There are two main purposes to include preferred equity into your business plan: one, financial leverage, and two, raising a large amount of capital from one place. A repeat guest on the show, Rob Beardsley, has spoken in several previous episodes where he talked about underwriting. He has since become an expert on this very complex issue, and it is always great to know guys like Rob, who is fluent in structuring deals and thinking outside the box.
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At only 23, Rob oversees acquisitions and capital markets for Lone Star Capital, and has acquired over $100 million of multifamily real estate. He has evaluated thousands of opportunities using proprietary underwriting models and published a number one book on multi-family underwriting, The Definitive Guide to Underwriting Multi-family Acquisitions. Tune in to today’s show to hear all about what’s happening with Rob and his company, how COVID has affected underwriting, and more about their preferred equity strategy to close more deals, enjoy!
Key Points From This Episode:
- Rob provides an update on what’s currently happening in his business.
- More on what COVID has done to lending and creating a preferred equity strategy.
- What it means when someone says “capital stack” or “gap in the stack.”
- What Rob has done with the gap in the stack and how it’s worked.
- Two ways to play with the market as a sponsor: focusing on cash flow and COVID reserves.
- How to play with the market as a lender: preferred equity strategy.
- The two main purposes of preferred equity: financial leverage and getting a large amount of capital from one place.
- Who would most likely make use of the preferred equity strategy.
- What to focus on if you are a sponsor, passive investor, or on the preferred equity side.
- How Rob prepares for a potential downturn using appropriate leverage.
- Rob’s prediction for the real estate markets over the next six to 12 months.
- Daily habits that have helped Rob achieve success.
- Rob’s best source for meeting new investors.
- The number one thing that has contributed to his success: working smarter, not harder.
- How Rob gives back through teaching.
[bctt tweet=”Cash flow today is really king. — Rob Beardsley” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Rob Beardsley
Rob Beardsley oversees acquisitions and capital markets for Lone Star Capital and has identified, negotiated, and structured over $100 million of multifamily real estate transactions. He has evaluated thousands of opportunities using proprietary underwriting models. He has a popular newsletter read by hundreds of real estate professionals and has published over 50 articles about underwriting, deal structures, and capital markets. Rob also helps run Greenoaks Capital, his family’s real estate investment and advisory firm.
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