5 Most Important CRE Data Points, Nicholas Abraham

CRE Clarity

Welcome to the CRE Clarity Podcast with Jeremy Goodrich. Our guest today is Nicholas Abraham, a multifamily real estate investor. In our conversation, you’ll discover the top 5 metrics every passive investor needs to know, proven acquisition strategies for finding winning deals, and insights into the current real estate market and upcoming opportunities. Tune in now!

Learn more about Nicholas and his story at creclarity.com!

“Real estate has always been a tried and true investment vehicle.”

01:01

Nicholas began his career in finance in 2009. However, he quickly discovered that real estate was the true recession-resistant asset class. This led him to transition into the real estate field.

Nicholas dives into his approach to evaluating real estate deals in the current market. He recommends looking for deals with good cash flow and fixed-rate debt in markets with steady job growth.

“I tell all my investing partners, I'm not here to transact with you I'm here to build a relationship. This is a long-term business.“

13:00

Nicholas shares the top 5 metrics crucial for passive real estate investors.

1. Cash-on cash: This metric focuses on the annual cash flow you receive relative to your initial investment.

2. Price per door relative to the market: This compares the price per unit (door) of the property to similar properties in the market.

3. Cap-rate: This metric is the NOI divided by the purchase price. Aim for a positive cap rate to avoid negative leverage.

4. Risk-adjusted returns: This considers both the potential return and the level of risk involved in the investment.

5. Yield on cost: Often overlooked, YOC factors in the renovation costs, providing a more comprehensive picture of your return on investment.

Nicholas points out that IRR shouldn't be the sole focus, as it can be manipulated by factors outside the investment's core performance.

Nicholas’ firm is operating with the “2 and 20” method for acquisition fees. This translates to a 2% initial fee for investors, along with a 20% share of the profits once the property is sold. Acquisition fees typically range from 0.1% to 5%, depending on the deal size.

“There's trillions of dollars sitting in money market accounts right now.”

35:25

Toward the end of the conversation, Nicholas shares what he’s most excited about currently. He’s looking forward to decreasing interest rates. Ge believes this could create new opportunities for investors due to a lot of capital currently available in the market.

Finally, Nicholas shares one point of clarity with the listeners - Diversify your income streams to achieve financial freedom.

About our Guest, Nicholas Abraham

Nicholas Abraham is a real estate investor passionate about financial education and creating passive income through multifamily properties. Originally from Columbus, Ohio, he has a background in Economics & Finance and currently resides in Charlotte, North Carolina.

Nicholas' interest in personal finance began at a young age and his diverse career path has included working for Fortune 500 companies, growing a solar startup to significant revenue, and flipping houses. After a hurricane-impacted his business, he transitioned full-time into real estate, focusing on multifamily investments.

Nicholas leverages his experience to educate others on the benefits of real estate and partners with them to acquire cash-flowing apartment buildings. By renovating these properties, he aims to increase tenant satisfaction and generate stronger rental income.

Mentioned in the show:

1. His LinkedIn

2. https://sterlingwealthcap.com/

3. www.shineinsurance.com/

4. The REI Clarity Framework

Need an instant insurance ballpark for your next Multifamily deal?! Answer 9 simple questions and we’ll give you a sense of what insurance should be. Visit us here for everything you need to know: https://www.shineinsurance.com/ballpark/

Special thanks to Nicholas Abraham for taking the time to share so many great insights with us If you enjoyed this podcast, there’s a couple of things we need you to do right now:

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Until the next time, We truly appreciate you listening.

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