Matt Bee

@MrFamilyOffice Most small-to-mid multifamily developers I know are in the same place - you definitely aren’t alone. My team typically skirts around the residential market but there are several asset classes that can still print - admittedly not to the scale they were previous to rate hikes.

I have paused investing in residential real estate I have a decent-sized portfolio, but I am not adding to it any time soon Here's why: First up, don't get me wrong, I love RE. It's a great asset class and is easy to build wealth over time using leverage You can make a lot of dumb decisions in RE investment and still come out on top. If you have time and you don't overstretch yourself, inflation does its thing But I am focusing my personal investments in other areas for the foreseeable future Hassle First and foremost, my main issue with RE is the hassle. It's a hassle to buy, to sell and to manage. I outsource management, they have clear instructions on how to act in different circumstances, but there's always something. Recently it's criminal damage to a block and in another it's tenants demanding unnecessary 6-figure upgrades to plumbing and heating A minority of units cause the majority of problems. Even though I am pretty laid back, the issues are a headache I don't need. So adding to the portfolio adds to the headaches Cash flow With interest rates as they are, real estate is not cash flowing in the way it once did. Some of my older holdings are still cash cows, but the newer investments are not throwing off any meaningful cash. High cash flows help compensate the hassle, but it's not worth the trouble if cash flows are not there I'm not an expert I have invested in real estate for more than twenty years, but I still do not consider myself an expert. I am not doing RE day in day out. So I don't have an edge As a family office, we invest in some residential and commercial real estate. But we have expertise inside and outside the team. When I do a deal, I want to have an advantage over the next guy. With RE I'm not sure I do Illiquidity I want to spend some money. My resolution for the year is to spend more. Having large chunks of cash tied up in RE will help long-term wealth building, but for once, I'm thinking short term The Family Office angle Here's the exception: If an opportunity arises to invest alongside the family office in RE, I may still take this. If I invest alongside the FO, I can participate with lower amounts and in more interesting deals. The downside is that I do not control the exit, but with smaller investments, this is less important -- I'm obviously not alone in cooling on RE. I still love the asset class and see it as one of the best ways to build generational wealth. A higher interest rate environment forces us all to invest smarter So while I may be pausing for a while, in the words of Arnie... I'll be back 🕶️🦾

@gas_biz Truly depends on the IRR (or at least COC) of each model. Nothing wrong with quick flip deals but looking at raw sales data doesn’t always paint the picture we think or hope it does.

In the middle of a deal. I can flip it and make $750k-$1m Or Redevelop and make $1.5-2m What’s the right move?

Question for my fellow developers out there: How best do you go about building your broker network? Events? NAIOP? LinkedIn? Curious minds want to know!

I’m shocked at the amount of ppl I talk to in recent weeks that have no idea what #ChatGPT is or the recent release of #chatgpt4. I’m already implementing it into development models with impressive success. Is anyone else still on the sidelines of #AI or have you made the leap?

My team and I are seeing more of these failed developments in recent months throughout the southeast and specifically in Florida - picking them up for relative pennys on the $. Curious if other developers are seeing the same in other parts of the country. #CRE #development

@ChadGriffiths I like it. Curious if this is a product that’s got more runway.

@JustMattBee Hey Matt - haven't seen a lot but one I've thought about purchasing is NAIOP's Best Practices in Cold Storage Facility Development: naiop.org/coldstorage

@ChadGriffiths - hey bud do you have any interviews or reading material on Cold Storage industrial? Curious minds are filled with questions. Thanks in advance.

@maxfisherRE 15% pref (higher risk for you and sole LP) 80/20 split (LP/GP) That’s where I’d start.

So I’m looking at investing a deal and I need your advice I would be the only investor (LP) The GP will be running the deal and repositioning it (more intensive than the typical stabilized deal) It won’t be cash-flowing positive for 6-12 months What is a fair structure for this deal? I’m new to the LP/GP world

@ChadGriffiths Thank you for sharing this.

I had a few DM's advising me that I shouldn't say thanks to everyone who left a comment on my last post. Naturally I thanked them for taking the time to send me a DM 😜

@mhprvpmvp Dude. Cut and run. I dislike being cold but the best part of a VA thru an agency is the ability to quickly delete and replace. Make the move and hold fast to your own standards.

@DailyTaxMemes Sounds like less employees are needed. If the interruption is that great, you’re spending more of your time addressing issues you’re paying employees to handle. Possibly a hiring issue, a training issue or simply too many employees period. Save the overhead and do it yourself.

For people better than me at this: how do people structure their days such that staff isn’t interrupting them with questions throughout? I’ve tried the gentle touch and more direct statements but they seem unable to stick to blocked off times The constant urgency is a killer

@NateSmoyer I would add that while the manufacturing process saves time and material loss - local labor proves ultimately a much harder line item to contend with.

@NateSmoyer Multiple reasons Nate. A lot of the same reasons 3D printed houses are still struggling. - Zoning - Jurisdictional reqs - consumer demand for this specific product - financing List goes on. Looking at this from a developer and GC lens it’s just a hard product to push.

Anyone care to jump in as to why this may not be happening at scale, yet?

@intrepidbrit @NateSmoyer This is a primary issue with this model. Ran into it personally on a few different models.

@PromoteJunkie Sounds like an exciting opportunity!

#REtwit - anyone here make the big jump from institutional to on your own or with a smaller firm with the chance to gain equity much quicker? Came across unique opportunity and honestly, I’m scared shitless. But FWIW, my guts telling me GO. Appreciate the insight, folks.

@RPAThree @CoyDavidsonCRE Dude- this is EXACTLY where my head went reading this.

@CoyDavidsonCRE My snarky ass was thinking punchlines of ppl dying in a fire or the dev being underwater. #ExitStrategy

Someone does a new #CRE development what is the first thing the architect ignores? Exit Strategy

@realEstateTrent Lesson one: Never ask about insurance in an open forum. End of lesson. 😉

Ok pulling the trigger on pursuing life insurance, finally. Married, 43, one child. What do I need to know?

@ChadGriffiths My team was recently discussing this in Atlanta. While we would love to introduce solar to our industrial and multifamily products - we are hesitant to buy in right now. Have you chatted with my developers regarding this?

Is solar power actually clean energy? Numerous raw materials (ie/ silicon, lithium, cobalt, copper and nickel) need to be mined, then the panels need to be manufactured, transported, and installed . Then at the end of the life cycle many panels become toxic waste.

@ChadGriffiths I see what you did there… Nice.

Industrial can occasionally suck. Exhibit A: Cannabis co. built a $50M production & warehouse facility in 2019 and just sold it for $15M. The sales data is blunt: pot is no longer a budding industry.

Interviewing a Leasing Broker for a new industrial flex and office development - what are your top 3 questions? #industrial