Time for some proper due diligence/ independent auditing in our communities

[liosac]

It's always a good idea to do your due diligence, but CCIIW, I think it's commonplace in Value-add deals.

Not when it’s bridge loans to finance class A at a steep price. Not really your typical value add.

[whacked1]

It's always a good idea to do your due diligence, but CCIIW, I think it's commonplace in Value-add deals.

Any time I see a value-add deal, that is when I do the most analysis. I've seen syndicators put together deals "below market rents" and capex plan includes painting the façade when comps show their "market" rate units with proper amenities. 

[WayBackMachine]

150k just by working an hour a week in RE

[VacationLover]

Ok enough with 99% of us guessing who’re the guys that went bust.
As per forum rules:
A. Please state name of guy/s who went bust.
B. USD amount of loss.

A) Not LH? Last name starts with a P
B)

I am hearing now that an investor's audit found him skimming off for himself. I think the properties are okay and just need new management. Investors have been getting returns.

[yuneeq]

Any time I see a value-add deal, that is when I do the most analysis.

That’s common sense. Value-add is trying to sell you a story that has to check out, a turnkey property should usually be pretty straightforward.

[JACKBLUE]

A) Not LH? Last name starts with a P

next letter is a R?

[Something Fishy]

next letter is a R?

[Euclid]

Is this an image of him??

[liosac]

Very poor taste. A real person with a real family. This is not called for. Please delete.

[Afrages6]

next letter is a R?

No

[Mordyk]

I am hearing now that an investor's audit found him skimming off for himself. I think the properties are okay and just need new management. Investors have been getting returns.

Have been getting returns from New capital.  AKA ponzi

(That's what my hock broker told me)

[aygart]

Have been getting returns from New capital.  AKA ponzi

(That's what my hock broker told me)

That may be the case, and also may be only because of his personal skimming. It will all come out eventually.

[jackofall]

That’s common sense. Value-add is trying to sell you a story that has to check out, a turnkey property should usually be pretty straightforward.

In reality, there really is no such thing as turnkey. Especially in large mutli-family deals.
Keep in mind 2 important factors. In order to win a bid, for the most part, it means you are the highest bidder. Which means, all other companies, didnt think it was a good deal at this price.
Also, the seller, for the most part, thinks they maximized the value of the asset and are willing to sell.

Obviously there are many factor related to each deal. No 2 pieces of real estate are the same. But the above 2 points are usuually relevant.

[avromie7]

In reality, there really is no such thing as turnkey. Especially in large mutli-family deals.
Keep in mind 2 important factors. In order to win a bid, for the most part, it means you are the highest bidder. Which means, all other companies, didnt think it was a good deal at this price.
Also, the seller, for the most part, thinks they maximized the value of the asset and are willing to sell.

Obviously there are many factor related to each deal. No 2 pieces of realesatte are the same. But the above 2 points are usuually relevant.

The cycle for CRE is as follows:

1) Large corporation sells to the small guy
2) Small guy picks everything apart and increases profits and cashflow.
3) Small guy sells it to a large corporation that is happy with the safe efficient asset.
4) With time the bloat reappears because there is no one in the large corporation incentivized to save $20k/year by renegotiating a contract that requires multiple steps of approvals.

The cycle repeats.

Large corporations are willing to pay more for a more efficient property because they're ok with a lower return. The small guys are willing to pay more for the less efficient properties because they see and can take advantage of the upside because they are more nimble.

[Yakov15]

In reality, there really is no such thing as turnkey. Especially in large mutli-family deals.
Keep in mind 2 important factors. In order to win a bid, for the most part, it means you are the highest bidder. Which means, all other companies, didnt think it was a good deal at this price.
Also, the seller, for the most part, thinks they maximized the value of the asset and are willing to sell.

Obviously there are many factor related to each deal. No 2 pieces of real estate are the same. But the above 2 points are usuually relevant.

From what I understand lots of times the winning bid is not the highest bidder.

[liosac]

From what I understand lots of times the winning bid is not the highest bidder.

Correct. A lot has to do with the broker and bidder.

[jackofall]

From what I understand lots of times the winning bid is not the highest bidder.

"For The Most Part"
Obvioulsy belief in your ability to close is critical.

[chevron]

I know nothing about real estate, but I've seen Miami develop and I've called it accurately 10-15 years in advance especially North Miami Beach, north Miami, the Aventura / Skylake corridor (west Dixie highway etc ) ..

I always dreamed of buying up properties and lots and waiting for the area to catch up but I'm told it's difficult and often money losing even if the property is generating revenue .

Oh well ..

Biscayne Blvd will yet have it's day... It's gotten really developed from Brickell down to Miami design district . Mind you, that was all aweful dumps a few years ago... Then mimo is really coming on it's own slowly .. there's a gap 60-80sh streets . Then 125-167

One thing, you have to understand Miami, Brooklyn was really expensive way back when . Neighborhoods turn or have blight seep in.

If you know where say Morningside park is .. then you'll have really nice area and then it was ghetto going west now it's called magic city.. or various area where little river is which had its gentrification, overlap with El portal / Miami shoes which is stunning.

But it's fun haha

[Euclid]

That may be the case, and also may be only because of his personal skimming. It will all come out eventually.

Also heard that this only really blew up because he was acting arrogant, and was starting to rub people the wrong way which led to the audit.

[aygart]

Also heard that this only really blew up because he was acting arrogant, and was starting to rub people the wrong way which led to the audit.

The big question is if it was just a matter of time.