Using Real Estate to Go From 0 to $1,000,000 in Just 5 Years
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- Опубликовано: 21 июл 2024
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This is awesome man. Seems so straightforward, no paralysis by analysis with this framework
Appreciate it! Anything you'd want to see in future videos?
Could you post a video of what years 5-10 could look like and different paths one can take?
Gold
I really enjoy these videos. However, would you be able to give us an example on a single family rental home? Perhaps similar to your previous videos, could you walk us through the rationale, financials, etc.
Thanks! Super useful information!!
Appreciate it! I'll be releasing a video on a smaller deal later this week actually that I think you'll find useful. Regarding single family specifically, it's the same exact process. Think of it as a 1-unit deal, you analyze it the same way you'd analyze a 5-unit deal or a 50-unit deal.
@@realestategod Does the cap rate still apply to SFR homes? You often discuss how the stabilized yield must be greater the cap rate to be profitable, but I find it challenging to get data points on this for SFR homes. Should I use a sales comp approach in this case? If so, how does the stabilized yield factor in when deciding to proceed with a smaller, 1-unit deal?
I'll be on the lookout for the next video!
@@jasonburkhart4992 Yes, stabilized yield still matters. Personally, the way I look at it, it has to pencil from both a stabilized yield perspective and a sales comp perspective to move forward.
Great video
Appreciate it! Anything you'd want to see in future videos?
Can you please provide clarity on math for Deal 2?
You're going in at 25% equity = $625K. You put down 10% = ~$60K. Assuming you've got a loan to cover the rest ($60k x 5 = $300k debt). Are you assuming in this example that you've got other partners putting in similar equity? Otherwise you've got only $60k down on this deal (maybe there was an assumption to include cash from Deal 1?)
I'm just not quite understanding the math on Deal 2 fully.
What exactly does 30% promote mean in a syndicated deal?
Thank you! Longtime Twitter follower of yours and email (and now YT) sub.
Yes, the assumption is that you put in 10% of the equity and you find LPs (investors) to cover the remaining 90% of the equity. The equity only accounts for 25% of the deal, the rest is covered by the debt.
The promote is the percentage of profits you get as the GP (or the "sponsor") for setting up the deal and managing the deal. I simplified it a bit as it's usually over an IRR hurdle (although there's usually a catch-up provision that accounts for this). It's basically the 20 that a hedge fund usually charges in their "2 and 20" model, just for private equity instead.
@@realestategod Got it, thanks for the clarification! Have subscribed and looking forward to more.