Top Investing Metrics in Commercial Real Estate and How to Use Them

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This Money Monday$, find out how to use the top investing metrics in commercial real estate! Join the conversation and bring your questions.

VIDEO TRANSCRIPTION

00:00
all for past four days but guess what we
00:02
cancelled our trip to costa rica to make
00:03
sure we’re back in time
00:04
i know i know we’re good we’re gonna
00:06
stay later but you know we missed you
00:08
guys
00:08
we got back late last night from our
00:11
mastermind show yeah
00:12
secret x fun trip no i think i think
00:15
david tube and kevin eastwood garrison
00:17
gilbert
00:18
um and maha who was let’s be honest was
00:21
probably the one that coordinated a lot
00:22
of this stuff
00:23
no but it was a team effort they did a
00:25
great job so shout out to them
00:27
we had an incredible time met some
00:29
incredible people
00:31
um you know it’s all about the people
00:33
you know no it’s a relationship business
00:35
team sport it’s it’s a team sport it’s a
00:37
relationship business and then obviously
00:39
the other half of it is obviously the
00:40
numbers data
00:41
you know that that stuff doesn’t lie
00:43
right but uh you know it’s it’s all
00:45
about getting back out there folks yes
00:46
we had covid we’re doing a lot of this
00:48
virtual stuff and we’ll probably
00:49
continue to do that
00:51
um but events are starting to happen so
00:54
we’re trying to get back out there prior
00:55
to that we went to
00:56
rod cleese mastermind yeah so busy two
00:59
weeks yeah two masterminds in two weeks
01:01
um we’ll probably try to stay home for a
01:03
little bit you know
01:04
maybe you know find another one for next
01:06
week listen for this
01:07
let’s keep that all right it’s going
01:09
we’ll see man we’ll see
01:11
but anyway money mondays every monday
01:15
come rain or shine costa rica or not we
01:18
are with you guys
01:19
at 3 30 p.m central standard time
01:22
dropping some fire talking about being
01:25
an entrepreneur
01:26
talking about investing talking about
01:27
real estate so what are we talking about
01:29
today
01:29
talking about the key metrics in
01:31
commercial real estate and how to use
01:33
them
01:33
oh ooh so those of you that hear a lot
01:37
of jargon and phrases
01:38
we’re here to kind of help decipher that
01:40
and talk about the key the key ones and
01:41
what to think about them
01:43
yeah and i think it’s it’s important
01:45
that we and sometimes even on the show
01:46
folks right we’re going to throw around
01:48
terms and
01:49
we can just kind of gloss over it that
01:50
everybody would know some of this stuff
01:52
obviously google’s
01:53
a tremendous resource the internet
01:55
there’s plenty of stuff that you can
01:56
obviously look up but
01:57
you know this is our way of trying to
01:58
kind of provide a little bit of value
02:00
and content to you
02:01
and you know these are some of the
02:02
metrics these are not all of them if you
02:04
guys know some other ones
02:06
that you want to talk drop them in the
02:07
comments we love likes we love shares
02:10
you know we love comments and questions
02:11
we want it to be interactive if you guys
02:13
do have some up you know
02:14
some options in terms of hey this is
02:16
what we’d like to talk about right
02:18
throw them in the comments you know
02:19
we’ll try to roll it out over the next
02:20
couple of months
02:22
so all right first one’s first and these
02:24
are not in any particular order this is
02:26
not probably the most important one but
02:27
we’re gonna go roll with it
02:28
lost elise lastly so i was actually
02:31
literally just talking about that right
02:33
before the show there’s a deal that
02:34
we’re looking at buying the broker
02:36
you know basically sent us an updated
02:38
rent roll and all right
02:40
what’s a rent what’s what let’s let’s
02:41
back up that roll is the table that
02:43
lists all of the existing leases at the
02:45
property
02:45
okay right but what we were talking
02:47
about you know this is part of our
02:48
business plan on many deals right is
02:51
the lost lease meaning hey they you know
02:53
right now they’re renting it at thirteen
02:54
hundred dollars
02:56
ben is currently attended he’s renting
02:57
it at twelve hundred dollars there’s a
02:58
hundred dollar loss to lease arguably
03:00
right
03:00
