Here Gordon and CFE take 100% of the risk as they put up 100% of the money given to the seller. Taking this even a step further to get an edge on the competition Gordon and CFE often write non-contingent offers and day one pass thru large sums of money to the sellers. Very few other buyers know about the deal and this lack of competition translates into a better price for the buyer. (an off-market deal is a deal that is not formally listed with a brokerage firm but the owner is selling the property to the first broker who brings him an offer he likes) This is where Gordon and CFE’S reputation and contacts MAKE MONEY ON THE BUY! If you are a buyer off-market deals are what you want to look at. Fully 50% of the deals sold today are sold “off market” as the real estate jargon goes. Brokers only want to have to sell the deal once and above all they want a buyer who will close escrow with the least amount of drama. In this space CFE has a sterling reputation as a no-nonsense repeat buyer. The untold truth about the multi-family for sale market is the fact that the brokers control who gets the deal.
Gordon and CFE have developed a solid reputation as buyers who perform and do not needlessly renegotiate deals. Today the for sale market in multi-family is very competitive often with multiple offers on every deal. All complexes’ are 100% full except for turnover and in the future the majority of increase in population will be living in apts not purchasing homes.Īn old saying in the real estate business is “ YOU MAKE MONEY ON THE BUY” There is a lot of truth to this. In Gordon’s opinion these smaller existing apt complexes are irreplaceable assets. Coastal markets are the barriers to entry.įirst rents would have to increase 300% to justify new construction second homeowners in these markets do not want more apts in their neighborhood and lastly there is almost zero land anywhere in these dense costal markets zoned for multi-family construction. Class B on the other hand are lifelong renters but they do have significant discressionary income and they appreciate a pristine renovated complex and will pay significantly higher rent for this lifestyle upgrade) The Key to the Class B & C assets in these Calif. (Class B and C differ in that C tenants can barely make rent each month i.e no margin for error. CFE focuses on acquiring well located class C assets and thru extensive exterior and interior renovations transforms them into class B assets. Thus an upscale renovation of these assets creates an arguably more appealing environment than even a new project for a family with children. The common denominator of all assets of this type purchased today by CFE is that nothing has been done to them since they were built.
Again unlike micro units being built today. Also earlier construction featured much larger units with larger bedrooms etc. Unlike multi-story concrete jungles built today. Additionally density of units back then was very low and these projects have a lot of open space with pleasant landscaping.
These 50’s,60’s, 70’s and 80’s projects are very well located as the original developers had their pick of the prime locations. The majority of purchases are class C buildings that have been owned long term by mom and pop type individuals. In these geographic markets the focus is strictly on B and C assets, A assets being newer projects with very high rents often in mainly urban core areas renting to millennials.
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