Ellie Perlman, Blue Lake Capital's Founder & CEO, joins Jeannette Robinson to talk about the main challenges and opportunities that we're seeing in the market. Right here, right now.
(For the video interview, visit: https://youtu.be/i4SeGbKXQfw)
One thing that everyone is talking about is debt. That's one of the main challenges right now because Loan to Value has gone down significantly. In the past, you know, operators & real estate owners, specifically in multifamily could have found deals that we could have financed at 75 to 80%.
Today it's very hard to find those deals because, lenders are being very conservative and very careful with higher interest rates. So when lenders are looking at an asset, they're looking at the cash flow and NOI and they anticipate the debt service, the amount of debt payment every month, every year, every quarter.
Sometimes that means that you need a lot more cash flow.
One thing that hasn't changed is the power of location. You want to make sure that you have assets in areas that are still in high demand, and the demand continues to grow to make up for those tenants that may have to exit. That's one of the things that's very important for all investors to take into consideration - is that area continuing to grow?
Despite the challenges, there are opportunities in the market right now.
A lot of groups and family offices are sitting on the sidelines and that presents more opportunities because you have a decent chance of getting a deal done. You don't have to overbid or bid against yourself to win a deal because it's very clear that you know the assets that you're looking at and you're not competing with 10 or 12 other groups.
The other opportunity lies in other operators that need to liquidate and sell assets, even from some big operators and REITs. Not because the assets aren't performing, but because their investors want to liquidate and leave the deals. That presents a huge opportunity because, as a sponsor, you can buy an institutional level asset or asset from a strong operator that is forced to sell because they just need liquidity.
There are challenges and pain in today's markets but there are also opportunities all around us.
If you're not frozen by fear and if you let the numbers talk (and numbers always talk), you can find those great assets, those great opportunities.
Now is a time to make a move and buy smart. Just stay disciplined and make sure that you're getting great deals.
If you look at the most successful people in the world, especially in real estate, they are always great at seizing opportunities and jumping in when others were hesitant and frozen by fear.
Are you REady2Scale Your Multifamily Investments?
Learn more about growing your wealth, strengthening your portfolio, and scaling to the next level and visit www.bluelake-capital.com.
To connect with Jeannette & her team directly & find out how to invest alongside Blue Lake, email them at firstname.lastname@example.org or just complete our potential investor form at https://www.bluelake-capital.com/new-investor-form and they'll be in touch with you. .
Learn more about your ad choices. Visit megaphone.fm/adchoices