Yardi Matrix also uses data in the Yardi property management system stack to create aggregated and anonymized operating expense, revenue, and operational metric data that improves underwriting analysis and competitive benchmarking. Links Learn more about Yardi Matrix, click here https://www.linkedin.com/in/doug-ressler-7b20968/ https://www.yardimatrix.com/ https://www.rentcafe.com/

In today's Syndication School episode, Theo Hicks shares his thoughts, insights, and analysis of the Yardi Matrix’s Bulletin for April 2021 about the markets that have fully recovered from the pandemic’s recession. To listen to other Syndication School series about the “How To’s” of apartment syndications and to download your FREE document, visit SyndicationSchool.com. Thank you for listening and I will talk to you tomorrow. Click here to know more about our sponsors RealEstateAccounting.co thinkmultifamily.com/coaching 

Trends changing? Performance adjusting? What should rents and occupancy do moving forward? Doug Ressler with Yardi Matrix, who closely observes 135 U.S. markets, shares all this and more.

Watch the video recording of this show, See the highlight videos Gain access to online real estate syndication resources ACCESS THE SHOWNOTES PAGE BY CLICKING HERE.

In this Podcast today, I will discuss the company Yardi Matrix! Listen to the podcast for details! --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app Support this podcast: https://anchor.fm/thressa-sweat/support

Apartments in gateway cities are less popular with renters, while secondary markets see stable or improving rents, Chris Nebenzahl of Yardi tells GlobeSt.com The apartment sector has been challenged regionally during the pandemic, with many metros facing significant decreases in rental rates and demand. Secondary markets, however, have been a bright spot for apartment owners. These markets have outperformed major metros, boasting stable and even improving rents, according to data from Yardi Matrix. To get more insight, we talked to Chris Nebenzahl, editorial director at Yardi Matrix. Matrix data shows that secondary markets adjacent to major metros are benefitting most from this trend, and Midwestern markets are also performing well. Gateway markets like New York, Chicago, Washington D.C., San Francisco, Los Angeles and Boston top the list for rapid declines in rental rates and demand as well as rising vacancy rates. Nebenzahl explains that outward migration is the primary factor driving the performance of secondary markets. In fact, many of the large metros have seen five years of outward migration over just six months. Renters are moving to more affordable cities with less density, as well as suburban markets. Listen to the latest episode in the Multifamily Visions 2021 podcast series to get more insight into these apartment trends and data, and what this will mean for long-term apartment investments.

Chris Nebenzahl, Director at Yardi Matrix, joined us on the podcast to discuss his latest report on the Multifamily Market.At Yardi, Chris manages research operations for Multifamily, Self-storage, Office, Medical Office, Industrial, and Student Housing asset classes.Chris leads a team of ten research analysts, creating content, bespoke client reports, and new research products for the Yardi Matrix platform. His focus is on demographic and economic drivers that impact the real estate market and built environment.LinksSteve cited many different sources throughout the interview. If you'd like to learn more, click the links below.Learn More About Yardi Matrixhttps://www.yardimatrix.com/Subscribe to Yardi's Newsletterhttps://www.yardimatrix.com/ReportSubscriptionDownload Reports From Yardi https://www.yardimatrix.com/Publications

Born and raised in the Boston suburbs, Chris Nebenzahl moved west to attend the Unversity of Denver and never looked back. Still residing in Denver, Chris is a Director with Yardi Matrix, a commercial real estate data analytics platform that provides accurate, timely data to operators, investors and debt and equity sources in the multifamily, office, industrial and self-storage asset classes.

#PlatformForChange Series Pilot Hello everyone and welcome back to The Self Storage Podcast, i'm your host Scott Meyers. I would like to take the time to introduce to you what will be known as the Platform for Change segments. My team and I have come up with the #PlatformForChange segments by inspiration of the #ShareTheMicNow campaign that took place in early June10 2020 across instagram. Simply put, these segments came together by way of collaboration with my team members who are able to educate me, as I do millions on the topics related self-storage investing, on understanding the lens of the Black community in their everyday experience. Self Storage Investing is a business that has grown through education, understanding and partnership with a diverse array of wonderful individuals combined. These podcasts segments will be a way to continue the conversations that are necessary even at the self-storage investing level as our way of saying "the lens and understanding need to become a shared experience in order to be the change we want to see." My first guest of this segment is my good friend Harding Easley. After almost two decades of a career as an executive in Telecommunications, Harding chose Red estate and Big Data as a perfect combination. As an Account Executive at Yardi Matrix, Harding advises prospects and clients on how to obtain up-to-the-minute data on multifamily, commercial, self-storage and vacant land properties. Harding demonstrated on a daily basis how Yardi Matrix has proven (using post-deal analysis, as well as pre-Investment Committee meeting analytics) that clients can come within 2% of final winning bids with less than 30 minutes of analysis per property. Experiences and opinions on the subject of social justice are representative of Harding an his family owned business-The Harding Group and not representative of the privately owned company Yardi Systems.For more information on today's guest:https://www.linkedin.com/in/harding-easley-32a2693/www.thehardinggrp.comhttps://www.yardi.com/Helping People Become Financially Independent Without The Hassles of Tenants, Toilets, and Trash with Self Storage Investing!Website: https://www.selfstorageinvesting.com/Facebook: https://www.facebook.com/ScottMeyers.SelfStorageInvesting/Twitter: https://twitter.com/SelfStorageGuyLinkedin: https://www.linkedin.com/in/scottameyers/Youtube: https://www.youtube.com/user/SelfStorageInvestingInstagram: https://www.instagram.com/self_storage_investing/

James: Hey, audience and listeners. This is James Kandasamy from Achieve Wealth Through Value Add Real Estate Investing Podcast. Today I have Raj Tekchandani from the Boston area. Raj is a co-sponsor/KPGP in 650 units across Georgia, Florida, Kansas City, and Texas. Hey Raj, welcome to the show Raj: Thanks, James. Thank you for having me James:  Good. I'm happy to have you here because I want to talk about technology. You are a technology guy turned into a multifamily investor, right? Raj:  Absolutely, I can speak technology all day long James: Yeah, absolutely. So I want to make sure I give you an opportunity to explain some things that I missed out. So why don't you tell us about your story? How did you get started and how did you end up being a multifamily investor? Raj:  Sure, I will do that. So hi guys, I've been in technology for most of my career, I did Undergrad Computer Science, then I did an MBA in high-tech so purely technology-based and wanted to become the next big company founder. A lot of my jobs were mostly startups but when I realized that I'm sitting on a lot of options and not going anywhere, I said, I need to diversify and started looking into real estate investing that was not until 2012, but that was just a side gig. I still was fully devoted to my job, which was startups and it was in data analytic space and we're building a platform to connect all the data in the world together and put meaning into data, using something called a Data Lake. A lot of formal companies were using our software, financial services, but there was no real estate company using it. But anyway after I finished my five years with that company, my stocks options fully invested. I was like, okay, what is my next startup? And by this time I had started collecting my grants from the little investments I'd done. I had started investing in 2012 in one Condo in Orlando, Florida, and gradually went on to buy more because the prices were very attractive and I could see the prices going up and I said, let me just get in there, so I got in there, fortunately, had a good property manager that helped us take the worries or headache off our head and the cash flow was beautiful. So in about 2016, I said, okay, they need me to see this look and I bought actually a 15 unit multifamily near my house in Boston and I wanted to do more of that because I'd heard, you know, multifamily the whole economy is upscale. So I said, let's get into multifamily and that experience was interesting, to say the least. I had not too much knowledge about the underwritings and how to really look at expenses and that came in as a very expensive learning lesson for me in terms of multifamily. So from there on, I said, this is too much work, I can't do this. I found a good property manager and he quit and then found another one then he quit and it's like, this is too much. So I said, no passive investing is my way to do it, this whole active thing is not my thing and I'm still working full time on my job. So I started nesting passively with some investors. The first time I looked at a passive deal I was like that's too much, there are too many zeros in here, I can't do this but gradually as I understood, I took learning and took all the courses and reading blogs and podcasts and I got comfortable with investing passively and then a couple of passive investments and I was like, this is great, I have my nine condos, I have my fifteen hundred, which has now started giving me cash flow and now has passive investments. Interestingly, it was almost matching up to my startup salary. And I was like the options are great, but what if the options don't mature or do much? So I took a bet and I quit after five years of my job to do real estate full time and that's how I dig more into multifamily. But interestingly at that point, I had this idea of another startup, which didn't go too much far because I wanted to take these learning from data analytics into real estate and now that I'm doing multifamily and doing all this, I'm not seeing too many systems out there. It's still very, laborious jobs, the property management company is a lot of work on paper and even the underwriting was very painful. So I was like, what if there's an automated software machine learning data, whatever we have learned in technology to build that. So I met up with the person at MIT, Jennifer, she had done a Ph.D. in Real Estate Technologies, like Artificial Intelligence Machine Learning for Real Estate. I'm like wow this is a person that I James: Talk to right? Raj: Yeah, so I sat down with her and she went through her thesis with me. In fact, she was nice enough to explain her thesis; there are too many companies out there that are doing what I'm trying to do.  James: So what was the thesis about? Raj: The thesis was the use of machine learning and artificial intelligence in real estate  James: But is it real estate underwriting, or is it real estate analysis or--  Raj: --Real estate analysis  James: Is it for investment or is it-- Raj:  So she actually worked for MITs and Darwin program buying the advisory real estate James: Oh, okay. So they're basically looking at investing Raj: So they're looking at investing so mostly commercial real estate, eventually, from her thesis, she came into that, MITs fund. She was working there at that time. But in her research, she had looked at a lot of technology companies, right? From doing everything from sensitivity analysis to underwriting to figuring out where the locations thesis are, property management companies that are looking to do automation based on the [inaudible06:24] so a lot of machine learning in there. Actually, one of the companies that struck me at that time was in [inaudible06:33], which is what I had been thinking about, sort of how to automate underwriting and how to take all the data that's been sitting in, all these Yardi Matrix and all the places that been collecting data. How can we leverage that to say, okay, well, this is a property that I'm looking at in multifamily, this is the address and boom, we'll go and run into algorithms and come back and say red light, green light, yellow light based on all these factors and in [inaudible 07:02] was doing that, some of that, I talked to the CEO there and start using the platform. So I had some suggestions for them into building other plans and other features on the platform but at that point I said, you know what, I'm more of a user now, and they're not technologists, I want to use these technologies that are out there, I can talk about what features they need, like lease analysis. In one of the deals we went inside in the back and you're looking at 150 leases, one by one, what is matching up. There's no use of doing that, those leases should be fed into a system and outcomes, and these are the mismatches  James: The lease [inaudible 07:38] should be automated Raj: This is a tenant profile and based on this tenant profile and this property and this neighborhood, this tenant profile will be surviving through any downturn, that’s what you need to know on tenant profile I'm sure somebody will build it in there; I think [inaudible 07:55] was already thinking about doing that. Anyway, from that I said, okay, I'm going to stay as a user, I started using these technologies but then I got stuck more into the whole underwriting piece and managing the properties, finding the properties, I was like talking to brokers, now I'm talking to this and that's how I met a couple of good people through coaching programs that I said, okay, it's time to take the next step, move from passive to active, and see how the big things are done. I wanted to be closer to the action. So that's how I got into active investments James: Got it. I mean, that's a lot of things there. So I want to go a bit more in detail on that, but that's good. I mean, so right now you're a full-time real estate investor, right? Raj: Full time real estate investor. Yes. I mean always thinking of the next technology ideas James: Well, that's the problem with all these tech guys coming into real estate? I also think the same, let's automate this, and let’s create a system on this Raj:  Yeah. But I mean, I keep in touch, keep a pulse on that. So I don't know if you know about this organization called CRE tech- Commercial Real Estate Tech, middle of New York and they are looking at all these things, all kinds of who's doing what, which company is being funded. So I keep in touch with them. I'm a member of them, but just looking at ideas, someday somebody has come with a great idea that we are still a little behind than other industries in terms of use of technology James: Oh yeah. Real estate is so manual. I mean, there's not many people investing in technology and it's a bit tricky too because a lot of people component Raj: And I was told one day that, (AI) Artificial Intelligence, the biggest tool, billions of dollars are being traded in real estate based on excel spreadsheets. That is the technology of choice of all these big reads and fund managers and they're just doing Excel spreadsheets James:  Yeah. I don't know why the real estate is just so hard to automate in terms of location because even like, if you look at a street, one side of the street can be completely different valuation from the other side. And how do you tell that to the software? You can't tell them that people have different preferences going in Raj: Well, if you feel that, you can tell that by how many murders were on the left side of the street and how many murders on the right side [inaudible 10:16] I mean, I just think the crime rate, our school districts and there are so many factors you can pinpoint it. Now there's so much data being collected on all of this, right? You just have to leverage the data and every time a property gets sold, a property gets bought that data is entered into a system, right? The analysis entered into the system, even for an upgrade, all the data has been entered so you should be able to tell that if I put granite flooring in this, or I put up vinyl flooring in this, or whatever, this is the gorgeous fettuccine down the road, right? Because that's [inaudible 10:50] James:  I think that's what [inaudible 10:52] does, right? Sometimes they do a lot of underwriting, they try to predict what is the rent going to be, but I'm not sure how big they are. I know there were some people really excited about it, but some people really didn't like it. I saw it once; the tool looks good for a tacky, right? If you're a second, it looks like everything's done for you. But I don't know for me, I don't feel comfortable yet. Raj: I think there's nothing. So all that said, James, there is no equal end to be having boots on the ground. So this is what I've learned James: Well, for real estate, you have to go to the property, you have to do the cost yourself Raj: Exactly. So you'll do all, that saves you a lot of time, right, because you can do the cost, the real analysis is done when you're there and you're looking at the property because we walked away from a deal that had everything looked good on paper and technology tools and everything, because this one building down the slope, had some structural issues that we didn't know, I mean, no technology tool will tell you that turning on some like pillars that are like fake  James: Correct. There's no way to know. I mean, as I say, I love all these tools, but I don't know for me, I don't want to pay so much money for this tool unless it giving me an automated thing. Raj: That's where the progression has to happen. The more they have to get better and they have to get cheaper for that option. Otherwise, excel spreadsheets help people doing their report James: One day will, right? I mean, if you look at it right now, we need a buyer agent, we need a seller agent to do a house transaction and the reason for that is so much people touch, right? I mean, a seller needs to know that he's getting the best value for his product. Only people can see the house and decide whether it's a good house or not, right? It's a bit hard for computer AI to really say that this is a good house for this person, right? Maybe one day it will. Raj: It will. They'll cut short the time or for your needs maybe James: Correct. And I know a lot of startups were trying to do all this right there. I mean, every tech guy who was introduced into real estate in the behind them is [inaudible 12:53], oh, I can do a startup, even syndication people are trying to automate right? They're trying to rank the sponsors, they tried to give stars to sponsors and everybody is trying to do all this but as I said, it's very hard to give a star ranking to sponsor there are so many other things that are involved. I mean, one day probably, yes. But we are not there yet with the technology, the information we have so how do you feel? I mean, you and I are almost the same, right? I mean, we're always in the technology space and suddenly become real estate. Do you think you've wasted all that lifetime in tech space? Raj: No, not wasted. It's a game, it's life as it plays out, now where I am my biggest strength is my value for my time. I mean, I control my time in what I'm doing, when I was working tech job, I mean, you had management meetings on Friday afternoon. I was like an owl, now if you go look at my calendar, you'll never find a Friday afternoon open because I dropped it James: Okay. That's good. Yeah. I mean sometimes people who have studied so much in certain fields, I don't know. I do see some doctors moving from being a doctor to becoming a real estate investor. I mean, at the end of the day it's all about time, right. Time and how much [inaudible 14:13] Raj: I mean it’s time and it's what you enjoy. I mean, I also realized that a lot of what I do in real estate is marketing and I love marketing James: Nobody cares in the tech company Raj: Yeah. So when I'm even in my tech job, my last job was in marketing. So I was basically a demand generation for this data analytics back on rebuilding. So basically evangelizing technology for people that don't understand it, it's sort of marketing. So writing blogs, writing white papers, writing all this stuff, simplifying things for them. That's what I had become in my technology job also because nobody wants to hear the mumble-jumble of data lakes and medication and all that stuff. It's like, bring it down. What does it do for me? And now he's the same thing, syndication and all what does it do for me? I mean, so marketing is basically attracting the right people and getting rid of people that you don't want in your system. So that's why even in capital raise or even the deals that we do it's very important to figure out who your customers are which in our case is investors and it took me a little while, my first four deals, I was like talking to everybody and anybody like, okay, this is what we have and I was like, no, that's not me finally figured out the people who are attracted to my deals, especially are tech executives, like me that have collected a decent paycheck, they have a decent amount of wealth, they want to diversify, they're paying a lot of taxes and they are paying [inaudible 15:50] that. So they want to learn about how real estate can help them with taxes, how real estate can help them diversify, a lot of them have invested completely in the stock market, which we have done that in the past and I've lost a lot of money in stock and that's why I never want to go back to stocks anymore and I'm trying to teach the same thing through my formal education. James: Yeah. Surprisingly not many people know about real estate. I know probably all the listeners here, they will. I mean, you are already learning and listening to podcasts about real estate, you already know, but it's very surprising to know how many people don't know about real estate and don't know what passive investing. I mean, people know that you can go buy a house and give it for rental, but nobody knows that I can put the money with a sponsor who will do the work every time Raj: They know real estate investing, they don't know realistic passive investing James: Correct Raj: Yeah, passive investors have become my passion James: Yeah. I mean, that's why I wrote my book too because not to introduce real estate to passive investors, I want them to be a bit smarter. I mean, sometimes when they got introduced to real estate, they think, wow, my God this is the best thing they just follow one way of thinking, right? So Raj: You just stole my line that's what I say, because, at smart capital, we make you smarter James: Okay, good. Because I mean, first, you get introduced to passive investing, second is how you become smarter, right? So let's talk about that. I mean, you said you have done some really cool stuff for passive investors and incorporating some technologies and all that Raj: Absolutely. I mean, again, nothing was planned. It just happened over time, my first deal, when I presented to some of my friends, they said, Raj take my $50,000. I'm not going to take your $50,000. You need to sit down with me, understand what it is James: Well, that's the problem with me. I don't like just taking money. I want you to understand the deal. Cause I believe it's a good deal Raj: I actually know the four friends that I had, I bought them tandoori chicken. I said, come sit with me and I'll explain to you what it means. So I bought wine and food. I said, look at this, I'm going to tell you what it is if you understand it and if you still want to invest, that's great. I want you to understand it because I can take the money and invest it, I mean, that's not a problem, that's the easiest thing for me, but I really want you to get smarter in my sense, you know, that's why smart capital and so that small group grew into a little bigger group and I created a meet up in the Boston area on just apartment investing and teaching what it is and growly slowly And I kept it small for a number of my first year I did it in my office in a conference room. They were like 35 chairs and who can come but we kept it very educational. That was the thing. We'll take a topic, we'll discuss the topic or make sure that anybody in the room is understanding and if there is somebody else experienced in the room, they're absolutely allowed to speak up and do so, kept it very educational, very different meet ups. A lot of people said, okay, Raj's meet up is educational so we're going to go there, and then I didn't have enough space so I took a bigger space now the membership in that whole meet up has grown to 600 plus people but we now get about 60, 70, 200 people monthly and I've kept it monthly and still, we talk about educational purposes There's no come have beer, learn about network and go back. That's not it. So to answer your point in doing so right, I've internally built some systems to make sure this is a smoother process for me. So in terms of the thought leadership platform, I have my meet up, I started doing blogs consistently. Obviously I'm active on Face book, LinkedIn, and really wherever else I can post my blogs. I also to become a member of the Forbes relisted council so I can do some technology related articles there and talk about what I'm thinking. So yeah, I've done all these things and now I have in a way that I've created this CRM and systems and attracting investors who, whatever platforms that they can get onto podcasts like this and talk more about what I've done in my past and just share my experiences, that's basically it. James: So how do you decide on doing a deal? Let's say someone brings you a deal, right? How do you decide this is a good deal, I really like it. What are the things that you look for? Raj: So the first thing I like, ideal deals only very few people. I mean, as partners, right? I mean, I'm not into numbers of deals and I don't count the number of doors. I don't do that. I like to enjoy myself, I mean, to [inaudible 20:30] my life, you're going to be just chasing money and [inaudible 20:33] James: You want to be peaceful too, right. Reinvesting the right sponsor because you can make an investment any-- Raj: --People that I enjoy, I mean, the deals will have good and bad times. One of our deals is we haven't done distribution, but I will say that I'll invest that deal again. I believe so much in the team that even because I'm so close to the deal and my investor is saying, Hey Raj, we haven't distributed work. I said it'll be fine. It's just because I trust the people that I work with and I could do another deal with them. So I’m very selective about who I work with, these are people from my coaching backgrounds, I've heard them say I hear them strength and they have to be complemented with my strength. So if I'm good at finding markets and I say, what, I'm going to invest in Orlando or Kansas City or whatever markets that I have in my head because I've done some research on data on that and obviously then underwriting should make sense but my number one criteria is the people that I work with and do I add value to them and they add value to me. So I will claim I'm not a good asset manager, I've never intended to be so I will always look for a very strong asset management on the team James: Got it. So you basically look for the sponsorship and how the team complements with you as well Raj: The dealership and the numbers should make sense, but that's true for everybody. You will not invest or be participating in the deal, that doesn't make sense James: Yeah. What do you look for in a very strong sponsorship team? That you really like? I mean, what personality, integrity or--? Raj: --Integrity, number one is integrity, right? I mean, the track record is okay, but I think track record, I've seen these guys done. I mean, it was not done like 15, 20 syndications, some of them have, but some of them are still early in the stage, they have done maybe two syndications before this one, but I've seen them through the coaching classes and going through with them to on due diligence trips. So I always go and make sure that I'm on part of, once we go sign up, form a structure, I'm going to get involved with all the due diligence and all everything. So I'd sit down with them and see what their work ethic is, how passionate they are about it, and will they stay committed with me? James: Got it. Very interesting. What about, on other things, in terms of the underwriting or in terms of market analysis, have you done any; have you incorporated any technology things into analyzing that? Raj: Yeah. I mean, I do my own technology things. I mean, I haven't written software for that, but I do look at a lot of data James: What kind of data do you look for? Raj: So, I mean, a standard feature, like population growth, job growth, and median income. We will also look at STEM jobs, right? I mean, I look at if it's a technology oriented job, are there or not because I mean, in these times the properties that are doing well, are people technology, company, people working from home, right? So all of that is important as well [inaudible 23:34] James: Got it. Very interesting. So is there any proud moment throughout this real estate career that you think oh, I did that and I feel really proud about it and you can never forget about it until the end? Raj: Well, the proud moment was I'm into partner with you on my first deal. I mean, that was a very proud moment. I told you right when the first time I looked at syndication when a friend of mine presented to me, he was on the GP side, I was on the limited partner side. He says "Raj I got the deal."  And I said, "What is this? This is like 300 units. I mean, there are too many zeros. There was no freaking way." So now when I did my first deal with that number of zeros, I mean, it was not 300, it was 152 units that deal was a very proud moment for me having gone through understanding what it means and then the other proud moment was to convince some of my investors to partner alongside with me right now that I learned this and I'm sort of sharing my education. I don't even call it capital raising. I'm giving them an opportunity to participate with us. I'm doing them a favor, sometimes I feel that way and that's one way to look at it and I'm saying no, every deal of mine for my side has the same investor. The first investor is always the same, that's me. So I'm going to invest in these deals, I've done the research; I've been to the property. Now I'm presenting it to you this deal, why I like it, and you're welcome to join along, so the proud moment was to getting that achievement, right? The first one and the second one becomes easy. And then the first one was the problem James: Got it. Awesome. Can you tell our audience how to get hold of you? Raj: Absolutely. I mean, I have a website, I'm very active on Facebook, but my website is smartcapitalmgmt.com. My email is raj@smartcapitalmgmt.com. Easy to use to get to me or LinkedIn. Facebook also is there James: Awesome. Thanks so much for coming. It's so refreshing to see how someone from the tech industry moved directly into a multifamily investor. I think a lot of people do, right? But there are still tons of people who don't, right? So it's just the thought process and sometimes the desire to technologize everything, sometimes it's hard, right? Real estate-- Raj: -- Why do you want to do that? I mean, you want to enjoy what you're doing, right? If building a technology company is your passion then real estate will not be the thing, but leveraging technology to get smarter is another issue James: Got it. Awesome. Well, thanks for coming. I'm sure everybody got tons of value Raj: Thank you, James. Thanks for having me James: All right. Good