as long as i can get it so we were just
03:02
talking about a deal where they’re
03:04
getting
03:04
a lot of that lost to lease back right
03:06
the renewals on their property
03:07
they’re getting that hundred dollar
03:09
premium on the renewals which is
03:10
actually pretty good
03:11
which the flip side of that right when
03:13
you’re going to buy a deal a lot of
03:14
people will
03:15
jack up their market rates but they’re
03:18
not getting those
03:19
those rents right it’s it’s all smoke
03:21
and mirrors so you really want to study
03:23
that’s why people look at the rent roll
03:24
folks it’s not just
03:25
some table oh that looks interesting
03:27
right you need to study it you need to
03:28
understand that there’s some powerful
03:29
data in there
03:30
and what we’re trying to see is you know
03:32
what are the last 20 leases
03:34
how close were they to the actual market
03:36
rent and if they’re within you know
03:37
three to five percent
03:39
or maybe they’re even above that
03:40
sometimes right you know you know that
03:42
they’re getting what they say that
03:43
they’re gonna get right versus
03:45
every single lease is nowhere close and
03:47
we’ve seen deals like that where they’ve
03:49
been two or three hundred dollars off
03:51
you know that you can’t use that number
03:53
in your underwriting because it’s once
03:54
again it’s smoke and mirrors
03:56
so that’s one of the reasons why i lost
03:57
the lease is it’s a powerful thing to
03:59
understand right
04:00
so this is a fun one yeah debt service
04:03
coverage
04:03
ratio dsscr all right all right
04:07
me me you want me to explain it you want
04:09
to go all right you go with ir
04:11
all right i’ll do them
04:19
income divided by your total debt
04:21
service
04:22
debt service is your mortgage payment
04:23
right so let’s just use simplistic
04:25
numbers right
04:27
you know you’ve got um a hundred
04:29
thousand dollars in noi
04:31
you’ve got let’s just call it you know
04:33
60 000
04:34
in in debt service right you divide that
04:37
by
04:37
you know the noi you come up with what
04:41
seven somewhere in that range somewhere
04:44
in there and uh that’s
04:45
gonna make sure that you have some money
04:46
left over yeah and then i was getting i
04:48
was getting to the results that’s the
04:49
calculation which could be very
04:50
simplistic
04:51
right you know but what the lender why
04:53
the lender cares about this and this is
04:55
really a lender-driven metric
04:57
that operators need to understand why
04:59
why do they care about that right
05:01
the higher that number the more meat
05:04
on the bone there is with that deal
05:06
right because you’re you’re even
05:08
further covering the note you have
05:10
cushion there
05:11
right whereas if you’re at .85 or you’re
05:14
below one
05:16
you’re in this distressed asset value ad
05:19
bridge deal right whereas if you want to
05:21
get a fannie or freddie deal
05:23
most of times it’s 1.25 to 1.3 minimum
05:26
they like to see a lot more than that
05:28
and typically if it the higher that it
05:29
is
05:30
the better loan you’re probably going to
05:31
get too right because you can take on
05:34
um a little bit more debt because
05:35
there’s so much meat on that bone
05:37
right and a lot of the sheets that are
05:38
out in the market right now are going to
05:39
calculate this but you need to
05:41
understand how this is once again
05:42
there’s a ton of things online
05:43
about this so you get the fun one all
05:46
right
05:47
irr this is the one that people either
05:49
know what or they don’t yeah and it’s
05:50
kind of complicated for most people
05:52
but essentially what it is is it’s
05:55
talking about the return you can expect
05:57
on an investment right or
05:58
really it’s a time-bound thing so maybe
06:00
the return that you got on an investment
06:02
right yep
06:02
depending on it’s projected or not and
06:05
what it’s trying to say is what does
06:06
that return
06:08
give you if you account for the time
06:11
velocity of money
06:12
right so to keep it simple if i get if i
06:16
had been invested in a deal
06:17
i gave ben 20 for five years because
06:20
average is 20 right
06:24
now he made 100 in five years
06:27
now let’s say instead i gave ben 99
06:30
in year one and i gave him one percent
06:33
in year five
06:34
right in that model the irr is actually
06:38
higher than the other one right because
06:41
