500 MILLION DOLLAR DEAL

[Zenoviy Kovtun]

Still moving forward with this venture, here is where i am at:

1. Building a massive pipeline of deal flow. Right now I am sent around 50-100 properties per week to analyze.
2. I have perfected our due diligence process and ROI/IRR analysis. Within 10 minutes I can say yes or no to any property that meets our criteria.
3. Sending out LOIs on a daily basis.

Right now rates are going up and property owners/brokers are stuck in there thinking that rates are still falling/staying low. Therefore, most owners/brokers are asking too much and haven't had to deal with a rising rate environment in a very long time.

Basically a waiting game to start deploying capital..

Intersting thread so far ! Thanks for the feedback. Can you provide some insight into your due diligence process? What do you look out for most? What kind of IRR or ROI is generally your goal?

You mentioned a waiting game and an overpriced market.. how much of a discount do you suggest / do your LOI's reflect? I've also noticed assets being over priced and wondering when/how soon we can expect a correction.
Thanks again!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[458]

Intersting thread so far ! Thanks for the feedback. Can you provide some insight into your due diligence process? What do you look out for most? What kind of IRR or ROI is generally your goal?

You mentioned a waiting game and an overpriced market.. how much of a discount do you suggest / do your LOI's reflect? I've also noticed assets being over priced and wondering when/how soon we can expect a correction.
Thanks again!

You're welcome

Our upfront due diligence is based on many factors but mainly it is based on: does the property fit our specific criteria for class, neighborhood and size. If yes, we quickly run the numbers using our analyzer. Typical upfront due diligence per property is about 20-40 minutes but we spent months perfecting our assumptions and analyzer for exactly what we are doing.

We will then setup the asking price to reflect a minimum IRR of 20% and if we are within 80-90% of what the owner is asking we will send them an LOI. Right now, a lot of owners are way off and are pricing there properties as if rates are going lower and there property is going to quickly appreciate as it has in the recent past, this is simply not the case, most LOIs are being rejected flat out right now.

Recently though, brokers/owners from a few months ago that were not interested in our LOI are starting to reach back out because the property has not moved like they thought it would.

 

[Zenoviy Kovtun]

You're welcome

Our upfront due diligence is based on many factors but mainly it is based on: does the property fit our specific criteria for class, neighborhood and size. If yes, we quickly run the numbers using our analyzer. Typical upfront due diligence per property is about 20-40 minutes but we spent months perfecting our assumptions and analyzer for exactly what we are doing.

We will then setup the asking price to reflect a minimum IRR of 20% and if we are within 80-90% of what the owner is asking we will send them an LOI. Right now, a lot of owners are way off and are pricing there properties as if rates are going lower and there property is going to quickly appreciate as it has in the recent past, this is simply not the case, most LOIs are being rejected flat out right now.

Recently though, brokers/owners from a few months ago that were not interested in our LOI are starting to reach back out because the property has not moved like they thought it would.

That's a great IRR to aim for! Mind touching on what kind of criteria solidifies your approval of the neighborhood? For example, do you look for something near a school or hospitals etc. Or is it more big picture stuff and just knowing this market is growing in general.

Any tips on when to buy, In terms of the market right now? I understand it doesn't make much sense to try to time the market, but what factors suggest that it is the right moment to deploy capital? Is it as simple as sending out an LOI in the price range that makes the deal/the numbers work and seeing if they bite?

Thanks again!