(Featuring Jeff Adler, Vice President, Yardi Matrix) Political risk in the US is usually seen mostly through a national lens, but what can we learn by understanding risk at the city level? https://www.afire.org/podcast/afirepodcast05/ By building a mechanism to quantify and understanding political risk at the metro-level across the US, unexpected insights and comparisons for real estate investors can emerge. In this episode, Jeff Adler, Vice President of Yardi Matrix, talks about mapping political risk in the US.

Jason Hartman is joined today by mortgage consultant and trainer, Jen Du Plessis. As a real estate investor, it’s great to gain insight on both sides of the mortgage business. Jason and Jen discuss GSE, QM and non-QM loans, as well as the great recession and where the pendulum has moved to now. This leads to a prediction of interest rates dropping even more. But before that, Jason offers congratulations because rent is on the rise. Listen to some average rent rates across the country and plan accordingly. Key Takeaways: [1:50] Investor Congratulations! Rents on the rise [3:40] Book, “Debt, The First 5,000 Years” by David Graeber [6:50] Not one person in a thousand can understand our monetary system [9:00] Landlord vs tenant in NYC  [12:28] According to Yardi Matrix; About 1.5 million housing units were delivered over the last five years, and 3,000 more expected for delivery this year. A housing shortage? Yes! [17:00] GSE: Government Sponsored Enterprise [19:00] What’s QM? And what’s non-QM? [29:16] From 2004, through the great recession, where is the pendulum now? [30:20] Right now, the average mortgage company makes $457/loan they originate. [32:30] Are we going to see interest rates go down even more?
 Websites: www.JasonHartman.com Jason Hartman Quick Start Podcast The PropertyCast
 www.JenDuPlessis.com

Jason Hartman is joined today by mortgage consultant and trainer, Jen Du Plessis. As a real estate investor, it’s great to gain insight on both sides of the mortgage business. Jason and Jen discuss GSE, QM and non-QM loans, as well as the great recession and where the pendulum has moved to now. This leads to a prediction of interest rates dropping even more. But before that, Jason offers congratulations because rent is on the rise. Listen to some average rent rates across the country and plan accordingly. Key Takeaways: [1:50] Investor Congratulations! Rents on the rise [3:40] Book, “Debt, The First 5,000 Years” by David Graeber [6:50] Not one person in a thousand can understand our monetary system [9:00] Landlord vs tenant in NYC  [12:28] According to Yardi Matrix; About 1.5 million housing units were delivered over the last five years, and 3,000 more expected for delivery this year. A housing shortage? Yes! [17:00] GSE: Government Sponsored Enterprise [19:00] What’s QM? And what’s non-QM? [29:16] From 2004, through the great recession, where is the pendulum now? [30:20] Right now, the average mortgage company makes $457/loan they originate. [32:30] Are we going to see interest rates go down even more?
 Websites: www.JasonHartman.com Jason Hartman Quick Start Podcast The PropertyCast
 www.JenDuPlessis.com

