Robbie Hendricks

Young RE Guys: Please stop romanticizing institutional-sized multifamily real estate and "going big". Once you start looking at deals around 100 units or so, margins get tighter and tighter. Owners are savvier. 99% of them aren't going to sell to you off-market because you can "close fast with cash". They're not in the business of taking a 25% haircut to save on the "hassle from listing with a broker". There's something to be said for sticking to the 20-60 unit space. There is a lot more upside in those little deals where older owners have no scale, no systems, and no efficiency. A fair price to them might be an exceptional basis for you given your knowledge of how to more efficiently add value and manage those smaller properties.

Not gonna lie, this song is catchy as hell. Afroman is a national treasure.

@theficouple Low hanging fruit for people that take it seriously.

@robbiehendricks I’m more bullish than ever before @robbiehendricks on the 2-4 unit space. Just started with a new client doing 2-3 of them a month in Cleveland

Young RE Guys: Please stop romanticizing institutional-sized multifamily real estate and "going big". Once you start looking at deals around 100 units or so, margins get tighter and tighter. Owners are savvier. 99% of them aren't going to sell to you off-market because you can "close fast with cash". They're not in the business of taking a 25% haircut to save on the "hassle from listing with a broker". There's something to be said for sticking to the 20-60 unit space. There is a lot more upside in those little deals where older owners have no scale, no systems, and no efficiency. A fair price to them might be an exceptional basis for you given your knowledge of how to more efficiently add value and manage those smaller properties.

@TravTrager Savvy work.

@robbiehendricks Fantastic point. That's where I've stayed.

@buildnbluegrass Thanks brother. Let’s go.

@robbiehendricks Great thread. Same industry but completely different games.

@teostealth Real talk.

@robbiehendricks Lol been there. Sometimes the simple life sounds pretty good when you're dealing with tenant drama all day

Today has been one of those days in property management that makes you want to sell everything, move to the beach, and just work at the docks and sell ice and bait to fisherman.

@carsonunderwood Well if you're trying to sell it for a proper off market price, shoot me a DM.

@robbiehendricks Let me know when you have a buyer in DFW. I’ll gladly turn loose of my 52 unit property. I was ran through the wringer for three years. “ Too small, not large enough to place management, and the list goes on”

@RCapitalInvest1 @JulieChangRE That's about right.

@robbiehendricks @JulieChangRE For sure. You have to vet the GP. They should have a track record. But assuming you go with a good GP 6-10% passive returns and a 2x on your money in 5-7 years is very doable.

+ A ton of people thought investing in real estate is easy and passive People bought STRs, went in as LPs to MF in the sunbelt promising outsized returns As @robbiehendricks writes about, you need to OPERATE and self manage MF if you wanna see outstanding performance I truly hope some of those social media influencers telling people how easy it is and rich they'll become go to jail but likely nothing will happen to them

@realestatedude0 Bunches.

@robbiehendricks Lot of deals in 15-50u space

@buyahause Ha, the 3Ts!

@robbiehendricks You mean they’re not looking to sell fast bc they are tired of tenants toilets and taxes?

@VenturesAscend I think this is a very good, low-risk, high upside way of participating in real estate.

@robbiehendricks Robbie, 100% agree If I could do life over, I’d do 6-12 unit deals solo. Value-add, refi dollars in a year or two, keep my brokerage gig, and most likely end up in the same place with no partners but own the whole deal instead of a portion.

@carsonunderwood That has definitely not my been experience in our submarket. New investors are dying to pick up sub-institutional stuff in our market.

@robbiehendricks Disposing of the sub 100 unit properties is a nightmare. Easy to buy, but disposal is a nightmare.

@JulieChangRE @RCapitalInvest1 True.

@RCapitalInvest1 @robbiehendricks Yes but the RE is not passive and to assume they can make a ton of money doing nothing and don't vet how much the actual GP is gonna do is I dunno what to say

Big deals can work when they're priced correctly or you have some sort of competitive advantage with ops. But we may see a deal a year at best that qualifies for that distinction. I'm not saying we don't enjoy the biz at this size, but there is a lot more opportunity (and less risk) in the smaller stuff for up and comers.

@robbiehendricks Yes. Seems like the only way to make big deals work is also owning the management company.

@Bay2WallCRE Totally.

Yes unless extreme distress / special situation dry powder chases large deals tightening spreads. For one larger resi asset my firm is selling, there is some jar on the deal but we’re getting top dollar because everyone is underwriting stabilized numbers since it becomes a math game over a savvy buyer game at a large scale.

@GenZMultifamily King status.

@robbiehendricks Me with my 17, solid ass units

@justlookinMT You've got that right.

@robbiehendricks 100% the best times are when you are bidding against other individuals before the institutional money stage. Enjoy the early innings.

@SullyBusiness That's right.

@robbiehendricks This is true for so many businesses. Move up the chain and you gotta be ready for the competition.

@RCapitalInvest1 @JulieChangRE True. Finding a good operator that knows their submarket is easier said than done though. There are plenty out there, but usually they require some digging to find.

@JulieChangRE @robbiehendricks Being an LP with a good operator is 100% passive. But you have to be realistic in the returns.

@JulieChangRE You've got it.

@MichaelWSpike Thanks Michael!

@robbiehendricks You're on fire lately with these rock solid tweets, Robbie.