you had more money up front
06:42
that you could then take and reinvest
06:45
now if i say
06:45
now it’s again a different deal let’s
06:47
say i gave him one percent year one and
06:48
99
06:49
year five right that deal is actually a
06:52
worse
06:53
irr in that first one and the second one
06:55
i mean right
06:56
and so it’s basically accounting for
06:58
that fact of you know
06:59
compounding that money that you got
07:01
earlier the velocity of money right
07:03
folks right the
07:04
you’re going to get the the good example
07:05
there you’re getting 99
07:07
of the investment that you put in back
07:10
right that you can then
07:11
reinvest in other deals right so the irr
07:14
on that deal is better
07:16
right so it’s some people are irr
07:19
driven investors i i think it’s one of a
07:22
few things that you have to take a look
07:23
at right some people get so caught up in
07:25
oh if it’s not a 17 irr then it’s a bad
07:28
deal right
07:29
um i i think you have to take some other
07:31
things into account right you know risk
07:33
the market the operators right and and
07:36
ultimately that needs to be baked in as
07:38
well
07:39
but irr is a very important metric that
07:42
operators that are looking at deals need
07:45
to understand right
07:46
and your investors are probably going to
07:47
ask questions about it so get familiar
07:49
with that term right
07:50
the average annualized return aar
07:54
is a lot easier to calculate right and
07:56
your first example right you said
07:58
percent
07:58
you said yeah it was 20 20 20 20 20
08:01
right you know
08:01
for a total return of a hundred all you
08:05
do is you take the total return
08:06
and total return is the sum of all the
08:09
cash flows
08:10
and all the net proceeds from the sale
08:13
and then you add that up let’s call it a
08:15
hundred grand
08:16
right you know and then you’re gonna
08:17
divide that by the amount of years
08:20
let’s call it five right you know
08:22
there’s 20
08:23
return average annualized return that
08:25
you’re getting on that deal
08:26
right so people need to understand
08:28
that’s kind of how that’s calculated
08:30
as well right and they’re not lockstep
08:32
with each other
08:33
once again irr takes into account
08:36
um the time right whereas aar is a very
08:39
simplistic mathematical equation right
08:41
you take the total divided by the amount
08:43
of
08:43
years and that’s it so that’s
08:46
that’s another interesting one i’m gonna
08:48
go ahead and pause there see is there
08:50
any questions
08:50
comments anyone has any questions
08:52
basically you know we do this every
08:54
monday through 3 30 central
08:55
we do q a at the end of it right now
08:56
we’re kind of going through our
08:57
presentation phase and
08:59
in five ten minutes starting q a so we
09:00
have comments questions please
09:02
feel free to leave them and we will if
09:04
not i’ll keep drinking my coffee and
09:06
keep rolling through this
09:07
what do we got anybody anybody uh we got
09:09
a few comments let’s see so trevor says
09:11
your mind
09:12
must hurt with all the masterminds
09:14
that’s actually very true i love you can
09:16
you hear
09:16
a voice you know lost a little bit of
09:18
our voice as well so it was a lot worse
09:20
yesterday but yeah it’s been a long long
09:22
long two weeks i’ve since regained it
09:24
you know jefferson says
09:26
how are you guys doing back to business
09:27
i know you came from secret next yeah
09:29
that was a lot of fun
09:30
no it’s definitely a lot of fun
09:31
absolutely well and rio costa says hi
09:33
trevor good to see you again so
09:35
all right we appreciate you guys tuning
09:37
in this is some
09:38
important stuff folks i’m glad that some
09:40
folks are kind of listening in on this
09:41
and once again
09:42
if you have metrics that you track
09:44
whether it be on underwriting or on
09:45
operations
09:46
we’d love to hear from you too right so
09:48
let’s go through two more
09:50
cap rate why don’t you roll on that one
09:52
so cap rate
09:54
basically means it’s the really it’s the
09:57
percent
09:58
return that a deal generates ignoring
10:01
everything else meaning you know and
10:03
everything else in terms of debt
10:04
so if i bought the property or that
10:06
business cash
10:07
and all i did was i did the same thing
10:09
as the current owner
10:11
meaning i didn’t try to improve
10:12
everything i didn’t try to improve rents