James: Hi audience and listeners, this is James Kandasamy from Achieved Wealth Through Value Add Real Estate Investing podcast. Today we are doing a podcast and a webinar as well because I've an awesome presentation from Jeff Adler who's the Vice President of Yardi Metrics. Yardi is one of the largest property management companies in the nation and they have a lot of data behind them and Jeff is going to provide a lot of insight, which is going to give us a state of the union of multifamily industry. Hey Jeff, welcome to the show. Jeff: Well thank you very much James. James: Alright Jeff, so let's go back to last year 2019 where we had a really good podcast. I believe that's podcast number one. Where we call it a state of the union of multifamily for 2019. So this time is 2020. So let's have a recap. What has changed from 2019 to 2020 for the multifamily market? Jeff: Well, you know, in one regard, not much. Okay. And another regard a whole bunch. So if you kind of recall at the beginning of 2019 from an economic standpoint, there was a fair amount of uncertainty. The fourth quarter of 18 was kind of a Swan dive, we had an, a big inversion of the yield curve. The Federal Reserve had kind of raised rates. Stock market had kind of gone into a significant correction and 2019 we really weren't sure whether the economy would continue to be able to grow. Would the fed take the corrective action necessary? And the economy would be able to navigate some of the trade pensions and basically the continued health of the multifamily industry would it still kind of advance at a good clip or what was the state of supply. So there was some uncertainty around some of those kind of components. And so the picture is a bit more clarified from the macro economic standpoint. The feds did cut rates, the yield curve stopped its inversion flat again. And the economy kind of advanced forward, we had 2.3% growth over the course of the year. Job formation has still been quite good. Difficulties with supply had kind of stretched out that supply delivery curve and occupancies have performed well. Overall rent growth across the country has been around 3% with fewer markets performing poorly. Some of the hot markets kind of beginning to tamp down. So the one I would say negative component in all of the multifamily world is the regulatory backlash that occurred from rent control legislation in Oregon, New York and California, which has made those markets less attractive compared to others. But the basic outlines of the economy are still quite good. I just came back from the NMAC conference in Orlando I guess it seems like forever ago, but I think it's was only last week. And there the mood is very good, lots of capital lots of activity going on. People always worried about are things kind of richly valued, and they are. But if you look at the spreads in cap rate in the 10 year, still pretty good. You look at good availability, still very good. More capital is flowing into the multifamily industry from not only outside the United States, but inside of the United States with a multifamily being one of the two top asset classes for investments. So when you look at the demographics continued to be on a positive, you look at the supply, which we do not think will be out of hand and we just finished up a new supply forecast by property almost.    Taking into account a lot of the cycle time data we have on deliveries of projects. We think that we'll actually, as a country, deliver a tad less than the 300,000 odd units that were delivered in 2019. And we are in generally speaking housing shortage contrasted to the housing surplus that we had before the crash. So it's really a really good time to be in multifamily. It's almost so good we kind of pinch ourselves and saying we don't want it to be this good. There must be something bad. What's the horrible thing that's going to happen to us? We're just having a hard time dealing with good news as an industry. But I'm cautious. I continue to be cautiously optimistic. I don't see a recession at least until 2021 and quite frankly, with the way in which the economy has kind of come through this, I'll call it a mini manufacturing recession. It didn't really affect the services industry; it did affect manufacturing and sectors exposed to trade. With us actually coming out of that growth prospects for GDP are actually higher this year than they were in 2019. So I don't really see a recession till 2021 and one could argue very effectively, 2022 but certainly we have another good year ahead of us and inflation is not out of hand in any respect. And because inflation isn't out of hand, there really is no pressure for interest rates at the short end to move higher. And there certainly is no pressure on the long end. I mean, interest rates for the tenure are back down to below one six and they were at one nine, not just before this kind of corona virus scare. But if you look at that, like if there's no inflation, then you're not going to see kind of big interest rate moves. You're not going to see big interest rate moves. You're not even going to see moving in cap rates or movement associated with a recession.    It's really quite positive. I think the biggest issue if you're a multifamily investor right now is it's hard to find deals that aren't very richly priced. You have to be very prudent with your underwriting and with your capital investment. The competition for assets is quite extraordinary, particularly in cities adjacent to California and the Northeast; there are capitalist fleeing those areas. I've been speaking to folks in Phoenix where the market for multifamily is so amazingly red hot because of all the California is trying to move their capital out of California on a gradual basis. So I think that the biggest challenge right now is to prudently underwrite and to find opportunities that make sense. And if you're going to overpay and the fact of the matter is if you're in a competitive bid situation and you won, you overpaid. The question is will the market kind of bail you out? Are you in a rising tide so that the fact that you overpay at any particular moment doesn't really matter because the investment overall will perform well as the market and your value creation strategy plays out. So, long answer James, but I'm pretty optimistic about where we are in 2020. James: So what would cause the recession in 2021/2022? Jeff: Well as I've been saying quite a while, I don't know if I had this little piece here. Let's see. I'm trying to find out how do I kind of explain, this is a classic way of thinking about, and by the way, this slide is the same slide I've had since Trump was elected in November of 2016. Alright. So seems like, okay, things are a little more positive than I think they were even in November. Alright. So the balancing act has always been the pro growth elements of the administration's policy compared to the anti-growth elements of the administration's policy. Pro-growth seemed first tax reform, regulatory relief, executive orders. The anti-growth came later immigration control, which has restricted the amount of labor coming into the United States. It has created a labor shortage which has boosted incomes at the lower end of the economics and education scale. So it achieved its objectives at the cost of some level of growth and trade negotiation. Because the tussle with China has scrambled supply chains. And so there's a little bit of clarity with the signing of the USMCA in North America and the first phase of the Chinese agreement in I think in mid January. So trade negotiation is less of an anti-growth element than it had been. Immigration control still is an anti-growth element and the program elements are still kind of there, but kind of burning their way in and nothing much has happened. Infrastructure, education reform or healthcare, nothing's happened there. So when you look at it, I would say it's more like three quarters full versus a half full that I said in November. So what would cause a recession to occur? Well if you had a sudden increase in inflation, either labor cost inflation or materials cost inflation that would raise shorter term interest rates, that would cause an inversion and then you'd have a recession. Some significant macroeconomic demand shock, negative demand shock would cause it; apart from either of those things, I don't see a response and the other thing I do look for constantly is where's the debt bubble? Recessions are classically caused by excess leverage in certain sectors of the economy. So you constantly, in my mind, I'm constantly looking for where's the debt bubble and it's a big enough to cause a recession? Right now one could argue that there's a bit of a debt bubble in consumer auto loans, not that big a deal. It's not happening in mortgage or real estate. That's clearly the case.    Is it happening in corporate debt? Yeah, maybe, but they're sophisticated folks. Is it happening to a certain extent in oil? Well, one could argue that that the factors are a bit over levered and the banks are trying to sort of reel them back in. But at 55, 60 bucks a barrel, it's not so bad. I don't see, again, when you look around and say, where's the inflation coming from? It's not coming from materials and it's certainly not coming from oil. I'll go back here and kind of show you a little bit of slide on oil production. It's not coming from oil. It's not really coming from labor. If I kind of go back a further point, not really coming back from labor, rent actually; rent, real estate is a quite frankly a bit of a driver of whatever inflation we do have because of frankly regulatory constraints to supply and the cost of materials and labor. That's kind of hard to produce supply to enter the market. So I don't really see inflation cracking over too, I don't see from the material side, I don't see from the labor side. Read some interesting papers by the way, that one of the issues we kind of are scratching our head about is with all this labor shortage. Why aren't labor unit costs going up? Or the fact of the matter is the workforce is older, is less likely to move, is reasonably productive. So there is wage inflation at the bottom end of the scale, wages at the bottom end is going up 5% but it's not enough to offset people who are retiring it at higher wage rates and slower wage growth among older workers. So even, and we've had a long history of services inflation with goods deflation and seems to play out. Now long story is the multifamily, not exactly economic piece, but the basic point is if you understand the basic sort of lay of the land, interest rates lower for longer, not really no big inflationary pressure, then income producing real estate looks really good because you're not going to get a reprising on the value of the asset and that's the way real estate works and generally you got growing incomes. So that's the basis of not believing that there's going to be a recession kind of upcoming immediately. We always thought, we're going to eventually have recession, but I don't see the basis of the pressures that would give rise to that at least for the next 18 months or more. James: Got it. Got it. So a primary would be the political climate is what you are saying could be where we might be causing some of these potential recession. It depends on what's the policy and you don't see any other big risk, I guess, right. In any other... Jeff: Yeah. So I mean, so James, you're in Texas, I believe, Austin is that correct? James: Austin. Texas, Jeff: Yeah. So your state and your city is the beneficiary of misguided policies in other places. The growth in population, the growth in tech centers is really occurring in the South and the West. It's not to say that New York, San Francisco, LA, are not wonderful places have very deep tech hubs and tech ecosystems. But what's generally happening is that when a business decides it wants to scale, it doesn't scale. In California, it can't, it doesn't scale in New York. It scales outside. That's not the say that Google is building a big footprint in New York City to access that labor pool. That's not the say that there are large tech firms that are; just yesterday I think Google was trying to in a wall street journal get San Jose, we redeveloped the city of San Jose downtown as an employment and a commercial center. But the fact of the matter is the cost of housing and expansion is so difficult in these major gateway cities that places that are business friendly and have an intellectual capital infrastructure like Austin are growing quite rapidly. Ross, Austin, Raleigh, Atlanta, Denver, Phoenix, Salt Lake City, these are places where the tech infrastructure on talent is expanding. Texas is a beneficiary of having a great business climate. And so population and I think I have a little slide on this one here, population is moving as one would expect. Population is moving domestically; Vegas, Austin, Phoenix, Raleigh, Charlotte, Nashville, Orlando, Dallas, and Denver. You know, these are places that have significant domestic inland ratio. If you look at the other, I'll call gateway cities, they have a significant amount of domestic out migration and in the past they really were covered by international immigration. Now that as coming down a population in the US is growing at seven tenths, I think now six tenths of a percent. So these cities over here are growing quite rapidly. And Austin is one of the beneficiaries of that. Jeff: Got it. Got it. So what about, I mean, in the beginning you mentioned about the cities just outside of California or like Phoenix, I mean, Phoenix and Las Vegas is beneficiary or people are moving out to California and why is that? Why is that driving? Why not they come to Florida or Texas? Why is Phoenix and Las Vegas which had a huge cycle in the past crash, it went from hype to so down. Why are they like now? James: So if you think about it both in New York and in California, you have a hollowing out of the middle. And so if you're extraordinarily wealthy, so let's convert this to almost a apartment investment discussion because of the structure of the economy if you can build a class A property in Northern or Southern California, you should continue to build it. They will continue to get occupied because there are a reasonable number of people that have continued to expand at the very high end of the market.    Jeff: Got it.    James: Conversely, in the very low end of the market, it is a draw for people from around the world who want to get a start in the United States. But if you're in the middle of the income stream, then your life isn't that great and your costs are quite high and you can improve your quality of life by going someplace not too far from where you are. So if you look at California, the people streaming out of California, Boise, Salt Lake, Phoenix, Las Vegas, and yes, companies are moving all the way to Dallas. But there's a steady stream of the middle income and I would say and low income and it will cost 50 to 150,000 a year. Educated, skilled, but not at the highest level, not the half a million dollar a year kind of thing or $300,000 a year, but right there in the middle. Now the same thing is happening coming out of the New York metropolitan area, New York, New Jersey, Connecticut, and that's streaming to the Carolinas and into Florida. That's what's happening. Orlando has a little bit of a bump from Puerto Rican immigration, but there's pretty much people streaming out of there. And if you're talking about people leaving Chicago, they're going more to the Tampa where they used to go for winters. The new workers are going to the gold coast and the people in Chicago go to the Gulf Coast and down to the Carolinas as well. And Carolina is Georgia and so forth. And this is just where, look at the numbers, look at where the people are coming from. I mean it's in the numbers, it's in the cost structure. Certainly the tax bill that it went to effect in 2018 is pushing people at the margin on a slow roll kind of basis, adding a little extra push to what's been going on otherwise. And so when I look at where the population is growing, where the new supply is going, where intellectual capital is moving this is what I see. That's what I see and that's where an investment standpoint, my own view is you want to be in places where the tide is rising. It's easier to make money where the tide is rising and populations are growing and the economy is boosting incomes and it is to kind of swim upstream. I'm not saying you can't make money in Buffalo or Syracuse or Cleveland, but it’s tougher. James: Awesome. Yup. Yup. So Jeff, I have a question in terms of the rising, I mean the capital is comprising the price of buying an apartment nowadays as reason now from, I mean if you look at Texas in Dallas, Austin and San Antonio and I think everywhere, I think everyone across nations. It used to be 50 a door to buy an apartment. Now it has gone like 80 to 100 and in some places 120, 130 a door even for a class B and C properties. So how does it make sense? Because you can construct new class A with that similar cost, like a hundred, 110, you should be able to? Jeff: But no actually you can't and that is the entire point. Because of restriction and again, we're obviously talking about the city and which part of the neighborhood, but the fact of the matter is that construction costs have risen significantly and regulatory burdens have risen significantly, particularly in kind of urban cores so that the cost of constructing new products is higher. Now there is a lot of work being attempted to bring down the construction costs through prefabrication, through potentially regulatory streamlining. But it's not as easy as it seems and there's a lot of institutional resistance to it. I've spent the whole year trying to help crack the sort of affordability code and it's literally just buried in a swamp. I mean, it's just, it's ugly. So can you build, if a city planner will let you build essentially what it was eighties product on sort of suburban ex urban land. Then yeah, you can deliver it at maybe 80, a hundred thousand dollars a door. But it's very hard to do so. And as a result, so if you think about values, values are driven by two things. One, what's the next best alternative? And two, are our incomes growing to increase the value of the asset? In multifamily, you have both of these dynamics happening. One, because of the general shortage of housing and the higher cost of adding capacity rents are rising. So if rents are going up three percent, NOI is easily going up five to six. Plus given the fact that interest rates are lower for longer and there's capital streaming into it that is saying, well my cost of capital is lower and all the institutions which started this cycle 10, 11 years ago, only in the urban sexy six all of them are spreading out all over the country and they're bringing their lower costs of capital with them and their lower return expectations and that is having an impact on values.    A third component I would also argue that kind of fills into the second one is that as cities grow and develop, and I'll use Austin as an example, Austin has become an institutional grade capital city. 20 years ago it wasn't, you had opportunities to capital, but now it is. So what that tends to as a city changed in its nature and becomes more broadly diversified and more accepted as having a broader economic base, institutions with lower cost of capital and lower return expectations now make it appropriate for investment and they drive up values. So it's kind of tied up in a second lot that I discussed. So multifamily is really in a situation where yes values are going up, but the real question you have to ask yourself is what does the future hold? Are the conditions under which the fact that the values went up are those likely to continue or are they likely to end? And like I almost hit myself over the head, I don't see how they end. So suddenly, admittedly we had always expected as a homeowner interest rate would increase a little bit and I think it's up to 65%. But it's down from 69 but up from 63 and we are going through a period of time where the millennial are getting older and they will want to live in basically the amenity if they have had children, more than one, they are more likely to want to live in the suburbs in better school districts, which is in the historical pattern. So, but be that as it may have, demographics are still very much people are renting for longer. They're getting married later. They're having fewer children. All that was elongating the rental period initially.    And then as people are living longer and living healthier they are selling the house and then moving back downtown in a multifamily asset. That one asset class you really have to worry about are very large suburban homes that are sort of ex urban go to Fairfield County, Connecticut. You can buy a big estate for a relatively speaking a song. Nobody wants to live there. The taxes are too high. It's too hard to get to New York. There's no reason to be there anymore. That asset class is going to experience some real problems, but if you're near an employment center with a modest sized home or apartment, you're going to do okay. James: Got it. Got it. Yeah. I mean, you don't see anything in the horizon as long as you're by the employment center you should be good from what we see right now.  Jeff: That just looks pretty good. So yeah, that's when someone says, okay, the careful thing you have to be at worry about excess leverage and overpaying. That's the biggest problem one has to be concerned with right now is there will be a recession. I don't know when. But you do not want to be in a situation where you are squeezed out during a recession because you're over levered and you have a debt maturity and you basically you get pushed out of a great long-term investment. That's the biggest concern. James: So let's say we have a recession right now, so the rents are going to drop. So if you have a long term loan, you should be able to ride and you should have some cushion in your operation cash flow. But one trick that has happened, not say one trick, one thing that has happened that what I realized in 2015 onwards, there used to be a lot of interest only loan started being given out by lenders after 2015. I don't know. That's what I feel. I know I used to be very hard to get even one year higher loan in 2015 and now it's like so easy to get three to five years higher loan. So it's the lenders that made it easier for people to buy and extend this expansion boom? James: Yes. I mean, so what they're doing is in order to sort of compete to get the loans, while they're not reducing the LTV percentage, they are allowing you to go IO and not pay down the principal which effectively helps you pay more. That's what it does because you have time for the rents to rise. So that by the time the loan comes due, you can refinance it and do okay. So certainly if you can get an IO loan for three to five years and increasingly you can fantastic. If you're a 65% levered, you can ride out a 5 or 6% reduction in rent that do occur in a recession. Obviously the reduction in rents will be higher at the class A levels than the class B, class B has got some more insulation. Value adds assets right now are priced to beyond perfection. So a lot of folks are basically saying, particularly in the institutional level, 150 units and higher, 90's or 2000 vintages a lot of the folks that I talked to were just saying it's not worth it. The prices are basically, I'm going to work for somebody else. I'm paying him all the profits from the value add. There's no point doing the work. So they're going back to, it's called core plus or kind of just building new again because those are the better returns converted value add. So the value add, you can still make work but you may have to sort of go under 50 units. You may have to do something to avoid the institutional capital pressure on values. And I saw about a year and a half ago credentials saying they were suddenly going to enter the value add space; by the way, I love credentials, they are great people, but it's kind of like run for the hills man because they're going into a value add place where you know there's an innovation risk. And that's not something they usually price too. I usually price to kind of a buy and hold deal. So they're not the only institution. A lot of institutions have found values add, but they found it as usual a tad late. Jeff: Got it. Got it. So I want to come back to the high leverage comment that you made. So on a value add deal, usually even though you buy it at 1.25 DSCR. So, for example, most of the banks gives us a loan at 1.25 but when you do value add that 1.25 could be 1.85, [31:22unclear] in a couple of years. So even though...   James: But when you're done [31:31unclear] in-going with the expectation that you'll invest in and raise the rents and then you'll be at a 1.75 when it's time to cash out. But my point being is, if you're paying a lot and you're not getting a big pop in the rent relative to what you paid, then that 1.25 may not move high enough to cover the risk. Remember, building a value add as anyone, I'm sure you and other people know. There's a lot of hard work. I mean, you've got to sweat for it. There's a lot of sweat to make a value add work. It's not just doesn't show up on its own. And I've seen a lot of value ads go horribly wrong. Because people didn't get the ducks in a row. So it takes skill to do one. But the fact of the matter is values add is really from a public policy standpoint and indictment of the inability of supply to expand to meet the needs of upper income renters because that's really what happens. What ends up happening is because there's not enough supply at the upper end value add is a near price substitute for new supply. It also happens to withdraw supply from the lowest income consumers. That is what it does because you don't add a new supply at the bottom end of the scale. And one could argue that the rent control in New York and rent control as executed in California are essentially a rebellion against value add because in New York they basically wiped out the value added trade entirely. And in California they basically changed the value adds from a maybe a two to three year exercise to a seven to eight year exercise. But remember they didn't say [33:30unclear] it's very difficult to build in any one of these locations to get through all the permitting and the environmental zoning and all these other kinds of garbage. But they're not stopping luxury housing. What they're trying to do is stop the value add trade because there's no structure to add supply in the middle to the bottom end of the stack. And the fact of the matter is that the public policy response is short term in nature. So rather than solving the root cause they are basically kind of putting a Band-Aid on the symptom and that's unfortunate. It's bad public policy. But I don't see it changing James: That's very interesting. Never heard anyone looking at that perspective that I know it's basically a going against value adds in that cities that's why the rank [34:25unclear]. But it absolutely makes sense. So I want to ask before we end because we are almost to the end, I want to ask a few more scenarios that may cost impact to the apartment; and you can answer it quickly in a short. Fannie and Freddie Mac becoming private, what could that be impacting? Jeff: Well obviously the intent is for there to be no impact and their current program and current capacity of 20 billion a quarter each without any kind of green exceptions is kind of, I'll say, calm the market. So it's always been profitable. It's been the most profitable part of the, the GSEs there is, I think, and the NHC and NAA are doing a fine job communicating to Congress the fact that multifamily isn't the problem. The blow up was in single family housing underwriting. So if you look at Brickman, David Brickman became head of Freddy and he came out of the multifamily industry. He was in charge of multifamily for Freddy. Now in charge of all of Freddy. So in my mind, that kind of bodes well because at least from Freddie and Fannie, they know how to make money doing what they do for multifamily. I mean, they make money, they know how to make money. It's always been profitable. They could rebuild their capital cushions relatively quickly. I think the issue will continue to be how does Freddie and Fannie support single family home ownership without pushing so hard on home ownership that it blows it up like the last time. So how can they retain their underwriting criteria? The fact of the matter is, should they be differentiate pricing by market for single family. They don't really do that and do that for multifamily much either; but they are supporting their mandate and really if you think about it Freddie and Fannie's mandate is to supply multifamily capital where the life insurance companies or other places won't go, which really is the middle of the stack. A smaller to mid size markets, class B assets. It's one of the reasons why Freddie and Fannie don't do construction lending. They say that's a commercial banks business. It's not our business. And so I'm optimistic that it'll all work out okay. It absolutely has been a tremendous boom to the multifamily industry to have Freddie and Fannie because it basically puts a lot of stability into asset pricing, but I think it's quite recognized. So I'm hopeful that that won't cause disruption. James: Got it. How was China's economy slow down could impact the US economy and multifamily? Jeff: The fact of the matter is the us economy is mostly driven by services and the dynamic and technology services in particular. So if you think about the recent trade spats, which really slowed and began separating the economies, the places that got hurt had a manufacturing or agricultural bend to them. Minneapolis, classic example right there. Even their urban jobs were tied to those sectors and then they lost employment. So I don't think it's a tremendous problem. The fact that there's excess capacity in China, for example, means that goods costs even less, there'll be less inflationary pressure on goods. What we sell to the Chinese are primarily agricultural goods that are what we sell. And anything else ends up being produced there with our intellectual capital. So, I think according to the trade agreement they'll buy some more agricultural goods, which will help rural areas, but they weren't big multifamily centers anyway, so it doesn't really have an impact. And for manufacturing centers, those were pretty much, manufacturing takes a lot of land that occurs in ex urban and rural areas where rents are low multi family, where it's done well is where it's tied to intellectual capital and technology that drives down costs globally. So all in all, I don't think much is what I'd tell you. James: Got it. Got it. And that's one piece of advice on how to be prepared as we move forward. And in case there's a recession, what kind of what would you advise a property investor that already owns a property or is going to buy a property? Jeff: Yeah. So I mean, first one should mind dependence. This is a relatively speaking low margin business. There is a increasingly systems and technology available to sort of squeeze expenses down. So the way one prepares for recession is always to really look at your cost structure and re-examine what you're spending money on in a very meaningful way. You need to sort of be mindful of your leverage and model up. What happens if your rents go down five or 6%. Remember, it won't happen all at once. What you'll see is the new leases will go negative, renewals will hang together. You will have a higher skipping of the upgrade. So you kind of need to model out what happens to you and in a recession, I don't think it'd be a big one, but only a mild one. What happens? Are you prepared? Do you have a cash flow reserve? Have you spoken to your investors and your lenders already about what you would do? So are you prepared? And then I'm chairman of a ULI council and our council members, about a year ago, we went through a recession planning exercise. Like what kind of recession we're going to have and what are you going to plan for right now; and so every one of the organizations that I was working with had had a recession scenario plan in place about a year ago. Not that they had to execute on it, but everyone had one. So what I've experienced in all of now I've seen through four or five recessions and a big blowout is you need to have a plan, you need to be prepared, in a calm moment have thought through what you're going to do because in the moment in the crisis your brain just doesn't work that well. Under that kind of stress you don't think it through. So I would argue whatever organization size you are, if it's just you and your spouse or you and a slogan of investors, spend the time now to come up with a recession plan, put it to paper, talk about it. And then begin asking on the steps that you can take right now to prepare yourself. Again, I hope you don't have to do it, but weaning and hoping it'll never happen and not being prepared for it is a sure fire away to not be able to capitalize on it. And we had a great session from Clyde Holland who basically he capitalized on recession. He's a chairman of Holland partners’ pledge, great guy. And he basically in preparation, he saw something bad coming in oh seven, he basically slashed costs built a lot of dry powder and basically waited to pounce and came out of the recession incredibly strong. Now I don't think we'll see another recession like that one in front of their 80 years. The recessions we're going to see it more like the typical post World War II recessions. But you can get yourself prepared and you can be ready to act. And with that James, I have to run. It's been a real joy speaking with you today. Take care now. Bye bye.  

