Affinius Capital’s Post

Blackstone. Quiz Who left the Board of Directors recently, sadly. its a good sign when Blackstone is buying these numbers. I think it is cheaper to buy exciting Apartment building than build new one. Interest will come down Rents will go up, slower, but still up. There are deals out there, big and small. And more to come. I am seeing properties that come up 2, 3 times in a life time. Good time to buy. Watch out for Rooming Houses, you may not be able to change Use of Building going forward. Once an rooming house always a rooming house. The Government has insentives too build Room houses. Now. I personally like the properties, they provide affordable homes. But it can be bit overwhelming for a small investor. My understanding is a 25 Rooming house can not be made into 12-plex. You would need to bring back to market 25 rooms elsewhere. "We need to build like we did after world war 2." Guess who said this last week. #Rooming house #affordable #housing affordable

Accredited investors can now seize the chance to participate in a value-add multifamily investment in the thriving Irving submarket of Dallas-Fort Worth! Lone Star Capital is pleased to present Grand Riviera, a 206-unit, 1972-built apartment complex. Here's why we love this deal: Great Location: Grand Riviera is strategically located in Irving, TX, between the DFW International Airport and the Las Colinas Urban Center, with convenient access to major highways and employment centers. The planned $3B Terminal F by DFW and American Airlines promises further economic expansion. Value-Add Opportunity: The property offers a value-add opportunity through interior and exterior renovations, including upgrades to units and amenities, and addressing deferred maintenance. Stable Market: Irving has seen steady rent growth, and the property is situated in a strong workforce area with a high demand for rental housing. Potential Returns: Projected Net IRR / EM: 18.6% / 1.64x (over a 3-year hold period). Average Cash on Cash: 6.0%. Projected Sale Price (3-year hold): $47,905,113 Originally planning a 3-year bridge loan with $24M proceeds, we have now opted for a more robust and flexible structure: • Senior Loan / Preferred Equity: $19,500,000 / $4,650,000 (71% LTC) both with 5-year terms and full Interest-Only (IO) payments. To clarify, we still project a 3-year hold, but the 5-year term reduces risk and improves our numbers with a lower interest rate, while keeping the flexibility to sell or refinance in 24-36 month. This is a 506(c) offering for accredited investors only, available on a first-come, first-served basis. To access due diligence and subscribe to this investment, please access our investor portal below.

How is value this far out of line? How could someone analyze a deal and make it make sense and fund at $300k/unit plus but find no bidders at $200k per unit? There has to be some sort of answer that makes sense? What does this say about the majority of real estate out there? Is this why the FOMC will never be able to lower its MBS holdings? Deals like this always raises eyebrows because honestly the more deals like this expose reality eventually someone very large is left holding the bag...who is it?

My best deals have almost always had elements of imperfection or just plain looked messy! - What separates the pros from the amateurs is being able to look at the imperfection or risk and quickly assess if it's an opportunity or a trap. - Some of my best deals on the first 112 units had elements that would scare most people away. - My single family house I bought in Garfield is now worth $250k-$300k. But when I bought it at $27k, I had my fingers crossed that I could get it to appraise for $120k so I could refinance and get all of my investment out. - The duplex I bought a couple of doors down was ON market, and I was sure I overpaid at $130k. It's estimated value now is $300k. But when I bought it, I had 2 tenants that paid $400-$500 a month. The top tenant always had some story about why he was late on rent. When I sought to have him evicted, he aligned with a Communist Group (I'm not kidding). They put flyers up around my property, AND they literally came to my house where my mother was watching my two daughters. I was furious! This property is worth over 2x what I paid for it and it cash flows nicely. - A 4 unit in Carnegie was purchased for $130k. It was half vacant and had a tenant that was a drug user and yelled at his children all the time. We put considerable investment into the property and I thought I could get it to be worth $320k ish. I did, but then rents went up and I ended up selling for $450k!!!!!! - This property came with a duplex that had a guy that FULLY took advantage of a mom and pop owner and when Covid hit, he was NEVER going to pay rent. I didn't even want the property, but I had to buy it to get the 4 unit above. It was a tough neighborhood, and after a year of trying to evict the nightmare tenant, we got him out. We cleaned it up and sold this property for a profit of over $30k when I thought I'd break even at best. - I could go on and on and on! - It's very easy to buy real estate and make 5% on your investment. It may even appreciate. - It's a different thing to multiply your money through assessing risk, and becoming a great operator. - There is NO better teacher than experience. I've gone through some AMAZING and EXPENSIVE lessons. All have made me the operator I am today. - Our Achieve Capital Partners, LLC team has no idea how much great experience they're getting! They're doing things that most real estate investors are too afraid to take on. - So.....assess risk. But take action! If it's Perfect, it's most likely a low return. Sometimes IMPerfect is what gets you the best returns! - No Finish Line

