A short YouTube presentation (Jonathan Cronin) giving tactical real-estate investing advice for 2023/2024 centered on multifamily apartments. The speaker reviews a specific 88-unit apartment currently under contract, explains a value-add (forced appreciation) strategy—renovate, raise rents to market—to increase NOI, and demonstrates back-of-envelope math showing how a $100/month/unit rent bump (≈ $8,800/month, ≈ $105k+/year) at a ~6% cap rate can add well over $1M in value. He emphasizes buying for cash flow, moving from single-family into larger multifamily deals, and inviting investors to participate.
Questions this video answers
88 units.
About 6%.
$100 per month per unit.
Hey, what's up, guys? Today I am talking about what to buy in 2023, what you should be investing in, what asset classes, what real estate should you be buying as a real estate investor, even when many people are saying there's a major recession coming or major downturn, more than what's already happened. Well, I am at an apartment complex right now where we just started due diligence. My partner locked in this deal. It's under contract, 88 units. I want to talk about a few things that makes this deal sweet even in the midst of a recession and gives us confidence to bring on investors and bring on people into the deal. First off, it's 88 units. So stating the obvious here. You can have a lot of people leave overnight and still have a majority of people paying the rent, paying the mortgages, paying the bills right now, number two, we don't speculate, we're not speculating that the market's going to go up. And that's the basis for how we're going to make money on this deal. It's a value add process. So basically it's forced appreciation. We come in, we renovate the place, we raise the rents to market rents. Right now the property is well below market rents. So that gives us the ability to come in, make the place nice or at least improve it some and increase the rents. You know, just say on an 88 unit, you know, if we are increasing the rents, only $100 a month. You know, it's the cool thing about apartments is its value. The property is valued based on your income or based on the net profit, the net operating income divided by the cap rate in the area. Well, this cap rate in this area is 6% or around that. So you come in and raise it 100 bucks a month. You know, let's just say 8,800 bucks a month and times 12. And if you don't increase expenses with that or maybe even make expenses even more efficient, then that's, you know, 100 something thousand a year that you just increased your noi to your profit on this apartment complex. And then divided by the cap rate, which is 6%, you know, you're well over a million dollars that you just added overnight. And so that's the other point here. When you're buying apartments in 20, 23, the last rule of thumb, I want to leave you with it, Number three is buy for cash flow. Okay? You need to buy something that is either already cash flowing or you can very quickly get to cash flowing. And so this property is not cash flowing right now, but it's within a couple months. We should, we should have it there because ultimately all we have to do this property is well under market rents and we can just increase $100 overnight. Of course, you know, there's a little bit of a process there, but we can improve it a little bit and increase rents. 100, 100 bucks a month. Okay. So that immediately gets us to cash flowing. Cool thing about this is it's not a transition for tenants because it's, it's, it's a, it's a LI Tech deal, it's a HUD kind of situation. So anyway, that's why we're taking this down and I believe that there's a lot more to come in 2023. There's some major deals to be had. If you're somebody who wants to create some major passive income for you, your family, your ministry, your mission, whatever that looks like for you. If you're somebody who wants to learn how to buy bigger deals, get out of the rut of single family and get into multi family, get into bigger deals and do it with other people. We'd love to talk with you sometime. Otherwise. I hope this helped you in your business, in your, in your plan for 2023. Cuz our plan is to take more deals down and we're hoping that this one will, will work out and close on time. So I hope that helped. If there's any questions, let me know. Have a wonderful day.