Jason Hartman is joined today by mortgage consultant and trainer, Jen Du Plessis. As a real estate investor, it's great to gain insight on both sides of the mortgage business. Jason and Jen discuss GSE, QM and non-QM loans, as well as the great recession and where the pendulum has moved to now. This leads to a prediction of interest rates dropping even more. But before that, Jason offers congratulations because rent is on the rise. Listen to some average rent rates across the country and plan accordingly. Key Takeaways: [1:50] Investor Congratulations! Rents on the rise [3:40] Book, “Debt, The First 5,000 Years” by David Graeber [6:50] Not one person in a thousand can understand our monetary system [9:00] Landlord vs tenant in NYC  [12:28] According to Yardi Matrix; About 1.5 million housing units were delivered over the last five years, and 3,000 more expected for delivery this year. A housing shortage? Yes! [17:00] GSE: Government Sponsored Enterprise [19:00] What's QM? And what's non-QM? [29:16] From 2004, through the great recession, where is the pendulum now? [30:20] Right now, the average mortgage company makes $457/loan they originate. [32:30] Are we going to see interest rates go down even more?
 Websites: www.JasonHartman.com Jason Hartman Quick Start Podcast The PropertyCast
 www.JenDuPlessis.com

Jason Hartman is joined today by mortgage consultant and trainer, Jen Du Plessis. As a real estate investor, it’s great to gain insight on both sides of the mortgage business. Jason and Jen discuss GSE, QM and non-QM loans, as well as the great recession and where the pendulum has moved to now. This leads to a prediction of interest rates dropping even more. But before that, Jason offers congratulations because rent is on the rise. Listen to some average rent rates across the country and plan accordingly. Key Takeaways: [1:50] Investor Congratulations! Rents on the rise [3:40] Book, “Debt, The First 5,000 Years” by David Graeber [6:50] Not one person in a thousand can understand our monetary system [9:00] Landlord vs tenant in NYC  [12:28] According to Yardi Matrix; About 1.5 million housing units were delivered over the last five years, and 3,000 more expected for delivery this year. A housing shortage? Yes! [17:00] GSE: Government Sponsored Enterprise [19:00] What’s QM? And what’s non-QM? [29:16] From 2004, through the great recession, where is the pendulum now? [30:20] Right now, the average mortgage company makes $457/loan they originate. [32:30] Are we going to see interest rates go down even more?
 Websites: www.JasonHartman.com Jason Hartman Quick Start Podcast The PropertyCast www.JenDuPlessis.com

5, 4, 3, 2, 1...want to know where the nation's best apartment investment markets are located?We analyzed the numbers from (3) of the top multifamily data analytics companies in the world - Yardi Matrix, RealPage and CoStar - to come up with our Top (5) Apartment Market Countdown.Watch this video to find out which markets made the cut.Get Smart and Invest Smarter with the Apartment Investor Show where JC Castillo and Paul Peebles interview top industry experts and discuss current market trends, investment strategies and fundamental concepts to help you make smart multifamily real estate investments.JC Castillo is an ex-techie turned real estate investor who’s profitably navigated through a full market cycle. In 2006 he founded Multifamily Property Group, a vertically integrated private equity firm focused on large scale value-add apartment properties in select US markets. Learn more about Multifamily Property Group at: www.multifamilypropertygroup.comPaul Peebles has been arranging real estate financing for borrowers and institutional clients since 1987. Mr. Peebles is the National Underwriter at Old Capital, underwriting and structuring all transactions handled by the company. Learn more about Old Capital at: www.oldcapitallending.com

The multifamily sector has been one of the strongest performing sectors, but what can we expect going into 2020 and beyond? Should developers be wary of over construction, and will occupancy and rent growth remain strong? Join Michael and his guests Carl Whitaker with RealPage, Doug Ressler with Yardi Matrix, and Paula Munger with the National Apartment Association as they discuss these questions and more.  For customized commercial brokerage services call Michael Bull, CCIM at 404-876-1640 x 101 or visit http://www.BullRealty.comFor cloud accessible commercial agent training, check out Michael Bull’s video-audio training at: http://www.CommercialAgentSuccess.comAppreciate the show? Please thank our sponsors: http://bit.ly/2ty53e1Subscribe to our weekly show topic email notification to know who’s on each weeks show and the topic: http://bit.ly/2gfoKSNYou’re invited to subscribe to the show’s YouTube channel: http://bit.ly/2u1vr1nFor more videos, podcasts, and articles visit: http://www.CREshow.comConnect with America’s Commercial Real Estate Show: LinkedIn:https://www.linkedin.com/company/amer... Twitter: https://twitter.com/CRE_show Instagram: https://instragram.com/creshow

