about $8M of difference based on rental rates. Look at the $2.00 PSF rate, that's a $22M disposition in 7 years. It's only a positive 2.6% IRR due to cashflow during those 7 years. You can see below, a $1.40 PSF rate today implies that a $13M project will sell for $14M in 7 years. The equity on these types of dev deals will typically consider a 7-Year hold, and require +20% IRR. I'll see underwriting with $2 PSF rental rates, and the comps I run get below $1.50 PSF. These are IMO one of the most nuanced and easily manipulated lease comps. were there concessions on the lease? what's the quality of the office building and amenities? Is it a full service gross lease where the landlord pays for everything, or a modified gross lease where the tenant pays for x, y, z and what exactly do they pay for? Find similar properties that recently sold in that neighborhood. Running sale comps for single-family homes is pretty simple. I often see comps that are almost negligent. It's so so so important that these are dissected before investing millions into a project. one of the most consequential assumptions for any self-storage purchaser or developer.

#RealEstateInvesting #FinancialStrategies #WealthBuilding #InvestmentInsights 🌟ĭM to learn more about multifamily investing! It's a financial strategy that showcases the importance of smart investing, tax planning, and building wealth over the long term. This is a unique advantage of real estate investments!! The government created incentives to encourage us to provide housing and jobs for others!īy understanding and utilizing depreciation, investors can legally reduce their tax liability while still enjoying the benefits of property appreciation and rental income. What if I don’t use all the losses this year? It gets rolled forward! What this means is that even though I’m making money from the property, I can legally show a 'paper loss' on my tax return due to depreciation. 🌟 As an investor, I can use depreciation 'losses' to potentially eliminate all the associated tax obligations. 💡 Now, here's the twist: the property has positive cash flow!

Today is the tax filing extension deadline and many other multifamily investors are also showing negative rental income!īelow is a K-1 I received for my investment in an apartment in 2022 where I’m showing a $87k loss. 🍾 Why am I celebrating a negative income in real estate?!?🥳

Move it storage sherman tx