The Best Ever CRE Show JF3796: Arizona Population Growth, Construction Volume Pullback, & Rising Capital Costs ft. Danny Flores
Jan 25, 2025
Danny Flores, owner of Prime Capital Investments and expert in multifamily acquisitions, shares his intriguing journey from construction to real estate. He highlights the challenges posed by high interest rates and the importance of understanding market dynamics, particularly in Arizona. Danny emphasizes the value of building relationships with brokers and the lessons learned from both successes and failures in real estate deals. He also stresses the necessity of careful underwriting to navigate a competitive landscape and hint at growth opportunities.
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Danny's Career Evolution
- Danny transitioned from a 16-year construction career into banking after earning a USC corporate finance degree.
- He began with small multifamily purchases and exchanges before eventually launching a property management company and multifamily acquisitions business.
Impact of Regulation on California Values
- California multifamily values declined partly due to increased bureaucracy, rent control, and eviction restrictions.
- Rising expenses with limited rent growth pressure operating income and deter investors from buying in California.
Changing Dynamics in Multifamily Lending
- Earlier, multifamily deals in California often required less down payment and easily cash flowed.
- Current market saturation and competition have ended those favorable conditions indefinitely.