James: Let's get started, 1 2 3. Hi listeners, welcome to Achieve Wealth Podcast. It's a podcast where we focus on how to achieve wealth through value add real estate investing. And today I have John Jacobus from, John, where are you from?  John: I'm from New York.  James: New York. Awesome. Awesome. Why not John, you talk to our listeners about, you know, about yourself and what you've been doing and we are going to be focusing a lot on a mobile home park investment and John is an expert in the operation of mobile home parks. And I thought of bringing him on board and learn that asset class through the level of details where we can learn and figure out, you know, why that would be a really good investment vehicle for everybody. So, John, why don't you go ahead and take a and tell our audience things that I would have missed out. John: Sure. Yeah. Thanks, James for having me on the show, it's really good to be here. As I said, I live in New York City but I invest in the southeast and the southwest. I got started in real estate investing in the early 2000s just doing single-family rentals and fix and flips, down in southern California. I'm originally from the San Francisco Bay area out on the west coast. And there was an equity opportunity down in southern California in the early part of this century. And with my dad, brother and I, we just got started. At the time, I was about 18, so I got started early and that really triggered an interest in investing and building wealth. And from there, just sort of followed my nose. So I got interested in stock market investing and just general assessing quality businesses. And then maybe four years ago, got interested in multifamily investing, being surrounded by skyscrapers and multifamily housing here in Manhattan. I poke my nose into that, got to know people, build the network and started my first multifamily opportunity as a limited partner in a project in Dallas, Texas. And since then, just sort of took incremental steps to become more active and raising capital. As you know, James, it's gotten pretty competitive in the apartment space, especially when you're out of state and don't have the ability to get on planes and meet brokers or property managers for tours. So seeing that it was a sort of impossible for me to compete with locals and the markets that I wanted to invest in, I stumbled across mobile home parks. And the more I learned about it, the more I poked my nose into it, the more I liked it. And I found that I could be competitive despite being located out of town. And for about the past year and a half now, I've been focusing full time on mobile home park investing. Now, I've acquired a portfolio of three parks and I'm looking to continue to scale where we find value. James: Awesome. So yeah, I mean mobile home parks, I mean, I do know some things about mobile home parks, but not to the level of details that you would know. Right. So can you explain to the listeners how does the whole, and at a high level, then we can go into a bit deeper into the details of mobile home parks. Why did you start with mobile home parks? Why not self- storage or office or retail warehouse and all that? John: Yeah, so I'm generally attracted to assets that are under the radar and have a kind of negative stigma with them. So I mentioned I am into investing in businesses on the stock market as well. And I tend to adopt a contrarian mindset where, you know, the more popular or something is in the media or among, you know, the masses, the less interested I become. And so, I think point number one that triggered me to look into mobile home parks was when I would attend these conferences of real estate investors or go to meetups or just hear about mobile home parks in the news, generally, there was no one really focusing on it. So amongst the thousands of people that were at a conference, there was maybe two or three people that were focused on mobile home parks.  And anytime you hear about mobile home parks in the news it seems to be negative. Nobody wants to brag about the fact that they're in the business full time because of the negative public stigma. To me, that's attractive because there are fewer competitors and especially when you dig into the details and see the fundamentals of the business, they're awfully attractive. So I think just generally the unpopular nature of the asset class was something that really appealed to me. And then, you know, the fact that it actually has appealing economics was even more of an attractive factor of the asset class. James: Okay. That's exactly why people can still find really good deals in mobile home parks where there's a lot of stigma tied to it, to mobile home parks and that could be just an opportunity. So I mean, I attended like a two days boot camp, on mobile home parks, like two, three years ago. And I thought it was a really good asset class to enter at the time because as you said, not many people, know mobile home parks, it's not out to the masses. There are not many gurus teaching mobile home park too even though they're teaching, they are not everywhere, right? They're not in the social media guys like what's happening now. And that's a huge stigma on mobile home parks. This is a bit cross kind of thing, right?  I mean that's what even the guy who was teaching that three-day boot camp was telling us, which can be a really good thing, right? I mean, I know the day we want to make sure that we have a good asset class where you know, it's very stable and able to predictably give you good cash and good returns at a high level. So let's talk about how do you make money out of buying a mobile home park? John: Yeah, so a number of ways. We focus on turnaround parks. So one of the areas, well, I said that mobile home park investing is unpopular relative to self- storage or apartments. There is some competition in the market so I still face very healthy competition in some of tier one, tier two markets, where the parks are closer to class B Class So, in an effort to find value, we've found that there's value currently in parks that are rough around the edges. So whether they have high vacancy rates, they have a high percentage of park owned homes, there may be an issue with the infrastructure, whether the sewer or the water. So those things that have a little bit of hair on the deal, those we're finding pretty attractively priced. So currently we focus on those turnarounds and that's where we're able to generate outsize returns, by digging into those problems and fixing them and either elevating the class of the asset or simply filling in vacancies or in some cases, like one of the projects that we have under ownership right now in San Antonio is we're actually expanding the size of the park.  So it's almost like a development deal, where we bought it for 20 units and we have plans to expand it by double. So those types of heavy lifts in terms of either turnaround operationally or expanding the footprint of the park, that's how we're finding ways to make money currently in the mobile home park business. James: Got It. Got It. And correct me if I'm wrong, so the mobile home park is basically you own the park, you don't own the housing units on top of it, right? John: So in an ideal world, and it really, depends on your perspective and what your preferences, but in the traditional way is that you just own the land and not the infrastructure. So you buy the land and you rent out the land to homeowners who pay you for the privilege of placing their home in your park. So in terms of operational cost standpoint, if you pursued that model, your operating costs are pretty low because you really just own the dirt and you're collecting rent for owner residents to use your land. Now, as you look more deals and get involved in the business, there are very few of those types of properties available because over the course of time, where residents come and go, ultimately you're going to find yourself as a park operator with some homes that you end up with, whether they're abandoned or sold to you or just come with the deal.  So there are models in the southeast, in particular where there are parks, where the park owners not only own the land and the infrastructure but also own all of the homes, in which case they're more or less operating an apartment complex just with a different look. There are individual units rather than stacked or adjacent to each other. And for those that can do it and have the model and the pricing is right and their strength in the market, that can be awfully attractive. But I think if you're looking to reduce the amount of time and energy to operate the park when you're a dirt owner, that's the lowest touch, lightest maintenance, I think most appealing and certainly most profitable model from an operating margin perspective. James: Yeah. It's like you have a big parking lot where people come and park their houses on top of it, I guess.   John: That's right. Yeah. Look at it. And it's great because you know, it's very high margin, but also you've got owners that are in your community so there's an alignment of interest. You've got people that have skin in the game because they own the home and they want to take care of the community. So that's a really unique aspect in contrast to apartments where, you know, apartments, you always have renters and just by nature, you know, they're going to treat their place as if they're renting it. And that's very different from the mindset and the behavior of owners who are in your community. It's a stakeholder group shared alignment of interests and it's a mindset shift and something that I really pursue and try to cultivate in our communities. James: Got It. Got It. Yeah. It's a very interesting model. It's a very simple concept. It does serve the affordable housing crisis that we have. Both apartments and mobile home park do serve it, even though it's two different, slightly different tenant base. One is one who wants to be a homeowner, even though it's a cheaper house, right? It's not like normal single-family houses but it's something that gives you a roof on top of your head and people liked that. And they have that community feeling when they are in that park so they are able to take care of it much better than like what you're saying in the apartment. You have leases turnover and you're 50% turnover per year and they leave the place every two years. So you have to go and do a turn around cause a lot more management intensive. How do you add value in mobile home parks? John: Yeah, so a couple of ways. So increasing the rents. So one of the appeals of being in the asset class is it's a very fragmented and somewhat a non-professionally managed business. So in contrast to apartments where you have, I think very high transparency into pricing, because you have things like Yardi Matrix and some of the other platforms, where you can get a very quick insight into what the market rates and comparables are, you don't have that level of transparency into pricing in mobile home parks. So there isn't this invisible hand of pushing up rents with inflation or with market forces because the industry is just sort of 30 to 40 years behind, relative to single-family and multifamily, in terms of just, you know, pricing transparency. So simply coming in and raising the rents to market rates or what should be market, is one way in which you can add value. Another that I described was expanding the footprint of rentable space. So in some cases, like our project in San Antonio, the former owner had given their residents very large lots, so they were almost twice as much as was required or determined as per the setback requirements. And so we found that if we simply move the homes over a bit and decreased the density by half, people would still be given pretty reasonable living space, we would be able to adhere to the setback requirements, and we would effectively double the rentable units within the property. So that's a way in which we're creating significant value by simply taking a look at the zoning requirements and the setbacks and seeing how we can reconfigure the lots well within the land to create new rentable space.  A third is just operating it more professionally. Again, this industry is not one where there's a very sophisticated network of third-party property management. And you know, it's largely mom and pops owner-operators who, you know, at this point in time probably own the property outright. They don't have any data on it and they don't really have a need to maximize or optimize the performance of the property and in which case they let things go. So they may run operating expenses high, where relative to where they should be, they may have their friends working for them doing maintenance and or day to day operations. And as a result, probably pay them at higher than market rates. So coming in and introducing professional practices and professional management, running it as a real business, that's a way to bring down operating costs and increase the NOI. Those are really the main drivers, you know, rent increase, increase the rentable space and push down operating costs, those are the things that we focus on and usually have the greatest impact in terms of value. James: So what about loans? I mean, you said a lot of these are mom and pop and fully, they own the whole thing, right? There is no debt on it. Are you able to get like seller financing deals? John: Yeah, so of the three properties that we own, two of the three are seller financed. So we've got interest-only loans for six years on those two. And it's awfully attractive not to have to go through a bank or an agency to go through the underwriting process. James: So you structure your non-recourse or recourse or how did you do that? John: Yeah, non-recourse loans on both of them. So really great, fairly low down payments. So we have a 75 loan to value on one and 80% loan to value on the other. And we even on the first one, we strung out the timing of the down payment so that we could minimize the use of upfront capital. So, yeah, just increased flexibility, ability to execute with speed and fairly attractive loan terms. Again, another appeal of, of the businesses, you have a lot of flexibility with the lending for some of these smaller to mid-sized parks. James: Yeah. Yeah, that makes it really interesting because recourse versus nonrecourse and loan terms, you know, in this case, you can structure this how you want, right? Because you're talking to mom and pop owner and how big are these parks? John: Yeah, so for us, so we have one in North Carolina, which is 75 spaces. That was the first one that we took down. And that was, we negotiated seller financing for six years at 75% loan to value. And then the second park, we closed the month after. That's in San Antonio, that's 20 spaces and we're currently in the process of expanding that to 49 spaces. So by the end of the summer, that's the one where we're reconfiguring the land and bringing in 29 new homes to expand the footprint of the park. And then the third one is in South Carolina and that's about 45 spaces. So in a 20 to 75 space range, that's where we're finding opportunity value and that's about in the zone where you can negotiate seller financing. You know, it's good and bad, the financing.  One, the pool of capital and the liquidity and access to the debt market is not at the level that multifamily is. So one of the nice things about multifamily is, you know, through Fannie and Freddie and other conduit lenders, you just have masses of capital available to you and it's an industrialized process to go through and get financing for these projects. That type of infrastructure doesn't exist really to the same extent with mobile home parks. So you know, on one end, financing can be really difficult, especially for the smaller parks. But what that affords you is the opportunity to negotiate more flexible and creative deals, through seller financing. Because ultimately, and in many cases, sellers, they don't have a choice. So if they are really interested in selling, buyers can't get financing through traditional sources and so they're sort of left with one choice, which is to carry a note. So, you know, in some cases we celebrate the fact that we can do this stuff, but in other cases we kind of bang our heads against the wall and say, if only we could go to Fannie or Freddie and get this financed, that, you know, very long term, low-cost rates. James: So you are in New York and scattered all over the nation. How are these parks being managed, who's managing them? John: So we have onsite managers for all three of our parks. And for all intents and purposes, they carry out the actions that we dictate. So all of them either live onsite in the park or live very close by and most of the time, we have daily calls with the managers to tell them what to do. Now their level of sophistication and their ability does not rival what you're accustomed to in multifamily because you know, in multifamily you've got a level of professionalism and sophistication that just isn't there yet in the mobile home parks that we deal in. So for us, it's just, we've got boots on the ground. Their jobs are primarily focused on collections. So making sure that people are paying rent on time, posting pay or quit notices or facilitating evictions, coordinating repairs to the extent that we need to bring in someone to fix the plumbing, for example. And then to the extent that we're filling in new units, they're coordinating showings with prospective residents to come and see homes and see if they want to sign a lease. So that's really where their job is focused on. So it's not a full-time gig really for any of them, it's part-time income for them and it's in peaks and valleys. So depending upon the activity, whether that's new rentals that we have, rental units available or repairs that are happening, they may be either really busy or find themselves with not much to do. James: Yeah, I agree. I mean, I see they're not very highly sophisticated people. They are basically, you know, house-owner. So you know, mobile home users, on how people are paying, then we don't expect a lot from them in terms of management. I mean, even in multifamily. Yeah. I mean, we have a lot of professional management, but still, you have to manage them, right? So much moving parts, there's so many expenses, so much of repair and maintenance that need to be taken care of, which doesn't exist in mobile home parks. Because mobile home parks, supposedly, you know, you're just looking at the land and collecting rent. Looking at some common area, usually this kind of thing. So I think it would balance out in terms of, you know, the amount of time that you need to spend, especially for operators. 20:56inaudible] me who's managing our own property management and also people who are not having their own property management, their own active asset managers of apartment, failing to be involved very, very closely. You can't just go to the party. I mean they'll take it to somewhere else. John: Yeah. Right. Yeah. Great. You know, and I think that's an important point that a lot of people miss. You know, going to the boot camp that you mentioned, I also attended, I think one of the things, I think the boot camp, people who leave the boot camp are fairly transparent about what it's like day, day in, day out. But for whatever reason, I talked to a lot of people that are interested in the mobile home park industry and one of the appeals to them is this sense that it's passive. And I would say, you know, it is very hands-on in the projects that we're involved with that we're turning around and trying to increase the value. We are pretty close to being full-time property managers as opposed to seeing the checks, you know, come in and you know, loving the passive income. So that's fine for us. I mean we like getting our hands dirty and taking action and being involved but that's one thing I would caution people about for whatever reason. I think headline news suggests that this is a passive income source and that's absolutely not the case at all when you're dealing with value add, you know, medium size mobile home parks. James: Yeah. I mean if you want really passive and you invest passively or [22:28unintelligible] I don't think there's any business, which is really, really passive in real estate, right? Especially if you're an active operator and you want to make the most money. If you want to be at the top of the food chain, then you have to do work. If you don't do work, you can buy the deal and all that but the thing is you've got no control on the returns that are being made and being generated unless the market is getting up. There a lot of guys out there who are making, who are boasting themselves that they made a lot of money real estate without doing work. But it's actually the market is doing the work for you.  John: Right, exactly. James:  So this is the elephant in the room, right? So how're the returns compared to multifamily class B and C in mobile home parks? Because you have worked a lot on the capital raising side on the multifamily, so you can see a lot of operational stuff on that side compared to mobile home park, you know, how does that compare to..? John: Yeah, so I'd say just general rule of thumb, it all depends, deal specific. I know that there are, you know, opportunities that you come across in apartments, they get into the 20% IRR. But generally speaking, I think hurdle rate for me, for apartment complexes, is about 15% IRR over say a five year holds. Whereas the hurdle rate for me for mobile home parks is about 20% IRR. So I'd say it's a 5% difference in terms of a return premium there that I'm seeing and that I'm using as a guideline for allocating capital in my projects. James: Got It. What about cash flow on a yearly basis? What do you expect between these two asset classes? John: It's about the same. So whereas, you know, you may expect an 8% yield a cash on cash for an apartment complex, larger apartment complex. We're looking at sort of 10 to low teens on cash on cash return. James:  Are you syndicating this deal or you're doing this on your own? John: No. So we use our own capital for all three of our projects and with this fourth in the pipeline. So, I work with other partners. There are about four of us that work together and to date, we've only used our own capital and that's intentional. We think we're still learning. We want to build a track record and we really want to get our arms around these heavy turnarounds so that in the future, we can raise outside capital and go to market with credibility and feel confident taking other people's money to do projects. So yeah, to date, it's just our own capital that we've used. So we're all active partners and no syndication. James: So you could do a Jv type of thing.  John: Exactly.  James:  Okay. So you're saying when you're doing syndicate, you know, I mean, if you do syndication then you have to make sure you allocate some money for your passive investors as well from [25:24inaudible] whatever you guys are putting in I guess. So you're saying cash flow wise is almost similar, is that what I heard? John: So like 3 to 5% premium, cash on cash return. Whereas the IRR was about 5%. That's what we're seeing. We see a significant portion of the overall return allocated towards the equity, the increase in equity because we are doing a turnaround. So you know, the cashflow is nice, but a majority of our returns are coming through the boost because we are fixing problems, elevating the class of the property or expanding it to generate significantly more income. James: Got It. Got It. Got It. I mean audience just want to let you guys know as I wrote my book, you know, as a passive investor, you can choose any asset class, right? It's not only multifamily. I know multifamily is a lot of, what popular names nowadays is more famous than anybody or anything else. I mean, yeah, it is doing very well. There's a black swan effect of people become renters, you know, just demographic shift too. You know, people becoming renters. But there are also other asset classes like mobile home parks, self-storage, office industry. There's a lot of different asset class in that people are doing very well, right? Like, I mean, if you as a passive investor can make a couple of percents more compared to multifamily and you can find a good operator who will give you the returns on the backend you can always definitely do that. The key thing is to diversify your investment from what I see, even though I only do multifamily but I just think that, you know, wearing a bigger hat, my thought process, I think that's the message for passive investors, right? So the question for you is, you're talking about the 5% premium with the IRR and that's where the value adds are being generated, I guess. Right? And how do you plan to exit? I mean, are you going to sell to someone else? Is there like a big reap that is coming in? John: Yeah, so for us, I mean, we like buying and we don't ever want to sell. So I say that in air quotes, you know, we'll own it forever. But for us, the exit is really through a cash-out refinance. For us, we find these smaller to medium size parks where we think that we can elevate the class of the property. So take it just under a million dollars and you know, at a low vacancy and augment it such that it can be financed through, either a conduit loan or a Fannie or Freddie debt. And at that point, we will have created sufficient equity that we can more or less pull out all of our capital that we've put in. And then when we're done, we've got long term, low-cost debt on the property and then we'll just collect the cash and go on and do our next thing.  So that's the vision for all three of these properties is to execute the heavy turn of the value add in the first three to four years and then refi, take out all our capital and then go rinse and repeat and do that elsewhere. Because, I mean there's a very stable asset class. We liked the business. Affordable housing, we think is going to be a thing for the very long term. We like owning productive cash flowing assets and so we don't have any desire to sell now. So someone comes along and gives us an offer we can't refuse, well, we've got to, you know, do the math and see if it makes sense. But we're definitely not looking to go in, execute a turn and then exit to other private equity owners. James: Very interesting. I mean that's what value add keeps you in commercial and that's the real power of commercial real estate. The other day, I was talking to a passive investor. He said, hey, this guy is giving me, you know, 8% cash on cash flow and that's it. Right? What about the back end? He said, oh, I don't care what the backend. I say, well then you can get much higher cash flow on mobile home parks. So if cash flow is the only thing that you're looking at, you know, you shouldn't look at multifamily alone. Or maybe you should look at 'A' type, 'A' class multifamily in a very strong location near to core urban center as what I call a core type of deal, right? You really don't have to do just multifamily, you can do a lot of other asset classes, right?  The power in commercial real estate is actually on the cash flow plus the backend. The equity growth that you generate through value add, right? So that's why I named this podcast as value add real estate investing, because that is the gs of commercial real estate, right. Otherwise, I mean, unless you are rich or unless you are a big family office where you want to preserve your wealth; you're not investing, you're preserving your wealth. You're making slightly more than your inflation. Say inflation is 3%, you're making 8% cash flow. There's nothing on the back end, then you can go and do, you know, that kind of deal. The majority of people, people want the value-add component where it grows on the backend. John: Sure. Yeah. I mean, we'd love to sell to those types of buyers. The ones that are looking at this squeaky clean, I mean, we'll do the work, we'll create the equity and then, you know, for those that just want to collect the rents, we're happy to sell for a premium. James: Yeah, there's a lot of syndicators who buy the type of deal where you just cash flow because they get fees. Right? But for the passive investors and you don't understand, you're just going to get a cash flow, right. And some times people are very intrigued by the cash flow concept. Suddenly they come out from work, you know, working w two for their whole lives. Oh, there's a cash flow coming in monthly, you're going to jump on it, which is okay. It's okay for some people, but there are much better alternatives out there. Where you can grow your wealth as well on top of preserving your cash against the inflation. So that's good. So, how are you finding these deals because you are New York, how do you find it? John: Yeah, so we explore all channels. So we do cold calling, we network with other owner-operators. We had done some fairly extensive direct mailing. We no longer really do that much. We talked to brokers, we go to industry conferences, we look at Facebook, Craigslist, eBay, a variety of other digital platforms. Really, we try to cast as wide a net as possible because again, this industry is really fragmented, not as industrialized as, you know, apartments are. You'd be hard pressed to find significant deal flow on a loop net, for example, for mobile home parks. So we just try to put ourselves in the flow of deals in as many instances as possible. Which means that we look at a lot of deals, we say no to most of them and it's very structured and haphazard. But, I mean, the three deals that we've sourced so far have been through relationships. So whether it's through meetups, we've met people and they needed to refer a deal because they had other priorities that they were going after. So despite, you know, we've done the work and built out databases of owners, throughout the country and, you know, done the cold calling, done the direct mail, despite all that time and energy put into revving up that engine, ultimately today, it's come down to relationships with other people. James: I mean, it is so fragmented, right? It's just so hard to go and get to a broker and buy a right deal. Right. And daily, even in mobile home parks there to work hard for it. But that's okay. I think you're able to find it, which is really awesome. John: Yeah. Yeah. And again, it's good and bad. It's hard work to do it because it's so fragmented. But at the same time, that's one of the reasons why there's value there because you've got really mispriced opportunities because the market isn't as efficient. So I mean, I'll take the hard work any day if it means you can still get good deals. James: Got It. What about the depreciation or tax benefit of mobile home parks? How does that compare to the apartments? John: Yeah, so with those parks where you're owning the land and the infrastructure, so you don't have quite as a large depreciable base as you do in multifamily. One good thing is that you have a condensed depreciation timeline. So while the depreciable base is not as high in terms of absolute dollar value, you can take a decent material dollar value for the depreciable base and depreciate it over sort of a 12 to 17-year timeframe instead of the, I don't remember the exact number.. James:  27.5 John: Yeah, 27 and a half year timeframe. So what you find yourself in a situation is that in the first sort of 10 to 15 years, you have about the same depreciation benefits and taxable losses that you would experience in multifamily. But then after sort of the 10 to 15-year mark, you run out of the depreciation and then, you know, you find yourself in with a larger taxable income. James: Well, I didn't know that that is shorter than multifamily, is it 12 to 17 years? John: Yeah. About that because it's not real property that you're depreciating. These are the utilities, so [35:11crosstalk] and the light posts and the roads and I mean this is equipment, essentially, depreciating. With the schedule, you apply a different shorter schedule depreciation. Then you do the actual structures, James: You're not paying for the whole, I mean, you're paying for the land plus the utility infrastructure. Infrastructure maybe 10% of the overall cost, is that right? John: Roughly. Yeah, it depends. It depends on what your infrastructure looks like. But it's still material; in most cases, it's material amounts that you can depreciate, but it accelerated, right? So now while you may have a lower absolute dollar value of an asset that you can appreciate, you can do it over a much faster time so it's accelerated, which means your yearly depreciation charge is higher and can also be a significant portion. But again, that expires faster than you find in multifamily. James: Yeah. Yeah. But even in multifamily, I don't think anybody owns it for 12, 17 years. I mean, on syndicated deals, I guess. John: Right. James: Interesting. So, okay. So yeah, usually I think in commercial office industrial, is it 39 years? Multifamily residential, it's usually 27.5. And you're saying some of the utilities or infrastructure in the mobile home parks minus the land is 12 to 17 years. Okay. Yeah. Very interesting. So, John: Yeah, so not quite as attractive from a tax basis. Look, after tax returns, I think you still find yourself in a very favorable situation because you know, the overall returns generated by the property are at a premium. And so even if you are paying taxes on that, you're after tax returns still tend to trend above what you would find in other commercial... James:  Are you able to get a negative K1 in the first few years? John: Yeah, yeah, definitely. James: I mean, let's say after value add is done, let's say after value-add is done stabilized, do you still get negative K1? John: I'd say, I mean deals specific, but it would be reasonable to expect that for, you know, the initial years of operation for sure. James: Okay. Okay. Yeah. For our listeners, I mean K1 is the form that everybody gets when you're invested in a deal where it shows what is your paper loss or a paper gain. But usually most of the times, it's the loss. Because your mind is seeing the mortgage or you're minusing the depreciation of the asset and also you're minusing the interest on the loan that you are doing. But in this case, I think, John's case, there is a lot of it is seller finance so that still be interest. Yeah. You still have interests, right? Because for your IOS and all that.  Interesting. So where do you think you want to grow from here in mobile home parks? John: Yeah. So continuing to scale. As I mentioned before, we're probably right on the cusp of taking in outside capital. We'd like to complete the turnaround with the three properties that we have under our ownership now so that we can prove out the concept, you know, go to market credibly with we've executed, have you turn arounds. We did it successfully and just have the inner confidence to be able to go and take outside capital. So look, we're trying to find value and when value presents itself, we'll act. We don't have any stated goals in terms of the number of units that we want to acquire. We do want to get larger. We wanted to do, you know, more complex, more interesting projects. Well, it's hard work, it's also really fun and we find a lot of sizes faction and turning around some pretty beat up and run down communities and augmenting the sense of community, beautifying the neighborhood and again, solving a really meaningful problem, which is the lack of affordable housing. So we get a lot of satisfaction and find fun and interest in solving these problems and continuing to grow the portfolio. James: Yeah. And how frequent do you go and visit these parks? John: So I make trips about quarterly. So I was just in San Antonio in April and was out there for a week and then flew back through the Carolinas to see the other projects. And in South Carolina, North Carolina, I'm going back to the Carolinas in June. So about, you know, every two to three months, I'm a boot on the ground, either looking at deals in the pipeline, checking up on progress on existing turnarounds or, you know, in some cases, we've got to get state licensing in order to do what we want to do in terms of lot infill. So for example, you know, I was in Austin in January to sit for the dealers licensing exam. So in order to execute the law and fill that we want to do in San Antonio, we need to be licensed dealers in order to buy homes directly from the manufacturer. So we were in Austin doing that. The same thing is happening in June. We're getting a dealer's license in North Carolina to be able to execute these large turnarounds. So between checking up on projects, chasing new deals and getting whatever required licensing we need in states, we're on the road a lot and touring around the southwest and the southeast. James: Yeah. Yeah, that's very interesting. How are you getting dealer license to turn it on these properties and how are you finding a lot of fun in doing a lot of value? That's where you make the money. To solve problems that other people don't want to solve.  John: Exactly.  James: Right. So, and what's the point of buying a cash flowing deal?  John: Right, right, exactly. You know, in maybe 30, 40 years from now, great. I'll do those and just collect the rent checks and that'll be fine. But in the meantime, you know, I'm still relatively young, hungry. I want to make an impact. And so that's where value add is really where the opportunity is. James: I don't know, I mean, I think if you didn't want to work hard, I mean, I know if people want to get into real estate, but just so many people either, they don't want to take action or they think the problem is too hard or they just didn't want to put their mind into solving that problem. And that's where the barrier to entry comes in. Not many people want to solve the problem. And people like you who are in New York, you know, is solving the problem like in San Antonio and North Carlina, it's hard work but that's fun. And you make money out of it and it's generational wealth too, right? Because after you refi, you take out your money out, it's your cash flowing for your whole life. So you don't have to answer to anybody since you're not syndicating anyway, so that's awesome. So let's go to a bit more personal side. Why do you do what you do? John: Yeah. So again, I think it's just fun. I'm the kind of person that I don't think I'm ever going to retire and sit on a beach or golf all day. I like to be active and doing things that are interesting. I liked doing challenging things and so, you know, for me, I just get a deep sense of satisfaction in doing hard things and really doing those hard things with teams of people. So I like surrounding myself with partners and binding together as a team to solve challenges that are just intensely satisfying for me. James: Got It. Got It. Is there daily habits that you practice that you think has made you more successful? John: Yeah, so I would say I'm a distance runner. So I'm an athlete, I've been running marathons for what seems like forever. And what that practice is instilled in me is a couple of things that have really translated directly into investment success. One is just the concept of compounding. So logging miles every day, over long periods of time. You know, maybe in a week or a month, I don't notice the progress, but over years of repeated activity and continuing to grind it out despite pain or cold weather or you know, emotional blocks that would, you know, would it difficult for me to want to move forward, I keep powering through it and ultimately it's led to a lot of success in my running endeavors. Implying that same approach of compounding and continuous daily incremental action in the investing space has really helped position me for success in investing there too. James: Got It. Any advice that you want to give to newbies who want to get started in the mobile home park operation or investment in the business? John: Sure. I'd say definitely learn about the nuances of the industry. Take the time to not only attend boot camp or something similar, but talk to other owner-operators about the details of owning and operating parks. You know, it's not enough to just read materials or listening to podcasts, I encourage people to do that, I do it myself, but really get to know owner operators because there are a lot of nuances about running or even finding parks that are glossed over or not adequately covered in podcasts, reading material or boot camps. So I'd say education, definitely take the time. I mean, I took about a year to really get my head around, you know, what is this industry like and what is it going to take to succeed? So education and then just get started. I mean, there's a lot of reasons to say no and to walk away from opportunities. Again, with mobile home parks being kind of 30 to 40 years behind the times relative to multifamily. There's just the nature of the asset classes, there always are going to be problems with these assets because they're not usually professionally managed and they all have some level of hair or warts on them. Don't let that scare you, that should inspire you to learn about which problems are fixable in which are not; where you should run away quickly and where you should dig in. And really find an opportunity to solve problems and create value. So I think those are my two best pieces of advice. Just get educated and then learn to get started and get going. James: Awesome. Hey, John, why don't you tell our audience about yourself and where to get hold of you or if they want to contact you? John: Yeah, so my website has my contact details. So Loan Juniper Capital is the name of my firm. We own and operate mobile home parks in the southeast and southwest. That's loanjunipercapital.com. There you can find my email address, my phone number and I'm on Bigger Pockets as well, I'm all over Facebook as well and the mobile home park forums and multifamily forums in Texas. So I try to be active and get my face out there and I do a fair amount of attending conferences in the southeast and the southwest too. James: Awesome. Thanks for joining us today. I'm very sure that you added so much value. You know, I like to talk about different asset classes such as mobile home parks, other than just multifamily. Because as I said, opportunities everywhere. You have to find the right guys to partner with to know or to learn from. So, absolutely, I had a lot of value. Thanks for coming to the show, John. John: Yeah, thanks for having me, James. This was fun. Appreciate it. James: All right. Okay. Bye. Bye.

