Blazin
Creative Title
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Just made my first RE investment in years and it's largest yet. I have avoided residential over my career partly because the more affordable investments at the time are just not the class property I wanted to own and I don't want to be dealing with day to day managing of renters and I didn't have the capital for a property where management could be taken off the plate. The office market holds no interest for me anymore as we are so over built at least in my neck of the woods. So long story short I made an investment I couldn't have done myself so went in as a partial owner of a pretty large complex.
Been a hard decision as this investment will now matter to my future rather substantially , I wanted to make a move that I could stick with for a long time maybe even never sell it and leave to my estate.
Equities have been great for me but they are also rather tax inefficient and subject too much to my meddling. With RE I can be much more long term. As I ran the numbers on this investment it becomes very clear that with large properties like this more of the investment success is tilted to asset value accretion than to operating income. Not that operating income doesn't matter but how I feel about it 10 years from now is going to be almost entirely driven by asset value or the dollars lack there of.
As many know I have a large aversion to borrowing/leverage the big step of this by having a managing partner is for me to be comfortable with using debt at arms length rather than me borrowing personally. This deal is 70% LTV but I'm not going to be stressing over the mortgage payment.
Its over 250 units and is about a decade old, higher end of the market for the area about $1600-1700/mo rents and 95+% occupied.
Been a hard decision as this investment will now matter to my future rather substantially , I wanted to make a move that I could stick with for a long time maybe even never sell it and leave to my estate.
Equities have been great for me but they are also rather tax inefficient and subject too much to my meddling. With RE I can be much more long term. As I ran the numbers on this investment it becomes very clear that with large properties like this more of the investment success is tilted to asset value accretion than to operating income. Not that operating income doesn't matter but how I feel about it 10 years from now is going to be almost entirely driven by asset value or the dollars lack there of.
As many know I have a large aversion to borrowing/leverage the big step of this by having a managing partner is for me to be comfortable with using debt at arms length rather than me borrowing personally. This deal is 70% LTV but I'm not going to be stressing over the mortgage payment.
Its over 250 units and is about a decade old, higher end of the market for the area about $1600-1700/mo rents and 95+% occupied.
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