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

Brad Sumrok is the Apartment King. He is the 2012 National Apartment Association’s “Apartment Owner of the Year.” He owns thousands of apartment units, but his passion is teaching and mentoring apartment investors. This Carnegie Mellon graduate has helped hundreds of investors earn double digit returns on their apartment investment and retire early. Brad is an apartment mentor and educates students the ‘how’ in buying large apartment buildings. If you are transitioning from single family to multifamily, you need specific education on how these transactions are put together. One critical mistake in apartment investing can cost tens of thousands of dollars. Shouldn’t you speak with an apartment mentor? To get in contact with Brad Sumrok: bradsumrok.com Facebook: Brad Sumrok’s Apartment Mastery To receive our FREE 15 page WHITE PAPER REPORT on the 2018 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 i

Coaching and Counseling with James Eng. Today on the podcast, James discusses the importance of networking at LIVE APARTMENT investing & educational themed events. You want to accelerate your knowledge level? Start attending apartment investing conferences, local apartment investing Meetup’s, and join a apartment education/ mentoring group. If you are new and just getting into the Multifamily Business...you must expend the energy and go out and meet your future investing partners, listing agents, and bankers at live networking events. They are not going to come to your house or office. James gives some examples on where you can go to network with other LIKE MINDED individuals. Why attend LIVE events? Sponsors have two jobs. 1) Identify investing opportunities and 2) raise equity. Also, by attending LIVE events you can network with listing agents, other sponsors and deal makers, and bankers to uncover current data on the market that you won’t read online. To receive our FREE 15 page WHITE PAPER REPORT o

Today we revisit with Bonnie & Kerry Staples. Bonnie & Kerry loved their corporate jobs. They were well respected within their companies, but knew they were building someone else’s dream and not working on their own. They were originally drawn to real estate through single family investing, but after seeing the bigger picture on scalability, they wanted to invest into apartments. They hired a mentor/educator to accelerate their specific knowledge of apartment investing. We originally spoke with them 2 years ago after they purchased their first building. They bought of a 106 unit apartment building called Casa Flores. After 18 months of rehabbing and making it into a “community”…they sold that building and rewarded their investors with a huge return. Now, they own 3 large apartment buildings; Bella Vida with 255 units, Fairmeadows with 200 units, and Spanish Timbers with 160 units. They quit their jobs in the last 2 years and work on real estate investing full time. They have the passion to make older

Upfront physical due diligence is critical when purchasing any apartment building. Have your engineer/ general contractor review all components to the apartment. Not reviewing deficiencies with your electrical, plumbing and sewer, foundation and roof can be the iceberg that sinks the investor’s ship.

Can’t find the RIGHT apartment building to buy today? Did you every consider BUILDING a new apartment? Vino & Mangesh Patel build apartments in Texas. Listen to this father and son team explain how they went from owning hotels in the 1980’s, then acquiring and rehabbing value add multifamily properties in the late 1990’s and 2000’s and now, BUILD ground-up new construction apartment structures for the last few years. Today, the Patel’s build large 150-200 unit, Class A- apartments in in-fill locations in DFW. Their competitive advantage is their cost savings that they create in building smaller properties. They buy the land at the right price, negotiate with their construction materials vendors hard, and are usually the general contractor overseeing the entire job. By coordinating all aspects of construction, they are able to build a better product in the market place at a lower price. Today, they are also building senior housing. Listen to this podcast to discover what is important in building a new apa

Structuring the right payout back to investors is critically important. Mike describes what waterfall criteria he uses to attract capital. Mike then discusses different exit strategies that many syndication investors can normally expect. It’s hard to “keep the band together” for an extended period; so most syndicator’s use the 5-7 year sale timeframe.

Having the highest offer price doesn’t always get you the deal. The seller needs “execution certainty”. Can the BUYER actually close on the proposed sales price? That’s the sellers worst fear that a buyer cannot close or will re-trade the original terms of the sale transaction. Yikes!! The seller needs to pick the right buyer and take the RISK OUT. The seller doesn’t want to end up with egg on their face by failing to pick the right buyer. But BEFORE a buyer is chosen, the seller needs to analyze and understand the strengths and weakness of every potential buyer. During the ‘best and final’ the seller will need for you to complete the BUYERS INVESTMENT FORM. This document gives the seller a chance to ask you (the buyer) questions about your underwriting, how are you financing, what capital improvements will you make, have you underwritten to higher property taxes, and is the equity already raised. These are critical questions that the seller needs to know. The seller wants to know that the buyer has done thei

Mike breaks down his assessment on comparing rental comps within a submarket. Becoming a student of the different apartment markets in your buying areas will help.

