Have you ever walked into a home and felt like the walls were caving in on you? Then, it felt like we should have been doing more regular inspections! It could be because the owners had too much stuff crammed into a tiny space. There's no bullet-proof strategy to sidestep hoarding. But usually, one of the best precautions is screening residents closely before signing a lease. Filter well to minimize the risk of hoarders taking over your property – a headache any property manager will want to avoid, if possible.

Despite the spike in online shopping, Cyber Monday 2023 topped 12 Billion in sales, we’re still only at the tip of the iceberg. Gone are the days of camping out outside of your local electronics store. If that indicates what’s still to come, managing deliveries will become increasingly important for landlords, property managers and HOAs. As technology continues to improve, we expect to see other solutions emerge. Until then, these strategies should give some reprieve as you adapt to residents’ changing needs.

Investors, sponsors, and property managers are increasingly vying for their share of this market demographic. That is why it is so essential to understand the priorities of older Americans. A range of property upgrades—some simple, others not as much—can be made to improve the appeal of your property among renters aged 55+.

When vetting syndication, be sure to ask the sponsor about their assumptions. Understand how they draw conclusions about specific numbers and what strategies they might use if market conditions change.

The DSCR is an essential metric for any company owner interested in obtaining a loan – real estate-related or otherwise. The loftier the going-in DSCR and the taller the projected DSCR after property improvements, the less risk associated with debt repayment. Deals with smaller risks will naturally qualify for better rates and terms among commercial lenders.

These legal documents will shed light on what kind of pref you can expect, the hurdle rates that must be surpassed, profit splits, and whether the deal includes catchup or lookback provisions. In addition, all parties involved in the equity waterfall must align interests so that everyone benefits.

Key Takeaways:

- Understand what each tier means.

- Know the difference between a waterfall and an LPI model.

- Use your knowledge to negotiate more equity into your investment or fund.

It’s is crucial to understand what goes into a project’s pro forma. This necessitates a fundamental knowledge of the soft costs and hard costs associated with the development project. These costs can be challenging to determine. Still, it always makes sense to have high confidence in the budget before moving forward.

The big takeaway is that multifamily apartment managers should put more consideration into their utility systems. A few strategic decisions can result in significant cost savings that, in turn, improve an investor’s ROI.

Sometimes, term sheets are clear on intention, but a quick and cursory review might often point to the wrong conclusion. The exercise here is to be accurate, explicit, and precise with syntax. Managing proper real estate terminology, especially in drafting term sheets or negotiating joint venture structures, is crucial to professionalism and successful deal-making.

All else considered equal – such as the interest rate, LTV, and other loan terms – most borrowers will want to opt for a non-recourse loan. The only time a borrower will want to take on a recourse loan is if the deal and/or marketplace requires it.

In some ways, choosing a general contractor is like choosing a spouse – choose wisely, and things will go well, but chose poorly, and you could be in for serious trouble. Like a spouse, you’ll typically have to communicate and negotiate with your contractor regularly. A good GC needs to be reliable, trustworthy, communicative, and financially responsible since you’ll be trusting them with hundreds of thousands (if not millions!) of dollars. In addition, a GC should be able to negotiate the complex relationships between city officials, architects, lenders, and subcontractors in a way that makes your project go as smoothly as possible.

Private equity real estate is an attractive way for high-net-worth individuals and accredited investors to produce passive income. They also present a unique opportunity to expand one’s portfolio without taking on the day-to-day management of direct ownership.

It might make sense to evaluate whether or not to become a Real Estate Professional. It’s undoubtedly not the right move for everyone, particularly for already high-income-earning people who are better off concentrating on their day jobs than their real estate portfolios.

Are you intrigued? Thinking about becoming a real estate professional? We don’t blame you! Now we’ll need to address how to go about acquiring this coveted designation.

If everything at the property is in as-expected condition, now is your time to seal the deal! Finalize any negotiations with the seller and bake the final numbers into your underwriting. If the numbers still work, including the cost of any capital improvements, you could soon be the proud new owner of a larger apartment community – a great way to grow and scale your real estate portfolio.

The Gross Rent Multiplier is a useful scanning tool for the investor in recognizing where opportunity may lie. When utilized with an assortment of other similarly broad, indicative metrics, it helps distinguish properties worthy of more in-depth investigation.

Author’s note: Yardi Matrix covers all multifamily properties of 50-plus units in size across 133 markets in the United States. This ranking reflects properties that are under construction within that sample group. This article was originally published in Multifamily Housing News on Aug., 21, 2020.