Real Estate House Hacking Guru

• Asking Rent Trends: Since 2019, asking rents have steadily risen, with only a slight deceleration after the pandemic. The gain of 0.3% from the previous quarter was lower than the 0.8% average quarterly increase seen over the past three years.

• Rent Reduction Trends: Rent reductions are expected to remain significant in 2024.

• Highest Average Rates: The San Francisco Peninsula and Manhattan recorded the highest average Class A rates at $86.62/SF and $80.43/SF, respectively.

• Class Rate Changes: For the latest quarter, asking rates for different classes varied: Class A rates increased by 0.1%, Class B rates rose by 0.2%, while Class C rates saw a decrease of 0.1%.

• New York City Metro Area: Leading all other metro areas, the New York City metro region has 6.9 million square feet under development.

• Manhattan's Contribution: In the first quarter, Manhattan added 4.0 million square feet, representing 34.5% of the 11.7 million square feet completed nationwide.

• Construction and Inventory Impact: The total amount of US space under construction dropped to just under 64 million square feet after COVID-19. Once completed, this will result in a 1.0% increase in inventories.

• Supply and Demand Balance: Reducing new construction starts is expected to help address the imbalance between supply and demand.

Let's get down to it, how does a person go from looking for a place to rent at 20 to retiring at the age of 27?

The answer...

Multifamily real estate.

Originally from Minnesota Turner made a name for himself in the real estate industry by concentrating on long-term wealth-building techniques. He places a strong emphasis on developing a positive mindset, being educated, and making sensible investments to achieve financial independence.

In college he was a History major, he just went in with all the credits he had and wanted to get out as fast as possible. Looking to become a lawyer he read the book "The Firm" by John Grishman outlining a lawyer who was chased by the mob. What he got from the book was the idea of lawyers working 40 years 90 hours a week and at the end of their life, they hated who they were and what they did.

He outlined the idea of making 200K a year for 90 hours a week was not worth it. From there he knew he had to find a way out, leading him to RE (Real Estate).

Bigger Pockets

• His association with BiggerPockets, a renowned real estate investing social network and resource center, helped him become popular in the industry.

• He offers insightful commentary, speaks with industry professionals, and counsels both novice and experienced investors.

• Bigger Pockets was a way for Brandon to find a place where instead of hearing real estate is dangerous he found the yes-sayers. A place where he can finally learn.

Open Door Capital

• Brandon Turner is the founder and CEO of Open Door Capital, a real estate investment company (managing over a billion dollars) that specializes in acquiring and managing mobile home parks and apartment complexes across the United States.

• The company has raised and deployed tens of millions of dollars, acquiring numerous properties and significantly growing its portfolio.

Today Brandon Turner and his firm Open Door Capital own 3,000+ properties generating $1.5M monthly.

Yes, month.

He is a well-known real estate investor, author, and podcaster, Brandon Turner is known for his personality in the industry for being reliable and inspirational with a little pragmatic attitude. Important works written by Turner include "The Book on Rental Property Investing," "The Book on Managing Rental Properties," and "How to Invest in Real Estate: The Ultimate Beginner's Guide to Getting Started."

Let's uncover the concepts.

House Hacking

• At the age of 20, he consulted with a real estate agent regarding rental options. The agent proposed an alternative strategy: purchasing a property and leasing out additional units. In 2007, amidst a lenient lending environment, he secured financing and acquired the property for $80,000. He then undertook renovations and successfully leased out the units, marking the inception of his real estate investment career.

  • He ended up living in it for 9 months before selling it at $130K at the peak of the market.

  • It was two properties on one lot not connected (see image above). One was a 400 sqft 1 bd 1 bath (6 inches from the alley) where Brandon stayed and the front house was a 2 bd 1 bath where his tenant stayed.

His first payment was in all cash $650. At that moment he held it and thought to himself,

"My mortgage is $620, I am practically living for free."

What are some ways I can get started?

• In 2007, getting a loan was easier due to loose credit standards, many subprime mortgages, and minimal documentation requirements. Today, getting a loan is more challenging with stricter credit checks, more thorough documentation, and higher scrutiny of borrower qualifications.

1. Low Down Payment: FHA loans mandate a minimal down payment of 3.5%, enhancing accessibility for first-time homebuyers and investors with limited capital reserves.

2. Favorable Loan Terms: Benefit from competitive interest rates and flexible underwriting criteria, which can result in lower monthly payments and increased borrowing capacity.

3. Owner-Occupancy Requirement: Comply with FHA guidelines by residing in one unit of the duplex, while leasing the additional unit to generate supplementary rental income, thereby offsetting mortgage obligations.

4. Renovation Financing: Leverage the FHA 203(k) loan program to secure funding for both the acquisition and rehabilitation of the duplex, facilitating value addition through property improvements.

5. Equity Accumulation: Gradually build equity through property appreciation and principal repayment, creating opportunities for leveraging existing assets to finance future real estate investments.

Brandon emphasizes the importance of taking marginal time to think. He highlights that taking breaks to relax the brain and focus on what truly matters is crucial. As an example, he mentions working out for 90 minutes. During the first 60 minutes, your mind may be scattered, but eventually, you reach a point where you can pinpoint a problem in your life. This allows you to dive deeper into the issue and ease your mind. Today he is living his life in Hawaii with his wife and kids.

Barry Sternlicht’s Starwood Capital sells a hotel in the Plaza District to a Maryland hospitality firm for $265 million. The transaction, finalized with a $150 million loan, involves Host Hotels & Resorts acquiring the property currently branded as 1 Hotel Central Park. The loan was provided by a lender whose details are obscured by a shell company linked to the law firm Fried Frank

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