10:14
or
10:14
just bought it as is i bought it as is
10:16
and i ran it as is
10:17
that’s the key thing yep and how much
10:19
percent can i expect to return all my
10:20
money
10:21
so all cash no debt now run it as is
10:24
yeah
10:24
then there’s gets the point where people
10:26
start talking about okay but now
10:27
whenever i
10:28
leverage that right i can start to
10:31
you know i’m trading two percent three
10:32
percent four percent debt
10:34
on a business that’s generating eight
10:35
percent well now i’m actually increasing
10:37
my margins right
10:38
yeah and so cap rate is really just a
10:39
way to value properties
10:42
or businesses really that could be very
10:43
different because really you’re looking
10:45
at it purely on a profit
10:46
basis and what do we do when we buy
10:48
apartments man what are we doing we’re
10:49
buying
10:50
buying apartments businesses man i mean
10:53
folks need to understand yes it’s real
10:54
estate but you’re buying a business
10:56
and all of them are unique they could
10:58
even be in the same sub market right
10:59
they could even be some of the same
11:00
vintage
11:01
same size they’re all run differently
11:04
right they were constructed differently
11:06
um different people have owned them over
11:08
the years taking care of them not taking
11:10
care of them
11:10
so this is a way to kind of see where
11:12
things are in the market
11:14
with all this randomness right you know
11:16
that that comes up with these different
11:18
businesses that we’re gonna own
11:20
right um generally when it comes to cap
11:22
rates right
11:23
you’re gonna try to buy high and sell
11:25
low right because the the higher your
11:28
cap rate
11:29
the lower the purchase price and vice
11:31
versa right
11:32
you’re going to want to sell it on a
11:33
lower cap because it’s going to increase
11:35
your purchase price so
11:36
it’s kind of the inverse thing and so
11:38
people need to come look that up
11:39
once again tons of stuff about cap rates
11:42
online
11:42
so check it out all right the not just
11:46
net operating income the net operating
11:49
income right because it’s
11:50
very very important right so this is how
11:53
profitable is a business right
11:54
yeah you know now it doesn’t this not
11:57
this not to be confused
11:59
with distributable cash flow right but
12:01
once again you’re trying to take
12:03
some of the different metrics out of it
12:05
and kind of how do you have a concise
12:07
way to determine noi right
12:08
at the most high level you’re taking all
12:11
of your income
12:12
call it total income minus your total
12:14
expenses
12:15
equals your noi right now this does not
12:18
include
12:19
your debt service or your mortgage
12:20
payment this does not include
12:23
one-time capex things and then we’ve
12:26
seen other guys the
12:27
gals that have thrown in all kinds of
12:28
random stuff below the line
12:30
so when people say below the line that
12:32
means below noi or net operating
12:34
income and that’s really how you’re
12:36
going to value a property right
12:38
you know you’ve got noi divided by cap
12:39
rate determines
12:41
the the approximate value now there’s
12:44
obviously some things that
12:45
can kind of play into that right
12:46
determining the market and everything
12:48
else
12:49
but that’s how much a property is
12:51
potentially worth right and so
12:53
noi is pretty simplistic cap rates
12:55
you’re going to get that from
12:57
brokers lenders people that are really
13:00
really
13:00
in tuned with that market are going to
13:02
understand where things are trading at
13:03
in terms of cap rates right
13:05
so um that’s how they kind of coincide
13:07
in terms of how you use them
13:10
all right so next slide if i can make it
13:12
happen
13:13
the battery’s dead there oh there we go
13:15
there we go
13:16
all right reversion cap rate so we’re
13:20
talking about cap rates right you have a
13:21
cap rate going in
13:23
right whoa whoa whoa whoa whoa you’re
13:26
killing me man you’re killing me
13:28
all right reversion cap rate you have
13:30
the cap rate going in like i said
13:32
and then you have a reversion cap rate
13:33
which is what do you think
13:35
cap rates are gonna be in three to five
13:37
years and let me just get my crystal
13:39
ball out and
13:40
you know um ultimately nobody knows
13:43
right but the rule of thumb and
13:45
