Alex Birch discusses the structural complexities of rolling syndicated multifamily assets into new properties via 1031 tax-deferred exchanges.
Prediction Not checkable as stated
Pandemic-era Sunbelt syndications face underwater debts and forced cash-in refinances
“Where we're sitting right now is a lot of those purchases, 20, 20, 21, 22, their debts come and do and they're underwater. Like they're going to have to do what's called a cash in refinance. Which is a capital call to their investor base, which is not good.”
Insight
Short-term rental revenue premiums are eliminated by high turnover and management costs
“The Delta just isn't really there for like the management burden that it creates, you know, so you can look at a unit and say, Hey, we're going to get two grand a month in rent for this two bed, one bath. And we could get three grand or 3500 bucks a month if w…”
Assertion Not checkable as stated
Veritas audited historical returns average an unusually high 30% to 31% annually
“Like our historical average is stupid high. It's like 30, 31% a year. When we go back and audit our deals, it's really high.”
Insight
Floating-rate debt is the primary way real estate investors lose everything
“The only way to really lose your shirt in this game is bad debt strategy, you know, getting into something that's too variable or too floating or assuming that rates are going to come down or whatever, and then buying deals with those assumptions.”
Insight
Real estate investors should execute deals at 80% certainty on fundamentals
“The biggest lesson, I guess, that I had is once you're about 80% sure, you know, just go, you know, like just go do it. Like it's, you're never going to feel a hundred percent on anything. It's not going to be perfect. But as long as you're doing the fundament…”
Insight
Class A multifamily profit margins are thin due to intense institutional competition
“Class A stuff is, is very thin. Like the margins are just thin. You know, the groups that are operating those and have been for 20 years are good. You know, the property managers that are managing those are good. People buying them are sharp, you know, like, a…”