So Beavis and Butthead walk into the rating agencies office... Sounds like material for an SNL parody. But read this article and you will see... When even Beavis and Butthead can get AAAs you know we're in trouble. This article covers Multifamily real estate loan syndicators (a topic I have written about previously). These are basically armchair home flippers who during the Covid and zero-rate era managed to scale and amass billions in capital. Thanks in large part to rating agencies who were doling out AAAs like corndogs at the county fair, capital was flowing to these upstart entrepreneurs. While this article doesn't mention CRE CLOs, Tide's loans were financed via CRE CLOs including those issued by Arbor and Ready Capital (two prominent issuers of Multifamily CRE CLOs backed). I found at least two deals where Tides were the sponsor of 10 top loans. Trepp, Inc. did an excellent analysis last year on MF syndications and CRE CLO. Trepp noted: "About 80% of these multifamily loans are set to mature ... by the end of 2024, and the WA DSCR (NCF) of all CRE CLOs in this dataset is below 1.0x. It is important to note that the $3.7 billion in CRE CLO loans do not have hard maturity dates as all these loans have the ability to extend, with a weighted average of 27 months remaining in extension options." Trepp further notes that maturity extensions are subject to DSCR conditions which are unlikely to be met. See Trepp article here: https://lnkd.in/ddawfQaX The losers are the retail investors who often provided the equity in these syndications. But soon enough CRE CLOs will feel the pain. No surprise that the ratings agencies have been slow to downgrade CRE CLOs. Key takeaway: "These two bozos amassed over $8 billion in assets under management. Unfortunately, Beavis and Butt-Head were unable to keep the momentum going. After a solid two years stacking up mediocre properties at obscenely high prices, the Fed increased benchmark interest rates." "One of the most voracious syndicators during the apartment bubble was Tides Equities, based in California. Headed by Sean Kia and Ryan Andrade, possessing a combined skill set that might equal that of a middling undergrad analyst, Tides ultimately acquired over 30,000 apartment units – a staggering figure for a team with no apparent investment management acumen." #ratings #commercialrealestate #CMBS #CLOs https://lnkd.in/dY-EVcKF

“Don’t invest in office real estate, right now.” Read on and more importantly, listen in at around the 4:43 mark. Anxious capital has been sitting on the sidelines for a while now and a couple of sayings come to mind that I’ve heard over the years. Buy low and sell high and when everyone says buy - sell and when everyone says sell - buy. Would you invest in office properties? https://lnkd.in/gV8VhcjY #officebuildings #sellers #buyers #propertymarkets #commercialrealestate #debt #foreclosure #interestrates #landlords #investors #futureofwork #investment

“While the increase in foreclosures is occurring across all asset classes, Nagi said there’s a particularly heavy concentration in multifamily, with perhaps less activity in the office space…”I think that in multifamily, lenders are probably a bit more likely to commence foreclosures because it’s easier to value the property. They actually know what they can get for it, and whether the property is underwater or not,” said Nagi. “Part of the problem with office is that the values are so uncertain. They’re not necessarily bad, it’s just very hard to pinpoint.” #UCC #Foreclosure #Distress #CRE #RealEstateInvesting

Fident Capital secured $29.0MM of bridge financing on a recently constructed mixed-use property with 52 apartments and ground floor retail. Loan proceeds funded the conversion of a multifamily asset, located only three blocks from the Ocean at the iconic Oceanside pier, into for-sale condos. The lender, a private debt fund based out of New York, provided non-recourse financing that allowed a cash-neutral refinance of the existing debt. Project Highlights: •Optionality from the original condo specifications and tentative map allowed for an easy pivot from, and back to, a for-sale strategy. •Experienced lender partner with deep expertise in all aspects residential housing, including conversions, offered pragmatic solutions reserve and incentive structures.  •Well-built mixed-use project in idyllic location three blocks from the beach. Non-recourse, cash neutral financing which capitalized all necessary reserves and conversion costs.      Challenges: •Complicated mixed-use wrap product surrounded a public-private parking garage with bifurcated access for residents. •Navigating perceived pressure on potential condo buyers from a rising interest rate environment. •Considerable cash flow analysis was required to plan for HOA, tax, operating, interest, and incentive plan reserves as revenue declined upon vacating rental units in order to sell them.  #commercialrealestate #mixeduseproperty #entrepreneurship #realestatefinance #sandiego

Another IMG project! Interesting asset stabilization strategy. Build to condo spec... initially for rent- then conversion to condos.

CAPREIT acquires $387M in new apartment buildings Trust also sells $89.3M in properties during Q2, for total of $477M in transaction activity Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) has unveiled six acquisitions of apartment buildings and three non-core property divestments totalling $477 million in transactions, a move aligned with its ongoing portfolio modernization strategy. In Q2, CAPREIT (CAR-UN-T) completed and closed the acquisitions of properties across Canada totalling $387.4 million. It also closed or has entered into agreements to close three non-core Canadian properties to non-profit organizations for a total of $89.3 million. To read more click on Image… Daniela Peeva, LLB, BA  Vice President, Financing  Broker License #13234  M: 416 879 7404  Peakhill Capital    #peakhill #realestateblog #commercialrealestate #commercial #construction #propertymanagement #landdevelopment #apartmentbuilding #Apartments #mortgage #mortgagebroker #commercialmortgages #commercialrealestatebroker #commercialproperty #realestatenews #commercialbuilding #realestatedevelopment