At what price point/range do RE entrepreneurs have the biggest advantage?

When it comes to MF...the lowest would be a senior housing deal at a minimum of $25MM.

In terms of market rate MF...it's doubtful you can do a deal that's sub $30MM even if it's garden style. If you're able to do at $30MM or below...I doubt it'll be in a market where institutional investors would play. The exception might be a student housing deal in a market with super cheap dirt.

When it comes to institutional grade MF...you need to have at least 150 units (unless it's a senior housing deal). That's generally the critical make or break point in terms of operating efficiency. And I cannot recall the last time I saw a deal sub $40MM.

I'll confirm what someone else noted about secondary markets. The typical institutional money won't play in those areas. There's a few valid reasons...the exit cap rates are lower...it likely takes a longer time to absorb market supply...and the capture rates will likely be higher.

Also...keep in mind...the construction costs between a core market and secondary market might not vary that much. So you have to find a way to make a deal underwrite when you go from collecting $2.30 sq/ft in rents in a core market with getting $1.30 sq/ft in a secondary market.

Institutional money can flow to a deal in a secondary market if the deal is sponsored by someone with a very strong track record and someone that that equity has worked with in the past. However...the institutional investor might require the sponsor to contribute slightly more equity than the norm...and/or require a more favorable waterfall structure...and the deal has to underwrite as a complete slam-dunk.

I do believe that there's a good market opportunity for savvy institutional money to invest in secondary markets as they can still achieve their desired returns by imposing better terms. Sponsors in such markets are likely desperate for equity and therefore would be inclined to accept such terms. That said...if I was on the IC for an institutional investor...I would only do such deals with developers that are vertically integrated. I'm starting to see a sizable disparity in deals in which the developer has their own internal operations team and GC...and those who need to outsource those functions to third parties.

Now...going back full circle here...let's say you want to do a $15-20MM deal. What's your exit strategy? You'll likely find that there's a very limited amount of potential groups interested in acquiring such an asset...as it falls into what I call the no-mans land. It's too small for institutional money to touch...and too big for even your wealthy mom and pop investors. Therefore...I would suggest that you better plan on holding that asset long term...and you should be very conservative on your projected exit cap rate.