Episode 106:
In this episode, Cody and Brian discuss the advantages of the value-add play, as well as how you should be wary when buying/selling a value-add deal as a passive investor.
For today’s episode we will cover:
[ 00:00 – 02:14] Opening Segment.
- Pleasantries between Cody and Brian.
- Why the value-add play has been talked about.
[ 02:14 – 08:41 ] a recap on what is the value-add play
- Cody discusses the value-add model.
- Definition of the value-add play.
- The current problem with the value-add strategy.
- Paying a premium for the opportunity.
[ 08:41 – 18:58 ] Is paying the premium worth it?
- Overplayed Value-add move.
- Why value-add exists.
- In-place value vs future potential value.
- Discussion on execution risks.
- How to mitigate the risk.
- Deeper impact of the strategy.
[ 18:58 – 22:15 ] The guide for passive investors.
- What it means to “buy right”
- Knowing what your risk tolerance is.
- Always consider the time.
- Checking out the operator and the team before investing.
[ 22:15 – 29:23 ] Things to ponder for passive investors.
- Always thinking about the exit strategy.
- Forcing people to be more creative.
- Make sure to ask questions.
- Why the market isn’t slowing down anytime soon.
- Variables to consider in asset classes.
[ 29:23 – 32:26 ] Closing segment
- Importance of asking any questions.
- How to educate yourself before getting a deal.
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