people there’s all kinds of sides of
13:47
this argument
13:48
um what we tend to do is we beef up the
13:51
cap rate so if we buy it at a five cap
13:54
i’m gonna say that we’re gonna sell it
13:56
at a five and a half to six cap right
13:58
people say well what is how do you
13:59
determine how much you beef it up
14:01
it’s it’s usually anywhere from 10 to 20
14:03
basis points per year that you hold the
14:05
deal
14:06
right you know it is the rule of thumb
14:09
now once again not a hard and fast rule
14:11
i think it’s dependent on the market
14:13
there are some places that are
14:15
historically lower cap rates than say
14:17
like a texas
14:19
and you need to take that into
14:20
consideration right that
14:22
if you bought it at five cap it could
14:24
very well be
14:25
you know you sell it in three years on a
14:27
four and a quarter cap
14:29
right you just don’t know right but it’s
14:30
better to that can be your gravy folks
14:33
right just go ahead and be conservative
14:35
and if the deal works then then guess
14:37
what you’re just going to make that much
14:38
more money on the back end when you go
14:39
to sell it
14:40
so don’t ever don’t ever count that as
14:42
oh that’s gonna be part of my business
14:44
plan is that cap rates are gonna go down
14:46
if you do that
14:47
you’re setting yourself up for failure
14:48
right because the net proceeds are
14:50
supposed to be the
14:52
icing on the cake right the real thing
14:55
that people are always looking for
14:58
cash on cash cash on cash cash flow baby
15:01
it’s
15:01
unfortunately look that’s all that’s
15:02
that’s if you kind of go back to
15:04
we talked about the noi yep separate the
15:06
ny you have all your various expenses
15:08
right below the line you pay every debt
15:10
service all these other things
15:11
and cash on cash is really looking at
15:13
based on how much money you put in
15:15
and what annualized return are you
15:16
getting yeah so it’s really the number
15:18
to me that matters the most right
15:20
if i’m not betting on appreciation yeah
15:22
right it’s what am i generating
15:24
for putting in a dollar am i getting
15:25
back 10 cents 20 cents
15:28
no sense right so yeah and and don’t get
15:31
me wrong right it’s it’s
15:32
especially when you’re starting off on
15:33
these deals there’s a lot of capex
15:35
you’re turning over the the tenant
15:37
profile you’ve got covid there’s things
15:38
that happen right
15:40
that you know it might be a little bit
15:41
light on the cash flow but
15:43
you’re trying to get that that deal to a
15:44
stabilized point where it is spinning
15:46
off something right
15:47
and typically what people are seeing in
15:49
the market just to give you guys some
15:50
perspective
15:52
is anywhere from probably six to eight
15:54
you know i’ve seen some deals push nine
15:56
to ten
15:58
anything above that i would question
16:01
right
16:01
because you know the way that asset
16:03
prices have gone
16:04
up over the last six to twelve months um
16:08
it’s it’s it’s putting a pinch on you
16:10
know how much money these these
16:11
apartments can actually make
16:13
right so you know be i would question
16:15
anybody that has double digit cash on
16:17
cash returns at this point right unless
16:19
they’re buying in the hood
16:20
but the most important metric i think
16:23
that we look at when we’re looking at
16:24
deals
16:25
right um gross potential rent right
16:28
i think this kind of coincides with you
16:30
know um what we were talking about for
16:32
lost elise
16:33
so you have the growth potential right
16:35
which is what we think that we can get
16:38
versus you know what we call the net
16:40
effective rent
16:41
which is essentially what’s actually
16:43
being gotten so and they’re not
16:45
necessarily always going to be the same
16:46
right because if there is an equilibrium
16:49
at some point in the future right
16:50
that means that you need to you need to
16:52
increase your gross potential rent
16:53
and the gross also the key thing too
16:56
it’s assuming 100 occupancy yes
16:58
right yes there hence the gross part
17:00
yeah so
17:01
it’s an important part of once again
17:03
underwriting we weren’t talking about
17:04
ben’s jokes
17:05
[Music]
17:08
equity multiple right
17:12
yeah it’s one that i don’t really like
17:13
personally because
17:15
it’s not time bound time you know that’s
17:17
where irr
17:19
is the time not even that i mean average
