Old Capital Real Estate Investing Podcast With Michael Becker & Paul Peebles

You WILL HAVE A PROBLEM with your loan…if the seller does not keep their eye on management operations and rental collections between the signing of the sales contract and the closing date. Lenders can possibly cut back loan proceeds if income declines or expenses rise.

Many apartment buyers are seeking to purchase a DEEP VALUE-ADDED property in a good neighborhood. These types of properties can be tough to find. Brian Holley bought a 160 unit apartment complex a few months ago. It needed lots of rehab to create a better product. He and his team will spend over $20,000 a unit in interior and exterior updating and repairs. Even though the occupancy was in the mid-90% range when acquired; Brian and his team, knew they needed to bring the property to the next level to capture better tenants to pay much higher rents. Listen to Brian discuss the challenges and opportunities he found with buying a deep value-added property. To contact: Brian Holley BrianPHolley@gmail.com To contact: Jonathan Ferrell JFerrell@OldCapitalLending.com To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com Are you interested in learning more about

After finding the right property; selecting the right property management company is the MOST important decision that an ownership group must determine.

The father and son investing team of Jody Ambrose & J.D. Ambrose just purchased a large multifamily property in Texas. After looking for a building for almost 5 years, Jody & J.D. found the right property. Pineview Apartments has 152 units. They originally invested passively into someone else’s transaction, then they figured out pretty quickly that they wanted to lead an acquisition team and purchase a large apartment building. They had specific investment criteria that they needed to be met before they would move forward with a purchase. Over the next few years, the Ambrose’s searched for the right property. They looked at over 50 large apartment properties for sale and offered on several. In the podcast, Jody and J.D. explain their journey on finding the right property. To contact Jody Ambrose: jodyambrose@winsteadenterprises.com To contact J.D. Ambrose: jd@winsteadholdings.com To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more ab

It is a REQUIREMENT to do a thorough analysis of the neighbourhood crime stats and school ratings when you are thinking about investing in an apartment building.

If available, retaining some or all of the existing staff can give you immediate inside knowledge on some of the property secrets that you did not uncover during due diligence.

Scott Henderson started in the apartment industry in 1982. He has learned some valuable lessons in apartment investing and brokerage over the last 35 years and shares them with you. He gives listeners a unique perspective on some historical events in the apartment industry and his assessment on what is going on today with apartment investing. Items that you should be aware of: -What caused the Savings & Loan Crisis and the impact it had on the apartment industry. -How over building can affect a market. -What caused the last major recession in apartment investing? -Is the current euphoria in apartment investing a bubble or reality. Perhaps a little bit of both. To contact Scott Henderson: scott.henderson@svn.com To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com  Are you interested in learning more about how Multifamily Syndications work? Please

Michael gives some general rules of thumbs on how to “stress” your underwriting for a future valuation on the exit.

In this podcast we speak with 4 lead-partners that came together to buy a 152 unit building in Waco, Texas. We discuss how they met, how they found the property and what they liked about the asset and of course…how they will make it profitable for their equity investors.   To contact Kevin or Daniella Dhillon: dhillonpartners.com  To contact Bryant Ho: bryantkho@gmail.com  To contact Angel Flores: aoflores92@gmail.com  To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com  Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.


Michael discusses what you should do to protect yourself right BEFORE you sign your loan documents and close on an apartment building.

The quarterly loan officer roundtable is an internal discuss with some of the loan officers at Old Capital on what is working or not working with lending. Jonathan Ferrell is introduced to the listeners. Jonathan joined Old Capital as a Senior Director. Jonathan has over 14 years in banking and is an expert on financing commercial real estate. James Eng gives us macro-economic feedback on how some of the different apartment markets are doing in Texas and the nation. Ricardo Hinojosa shares the importance of property management and getting them engaged early in the transaction. Looking at rental comps in the submarket and then building a an initial rehab budget early on with a qualified property management company, can save a ton of time on a deal that may not work. Ricardo goes onto explain some REFINANCE CASH OUT GUIDELINES for Freddie Mac Small Balance loans. Dave Walls talks about the challenges with affordable housing. Jonathan Ferrell stresses the importance of having the right budget numbers upfront whe

Michael gives reasons on why he would NOT build large apartments at this time.