To be competitive in apartment investing you need great information. The top producing agents at ARA- DALLAS have great information on what is happening around the state. They discuss the current state of the apartment market, amenity trends and how to win a deal. Being well prepared in presenting an offer and having your team (Key Principal’s, real estate attorney, MF general contractor, lender, etc.) positioned together is critical in winning a deal. It may not always be the highest offer that wins a deal...BUT ALL sellers want to see execution certainty. Having a team formed before you offer… certainly will help your story. The ARA- DALLAS office will close over $1.5 billion in apartment transactions in 2018. They know the market. Jakob Andersen jandersen@aranewmark.com Richard Furr rfurr@aranewmark.com Bart Wickard bwickard@aranewmark.com To receive our FREE 15 page updated WHITE PAPER REPORT on the 2018 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Sp

Many apartments may have retail or office space included within an apartment structure. A small grocery store, a coffee shop, or a nail salon can be the typical retail store you may find attached to the apartment building. Mike explains what to look for when purchasing a mix-use property.

Bhuvan & Pratima Sharma needed to make a change….a huge change. Unfortunately, a few years ago, most of Bhuvans’ & Pratimas’ retirement was wiped out when the company that they both worked for… filed for bankruptcy. Yikes!! They had to re-group and figure out what to do next. They concluded that buying a hard asset through real estate investing was the best idea. In less than 5 years and through apartment investing, Bhuvan was able to quit his corporate job and now has his retirement secured. Listen to how Bhuvan and Pratima purchased over 500 units in the last 18 months. Can you do that? Contact info: sevenseashld@gmail.com To receive our FREE 15 page updated WHITE PAPER REPORT on the 2018 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 busi

To promote affordable housing, some older properties may have an income restricted LURA. A LURA is a LAND USE RESTRICTION AGREEMENT. It runs with the deed. This recorded regulatory agreement may restrict the amount of rent you can charge a tenant, based on the tenant’s income. If you rehab a property and are expecting to increase rents to justify the cost…a LURA may prevent you from being able to raise rents in the future. Make sure you ask the seller’s agent if the property has a LURA.

Friends become partners; finding the right partner is critical to your success when buying apartments. If you have a full time job and life commitments, but still want to own apartments… you may need to find a complementary operating partner. Today we chat with Kristalee Thomas and Larry Troy. Kristalee and Larry are great partners and friends. Kristalee and her husband David have full time jobs and are parents of infant twin boys. As you can imagine, they are very busy. After making several passive investments in other investor’s transactions, it was time for Kristalee and David to step up and purchase their own deal. Larry is semi-retired. After 30 years in the communications industry, Larry wanted to pursue real estate investing. He also invested passively in several apartments; and now was ready to lead his own deal. Also, he had the time to be an operating partner. ‘Time’ was something that Kristalee and David didn’t have. These friends teamed-up and purchased a large property together. To contact Larry

Michael shares a success story of an investor that sold a NEGATIVE CASH FLOWING four-plex in California and replaced it with a large apartment building in Texas that produces a LARGE CASH FLOW stream. Can you do that?

On your operating statement, utility costs -paid by the landlord- can be a HUGE expense. Utilities can include water, electric, gas, sewer, and garbage. On the podcast today is Katie Anderson with Save Water Co. Katie and her company help to reduce the amount of water that is consumed on the property with low flow toilets, leak detection, aerators, and shower heads. Water is money. The ever increasing cost of water and sewer can be very expensive for a landlord and tenant. Listen to how Katie can have a direct impact on lowering water consumption, which lowers water & sewer expenses and thus increasing NOI and valuation of the property. To find out more information on Save Water Co: info@savewaterco.com To receive our FREE 15 page WHITE PAPER REPORT on the 2018 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.s

Michael discusses the mechanics of pushing over a letter of intent to the seller and how to get that offer accepted.

This was the title to the recent Jake & Geno Podcast that featured the “Michael Becker” story. We love that story and wanted to hear it again. Michael went from a lonely, top producing commercial real estate banker to the popular, apartment owner that we all know and love today. After 15 years in banking, Michael went from a “loaner to an owner.” Are you an engineer, doctor, or attorney and tired of being a “corporate monkey?” You will be inspired after listening to this podcast. To receive our FREE 15 page WHITE PAPER REPORT on the 2018 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.

IF you are a passive investor you want to review a realistic PROFORMA before you invest. Michael discusses line items on the operating statement such as rental rate growth, loss to lease, property tax step-up costs, and future labor costs. Are the assumptions from the SPONSOR too aggressive?

The Old Capital Lending team discusses the current apartment lending environment and what you should be aware of when structuring your transaction. James Eng shares his article on “The 7 Things Buyers Need to Do to WIN DEALS.” http://www.oldcapitalpodcast.com/blog/ To Contact a Loan Officer at Old Capital: James Eng: JENG@oldcapitallending.com Richardo Hinojosa: RHINOJOSA@oldcapitallending.com Hans Box: HBOX@oldcapitallending.com Jonathan Ferrell: JFERRELL@oldcapitallending.com Les Meisl: LMEISL@oldcapitallending.com Dave Walls: DWALLS@oldcapitallending.com John Brickson: JBRICKSON@oldcapitallending.com To receive our FREE 15 page WHITE PAPER REPORT on the 2018 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 Advi

Michael gives specific examples on what to consider when assessing a property that’s in a little tougher area of town.