Jeff Adler, Vice President of Yardi Matrix share his view of the latest state of Multifamily commercial asset class. Show: Achieve Wealth Podcast  Guest: Jeff Adler  Title: Multifamily State of Union with Jeff Adler  Host:  Hi Audience, welcome to Achieve Wealth Podcast, a podcast where we are tuning in to learn as much as possible. Today, we are bringing in an awesome guest, who is the keynote speaker at many conferences, many high-level conferences, so was able to get his time to spend with us today to go to as what I call the state of the Union of multifamily real estate. So today we have Jeff Adler who is the vice president of Yardi Metrics. Yardi Metrics is a US multifamily office, industrial and south storage as an information toolset in coordinating underwriting and asset managing commercial real estate investment.   So if you have subscribed to Yardi metrics report, which is awesome, very, very data rich and I think it should be part of your decision making in selecting markets and looking at trends in terms of a commercial real estate, especially on multifamily. Your mail would have come from Jeff Adler. So I'm very pleased to bring Jeff on board. Jeff, why don't you tell my audience something about yourself and your company that I would have missed out?  Jeff:   I'm based here in Denver. You already made fixes. Basically the data division of Yardi systems, which is well known in the property management sphere, across all different asset classes, we cover the multifamily office, industrial self-storage in all those different other asset classes. But my background was primarily in multifamily. I was the chief operating officer of a [01:49unintelligible] in Denver,  for about 10 years from 2002 to 2009 and I joined matrix about five years ago. So that's kind of what we do. And some of the work that I do is the basic products, the tool kit that helps you identify opportunities under find deals, underwrite deals, understand markets, understand entities and players in those markets. And then on top of that work, I have a team along with Jack Kern that talks about investment strategy, investment themes and the overall economy.   And so we try to put everything into context from kind of what's going on in the global economy, straight down to which deals should you buy that fits your investment strategy. And that's kind of what we do. So happy to be on the podcast and give you any information about what it is we're thinking.  Host: Yeah, I'm really excited because I read the reports that are created by Yardi Metrics on whenever you guys send by-market, by-economic at high levels so it's very, very informative and I love it.  Jeff:  As a part of what we do to get our name out, you can go to yardimatrix.com/publications and for free, sign up for our [03:16unintelligible] reports where we do those 10 multifamily markets a month, six office markets a month. We also do a monthly report that's free on the multifamily market nationally, the office market nationally and self-storage market national. So there's a lot that you can plug into that kind of can set a context so we provide free. And then if you want to learn deeper then you can talk with us and go deeper into the data service. So that was the resources that are available to all of your sort of listeners.  Host: Yeah, yeah. I would encourage all your listeners if you want to do commercial real estate, especially multifamily or an office or self-storage, go and subscribe right now. It's an awesome, awesome tool and information is free and it's really good.   Jeff: What else can I do for you? Let's get in there and let's start talking.  Host: Yeah, yeah. Correct. I mean I know we talk a lot about multifamily because I'm a multifamily operator. We own 1400 units in San Antonio, Austin, Texas. But I want to always understand about other asset class. I mean, recently I launch a book, it's called Passive investing, Commercial Real Estate, which I also talk about other asset classes. So I'm very happy to ask you questions about other than multifamily, you know, as a start. So compared to multifamily office and self-storage, what are the good and bad about each one of this asset class from your perspective since you look at all of this?  Jeff: Yeah, personally, I think multifamily is in an incredible sweet spot. So let me take a multifamily and we can compare it to other asset classes. The reason is is that there is an overall shortage of housing in the United States, which to a greater or lesser degree in different markets. And then it's really kind of an overhang from the kind of the crash. So we had a surplus of housing in going into the crash. But really now we have deficits, on a cumulative basis since '06, we've got a 200,000 unit multifamily and single family deficits. If you go from the bottom of the crash, it's about 2 million units. So how is this being expressed? And we also have, we have a number of demographic trends; people getting married later, having kids later, having fewer children, having student debt.   So if you look at all the divorce rate, look at all of these demographics, we seem to have like a secular shift in the number of renters and the renter households population in the United States overall. And you see that expressed in very high occupancy rates since the crash that are still hanging in the 95, 96 level at the national level, which is very, very high and rent growth that historically if you look at, and I've done this back in 1970, CPI and the rent growth are very, very tightly coordinated. Since the crash, the rent growth has been about cumulatively five to 600 basis points higher than CPI, it is an anomaly so it's not like the normal cycles you can go back to, this is fundamentally different. You can look at the extent that there is new supply coming on, about 300,000 units a year.   It's Class A, kind of an urban core or in places that are sort of urbanizing notes. There's the big opportunity for, I'll call it non-institutional investors, it's been in class B and Class C I would probably say 50 unit to 100 units where there's not a lot of institutional competition. There is a deep need for housing and the price umbrella of the new supply is so big; I mean the new stuff that's coming in is five to $600 a month different that is coming from the masses, sort of majority of the workers and renters can afford and are paying so you're really insulated from new supply pressure. And so again, if you look at the demographics in terms of the demand and job formation is really pretty good and then you look at the fundamentals of supply, it’s very expensive to bring new supply to market. There is a labor shortage, material costs are going up, impact zoning fees are high so you have the kind of the recipe for a great demand-supply balance and multifamily and this severe problem is happening on the coast.   So just talking to your maybe constituency in Texas, right? You can look at the severe problems that are occurring in California with job growth and affordability, there is a significant out-migration from New York, New Jersey, Illinois, and California. They're moving into all of the markets in North Carolina, in Texas, in Arizona, in Nevada and so you have in addition to the tailwind of organic economic growth happening throughout Texas you have relocation; and in a relative business-friendly environment  with a very high level of supply response relative to other parts of the country. So you have a lot of very positive things. So I'm very, very positive on multifamily as a sector, particularly class B and C assets; C is a little tougher because only just until recently you began seeing finally a wage growth at the bottom end of the skill sector, people would traditionally go into a C class asset.   B class asset, in my mind, is a little bit better because there's more income growth there and there's more sort of to work with. C class assets, generally speaking, you make your money on having very low expenses, very low turnover by picking your customers very, very carefully so that you get a community that's going to stay there and can tolerate maybe 2% rent increases, but you really can't push rent five, six, 7% in that group, they just don't have the income. Whereas in class B, you can push rents higher, expect a higher level of turnover because there's a deeper pool of people who can kind of pay the rent. Those strategies, particularly for the non-institutional investor are very attractive. And I really find there's a deep market in terms of demand and I view the economy as in pretty good shape.   There are some pressures; we're late into the cycle here so the biggest issue I see short term is that potential end version of the yield curve. Long-term rates are two- sevenish, they were at three- two and now they are two-seven again, short term rates are at two and a quarter. There's not a lot of room between the 10-year and the overnight rate. The importance of that is, is that if the short term rates go higher, bank lending will pull back, the data has been historical and you're 12 to 18 months from a recession; we're not there yet, but it's a tight rope.    My best guesstimate right now is we probably have another, I think in 2021ish is when it's likely to have a recession. I don't think it's going to be a big one, I think it's going to be kind of a mild one and the reason I think that is we did a big blowout in '09. And if you go back historically, and I'm bouncing around on you a little bit, but if you go back historically, the best analogy is what happened in the 1930s versus post role, World War Two recessions, they're different animals. So I think we're coming off of a big blowout, really a depression we got through very quickly because of great action on the part of the Federal Reserve.  So I do see a recession coming up, but I do think it's going to be a mild one. So really multifamily is best positioned, in my view, to serve right through this recession. And so I think, again, multifamily is a great asset class; its guard a tremendous amount of institutional and investment capital and will continue to. There are other asset classes out there. So office has traditionally been, I would say a big kind of institutional asset class requires tremendous amounts of capital and it's really viewed as a bond alternative. If you think of that as a bond alternative, it's bought largely for cash; if it yields 4- 5%, that's great. Again, we're viewing it relative to bonds and it requires a tremendous amount of capital to keep those assets fresh.  If you're an opportunistic office investor, you really have to take something like a suburban office, which is really beat up to hell and change its fundamental character connected to transit, make it into a canvas, and create a place. Now that has tended to require a tremendous amount of capital in order to play there. So I kind of view office is just really more of an institutional capital play because of all the capital requirements that are required for it. And it's hard for a non-institutional player, in my view, to have success in office unless you are riding off the coattails of a smaller building attached to these other investments; it's just a very hard thing to make work.   Now, the big playing industrial, you know, and I'll slip over to storage in just a second is really kind of what's going on with e-commerce. I mean that's what's driving industrial is the commerce need and really the pullback and retail. So retail is littered with strip malls that we just don't need or it can be repurposed to other uses. So what I do see often is people who are opportunist to be looking for sort of beat up retail assets that are distressed and changing the nature of that asset or for industrial what's driving the market is not knowing so much manufacturing, which really isn't driving space requirements, but it's really ecommerce and those tend to be very large facilities. I mean like 500, 300,000 square feet, a million square feet that are in near population centers to handle the demand. So there's active development pipelines and industrial. Again, it's very hard I think for a non-institutional player to sort of access the action because of the capital requirements that are needed in the industrial.   Self-storage is very much a different place; it is historically owned mostly by small owners and non-institutional players. The capital requirements to get into the sector are, generally speaking, much lower than multifamily or any of the asset classes. Right now, the issue at the moment is that there's been a significant level of development. Self-storage to the sector did incredibly well during the downturn. And the reason it did was that most of the people who have stuff and only about 10, 11% of the population use storage but most of the people who did use it, needed it to store their extra stuff; in a downturn, they didn't stop using it. In fact, in some cases, people use more of it because if they were going through struggles in their homes, downsize in their homes or apartments, they moved their stuff into a self-storage facility.   So the sector did incredibly well in the recession, has attracted a fair amount of capital and now more and more institutional capital is trying to get in. There's been a lot of development that's been going on and so the big issue in self-storage is finding an asset that's not under supply pressure or finding pockets. And then self-storage is a very local kind of asset class but the bottom line is the world is within three to five miles, that's it. Somebody could use somebody across town and it just doesn't matter. It's really that three-mile pocket or like a 10 to 15 minute drive time because people are using storage only to the extent that is near them. So a lot of storage developers basically track new development in multifamily and will plot the deal down close by or they'll look for new home construction and plops something near there.  They will look for pockets where there is less than about seven square feet per person and that's the tools we provide, where you can actually find the pockets of population that are not currently served. It is a good asset class for a non-institutional investor to get in and it does complement very nicely with multifamily because they're a complimentary kind of asset classes. I would say though, that we don't necessarily cover single-family rentals per se, but I would say, again, single family rentals along with, kind of 50 to 150 unit multifamily in self-storage, they're all complements of each other. They were around people who need space to live but don't have the capital to actually get into buying a home. And so I find we kind of track, we cover self-storage, we cover multi-family and we track single-family rentals because I view it as a complementary asset class.   I know a lot of people in that sector; I actually was in that sector myself for a year and I just knew that entire space is very good for, kind of the smaller institutional player and the non-institutional investor. Kind of a long expedition but [18:27unintelligible]   Host: Yeah, I didn't know that you guys have some tools to look at the self-storage demand analysis, which is very interesting so that's a really good explanation. So coming back to multifamily, so what you're saying from what I heard from you is the 2008 crash, the whole crash is equal into 1930s crash and that's a huge crash and we don't expect to see that in the next coming crash, right? Because a lot of people have that short-term memory about 2008 and everybody's like, okay, I'm not buying it. It's going to go down like what 2008 happened, is that correct?  Jeff: I mean, 2008 was an 80-year event. We're not going to see something of that magnitude in our lifetimes. What we're likely to see on a go forward basis, is something akin to the recessions that occurred prior to 2008, 2001 recession, the '91 recession even further back. So these were typical kind of recessions that we're not driven by debt blowouts, but what connotes a depression is that they are fuelled by overleverage in assets classes. A typical recession is where there's inflationary pressures and goods and services, which then lead [20:00unintelligible] kind of cooled by rising interest rates and it's kind of a minor. deleveraging.   So if you want to kind of get deep into this, for anyone who's on this, Ray Dalio, who's the CEO of Bridgewater Associates, has a great video on YouTube, a 30-minute video on how the economic system works. And he pretty much lays out basically the notion of a minor debt cycles, which occur every seven to 10 years and a major debt cycle which occur every 75 to 100 years. We just went through a major kind of blowout so we're unlikely to see a major blowout again in our lifetimes. We'll now do normal minor recessions and so you've got to be forward-looking as opposed to sort of backward-looking.   So with that in mind, right, the debt position of households and businesses are actually in pretty good shape. The issue we have is that the debt position of the federal government is the thing that's a concern. Now, fortunately, and again, I'm taking a bit of a tangent, our debt is denominated in our currency. So the debt really isn't going to be a problem because it can get inflated away. Other countries don't have that luxury and if you're worried about potential inflation, well you want to be in real estate because it basically marks to market on inflation and our debt is denominated in $6.   So paradoxically in a weird kind of way, real estate is very attractive because it's yield relative to current interest rates is high. But even if, God forbid, we had inflation, a recycle that came back, if your debt is denominated in $6, you make money because your debt depreciates and your income goes up nominally because your rents are sitting in nominal dollars. So I would say, real estate is kind of like, it's a win-win. Like if there's no inflation, it's good; if there's lots of inflation it's still good but I wouldn't do it, make sure your debt is in fixed. It's fixed versus I wouldn't go with a floater right now in terms of floating rate, interest rates, that wouldn't be a good idea.  Host: What about floating rates with hedge? I mean some people they say there's a cap on the floating rate. A lot of people do bridge loans or short term loans or they do a hedge.  Jeff: Again, I'd say, a bridge loan is designed because you have a value-enhancing program that you're going to execute. It's usually a  one to two-year bridge loan and for that purpose, it's just fine, right? Because you're going to do something different; you're going to create value, you're going to add cap or you're going to reposition the property so that makes perfect sense. And then you want something that gives you your payments as low as possible while you're executing your value-add.   When you're done with that value-add repositioning, if you choose to hold the asset, that's when you have to think about permanent financing and you don't want to be kind of on a floating rate, IO forever, in that case, because you're not getting the advantage of what might happen in the broader economy. You're basically, maximizing current return but you have an exposure. So I kind of view bridge loans as appropriate in the context of a value-creating program. But outside of it, it's very dangerous, you've got a lot of risks you're taking on.  Host: I'm out of all my short term loan so now I'm on long-term fixed rate loan, all agency loan, which is good but I know a lot of my listeners, have this notion of, hey, let's go do a bridge loan, I mean, it's easy to make deals work under a bridge because you get higher leverage. But there's also a notion of, oh, now we're going to hedge the bets on the interest rate hike by having an edge and there's a cap that they can do.  Jeff: But I would say here, but if the cap came into play, it's a cap per year. Suppose there is a lifetime cap is at a very high level if you have to get out of a bridge loan, what do you have to get into is going to be very unpalatable at the time. So I do think, again if I was giving advice to an investor is to say a bridge loan is great for a specific objective you're trying to accomplish, but it is not a long-term old strategy or if you're doing it, just understand you're going to maximize current income but you are taking on an asset risk that's rather significant. You know, everyone will make their own decisions and if they choose to do that, then they choose to do that but you should be aware of the risks that you're taking and not kid yourself about it.  Host: Yeah. Especially on syndication where we are raising money from private investors and we just have to make sure we communicate that to the investors and that he's okay with that, right?   Jeff: Yeah.   Host: Interesting. So you're talking about yield curve inversion, right? Where the daily yield curve might be higher than the 10 year Treasury, at high level so what is causing that?  Jeff: Well, what you have is an interesting kind of situation here and this is more geopolitical if anything, but it has deep implications for us in real estate if you're trying to understand the demands side. So this is the issue of, again, demand looks great, the economy is expanding, jobs are being formed, unemployment's low, wages are rising, all sounds great. So what happens in these periods of time? Well, normally, you would begin to see inflation; it would kind of rear its head and the Federal Reserve executing its mandate to try to kind of make sure the place doesn't get out of line, would tend to be pushing up rates on a short term basis to quote-unquote cool the economy. But what we're seeing very interestingly is, we're having economic growth, but where's the inflation? You're not seeing inflation really be systemic above a 2% rate. Which is what their stated goal for price stability is and why is that?    Because growth isn't that great in Europe, growth isn't that great in Japan and the trade pressures that the administration is putting on China is basically hurting the Chinese economy, which is why they're at the table in the first place and so there really isn't the system long-term inflationary pressures. So as a result, long term rates, it's your step in the market, the Federal Reserve has no influence really on long-term rates. They set short term rates but long term rates, they can't set directly. They can try to influence it and they did try to influence it in the past by buying up mortgages and other long-term securities but there's a lot of where generationally, and some folks get it simple and don't quite realize it, we're in a demographic period of time where there's a lot of global savings.    And you can look at those global savings, they are going into bonds. And if you look at Europe or Japan, because their economies are actual have declining populations, they're in a saving mode significant significantly. They're not in a consumption mode, they're in a saving mode, and they’ve got a lot of capital to deploy. The interest rates in Germany, for 10-year German government bond, are negative so our 10-year notes, a 2.7, the equivalent of what Italy is paying. So if you're a European investor, do you want to put your money into Italy or the United States? Because that's really the choice so if I had a choice between Italy and the United States, I'm putting money in the United States and so we are attracting a lot of capital on a long-term basis, which is keeping our 10-year rate pretty low. And there's no real evidence of inflation to justify an investor saying, oh my goodness, I need to be compensated for inflation and so I should get out of bonds and other assets that would cause the long-term like [29:24unintelligible]    So if long term rates aren't rising that much and there's not a lot of inflation, the Fed pushed up short term rates to the point where the fourth quarter, when the stock market meltdown was really a function of the market saying, well if the Fed keeps raising short term rates, they will create a yield turn version. And what happens is that short term rates are higher than long term rates. Well, if you're a bank, banks are in the business of lending money, borrowing money on a short term basis and lending money on a long-term basis. Well, if there are not enough margins in there for them to do that, they have costs, they stop lending because they would lose money if they borrowed short and lend long, it's not profitable so they choose not to lend money. Well, what you're talking about there is a contraction of credit in the economy. Well, when credit contracts, guess what? You know though it takes a little bit of time, you get a recession, you'll get a recession tomorrow or within 12 to 18 months you get a recession because there's a contraction of credit and that's worked its way through the system.   So if you think about us as in real estate, we deal in metrics that are rents, occupancies and things like that, our cash flows, those are lagging indicators. So what's happening in the real economy, what's happening in the economy is wage growth, employment. Those are the things that happen in the real economy. I look at the capital markets as a precursor to what's going to happen and then we have an economy which is then a precursor to what's going to happen with real estate operating metrics.   So by paying attention to the capital markets, I tried to keep our clients and our organization two years ahead of what will eventually show up in rents and occupancies and cash flows in real estate properties. So that's why I kind of dwell on the yield curve because if I looked at it, there are five models that we look at in terms of capacity, utilization, wage pressure, and of the five, the one that is, I'll call it the current binding constraint is the yield curve. So it's not the only thing I look at, but it is right now the key thing that I look at.  