💧IRR

@torysheffer Thrill of the hunt. Congrats big dog.

We just bought this property yesterday for $1.2m. - 19 apartments (18 - 1 beds, 1 - 3 bed) - 8 (12x24) storage units - $14,780 current rent roll Here's how it happened: I cold called the owner in November of 22. He wasn't ready to sell. I tried to follow up consistently with no responses after that. June of 23 I got an email from a broker I know well announcing the new listing. Asking price $1.45m. I immediately offered $1.05m. Seller countered at $1.35m, I countered at $1.15m, rejected. Late July I followed up with the broker to see if pricing had moved. It hadn't. October I got a PRICE REDUCTION email. New asking price, $1.35m. Aka, no change. Updated my UW based on October rates, offer lowered to $1.05m. November, broker texted me that they countered another group at $1.25m to see if I could get there. First response after updating debt quotes, no chance. Two weeks later (Nov 17) got a great debt quote ~100bps below all others with 25 year am. Texted the broker that I could get to $1.20m. Seller countered at $1.24m. 10 days later (Nov 27) I got back to him and said $1.20m needs to be the number. Next day, broker calls me and said we got a deal. PA out immediately, fully executed November 30th. 45 day DD (0 issues), 30 days post DD to close. Closed February 13. Funded with $655k of LP equity raised in <24 hours with one email and a few phone calls. Debt terms: $900k loan 6.49% fixed 5 year term 25 year amortization 0.4% lender fee Now the real work begins!

@1031_forever 😂

@drippedIRR When I asked my favorite real estate prof in college for career advice he told me “I’ve done just about every job in real estate, been divorced 4 times, bankrupt twice, and the only thing I regret is the time I spent developing master-planned subdivisions. Just don’t do that.”

@accruedpreff Large single family communities

@landandlearning City is widening a highway but won’t be complete until 2027

@drippedIRR What was the issue with utilities?

@PromoteJunkie @jfbrly Will likely be doing the horizontal work on this one if we continue. VP of land here making builder calls this week. Deal is a bit out there.

@drippedIRR @jfbrly Why don’t you flip ur 400ac UC to a homebuilder?

@jfbrly @PromoteJunkie We’re here for it

@drippedIRR @PromoteJunkie They're like the one exception. Non-production homebuilders are getting swallowed via M&A + Most multi deals are not pencilling. If you're working w/ a DR or NVR, then that doesn't really surprise me that much. Selling land to them is like selling candy to fat kids

@jfbrly @PromoteJunkie Correct

@drippedIRR @PromoteJunkie Are these SFHs from one of the larger production homebuilders?

@jfbrly @PromoteJunkie Resi lots are flying. Last play my group did (prior to me joining) was a deal level 6x. We have a large project open that’s doing 150-200 paper lots/month.

@drippedIRR @PromoteJunkie yeah I'm curious how institutional investors are looking at this -- I intro'd one of the better developers I knew to some larger private wealth folks and they all balked, w/ most resi projects in 2024 not pencilling out At what return does that much exposure make sense

@RE_Observer_1 Some will be duds, others we’ll make our money back, a few home runs. Once capital is committed it’s committed. Everyone shares risk. 36 months. Very prelim bullets on the deck as of now.

@realestatejayz @PromoteJunkie None

@PromoteJunkie @drippedIRR 3x multiples at what leverage?

@PromoteJunkie Essentially VC investing. We’re toying with the idea of just going pari passu instead of a promote given the risk. Should be getting feedback next week.

@drippedIRR So basically a predev cost share “fund”, but at 25/75? You have groups that can stomach putting up 75% of at-risk predev dollars?

@GaucherAndrew We’re having conversations with some local and national builders to see if they have an appetite for the play

@drippedIRR Size of market? Can you over invest in marketing to leapfrog/expedite growth trajectory?

@FARlikewhoa Will likely be dropping this one

@drippedIRR Doesn't your fund target entitled land flips? Does that kill the deal bc it will be hard to flip?

@RE_Observer_1 Capital will be called deal by deal - encapsulated as “fund” to a few investors to get them warm.

@drippedIRR Why raise a blind pool fund vs. capitalizing deal-by-deal?

@twallyweb First $5-15k yes. The remainder subject to approvals. Sometimes the initial point also goes hard.

@drippedIRR Non refundable the whole time?

@CaseyMericle Might be a wash with what he’ll pay the broker

@drippedIRR Counterpoint Yes it is As soon as that Broker got involved the price went up

@Snowball_Dev Don’t see why he would even loop him in. Listing went stale 16 years ago. Maintain relationship I presume?

@drippedIRR The buyer always pays all fees. The net to the seller is what is reduced. Giddy up for a good negotiation.

@NNNIncome Did you watch the full vid? He lands some serious shots.

Me to anyone that says they hate drive thrus…

@gas_biz Na you’re itching for that ev;)

Me to the guy who drives a Prius that wants to date my daughter

@douglascashflow We use mapwise then have a VA skip trace the owner contact info

@drippedIRR Where are you getting owners contact info?