17:21
annual something but like equity
17:23
multiple
17:23
if i tell you a deal is a three x
17:25
actually a multiple the next question
17:26
you’re gonna ask is
17:27
it three x over two years yeah five
17:29
years ten years and we’ve seen
17:31
some people that are gonna be like oh
17:32
you got three x and then they found out
17:34
that they’ve
17:35
owned the deal for nine or ten years
17:36
right you know i mean like so
17:38
you know still great for people that are
17:40
patient with their capital but
17:42
um you know if you want to constantly
17:45
kind of
17:45
be working your money um irr might be a
17:48
better metric for you to kind of
17:50
understand but
17:51
it’s another thing that people are going
17:52
to see on investor decks
17:54
as an operator as a syndicator as
17:55
somebody that’s underwriting deals you
17:57
need to understand it
17:58
and why is it important um because it’s
18:00
just gonna be another thing that you’re
18:02
gonna have to disclose and say
18:03
hey this is what it is right you know
18:05
and typically the higher
18:07
you know um the more attractive it might
18:10
be once again depending on how long the
18:11
whole period is
18:13
right you know we typically just to give
18:14
some perspective it’s 2x
18:17
um you know within five to seven years
18:19
yeah
18:20
you know is what it’s going to be right
18:22
but this weekend it was the
18:23
10x oh kevin kevin kevin
18:27
all right so important ratios to analyze
18:29
in your underwriting you know i think
18:31
that there’s some other things too to
18:32
take into consideration when you’re
18:33
looking at deals
18:34
uh your what’s your rent escalators
18:36
what’s your expense escalator
18:38
what that means basically what is the
18:39
annual increase for your rents and for
18:41
your expenses right yeah they have a big
18:42
impact on their underwriting they have a
18:44
huge impact right
18:45
and uh you know as a lot of people saw
18:47
you know covid
18:49
um really depressed rents for a good 12
18:52
months now we’re starting to see a lot
18:53
of things start popping right there’s a
18:54
lot of pent up demand in terms of rents
18:56
because they haven’t moved for about 12
18:58
months in a lot of areas
18:59
um but typically what you’re gonna see
19:01
is anywhere from one to five percent
19:03
right five being on the might be a
19:05
little bit aggressive side
19:07
um and then that’s each year right you
19:08
know so you know maybe you think that in
19:11
year one i can do five but in year two
19:13
it’s going to be two
19:14
right because you’ve already kind of
19:16
you’ve captured a lot of that
19:18
that room and the rents expenses too
19:20
let’s be honest expenses are going up
19:23
taxes insurance this stuff’s not going
19:25
down unfortunately i mean we do
19:26
everything that we possibly can to
19:28
mitigate that risk but you need to
19:31
constantly be
19:32
you know um expecting that expenses are
19:35
also going to go up and they might not
19:36
be a one for one right
19:38
you might have no rent growth and your
19:40
expenses went up five percent
19:42
does your deal still work right that’s
19:44
that’s some of the modeling that you
19:45
need to be doing as an underwriter
19:47
um just to stress test your deal right
19:49
absolutely and then last but not least
19:51
i think this is the last one i think it
19:53
is too expense ratios
19:55
right and what is an expense ratio man
19:58
expense ratio is basically just looking
20:00
at you know
20:01
what percent of expense to income right
20:04
so
20:05
let’s say for every 100 of revenue that
20:07
i generate
20:08
i pay 60 of that or 60
20:11
to my expenses right for you know that
20:14
that’s ever that’s
20:15
actual expenses not debt service right
20:17
that’s your taxes
20:18
your insurance but your payroll and your
20:21
repairs and your maintenance and so
20:23
you know typically most of us we’re
20:24
looking at anywhere from 45 to 65
20:27
percent yeah
20:28
it’s kind of the really it’s very deal
20:30
specific area specific
20:32
but you’re trying to just get a sense of
20:35
how much of the money that’s being
20:36
generated is going towards those
20:37
expenses so
20:38
and and typically this is not always the
20:41
case but
20:42
most of the time your older properties
20:44
are going to have a higher expense ratio
20:45
right and your new orleans are gonna
20:47
