Jake & Gino: Real Estate Investing & Multifamily RPP - Nikolai Ray
Nikolai Ray is the founder and CEO of the MREX, creating marketplaces for multifamily markets and secondaries market for real estate. Nikolai discusses with Rand Partners how people overemphasize cap rates in value-add deals.
Key Information:
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Cap rate is the annualized return on investment if you purchased a property all cash
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The problem with focusing on cap rates with value add deals is that:
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Debt is used to purchase real estate (leverage)
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Cash flows aren’t stabilized, but cap rates are based on annualized cash flows
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Don’t look at averages of exit cap rate, look at ranges
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About Jake & Gino: Jake & Gino are multifamily investors, operators, and owners who have created a vertically integrated real estate company. They control over $350M in assets under management. They have created the Jake & Gino Premier Multifamily Community to teach others a simple three-step framework for investing in multifamily real estate. Connect with Jake & Gino here --> https://jakeandgino.com.
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