Apartment Broker Live Call - From Christian Osgood and Multifamily Strategy

Garrison. How about Louisville, Kentucky? Louisville. All right. I spelled it right. For those who don't know, I am, uh, I'm much better at math than spelling. Spelling is not my strong suit. So this is always an exciting win for Christian. We're starting off strong. Here we go. Okay. So, uh, in CREXi, and this is free anywhere. So you log in, I logged in through my Facebook. You can create an account. For some reason, my computer doesn't like it when I try to use my email, but CREXi is completely free to use. They have some paid features. Apparently they're pretty good. I've never used any of them. You can do everything that I do for free. I'm not one to buy a whole bunch of systems because I end up never using them personally. So we're going to go into CREXi. We're going to go ahead and dump into multifamily like we did last week. And I'm just looking for deals that look like the type of thing that I would like to own. So I'm going through and I'm going to get a quick feel for what feels to be the, the standard pricing here. So 12 units, $900,000. How many units is this thing? I have no idea. They're calling it 10 units. There it is, 10 units, $70,000 a door. A little triplex, that's a little bit more expensive. So I'm just gonna look it through, get a quick look. This is kind of a cool-looking building. It's more expensive, but very interesting. And we're just trying to get a quick map of what's what. If you guys are wondering what opportunity zones are, it's usually for people who want to redevelop or put significant value-add where you actually get the benefits. I get this question a lot. Don't worry too much about the OZ zones. It's a, it's a benefit, but it's not a huge benefit. I'm going to skip for ease here. I'm just gonna say I'm going to skip the unpriced ones because you guys know those drive me nuts. So I'm just looking through, I will pick one or two. And the goal here is just to get on some calls here. This is a mixed-use building. Incentive, seller financing, any use. Okay, kind of be intrigued. Let's see, this is the first one that I'm seeing the word seller financing on it. But I I am currently doing a mixed-use renovation. This makes sense to call on. So we got Dollar, Mimi's Wigs, and McRory. No idea what these are. They both look like they are currently vacant. So very interesting. They want $3 million for it. InStyle, Mimi's Wigs buildings. Looks like they are mixed-use. Just to get a quick— I'm actually hoping they pick up on this one because this is such an interesting deal near the airport. Seller financing, what do they want? So I know going into this— this is why I always read the descriptions— I know going into this one they're open to creativity, so I'm not going to be a weirdo and ask the question. It looks like they want about 10 to 15% of the purchase price acquisition. I assume this is what they're asking for down. Amortization, 20-year AMM balloon. They're looking for a 3-year balloon or a 5-year balloon. If the terms are the same, why would you ever choose a shorter balloon? You could still refinance at year 3 if you want. So I know that they're a flexible on terms. I would ask for longer, but we'll negotiate around a 5-year in our general conversation if it gets that far, which I doubt. It has elevators. Look at this description though. Someone actually spent time trying to market this. Very interesting. It's been on market for about half a year. Very unique space. Let's view the offering memorandum and see what the— if they share any numbers on this. Thank you for putting this here. Agents will be in touch. Okay, so they uploaded a random document to the operating. So I have nothing there. Do I have a flyer or something? No. Or contact the listing agent. Okay, so they give no additional information, but they have a great description. Can combine the walls, leave the support columns, multi-purpose condo. Trying to figure out how many units are actually in this. That's the one thing I'm trying to figure out. So I want to call and ask a stupid question if they answer. That's the only thing we're going through here. So they're saying this has a rooftop terrace. Does it say if you scroll all the way up to the summarized, you know, on the left, our units, 50 on the left column? There's no way this is 50 units. There's no— that doesn't add up. I'm trying to figure this out. Hey, Christian? Yeah? If you look at the marketing description, it looks like there's 4 or 5 buildings in this. Oh, it's multi-building. That's why. Okay. Right side of the page, partway down. Well, 4 or 5 buildings. Okay. This is actually kind of cool. It's very interesting. Of course, I'm not going to buy this. I've not invested in Louisville, but I am, you know, We'll play the part here. The fashion. Okay, so it's all of these. We don't have a whole lot of interiors, but they're saying 50 units. I want to know— and the property type is just completely flexible. So my question for them is, how much of this do you think is multifamily? What's your opinion of highest and best use here? I love projects like this. I'm just trying to wrap my head around it. I think that's a reasonable call. Rachel is our contact here, and if it's not Rachel, it's Stephanie. Last thing I'm gonna do I'm not trying to stall, but I do like to know who I'm talking to. 5 million listings sold. She has a marina for sale, land for sale. Looks like some of these buildings are available individually. It looks like I can buy this one individually. Okay, so I know enough to make a call. What you don't want to do is overthink. You also don't want to ask them a stupid question. They're like, well, it's on the listing, right? So this one, I don't have an offering memorandum. I don't have a flyer. For 4 buildings, I don't hate the price. I just don't really understand. Opportunity completely. So my question is, how much of this should be multifamily? I do a little bit of retail. I do a lot of mixed-use downtown renovations. What is her thought for highest and best use? It is certainly an interesting property. So without further ado, I think we have enough. Let's go ahead and give a call to Rachel and just see what's up with what's up. Everyone stay on mute.

Hi.

Hey, this is Christian. How's it going? I am doing fantastic. I was actually, I was looking at a fairly unique listing that you have. It's the redevelopment opportunity in Louisville. It's the the 544 South 4th? I think it's 4 buildings.

Yes.

Perfect. I do a good deal of mixed-use downtown, and so I saw the retail. I'm personally primarily a multifamily guy, but I do like mixed-use. I was trying to wrap my head around what the project is and highest and best use. You did a great job on the description, but I was, first of all, just checking, are these still available?

