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Have you been wondering what’s the difference between a multifamily commercial vs an industrial commercial? Do you want to learn how to foresee if your investment has high value in the long run before closing the deal?
There’s a difference when running a multi-family to industrial commercial– from fishing out for a deal to closing one. So how should you be choosing deals in the competitive real estate market?
Cody Lewis is a founding partner for Vendue Capital, LLC. He is involved in property acquisition, investor relations, and asset management for the company.
Prior to Vendue Capital, Cody worked for leading technology companies such as Apple, Verizon Wireless, and CompuComand Jamf in the management of Business-to-Business Sales and Engineering as well as Business Accounts Executive. After educating himself in real estate investments and exploring many avenues of investments, he became a partner of Vendue Capital to acquire multi-family properties. Cody produces the podcast, Real Estate UnSuccess Stories, where other investors share stories of unforeseen problems in investing, resolutions, and the lessons learned.
Cody graduated from Coastal Carolina University with a Bachelor of Science in Applied Mathematics. He resides in Charlestown, SC with his wife and twin sons. In his free time, he enjoys time with his family and his season tickets to Clemson University football games.
In this episode, Cody shares the difference of having a multifamily and industrial commercial and how to foresee the value of your investments through IRR.
What you’ll learn in just 17 minutes from today’s episode:
Topics Covered:
01:10 - Cody’s background in real estate investing and journey into scaling into the multifamily space.
03:20 - Why haven’t Cody and his partner been closing deals recently?
06:43 - Cody explains how their competitors are making money with the deals that Cody’s turning down.
07:43 - What does IRR mean?
11:16 - Is Cody starting to look at any other kind of asset classes?
13:22 - Cody’s website: Venduecapital.com
Key Takeaways:
“If you underwrote any deal back, you know, in 2020, 2021, even this year, a lot of things are still on future value. And there's a ton of risk that you have to take to bring maybe a cap rate that you're seeing.” - Cody Lewis
“As those cap rates were just continuing to get compressed, it just didn't make sense. We were looking at well, there's just there's not a lot of value to be added here.” - Cody Lewis
“We like to look at things from a long-term standpoint-- five-to-seven-year hold, or even longer, depending on what the market dictates. We underwrite for cash flow, that's our primary focus. We want to make sure regardless of what the value is of the property, if we need to, we can hold it for longer.” - Cody Lewis
“The equity is heavily weighted in favor of the passive investors. Well, as that IRR starts to creep up, the equity split starts to balance out or become more in favor of the partnership group, the general partnership group, and it does behoove them to perform at this level.” - Cody Lewis
“It was less about these groups performing the property really well and driving the NOI up and adding value to the property, it was more so that the market and the interest rates were really just taking that to the next level.” - Cody Lewis
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