Vacancy in real estate investing is a crucial thing to pay close attention to, whether you’re analyzing the vacancy on your own active investment property or the vacancy on a prospective deal you’re looking to acquire. The lower the vacancy, the lower the net operating income is on the property. In this article, we’ll break down for real estate investors what is vacancy in real estate, some of the ways you can reduce vacancy, and why it differs from market to market. Key Takeaways When you have available units to be occupied in a rental property but cannot lease them out to a prospecti ..read more

A real estate GP fund in commercial real estate investing is a joint venture that maximizes sponsors’ buying potential while providing partners passive income. The best-laid plans in real estate often involve partners. That’s why learning about general partners (GPs) and limited partners (LPs) is alternative investments 101 for anyone looking beyond the hassles and elbow grease that go along with having to invest directly and being a solitary landlord/property manager. In this article, I’ll show you what a real estate GP fund in commercial investing means for those who desire passive income ..read more

Opportunistic real estate investing is not for the faint of heart. Generally, with greater upside and return potential comes a greater risk profile. Opportunistic strategies lack the consistent cash flow aspect that makes certain types of rental real estate such a stable risk-adjusted asset class. The opportunistic game of real estate investing requires a ton of due diligence and strategic planning to even get past the first phase of evaluating whether the sponsor believes this investment opportunity is viable.  In this article, we’ll break down what an opportunistic investment in real ..read more

New investors need to conceptually digest how compound interest works and the power of compounding growth before making their first investment. You don’t need to hit a home run on every investment, nor should you expect one, and if you’ve be advise that by someone, you need to exit stage left! The truth is forecasting what your double-up timeline is for every investment dollar you put to work should be your focus. In this article, we’ll discuss what simple interest rate will double your money in 5 years and answer other questions about things like the rule of 72. Key Takeaways If you w ..read more

How does one verify, audit, and analyze a cash-flowing producing commercial real estate asset? One of the necessary items needed in that process is the financials which is also referred to as a financial statement, income statements, cash flow statements or a P & L. Being able to digest all the line items in a real estate financial statement will help you understand what’s happening under the hood financially and to get an idea of how they arrive at their current net operating income.  In this article, we’ll breakdown down what is T-3 in real estate and what is T-12 in real estate ..read more

Understanding occupancy and cash flows are crucial to know how much exposure you can take on as a multifamily operator before you’re at a deficit. In today’s market, U.S. apartment unit occupancy is at all-time highs due to supply constraints, but each property in each market has its own pulse. As an operator, you have to be able to foresee and calculate what the breakeven occupancy ratio is for your property on behalf of your real estate investors. Key Takeaways In commercial multifamily real estate investing, the breakeven occupancy is the occupancy number at which the real estate in ..read more

In multifamily apartment investing, ensuring you acquire the right property with the most optimal type of unit mix could drastically change the trajectory of the property’s long-term success.  Suppose the property has an undesirable unit mix, or simply a large majority of a singular type of unit that tenants aren’t looking for in that particular area. In that case, you’ll have a problem leasing those units. As a result, this could push you to make more than necessary unit concessions to encourage prospective tenants to become residents. In this article, we’ll go over the best unit mix ..read more

Unlike bonds and stocks, what’s unique to real estate investing is the opportunity to mortgage a part of the purchase price to leverage the investment and take control of an asset worth considerably more than the cash you used to acquire. A slight rise in the value of a carefully and conservatively leveraged real estate investment can result in significant equity when compared to an unleveraged asset. That said, stocks can produce infinite returns, and bonds offer the most security out of the three.  So, where should one place their money? The stock market? Bonds? Or real estate? We’ll ..read more

Occupancy is simply the number of rental units occupied in a given property. Occupancy is relevant in many real estate types, such as single-family rentals, multifamily apartments, retail, senior living facilities, student housing, and office real estate.  In this article, we’ll discuss how occupancy is calculated in real estate and ways to increase your occupancy rate in assets like multifamily real estate. Key Takeaways A good occupancy rate for a multifamily property would be 90% plus. Most apartments in most U.S. markets can achieve this as apartment units are in high demand d ..read more

In commercial real estate, the preferred return, or “pref,” is a common feature of the waterfall framework of a real estate investment deal. So, what does a preferred return represent in property investment, and how does it work? In this article, we’ll explain the preferred equity in private real estate, including why it aligns with the interests of multifamily investors. Key Takeaways The preferred return in multifamily property investment alludes to the precedence of investors’ receiving a specified return hurdle before the deal sponsor in the distribution of profits to investors ..read more