Host: Yeah. So that's the best explanation on yield curve and how it's going to impact because I wrote so many reports and listened to so many webinars by brokers and all that, but that's the best explanation, I get it completely. So what you're saying is if there's a yield curve, banks stopped lending bridge loan is more dangerous because if you are predicting that's going to happen by 2020 or 2021 and if you are initiating a bridge loan right now which has three year span, you are going to be landing in a spot where you may not have any funding at that time if the banks stopped lending,  Jeff: Right. And also you don't the maturities come up in a crash, right? Because what's going to happen, what happens in a downturn, even if it's a minor recession, is people withdraw from the market in terms of transacting, they don't transact. So what transactions do occur tend to be at a depressed level, not depressed level then it's considered quote-unquote, it's a current market value.   If you have a bank loan or a line of credit is coming due, they are going to revalue your loan devalue based upon an artificially depressed evaluation. And then they're going to say, oops, your loan devalue is a mess so basically they're going to squeeze you out. They're going to force you to add in more equity or to basically liquidate the line. So you do not want to be in a situation where your debt, if you have a five year term, you're going to see through this problem or seven-year term, but your two to three-year term right now, you bear a risk that you're going to have to come for refinancing when there is an artificial kind of re-evaluation of your assets.   And what's great about real estate is it really is a long-term value. That if you can last through a problem and not get squeezed out, generally speaking, you're going to be fine. Particularly in multifamily where the cash flows are much more durable, you may see a dip in occupancy of a few points. Your new leases might transact with lower rent, but you've got a lot of existing cash flow; you can always squeeze back on some of your expenses for six months, you can ride through a problem as long as your debt isn't coming due. That's the main thing, don't be squeezed out in the downturn. So you're dead strategy and multifamily is critical to your survival and value creation.  Host: Absolutely. That's good advice. Coming back to what you call the level of players in the market, right? So if you look at it in the past before coming back, what do you think about the high loan? Because I think in 2015, the lenders have loosened up, giving up more IOs to a lot more people. It is become default to have like three year IO, four year IO. When I started at that time, I know it was hard to get even one year IO and one year IO was sort of attractive because valuable then, but then 2000 was when lenders started opening up the flood gate and now it's like five, six years, seven-year IO kind of thing. What do you think about that? How would that impact [35:19unintelligible]   Jeff: Yeah, from a cash flow perspective, if you have an IO to an interest-only payment and you can get that for five or six years but it's still fixed; so on the conversion, it's a fixed rate kind of conversion, then great, you just got a great deal. You want your IO to be at a fixed rate and you don't want it to be floating. So if you can get a fixed rate IO for a certain number of years and you're guaranteed to convert to an amortizing loan at the NBIO period at a fixed interest rate, well, you kind of got your cake and eat it too, right? Because you got the benefit of not paying down the principal during the IO period, but you didn't expose yourself to the risk of having to go through a negotiation.    So great; if you can get it, go for it, right? I mean, that's fantastic. You guys can put that in your pocket or put that into the property so that you're going to be able to expand your cash flow. It really depends upon who your investors are and what their goals are, whether it's cash now or value appreciation later.   Host: Yeah. Where I was going with that question was a lot of people have justified the deal, doing deals because the numbers with IO, it looks much better now and it looks really good, right? So a lot of investors are coming in, especially at the level where we are right now, where there's a lot of syndicated commercial real estate deals are happening. There are very less sophisticated people who just look at as [37:18unintelligible] cash and cash, you get 8% cash, they just jump on investing in but that 8% could be IO and in the next three years, let's say rent doesn't go up or you have a deep in occupants, it's what you're talking about that 8% and once the IO kicks in, that 8% becomes 3% right? [37:36unintelligible] become negative so your basic concern is the loan. So I think, I don't know, in my perspective, there's a lot of deals happening right now in the past since 2015 with IO, especially at the less sophisticated level right now.  Jeff:  I would say, IO, it should be gravy, it should never be the main dish.  Host: Okay. [38:01crosstalk]   Jeff: If you're expecting the IO to make the deal work, your betting that by the time the amortization kicks in, the rents will have grown high enough to cover the amortization. I haven't run the numbers on that, but that would be the thinking, you have to get comfortable around is okay, what has to happen when amortization starts since that it actually was a good deal. And then say, well, the rents have to grow at 1% a year or 2% a year, 3% or 4% a year so you really need to stress test that assumption. But you know, this is where people take risk and so if you're taking this kind of risk, understand that in a downturn, that's going to be the first people who will basically get shut out.  They can't make their principal, they paid too much and when I had to start amortizing, they couldn't make a go of it. So I view that just as similar as the equivalent of a debt maturity; it's like, okay, if you've got an IO period of two years that you bought the deal on the assumption that in order to get your hurdle, the IO period is what made the hurdle work for you, you're basically are sitting at a two year refi’ and you better understand that what your debt service requirements are when you walk in into that. I know we're spending a lot of time on debt strategy here and I think that's kind of okay because the fundamentals are good, generally speaking. There's not a lot of too much supply so the demand is decent, the supply is decent and your death strategy. So there's one part of this, which is your value added, your value creation strategy; what are you doing to create value for your residents, to make your property more attractive to them and a better living experience so that you'll be at high rents and high occupancy? And that's entirely valid and I think, my view would be in terms of enhancing the resident experience, I think there's a bunch of IOT upgrade packages to existing properties that I think add a lot of security issues that people will pay for, not so much to manage your thermostat, but if you kind of know that your kid can come in and you can see on your phone when your kid came in from school and that they're safe, there's value creation there.  So I think we as owners have to look critically at how are we adding value to the living experience? Not just the four walls, but stickiness, right? Creating stickiness that keeps people kind of in place and so I think there's a whole set of strategies there. The debt strategy used to make sure it's honestly to make sure that you don't get kind of shaken out. That's really my goal as data strategy is not to get shaken out in a downturn. And if you could protect yourself from being shaken out in the downturn, then the fundamentals will basically bail you out. And so as we're talking about IO, which is people reaching to make the deal work when in some cases, I'd rather you focus on what can you do to add value, you can increase the revenues so you didn't have to go that crazy out financially.   Host: Correct.   Jeff: So focus on the value creation part that they had provided the increased rents where you don't have to go five years IO and kind of crazy kind of amortization and you're sort of sitting on a time bomb. So that would be kind of my take is; we're talking about debt, but it's more in the nature of put yourself in a situation where you can ride out a storm.  Host: Yeah, that's awesome, absolutely the right thing. Just make sure you're on a fixed rate loan, and the other thing that is very subtle is even though you're on a fixed rate loan, make sure if you have IO and make sure you have enough buffer when the principle kicks in. Because from my calculation at 80% leverage, you need at least 5% cash on cash buffer and on the 75, it's like 4%, in terms of return; you need to make sure you're still able to service that debt. Let's move on to a bit more different topic. So selecting a marker; so let's say, someone who wants to start in multifamily, multifamily real estate is very local, at the same time, multifamily is an asset class where it's very, very intensive in terms of property management so how would you recommend, how do they select the market?  Jeff: I look at a number, I'll call it very basic kind of fundamentals and it's on our website and in our materials, we only have a four-box model and that attractiveness of the city. And first of all, we come from the perspective of, how is wealth created in this economy? And I would tell you that I believe wealth is created in this economy based upon the force of ideas and the creation of new products and services, which tend to have an intellectual capital component. So where and in which cities are new ideas being formulated into new products and services? We call that intellectual capitals notice strategy. So we want to be in cities and within that, in or adjacent to the parts of major metropolitan areas where there's a concentration of people who are doing work with their heads, primarily.    And then within that context, we use a four-box model. Well, one is first of all, how business friendly is the state within the United States, in the state, at the state level, and at the city level, how friendly is the environment to the formation and creation and continuance of business. Next, we look at how many people are being educated in this area. So it's universities, community colleges, maybe even trade schools, but we're looking for, where is intellectual capital being created? So basically higher education and also, I focused on the quality of the K through 12 school system as well as alternatives for quality education for the port, like charter schools.   A third component is amenities; what kind of amenities and culture is being fostered that will attract and retain folks who are highly creative intellectually? So you're looking for arts and recreation and culture and music and trails and things that sort of like people who are active, healthy and thinking with their mind; where is that in your community or any community?   The fourth box is really the quality of the public-private partnerships. They're going on attempting to foster this environment that makes it conducive for the creation of intellectual work and the attraction and retention of talent, which then powers the growth in a market. Well, we have found, we've done this for the top 40 cities metropolitan areas in the United States is that these cases happen inside metropolitan areas and they don't happen everywhere. it's not uniform, there are clusters of them in any particular metropolitan area and we'd gone actually through the work of mapping those.   Now all of that is you kind of sort your way through that; we do this all across the United States. I track also very clearly domestic migration; you've seen a tremendous amount of domestic migration out of high-cost cities and into cities and states that our score well on these kinds of, all these four attributes. So for Texas; Austin, Dallas, Houston, and to a lesser extent, San Antonio all score well in these areas. And that is where, if you look at where people are moving from and where they're moving to and where businesses, moving from and moving to, that's why, getting a view of the entire country, that's why Orlando, Tampa, Las Vegas, Phoenix, Atlanta, Raleigh, Salt Lake City, are all doing incredibly well because they have a combination of good governance, good weather, which helps.   Plus these other condition where businesses are moving and where talent is moving. Now it's not to say that if you're in a core, we call it global gateway city, these cities aren't going away anytime soon, they are major centers of intellectual capital, but they are in places and in circumstances where you're kind of swimming upstream as a real estate investor and there is an increasing level of political risks associated with that as well. So among the core cities, the top six, and usually you can think of these cities as generally speaking--I'm I on the right track, Jim, with what you wanted to hear?  Host: Yes. Absolutely, go ahead.  Jeff: I could keep going on this [48:41 crosstalk] the core cities are viewed as Boston, New York, Washington, Chicago, LA, San Francisco, and sometimes I'll cross Miami because it operates as a core city. And if you look among those core cities, Boston and Miami are kind of like the best positioned and the other ones less so because of a very high cost and the tax bill and the tax law isn't helping.   So those areas were bleeding people anyway and now they're bleeding more. So Boston is pretty well positioned, Miami is pretty well positioned. But even with Miami, there's significant out-migration from Miami to Orlando and Tampa. So I like Orlando and Tampa in that regard and I know there are certain markets that I think are great markets but there's a lot of supply currently. Dallas is an example in Texas. Houston is how you diversify the economy but there's also a large supply response. So in Houston, I would say you have to be very localized; you want to be in places where there's some traffic congestion and you're very close to places where either the Anderson Medical Center or the energy corridor where people want to be and there's a certain level of stable demand so that's, that's kind of the story of Houston. But there are also other cities, Seattle, Denver, Charlotte, these are great cities; they do have a lot of [50:18unintelligible]  if I was talking to someone in the Midwest, I would say Minneapolis is a really good city because the weather goes against it, but it's a kind of a core, a great market, particularly in the suburbs.   Indianapolis and Columbus; their downtowns are sort of emerging and in creating something because of their good intellectual capital and very low-cost position. So they are kind of like the king of that hill as it were and they're getting benefits of outflow from Chicago. Most of the Chicago outflow is going to Florida or the Carolina's not so much inside the Midwest. So this is the way I think about cities;  you want to be in places and so if you're a smaller investor that says, look, I'm only going to invest wherever I am, I'm going to only invest to the extent that I can drive to it and I'm two hours away. Okay, fine, that's great. Go and look for the locations within your two hour driving radius. Go look for those locations that have these conditions, where is intellectual work happening and some of the best strategies are to be in an area and find that area and then find an area that's low cost to rent adjacent to it.   So even though you have a cost advantage that's within 10 minutes of drive time of intellectual capital note and intellectual capital notes or sound honestly in most of the top 40 US cities, you can find them, they're there. We do this for our clients, but anyone can do it if they do have the time to spend, and again, if you're investing within a two hour radius of where you are physically located, then your job is to get to know your economy, your regional economy and understand where interesting work is getting done. That's where you would tend to spend your time, that's how I think about it.   So when I come back with certain cities that are attractive or certain studies that aren't attractive, it's first looking at the basis and its intellectual capital work and then layering supply conditions on top of that.  Host: So are you saying that an investor in Texas should not go to some of the other cities and look for deals?  Jeff:  I mean understand that when you sort of non-institutional investor go out of your immediate ability to touch the real estate, if you have to get on a plane and you're a non-institutional investor, you are eroding your returns. So what is your competitive advantage as a non-institutional investor? So you have to be very sort of upfront with yourself and I would say your competitive edge as a non-institutional investor is not going to be necessarily a cost of capital because they're going to low cost of capital. It's going to be that you can have more intimate knowledge and you can get to the real estate more closely and you can provide more attention to it than anyone else can, that's your advantage or investing in assets that a large institution would not attempt to invest it, maybe a 50 unit property because they won't want to touch that. It’s a little subscale scale and you can't have a major property management company manage it; it just doesn't work in their strike zone.   So you've got to look for assets that you're not going to have competition from institutional investors and where you can bring a competitive advantage. And if you have to get on a plane to see it and you have to have a third party property manager who you eventually can get to it, where's your competitive advantage?   Host: Yeah, you're absolutely right. A lot of people think that where they are they kind of start finding deals and they start going somewhere else and they become out of state investor, right?   Jeff: [54:35unintelligible] out of state investor, I would say if you're at the point of having a big office and a large staff and a big discretionary fund, then you have the infrastructure to go across geographies, across the United States. If you are someone who doesn't have those advantages, well, play to your strengths; which is, go to places that those investors can't go or won't go and focus on your intense knowledge. The local economies that you can get to within two hour drive time and depending upon the cities in the region you live in, two hours is not slim tickets; focus on where you can add value. I think all of us have to focus on where we are going to add unique value and that's what we should spend our time on.  That is definitely how we, as an organization, decide how we're going to spend our time. And if I can't find a way to add competitive value to create value, I'm just not going to go do that activity because someone else can do it better. I need to focus on what I can do uniquely better that no one else can do or very few people can do. And that is getting, if you're a multifamily investor is being in asset classes that are smaller, that institutional investors and knowing where the nodes are and being in an adjacent place to those nodes with a class B or C asset and focusing on value creation to the resident that makes your property more desirable, more valuable because you don't want to be just a box.   But then you're in a commodity market, you want to create differentiation; either in the living experience, the things that you offered and ideally like IOT upgrades or other sort of a upgrades where people will pay you for these additional services because they add so much value to their lives and that's what you want to focus on.  Host: Awesome advice. Let me ask you one more question before I let you go. So between the primary, secondary and tertiary marker so I think we have to define primary very specifically; primary means, the entire coastal city that gateway cities, right?  Jeff: So the way I define primary, primary i snot a good term. We kind of US international gateway cities so there's seven US international gateway cities. There are primary markets, which are really the top 30 metropolitan areas. And primary in my mind would include places like Dallas and Houston and Austin, they're big markets. Then we have, I would call secondary markets where the economies are not nearly as diversified and then you're getting into smaller and smaller metropolitan areas. That makes sense?  Host: Okay. Yeah, it makes sense. So people go nowadays to look for Yale on the tertiary market, secondary and tertiary markets so do you think that's a good strategy?  Jeff: I've seen people go to Huntsville, Alabama and they've gone to very, very small markets in a search for yield because their investors are looking for current returns. First, is the metropolitan area you're investing in going through a process where it's changing its fundamental character. So if you were able to identify that Denver 15 years ago was going to go from a tertiary market to a solid kind of viewed as a major metropolitan investment-grade market, you made a lot of money because in that transition of the city, it was able to attract in a new group of investors who had a higher willingness to pay.   So one strategy if you're going to a smaller city, is the city in a process of changing its fundamental nature? That's a key issue because if it is, then you're going to basically riding on a trail. And I would say there are some cities like believe it or not, Orlando and Tampa and Phoenix that is changing the fundamental nature of their city to be less volatile and have a broader and more stable kind of basis to their employment. If you're going to a really tiny market, and I again, I've seen an investor go to Huntsville, Alabama and buy an asset next to a NASA facility, well that would mean a lot of sense, right? You have found a very interesting special situation in a very small market with good intellectual capital characteristics.   But the city, let's say Huntsville, I may be doing dishonor to Huntsville, I'm not familiar with what's going on in Huntsville but if the city is not fundamentally changing, it's character, then your issue is that there's not a lot of other people for you to sell to when it comes time to sell. It's the asset is what it is and you are basing your return on what overall capital market conditions are when you decide to sell. And if you never decide to sell, it may be a great cash flow play; I'm not saying it wouldn't be. You need to be kind of honest with yourself; if you're going to a smaller market than you've been in the past, are you going there because you think that the city is changing its fundamental character and will change to have the characteristic of a bigger city and will grow to that bigger city? In which case, I would say it's a very viable strategy, very worthwhile strategy.   If you're going only because you're getting a higher cap rate and that's it and you are taking on a lot of risk and you want to be honest with yourself and not kid yourself.  Host: Also I've seen in the past when the recession hits, the tertiary market is the first one to get hit as well, is that right?  Jeff: Because, the exception of this asset that's near NASA, those economies are not broadly diversified. They are generally the basis that local economy, it's usually one or two industries and there's a greater likelihood that one or two industries will get hit and you will have exposure that you can't get around and there's nobody else for you to rent too. So yeah, it is very clear so you do want to understand what's the basis of the local economy and do you understand what that basis is and are you willing to accept the exposure that comes with your renter pool being dependent on one or two industries?   Yeah, you might pick right and say these one or two industries will not be affected by changes in the broader economy. Okay, but I will say generally speaking, that these other industries in a smaller city will tend to be more focused on manufacturing and extraction, mining, and then some kind of extractive industries, which are generally because the real estate cost is lower. So there's less intellectual capital work being done, it's more extraction or manual or transformation of things and those do tend to get hit pretty hard in a downturn. So I just think you're taking on more risk.  Host: Got It. I don't want to take up too much of your time, I got so many other questions but I have to respect your time.   Jeff: We'll have to set up another time and you may do round two. It's been a pleasure being on your podcast.   Host: Yeah. Do you want to let people know how to reach you or how to subscribe to Yardi?  Jeff: Sure, the easiest way to do is go to www.Yardimetrics.com. That's one word and on that website, you'll see the publications department, you can sign up for stuff, you'll see my contact information if you want to reach out to me personally or any of my team and that's really the best way to kind of get in touch with what we do. And hopefully, this has made some sense to you and I wish you all much success in your investing.  Host: Thank you, Jeff, for being with us. Thank you.  Jeff:  All right. Take care now. Bye. Bye.    