have a lower one why is that because
20:49
there’s just gonna be
20:50
less deferred maintenance less
20:52
maintenance in general
20:54
um you know but sometimes on the newer
20:55
deals it’s offset by your increase in
20:57
taxes right so
20:59
you know typically middle of the road is
21:00
50 but we’ve seen it as high as 65 and
21:03
we’ve seen it
21:04
actually on a few deals you know 40 you
21:06
know and
21:07
on the newer class a stuff so once again
21:10
another metric as you’re underwriting
21:12
deals that you should pay attention to
21:13
right
21:14
and it doesn’t necessarily mean that if
21:15
it’s a higher that it’s worse right but
21:17
maybe if you start looking at it there
21:18
might be some weight
21:20
gives you some pulse right where you can
21:21
maybe potentially fine-tune some
21:23
expenses
21:24
and maybe you get in there and say hey
21:25
it is what it is i mean we had a deal on
21:26
beaumont it had
21:28
chillers it had you know boilers there
21:30
was stuff that would that
21:32
that made the expenses higher and there
21:33
wasn’t gonna be anything that we could
21:35
do to get rid of them
21:36
so it’s always gonna be that high right
21:38
and so you just gotta make sure that
21:39
your deal still works
21:41
so i blew through that as quickly as i
21:43
could yeah so let’s see so
21:45
if you have any comments questions
21:47
please leave them we do monday mondays
21:48
every monday 3 30 central ray acosta
21:51
says
21:52
actually sorry before that trevor said
21:55
excited to join your conference in miami
21:57
got my vip ticket
21:59
all right thank you thank you thank you
22:00
thank you i look forward to seeing you
22:02
there
22:03
um next up raya costa so if cash on cash
22:07
is the most important
22:08
what is a range you look for when
22:09
analyzing your deals most important to
22:11
your partners
22:12
or your company well i think you know
22:14
and i mentioned some numbers earlier i
22:16
think
22:16
realistically you’re looking in the six
22:18
to eight percent range right now
22:20
right once again we’re seeing some deals
22:21
pushed to nine to ten
22:23
right but i would question anything
22:24
that’s above 10
22:26
right i would say that they either they
22:28
might be being a tad bit aggressive
22:31
um or there might be something off with
22:32
their underwriting right doesn’t mean
22:34
that’s not possible
22:34
there’s always that diamond in the rough
22:37
but
22:38
folks we have underwritten hundreds of
22:40
deals already this year
22:42
and nothing is penciling out that high
22:44
so just take that into consideration
22:45
that’s kind of where the market is right
22:47
now
22:48
so yeah so let’s see any other questions
22:50
any other comments
22:51
questions we will and i want you guys to
22:53
dump if you if you
22:54
hear of some you know of some do we
22:56
forget some dump them in the comments
22:59
you know this is for everybody’s benefit
23:01
this is just some ones that we kind of
23:02
came up with
23:03
you know that we take a look at there’s
23:05
a ton of other ones
23:06
especially on the operations asset
23:08
management side that we could go into
23:09
this was
23:10
more probably on the underwriting
23:12
portion of things to kind of take a look
23:14
at but we can also do another asset
23:15
management one time absolutely
23:17
so let’s see so iggy says what’s up
23:18
welcome back what’s up what’s up thank
23:20
you
23:22
porter was looking really good by the
23:23
way so far so we’ll see
23:25
all right all right let’s see uh any
23:28
other comments questions
23:29
babe pacheco thanks gentlemen you’re
23:32
very welcome
23:33
abel thanks for tuning in man yeah i
23:35
really appreciate
23:36
it you know abel probably knows a little
23:37
bit of you know you underwrite some
23:39
deals come on these terms probably all
23:40
these terms you know
23:42
i mean throw some of that stuff in there
23:43
too but uh
23:45
yeah i know folks so what else we got
23:46
going on we just i know that they they
23:48
kind of dropped the hint about
23:50
uh our infant conference we want to go
23:51
ahead keep going so let’s get there
23:53
what do we have coming up ben finally
23:55
locked it in last thursday
23:56
i’m excited about this one too miami
23:59
investor network conference we do three
24:00
of these a year
24:02
we’re doing the next one in miami so we
24:03
had our big a big one this past february
24:05
yep home run 150 people on the waiting
