So what is the multi-family syndicator’s secret to great returns?

Well, any multi family property you buy is going to need some work. If it’s in great condition, the price will be so high that you can’t make any money on it.

If you can buy it at a good price, it’s because it needs work to bring the rents up. So you’ll need to do some big renovations before you see any returns.

This strategy is what multi-family Investors call: ‘Value Add” and this is how most of the successful syndicators make money on their multi-family investments.

The trick is that when you do a substantial renovation, you’re making a profit on the improvements that you’ve made to your new property, in other words on the construction that you’ll be doing to fix it up.

That construction is how you bring the rental income of your new property up.

But your profit shows up not only as higher income, but also as a bump up in your equity as soon as construction is complete and the income stream is stabilized.

In other words, if you’ve done it right, the property is now worth much more than the total of your acquisition cost and improvements and that’s because of the value of the work that you put into it, right?

What most people don’t realize is that building new construction income property is the Ultimate “Value Add” strategy.

Because the entire property is new, you’re maxing out the amount of improvements and you are also maxing out the income because new construction units always command top rents.

So by building a new construction building, you’re maximizing this bump up in equity that you get as soon as your property is completed and the rental income is stabilized.

On top of that, Brand new units attract the best tenants and rent quickly for top rents. Right now, there’s huge demand for new construction units and rents are at all time highs.

This is why you see big developers putting up high rises and big multi-family buildings just as fast as they can right now and that’s why you should follow their lead!

My new book:

Don’t Buy Multi-Family! BUILD IT

is on Amazon now, but if you’re watching this, there is a link in the text below to get a Free eBook Download.

It’s a short read, but it will show you how you can get started building and owning brand new income properties.

✅ Download Free Ebook: https://LD2development.com

✅ Amazon Author Page: https://www.amazon.com/author/rogerluri

______________________

✅ Let’s connect:

YouTube: https://bit.ly/LD2YouTube

Linkedin: https://www.linkedin.com/company/ld2-development/

Facebook: https://www.facebook.com/LD2Development/

Instagram: https://www.instagram.com/ld2development/

A lot of investors are searching now for good multi-family investment properties to purchase, but not having much success finding them.

In my new book, Don’t Buy Multi-Family! BUILD IT I talk about the advantages that multi family investors can get by building new construction properties rather than buying older properties and fixing them up.

But I think a lot of people might think that they need to be an architect or contractor to build a new multi-family property.

If you’re already investing in multi-family buildings (big or small), you’re probably working harder than you have to for smaller returns.

And It’s just not as big a jump as you think to start building your own new construction properties.

In fact the majority of big developers hire outside architects to design their buildings and they hire general contractors to build them. That’s what you should do too.

So let’s take a quick look at how it works. When a new building is developed, the expenses include Soft Costs: Like financing costs, permits and architectural design, things like that.

And Hard Costs: Which include all the labor and materials to build the property. hard costs also includes the General Contractors fee.

The owner who puts up the money and hires the people necessary to build it, is actually the developer who gets the benefit of the investment. (they get the profits).

Now they may choose to hire everyone and manage the whole development process themselves, or they might partner with an experienced developer so they have someone else to manage the whole process for them, or they could even hire a developer on a fee basis manage their project for them.

The point is that the owner/developer makes money because the property she/he is building is worth more when completed, leased up and stabilized than their cost to build it.

It’s no different than when you buy a car or clothing or anything else; The finished value (what you pay for it) is going to be substantially more than the cost to build it. This is how the company makes money.

I talked in my prior videos about this “Equity Bump”. that a new property enjoys when it’s completed and stabilized (leased and operating). This is the real game changer when you compare numbers for purchasing an existing building to building a new building.

What’s really surprising is when you see how quickly this “Equity Bump” combined with cash flow and appreciation will multiply your initial equity investment in just the first few years of operation.

So whether you’re investing in a few units or hundreds, You should definitely learn more about developing new properties,

The first step:

✅ Get New Book on Amazon:

Don’t Buy Multi-Family! BUILD IT https://www.amazon.com/gp/product/B09PSFMC6Z/

✅ Amazon Author Page: https://www.amazon.com/author/rogerluri

_________________________

✅ Let’s connect:

YouTube: https://bit.ly/LD2YouTube

Linkedin: https://www.linkedin.com/company/ld2-development/

Facebook: https://www.facebook.com/LD2Development/ 

Roger explains an example of how Cap Rates affect the New Construction Equity Bump and IRR.

✅ Get New Book on Amazon: https://www.amazon.com/gp/product/B09PSFMC6Z/

✅ Chance to win a FREE Copy: https://LD2development.com

✅ Amazon Author Page https://www.amazon.com/author/rogerluri

_________________________

✅ Let’s connect:

YouTube:

https://bit.ly/LD2YouTube

Linkedin: https://www.linkedin.com/company/ld2-development/

Facebook: https://www.facebook.com/LD2Development/

Instagram: https://www.instagram.com/ld2development/

Get my new book to Learn More!

The “equity bump” you get when you build new construction multi-family helps you build equity (and wealth) very quickly in the first couple years of ownership.

There are a lot of reasons why building new construction multi-family properties is much more attractive than buying older properties and my new Book:

Don’t Buy Multi-Family! BUILD IT

goes into all of that, but I think a lot of multi family investors are very focused on cash flow numbers and might not understand how important it is to also look at the equity side of the equation.

So let’s look at a quick example from the book: Here we’ll look at the numbers for a new 4 story building with 3 ~ 1700sf 3 bedroom apartments over a smaller commercial storefront unit.

First we’ll look at the cash flow numbers for the finished project and then we’ll look at the equity position and projected sales returns.

This is where we examine the new construction equity bump that in this example helps us increase our equity by 70% after just the first year of operation! 

Get my new book to Learn More!

With higher inflation numbers, investing in multi-family income properties makes more sense than ever. The problem is that finding a property with good returns is like finding a unicorn.

There is a lot of competition for quality properties and prices are very high, which of course means that returns are very low (in other words, low cap rates).

Properties that are cheaper to buy normally need quite a bit of construction work to re-position them in the market for higher rents.

Most of the big syndicators are buying properties like these, ‘value add” deals that have room for them and their investors to make money.

But if you look around in Chicago and other growing markets, big developers are putting up offices, apartments and condos as fast as they can right now.

Why? Rates are low, rents are at all time highs and demand for new construction units is very high. Now is the time to build new construction!

Why would you want to compete to over pay for an older building and then do a bunch of construction work rehabbing it, only to achieve rents much lower than new construction.

My new book: Don’t Buy Multi Family! BUILD IT will show you how the numbers work and how you can find opportunities to get started building new construction multi-family yourself.

Grab a copy on Amazon and learn how it’s done. https://www.amazon.com/gp/product/B09PSFMC6Z/