Yes.

Okay, perfect. Well, that is good news for these particular properties. Can you help me wrap my head around the deal just a little bit? Give me a brief description of what you think the project looks like for a buyer?

So they basically, you know, it's vacant and it's really open space. The first floor is really, really open. Some of it's good to go. And then there's space that maybe was like an old shopping mall, like it has before MasterCard was there. It might have been like called like Master Credit or something. And it looks like there's, there's like an open area. There's a couple older elevators and like a kitchen and bar that used to be functional. That's basically the first floor. The second floor, let me think. It's a lot of space to try to summarize.

Oh, I know. I'm trying to wrap my head around it myself, especially that because it looks like there's 4 different buildings, correct? Or is it all technically one building?

They're technically different, like folio numbers. They do touch walls. So if you put a doorway, then they connect.

For the— for— so the first floor, obviously that needs to be— that all needs to be retail. That's, that's the correct use for it. If my goal was primarily to look for something where I can do ground floor retail and turn the remainder into multifamily, one, is that going to be within what we think highest and best use is? And is that what the city is going to want to go for when I go through the permitting?

I think that they would say yes to mostly anything because the surrounding buildings are retail and multifamily.

Okay, well, that's, that's good news. I'm working on a smaller project right now that is very, very similar to this, which is why it caught my eye. I have a lot of fun with these. I am going to be new. I'm specifically looking for a project in Louisville. I'm invested in Washington State and in Texas, and this is going to be market number 3 for this particular area. Do you have any insights at all in this particular area? I'm getting to know the— I'm getting to know the area better. I have a bunch of family and I have a great contracting team up there, but I am learning Louisville personally myself a little bit. Can you give me any insights on the, on the specific like street and area of town?

I used to live in residences like apartments. The Louisville football player in college or high school, I don't really understand men's football, but—

Okay, neither do I.

They're making like $200,000, $300,000 a year now or whatever. They're getting like big, big— they're getting big allowances. Some type of big allowance. So downtown, my neighbors were doctors. All the doctors walk to work or take like a scooter to work or a bike because all the hospitals are downtown and they just don't want a long commute because they do surgery all day. So there's a lot of doctors and then U of L is pretty close. So there's a lot of football players. Let me think. Then there's, you know, as far as that area, what, what I would do is you can just walk down 4th Street all the way down to Bourbon Row, which is— I think it's like Market Street and Main Street. You can just go towards the Gault House and then you can make a right and then that's like Bourbon Row. So there's not a ton of— I think that, you know, those are the two main people that I hung out with when I lived at the Omni. And then I would just walk down Third Street and go to all the restaurants on Main and Market. You're near Nulu. You know, the Omni would fill up every single weekend as like a main destination. But as far as multifamily, yeah, I mean, I think that if there was some product for the doctors or the football players, I think that— I think that they would check it out.

Well, that's actually a really good insight because that tells me what type of renovation that I would be doing. I wouldn't be doing entry-level housing here. I'd actually probably be doing more upscale, which would— which would determine the type of retail tenants that we want to attract there too. So that's actually extremely helpful. Thank you for that. Yeah, I noticed because my next question, of course, on renovation is going to be how we would take this out with the bank. But I did this, the listing mentioned seller financing. Do they— does the owner prefer to be cashed out, or is seller financing what they want to do? I'm imagining that's probably what it needs to look like, but I'm just curious what their objectives are.

They would like cash.

Yeah, I assume so. But with the financing, would they— are they flexible on price to get cashed out, or would they prefer to hit closer to their number and receive financing? I'm pretty flexible on deal structure. I just wanted to make sure if we end up going with this project that it makes sense for what they want to do.

They are negotiable if there's cash on the table.

Okay, that is, that is very helpful. Um, let me do this. It's a very unique project. I'm gonna go— I have, I have one business partner I need to run this by, but you answered my questions beautifully.

And I'll just tell you, there— so It's like that street who invented the hot brown. Then there's the Sealbach Hotel, which was the Great Gatsby.

Well, that's cool.

Yeah, that's like, I don't know, 3, 3 doors over from that. Oh, the McRory Building.

Okay. That makes me think I don't want to do hospitality because I don't think I want to compete with them. So that's good for multifamily. Really?

Yeah. I think there's still a huge market.

Okay.

Because the Omni would fill up and then it always fills up because there's just so many events that come here. I think because of Ohio, Indiana, Chicago, it just— there's so many events.

Okay, well, let me, let me do this.

Let—

I got what I needed here. Let me run some of this past my business partner, and if he's as interested as I am, because I think this is a really cool project, I will, I will make the jump over. Schedule time to walk it with my team. So let me, let me give this one some thought. This is, this is good to know though. So, so if we can bring a little bit of cash to the table, we may have some negotiating room. I want to figure out, it's such a unique listing. I want to figure out what the highest and best project is and how we would structure it. But I will, I will talk to my partner here in just a little bit and I will, I will reach back out to you and let you know what we're thinking, but very cool project. Thank you so much for giving me the time. Yes, ma'am. This is a pretty normal broker interaction that was like, I was hoping for some drama. There was nothing hard there. So I'll try to, we'll try to hop on a harder call. But that's the basics of how you're doing this. Tonality, you want to try to pace with them. My natural state, and it's good to kind of document this about yourself, my natural state is to transition into high energy anyway. So the fact that she was a little bit bubbly was really easy for me to pace. I didn't need to control the pace of that call. At least I didn't feel that I needed to with her.