What distressed multifamily deals are investors looking for?
Short answer: Nick's below-construction-cost example makes the financing gap a signal: a building can be sound and still enter his pipeline when its owner cannot refinance. That makes the owner's financing part of how he assesses a property.
At a real estate investment panel, Richard C. Wilson asks investors what they are sourcing, and Nick and other panelists describe the deals they seek.
Distressed multifamily properties
Nick says he is primarily looking for multifamily projects in financial distress, even when the buildings are not in bad shape. He says some owners cannot refinance properties bought at very low cap rates, creating a chance to buy below construction cost. (Nick, 52 seconds)
Stalled projects and bank notes
Nick says he is also looking at notes banks want to sell, rescue capital and stalled projects where owners lack money for a capital call. He says he favors picking up a live asset without the extra work of ground-up development. (Nick, 105 seconds)
Owner and partner difficulties
An opportunistic multifamily investor says he looks for financial challenges such as pre-foreclosure, owners who want to retire or move, and partners who are fighting. He says his mentors taught him to focus on buying right rather than buying often. (Panelist, 169 seconds)
"we are looking for multif family projects that are in distress"
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Igor Olenicoff: Learn the business from the ground up. A job at a builders hardware store taught Olenicoff about building materials and techniques. It also built an affinity for real estate.
- Larry Connor: Learn from every mistake. Larry's team owns its failures and makes no excuses. They learn, change quickly, and keep getting better.
- Michael Lee-Chin: Find the person who is responsible. When a problem comes up, he asks who the agent was. He wants a specific person to call, not a department.
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Frequently asked questions
What distressed multifamily deals are investors looking for?
Nick's below-construction-cost example makes the financing gap a signal: a building can be sound and still enter his pipeline when its owner cannot refinance. That makes the owner's financing part of how he assesses a property.
Why does Nick favor existing properties over ground-up development?
Nick says he favors picking up a live asset without the grunt work of building from the ground up. He says his partner sees no glory in building, especially going very vertical. (Nick, 128 seconds)
Where does the opportunistic investor buy?
The investor says his group buys in California, Washington and Florida, and uses cash or wraparound deals. He says they like passive income and aim to buy below replacement cost. (Panelist, 190 seconds)
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.