Starting a RE Firm in today's environment
If you were to start a RE investment firm today from the ground up with $5MM of committed capital - what asset class, geography, and deal size would you target?
Or would you exercise patience to see what the state of the world looks like in 12-18 months.
There's always a reason to wait.
As in, that's an excuse or a valid reason haha
Analysis paralysis
100% wait. Liquidity has dried up a bit in the last two weeks alone and multifamily pricing has already softened. Could be a blip if rent growth continues to push and interest rate hikes start to stabilize but could also be indicative of the beginning of a capital tightening cycle.
Wait 12-18 months then go on a huge buying spree with all that dry powder! ($5M)
But seriously, I would do small multifamily development in small towns where there are no large, well funded, or experienced developers.
Wait for some distressed deals. With that size check, you could create value at entry from a non-institutional owner looking for a liquidity event in a recessionary environment. Usually when the fed has raised rates as quickly as they are projecting, they trigger a recession.
Depends on the deal...if it's a home run then go for it...if it's going to blow up then wait lol
I have one movie studio under construction and three more under contract. No time like the present when you have an aggressive equity partner and good relationships with lenders. Whenever one of the three starts, I'm full time with my partner on my own deals. In the meantime, working two jobs is exhausting.
I remember you being hot on HPP awhile ago, is the move into movie studios related to them doing the same?
To that point, what has been the natural progression for people moving from a full-time intense acquisitions role into something more entrepreneurial (doing a 1st deal). Did you typically quit your main job to do it full time or ease into it?
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