Doug Ressler, Director of Business Intelligence with Yardi-Matrix, joins Michael to discuss trends in the multifamily market, including fundamentals, demographics, and opportunities in growing markets.

Rent growth came to a halt in September at a national level, according to RentCafe, marking the first period of negative growth M-o-M since February. However, the $1,412 national average is still 3% higher than this time last year. As landlords, should we be concerned? On today's show, we'll look at where rents are headed in 2019 and beyond.  Are we overbuilt at the high end? Where is the most demand? Should we be concerned about an economic slowdown? Our guest today, Doug Ressler, is Senior Analyst and Director of Business Intelligence at Yardi Matrix, and RENTCafé.com is a nationwide apartment search website and a part of Yardi. The website provides research, insights, and in-depth analysis of the real estate market. www.RealWealthShow.com  

Harding Easley, with Yardi Matrix, is on the show to talk about all things real estate. He gets into the economy and gives his two cents for how things are going — he says they are keeping an eye on the yield curve and calls it a “sharp shooters” game. It’s all about knowing the decisions you need to make in a market before jumping in. Abhi asks Harding to speculate a little on the economy and they bring up the “Black Swan” and what “could” happen in our economy. Harding and his team work on five different models for if and when a recession hits and he gives his prediction for what year that will take place. Whether you are a new investor or current investor, they are unpacking complex concepts to help you better understand what can seem tricky and complicated. To learn more about Yardi Matrix and to get in touch with Harding, email him at Harding.Easley@Yardi.com  

Jeffrey Adler is Vice President, Yardi® Matrix, which offers the industry's most comprehensive market intelligence service for multifamily, office, self storage and vacant land properties. Adler also is the publisher of industry market intelligence and content providers Multi-Housing News and Commercial Property Executive.Yardi Matrix is a U.S. multifamily asset decision support toolset for originating and underwriting investment transactions. Matrix also provides market and institutional research leveraging underlying property-level detail of 131 U.S. markets, 85,916 properties and more than 16.1 million units.Link: Jeff Adler - Emerging Multifamily Real Estate Markets

Whether it’s single- or multi-family housing, local markets or across the country, seasoned investors and beginners should always realize the power of strong, reliable data. While there’s no such thing as too much data, oftentimes investors can become paralyzed by the wealth of information and are reluctant to make the next move. Harding Easley from Yardi Matrix chats with Abhi to reveal how smart investors use data to their benefit. To find out more about Harding or start receiving industry data from Yardi Matrix, visit YardiMatrix.com.

Doug Ressler, Director of Business Intelligence at Yardi-Matrix, joins show host Michael Bull on America's Commercial Real Estate Show to assess and forecast the multifamily market. They discuss the occupancy and vacancy trends, economic growth impacting the multifamily market, rent growth, areas of demand, pros and cons of renting vs owning, and the driving factors in the market.

Doug Ressler, Director of Business Intelligence at Yardi-Matrix, joins show host Michael Bull on America's Commercial Real Estate Show to assess and forecast the U.S. office sector. They discuss tax rate changes and tax reform, 2017 office sector recap, vacancy rates, economic growth, inflationary pressures, opportunities, urban vs. suburban trends, e-commerce, investor opportunities, cap rates and NOI, and employment.

America's Commercial Real Estate Show and show host Michael Bull welcomes Jay Parsons, Director of Analytics with RealPage, and Doug Ressler, Director of Business Intelligence with Yardi-Matrix, as they discuss the multifamily sector leading 2018. The show covers how 2017 wrapped up, what to expect moving forward into 2018, including property level performance, cap rates and the factors expected to impact the multifamily sector.

Doug Ressler, Director of Business Intelligence at Yardi-Matrix, joins host Michael Bull on America's Commercial Real Estate Show to discuss trends and forecasts in office market, occupancy and rental rates, profits, and tips moving forward in office market investments.

Yardi Matrix research and data analysts Chris Nebenzahl and Doug Ressler discuss how investors can use the Yardi Matrix to track rent growth, occupancy and development in Florida's multifamily and other commercial markets.

Jeff Adler, Vice President at Yardi and leader of the Yardi Matrix team, weighs on his top six markets, the future of the multifamily industry, how the commercial real estate industry is using Yardi Matrix, and much more.

ControlTalk NOW — Smart Buildings VideoCast|PodCast for week ending Nov 13, 2016 features an interview with Therese Sullivan of BuildingContext.Me, our eyes and ears covering Silicon Valley and the possibility of buying back your data from your cloud services provider. Much more to follow: EasyIO Europe training dates; Yardi Matrix 2016 Review and 2017 Forecast Webinar; CoRE Tech 2016 Review; Flame Safeguard Parable from CGNA Distributors; Honeywell N4 Certification Discount; Sophos’ James Lyne How to Hack CCTV Cameras; and ControlTalk Rewind with Ken Sinclair, “The Times They are A Changin’.” ControlTalk NOW interview with Therese Sullivan of BuildingContext.Me, our eyes and ears from Silicon Valley. In this interview Therese tells us about her latest Silicon Valley coverage and delivers another round of advanced sapience, issuing a not so far-fetched warning about the next lock-in battlefield — waged in the cloud, where your data is being sold, and like it or not, you may have to buy it back from your service provider. EasyIO Europe CPT & EasyStack Training Sessions Coming Up. We are very pleased to inform you about the upcoming CPT and EasyStack trainings. The CPT training is scheduled for the 28th and the 29th of November. The EasyStack training is scheduled for the 30th of November and the 1st and the 2nd of December. The trainings are the best way to get to know how to work with the CPT tools and the EasyIO FG series and EasyStack. Yardi Matrix – 2016 Review and 2017 Forecast – Webinar Thursday, Nov 10, 2016 10:00AM PDT – 11:00AM PDT. Professional investors are worried. 2016 has done little to allay the fear that the investment cycle has hit a slowdown, and questions have emerged. Is this the end of a successful long run and will those still in the market be left holding assets with diminishing values? CoRE Tech 2016 – Realcomm Nov 16-17, 2016 Program Details: The CoRE Tech education program is designed to give CORPORATE REAL ESTATE DIRECTORS, CIOs, FACILITY MANAGERS, BUILDING ENGINEERS, ENERGY and SUSTAINABILITY EXECUTIVES, PORTFOLIO MANAGERS and ASSET MANAGERS the technology tools they need to positively impact the bottom line of their companies – from automating business processes, to general technology solutions specifically for corporate real estate organizations, to smarter intelligent building technologies. A Flame Safeguard Parable from the Distributors at Controls Group North America.There is a saying we have all heard, “penny wise, pound foolish.” which I’ve taken to mean, “making decisions to save small amounts of money (pennies), that end up making bad sense for affecting larger amounts of money and potential liability.” In this video, created by the elite Flame Safeguard Distributors that are members of Controls Group North America, you get to experience a realistic simulation of what could happen when you take financial shortcuts at the sake of safety. Contact your nearest CGNA Distributor for assistance. Honeywell Discount on Niagara 4 Certification Training. 50% Discount on Niagara 4 Certification Training! Honeywell is offering a 50% discount to Authorized System Distributors towards Niagara 4 (WEBs-N4) Certification training (unlike the WEBs-N4 Crossover training) when an order of $60K or greater of WEBs integration products that are purchased between now and November 21, 2016. In addition, Authorized WEBs Contractors earn double CPRO points on any order amount of WEBs integration products purchased between November 11, 2016 through December 2, 2016. How to Hack a CCTV Camera with Primitive Methods from James Lyne of Sophos. Sophos researcher James Lyne demonstrates how to hack an Internet-connected CCTV camera and an Android-powered phone using staggeringly simple methods. James Lyne is global head of security research at the security firm Sophos. James, a self-professed ‘massive geek’ has technical expertise spanning a variety of the security domains from forensics to offensive security. He has worked with many organizations on security strategy, handled a number of severe incidents and is a frequent industry advisor. ControlTalk Rewind: Ken Sinclair “The Times They Are A Changin’.” “The Times They Are A Changin’” Bob Dylan said this in a song in 1964, and our very own Ken Sinclair echoes this sentiment in 2016. If you missed the October 30th Episode of ControlTalk Now The Smart Buildings Video Cast, you missed our awesome interview with Ken in which he lays out the changes that are afoot in the Building Automation and Smart Buildings controls world. Make no mistake, these changes will have a dramatic effect on all of us. So if you missed the show, no worries, you can see the interview with Ken right here right now. The post ControlTalk NOW — Smart Buildings VideoCast|PodCast for Week Ending Nov 13, 2016 appeared first on ControlTrends.