Multifamily physical due diligence is extremely important. You gotta know what you are buying!  You need an apartment inspector to determine the condition of the asset you are buying.  Bryan Amos is a multifamily inspector & engineer. He helps buyers uncover possible rehab concerns and potential future costs when they are considering purchasing an apartment building. He is looking out for you and your investors on any potential future capital costs. Bryan creates a reliable rehab/ construction budget for you and your lender to review. Whether the transaction is a stabilized property or a value-added property, most lenders should be able to include the rehab costs into your loan.  Again, do not pay for rehab out of monthly cash flow.  BUT BEFORE, you engage an inspector at your INITIAL visit at the property with the listing agent, you should have a back-of-the-napkin opinion on what some of the rehab items will cost to replace or repair. Bryan gives us some initial cost breakdowns on several big ticket ite

Michael comments on his personal beliefs on apartment ownership. He points to a few factors that keep his outlook positive. According to a new study commissioned by the National Multifamily Housing Council and the National Apartment Association, delayed marriages, an ageing population and international immigration are increasing a pressing need for new apartments in the U.S., to the tune of 4.6 million by 2030. Currently, nearly 39 million people live in apartments, and the apartment industry is quickly exceeding capacity; In the past five years, an average of one million new renter households were formed every year, which is a record amount; and, It will take building an average of at least 325,000 new apartment homes every year to meet demand; yet, on average, just 244,000 apartments were delivered from 2012 through 2016. Delayed house purchases- Life events such as marriage and children are the biggest drivers of home ownership. In 1960, 44 percent of all households in the U.S. were married couples with ch

Michael Becker knows something about finding apartment buying opportunities. He and his investors own thousands of apartment units. Michael explains what it takes to get the momentum going with listing agents and other influencers. Michael shares his win-win strategy on how to build deeper relationships with the "right people" in the apartment brokerage community. To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.

Michael discusses what lenders are looking for when applying for financing on an apartment transaction.  With apartment lending- the quality, condition and location of the asset are the most important factors in underwriting. A PRE-APPROVAL is not going to be available because 2/3rds of an apartment lending decision is based on subject property. The lender needs to have a complete picture on a number of critical underwriting variables. Examples: Where is property located and age? What are historical cash flows for the last 2 years and year to date? How much deferred maintenance does the property currently have and what is rehab budget necessary to cure? Who is going to manage the property? What does your monthly proforma show; what is your future expected operating expenses and total income?  1/3 of an apartment lending decision is based on you. What is your liquidity? What is your net worth? What is your past apartment experience and level of ownership or management? Do you receive consistent personal income

Lessons learned from 30+ years in Property Management: City Gate Property Group Dawn Waye is President of Dallas/ Fort Worth based City Gate Property Group third party property apartment management. G. Patrick Smits is the CEO. Both have deep knowledge of managing in the “B & C – workforce housing” space. They currently manage over 10,000 units. Dawn & Pat share some ideas on what the ‘biggest bang for the buck’ will get you as an apartment investor. Dawn shares the ‘4 P theory’ for successful property management. 1) People- Are the onsite people they engaged with your success? 2) Price- Are you getting the best price for materials and labor? 3) Product- Do you have a good idea on what other properties in your submarket are charging in rent for their amenities? 4) Promotion- How are you driving new tenants to the property? Social media? Active marketing? Michael asks Dawn and Pat about surviving a future down turn in apartment investing. To get in contact with Dawn Waye: dwaye@citygatepg.com  To rece

Interest only can certainly help the cash-on-cash returns on your investment. If you are purchasing a broken property- deferred maintenance, bad management, bad occupancy; you need some type of payment relief during times of weak cash flow. Having an interest only period during the renovation is certainly typical for a BRIDGE type of loan. Banks typically don’t like to do lots of interest only…because the bank regulators don't like interest only. Most community banks on bridge loans will only do 6-18 months of interest only during the rehab…then it will modify into a principal and interest payment. 

Al Silva has successfully closed nearly 15,000 units and over $600 million in investment sales transactions and in doing so has averaged an industry leading 99.6% closed sales price to asking price ratio. Al is currently based out of the Marcus & Millichap Fort Worth office, where he has been the top agent in seven out of nine years since the office opened in 2007.  You think it’s tough to be awarded a deal by the seller… Al comments on how difficult it is even for a listing agent to win the opportunity to list a property for the seller. Al believes that overall transactional volume will be down 10% in 2017 compared to 2016. He sees that as a blip on the road, when you compare how hot the apartment market has been for the last few years. Al has seen a large increase of international buyers coming into the Dallas/ Fort Worth market. Al comments on what submarkets he likes in the DFW area. If you are a buyer, Al has advice on how you should bid on a property transaction on the tangibles and some of the inta

Michael discusses who represents the buyer and seller and who pays the listing agent. In today’s HOT apartment market…most apartment listing agents WILL NOT share the sales commission with a buyer’s representative. Unlike the single family home market, where it is typical for the listing agent to share or split commission fees, most apartment listing brokers will not pay your agent representing you. If you have buyer’s agent in a buyer’s transaction, you will likely be paying that agent out of your capital raise.