Street Smart Success Roger Becker

Getting high returns is very difficult in Real Estate investing, largely because there are too many people chasing the same deals and sellers want a lot for their properties. If you’re willing to invest in projects that are off most people’s radar, however, there are great deals that can generate double digit cash flow. Mike Holdwick, Co-Founder of Pro Team Commercial, identifies non-residential value-add properties, mostly in the Detroit metro, where he resides. Mike has acquired six commercial buildings with 30 tenants, mostly in the $500,000-$1,000,000 range, all while working a W2 job. Mike has generated enough monthly cash flow to stop working his W2 job.

Single family homes in U.S are the largest asset class in the world at $43 Trillion. Many investors have made a fortune investing in single family homes over the decades, and large institutions have been aggregating single family portfolios over the past dozen years. One sector of the market that has unique appeal is homes in the best school districts in the best zip codes. There are very few homes for rent in these neighborhoods and families pay a premium for their kids to attend the best schools. Sean O’Dowd, Managing Partner of Scholastic Capital, is building a portfolio of single family homes in the best school districts in top markets in the Upper Midwest. Sean is targeting the acquisition of 250 homes for his fund that projects an 8% distribution to his investors. 

Investing passively is a great way to generate cash flow and appreciation, without having to deal with day-to-day operations. You just need to develop the skills at vetting operators and specific deals. David Shirkey, a fellow passive investor, has done a great job finding quality operators and profitable deals over the past eight years. David has made numerous successful multifamily investments plus several profitable investments in Mobile Home Parks. He is also focusing on Industrial properties. Additionally, David founded the Michigan Investor Group to help other investors like himself learn about Real Estate and other alternative investments that produce strong cash flow.

Most multifamily syndicators are facing major headwinds including interest rate increases, new supply, and escalating expenses. In order to thrive in this environment, you have to have an excellent organization that executes on business plans and maintains healthy working relationships with their lenders. Zack Haptonstall, Founder of Rise 48, has never made a capital call or missed a debt payment. For the properties he acquired in 2021, Zach’s now making distributions to investors. In the face of unprecedented rate increases, Zach accelerated the pace of renovations in 2023 and completed almost 2000 units. This enabled him to increase net operating income enough to continue making debt payments and distribute cash to investors. 

Eventually, ma and pa Mobile Home Park operators will be swallowed up by professional operators, so the opportunity to invest is now. The demand to live in Mobile Home Parks is growing while the supply is shrinking. The average Mobile Home Park owner stays in their home 17.5 years, some stay even longer. Many ma and pa owners, especially second or third generation family members, don’t reinvest into their properties and the assets become mismanaged and neglected. These parks can be great value-add opportunities for professional operators. Jack Martin, Co-founder and head of Investment Capital of 52/10, specializes in the acquisition, management, and development of Mobile Home Parks.

Even before covid, the Southeast was rapidly growing, but the trend accelerated during covid, and still continues. The population of Atlanta, for example, is projected to multiply three times in the next thirty years to over 15 million. Currently, office leasing activity in Atlanta is 80% of the volume of 2019, which was robust. As recently as 2022, however, companies were still questioning whether they would return to the office, now they’re focusing on the best way to outfit offices to best serve their employees. Joey Kline, a commercial Real Estate broker and Executive Vice President at JLL in Atlanta, helps tenants find new space or renew in downtown Atlanta and surrounding suburbs, plus other markets in the country.