24:07
list and we’re moving to miami so
24:09
different crowd different people same
24:12
awesome audience same awesome content so
24:14
yeah we’re going for great speakers you
24:16
know that we’re going to be announcing
24:17
over the next couple weeks
24:19
some great panels you know and
24:22
ultimately we try to we try to curate
24:23
the whole entire day
24:24
so you get some opportunities to network
24:26
throughout the day right you know this
24:28
is what it’s about
24:29
it’s learning you’re going to get some
24:30
golden nuggets but you’re not going to
24:31
learn the whole business in one day
24:33
it’s all about developing those
24:34
relationships and continuing to learn in
24:37
this business and we do it really you
24:38
know we don’t make any money on it
24:40
it’s really a chance to kind of put that
24:42
environment together and we just love
24:43
talking and
24:44
networking with people so who doesn’t
24:45
want to go to miami come on yeah and it
24:47
is the lowest price it’ll be
24:48
so this is a early up early early bird
24:52
right so use the coupon code early bird
24:54
and you’ll get 150
24:55
off so not bad so what what what’s the
24:57
address
24:58
wwe
25:02
all right put early bird in there coupon
25:04
code
25:05
and shanna when’s this when’s this
25:07
expire
25:08
uh may 7. so this expires may 7th so
25:11
this is the earliest
25:13
best pricing you’re gonna get we
25:15
literally just announced it this morning
25:17
so check it out get your get your
25:19
tickets in before may 7th and you’ll get
25:21
that 150
25:22
off we’re excited to see everybody um
25:25
you know
25:25
going back real quick here let’s go back
25:29
to the toolkit
25:30
there’s not going to be a week that we
25:31
don’t talk about it because it’s awesome
25:33
and shanna does a great job with it so
25:35
check that out
25:39
www.disrupteeequity.comtoolkit
25:40
and it’s got all of our checklists it’s
25:42
got all of our webinars it’s got all of
25:44
our podcasts it’s got everything on
25:45
there
25:45
it’s completely free so check it out you
25:48
know we love for you guys to
25:49
to give us some feedback on this stuff
25:50
too but
25:52
moving right along what are we talking
25:55
about next week
25:57
we’re talking about basically you know
25:58
what it takes to go from loi
26:00
to closing your property so what are all
26:02
the steps that happen in between there
26:04
it’s hectic there’s a lot that goes on
26:06
and it’s important to understand what
26:07
those are and
26:08
make sure you’re aware of them and how
26:10
to complete this all right strap in
26:11
because that’s going to be
26:12
been speed talking through that whole
26:14
entire thing in 30 minutes
26:15
yeah we don’t know how much ben hates
26:17
talking no no i hate it i hate it but no
26:19
this is an important actually
26:20
important topic um you know so everybody
26:23
tune in
26:24
you know and uh we’ll try to go through
26:26
it as quickly as i can
26:27
that might be a two-parter i don’t know
26:29
yeah we’ve got about a minute and a half
26:30
so if anyone has any comments questions
26:32
please go ahead and leave them we will
26:34
answer them uh abel says thanks
26:36
gentlemen
26:36
always great to get it refreshers and
26:38
additional knowledge no
26:40
appreciate it buddy appreciate it all
26:42
right so yeah hopefully we add some
26:43
value to that or we’re going to call it
26:44
a day
26:45
and ben and ferris can go rest you know
26:47
we should order like a massage to the
26:48
office
26:49
you know from this trip yeah this coffee
26:52
is awesome no actually the very first
26:54
day the very first night of the event
26:55
you know they did a
26:56
team exercise that morning this guy
26:59
didn’t show up for the record
27:00
but what i like to joke about it is the
27:02
person that led it
27:03
was a professional basketball player now
27:05
i’m like why do we have the professional
27:07
basketball player lead the thing
27:08
and you were complaining about how much
27:10
you hurt the whole entire rest of the
27:11
year
27:12
no it’s amazing about it it was only
27:13
like 15 20 minute exercise too
27:16
all right so i’m actually pretty
27:17
impressed i got that story we’ll let him
27:18
sleep a little bit tonight
27:20
all right but no check us out next week
27:22
3 30
27:23
p.m central standard yes thank you

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