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27
Mar, 2025

Is A Joint Venture Real Estate Deal Better Than Syndication?

Rob Rowsell answered a caller who asked about which of two investing choices was the best arrangement. Should the caller choose a joint venture real estate deal or a syndication investment? Watch and learn which is the best scenario for your own property deal.

Real Estate Joint Venture Investment or SyndicationJoint Venture Real Estate Deal And Syndication Investment Compared

Our friend Gabriel asked Rob which factors dictated a joint venture real estate deal, rather than investing with a syndication. For example, could the number of units in the property play a role?

Instead, Rob feels like JV deals are appropriate whenever you can pitch in with competent, like minded friends. He shares his Christian faith with one group who he does Joint Venture investments with, although Rob welcomes non believers to his business circle. Faith in Christ just happens to be one of the common threads in the trust that bonds this group.

When is a Syndication property investment a better choice? Rob explains that if you contribute to multiple Joint Ventures, you will soon run out of money. Syndication investments do not require you to risk as much cash as a JV or become as directly involved. When you go into a Joint Venture, it’s all hands on deck amongst a small group to make sure all of the paperwork is signed and decisions are made.

So, which do you choose? Go with a smaller property and smaller team on a Joint Venture? You may get a greater return, but you will definitely work for it. A Syndication could reap a smaller reward, but will not require as much investment or effort. It all depends on your own financial situation, whether or not you have a close knit core group of investors, and what your goals are.

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

20
Mar, 2025

Interest Only Loans vs. Balloon Loans

Here is a clip from a recent Inner Circle Gathering Zoom call. Rob Rowsell answers a question from our friend Deon about the difference between interest only property loans and balloon loans. Watch and learn.

Interest Only Property LoansInterest Only Property Loans – When And Where?

Many interest only property loans are also balloon loans. For example, Rob cites a ten year interest only loan he currently holds. At the end of the ten year period, he can make a balloon payment to pay off the loan, or he can choose to refinance that loan. Deon next asked if that type of loan is Rob’s preferred arrangement.

Rob then gives his honest opinion that taking out an interest only loan. Such a loan is not usually the best move for multifamily property investments. Why not?

One benefit of having tenants in your properties is that their rent payments can go toward paying the principal of your loan. After ten years of collecting rent, you can considerably pay down the amount that you owe to the bank. This is a great method when you intend on holding onto the property for a long time. Conversely, if you want to sell the property in a short amount of time, an interest only option may be a good choice.

In summary, taking out interest only property loans should only be done in special circumstances. Building equity on the front end allows investors to potentially take out other, more manageable loans to add more revenue generating properties.

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

13
Mar, 2025

How To Negotiate Cap Rates With Commercial Property Brokers

Here’s a clip from one of our monthly ATL Zoom Meetings. Inner Circle Member Gustavo asks Rob Rowsell about negotiating with commercial property brokers. Can buyers negotiate cap rates? The answer is YES! You CAN work out attractive financing deals with real estate brokers and sellers – every deal is different!

Negotiate Cap RatesRob Explains How To Negotiate Cap Rates

We know that the market, as well as a property’s location, condition, and income production are factors in its cap rate. The brokers themselves can also factor into that number. Rob provides a few tips on how to negotiate cap rates on commercial real estate deals, specifically with property brokers.

While brokers are responsible for getting the biggest returns for their partners, they may also resort to casting a wide net for investors. Every broker has their own top five investors. When none of those work out, they may turn to the other brokers in their office for recommendations. If each of their top five investors pass, the next step is looking for retail buyers.

Building Relationships With Brokers

Then you, a seasoned property investor, come along. Take the time to convince them that you know what you’re doing before attempting to negotiate cap rates. You are not a fly by night operation. When you build a relationship with a broker, you can submit offers that are more realistic than the ones they’ve been sitting on. Maybe the first few offers get rejected, but when the selling broker learns that you know your stuff, you are more likely to get calls from them in the future.

Remember, if you become a member of Rob’s Addicted to Life Community, he will personally inspect your underwriting. What could be better than getting advice from the best?

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

6
Mar, 2025

Cap Rates Deep Dive

Rob Rowsell answers a question from a caller about commercial real estate cap rates. Rob follows up with a deep dive on capitalization rates in the property investment industry. Watch and read along to learn everything you need to know in this cap rates deep dive!

Commercial Real Estate Cap RatesCommercial Real Estate Cap Rates And Property Values Explained

Our caller Deon asked if a “6” cap rate was ideal before making an offer. Rob clarified that his initial example was based on a “6” rate. Really, Rob views that number as a starting rate when making a quick valuation, then you will want to dig deeper to see if you can do better. Depending on the situation, another rate could work better. Many factors, from the market to the broker, could affect what rate you want.

What formula do you use to determine a commercial property value?

Rob explains that this formula differs from the one we use for multifamily property values. In that situation, you compare recent sales near the dwelling you’re looking at. When looking at a commercial property, you can divide the Net Operating Income (NOI) by the Market Cap (Capitalization) Rate. You will then arrive at the value of the commercial property.

For example, you pay $1 million cash for a property. It brings in $100,000 in Net Operating Income. Therefore, you paid a “10” cap for that property. A more realistic scenario would be paying $1.7 million cash, bringing the cap rate to 5.8 – thus, Rob’s initial example rounded up to 6.

When you take the time to calculate realistic numbers, you will know whether or not a property is worth your time. Do your due diligence, because commercial investments can be risky business, even for seasoned pros!

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

27
Feb, 2025

Debt Coverage Ratio Explained

Multifamily Real Estate Investor Rob Rowsell explains the Debt Service Coverage Ratio Formula. How, when, and why should you use the DSCR (or DCR) loan formula? If you can’t answer those questions, then this video is a must watch!

Property Investment Debt Service Coverage RateDebt Service Coverage Ratio Formula

In this clip, Rob explains a crucial formula for members in our monthly Inner Circle Community Gathering.

The Debt Service Coverage Ratio Loan formula is as follows: DSCR = NOI (Net Operating Income) divided by Annual Debt Payments. This includes the loan principal, so do take care if you have an interest only loan. In that instance, you will want to review the amortization schedule in order to determine your true percentage rate.

Why is it important to understand this formula? Banks use it to determine if they will grant a loan to your project, as well as the amount. In Rob’s experience, banks prefer a 1.25% ratio. Sometimes, he can’t get that number because of renovation plans. When his team crunches the numbers, the project still makes sense financially. In this instance, lenders occasionally will allow a bridge loan, in which the property investors have a set amount of time to up the Debt Service Coverage Ratio and make the loan worthwhile. If the investors fail to make the difference in that time, a penalty will apply to cover the bank’s losses. Make sure you read the fine print of your loan agreement and plan accordingly!

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

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