💸 A 'once-in-a-lifetime' opportunity on the horizon?

Hello, Best Ever Community!

In today’s newsletter, a “once-in-a-lifetime” opportunity arises, a Tucson deal nets a 72.8% IRR and a 2.7x equity multiple, and we simplify choosing the right property management software.

Plus, if you haven’t already, make sure to sign up for the Best Ever Book Club now so you can take part in our discussion hosted by Joe Fairless at the end of the month. Click here to vote for our November pick!

First time here? Subscribe to stay current on all the latest CRE news!

Let’s go!

_{🗞 NO-FLUFF NEWS}
THIS WEEK’S TOP HEADLINES

🔨 Jury Slams Realtors With $1.8B Verdict: A federal jury has ruled against the National Association of Realtors (NAR) and major residential brokerages, holding them accountable for $1.8 billion in damages, citing a conspiracy to elevate home sales commissions artificially. CRE Daily breaks it down.

⏸️ Fed Hits Pause: The Federal Reserve opted Wednesday to leave interest rates unchanged while indicating a majority of officials expect one more quarter-point interest rate hike before the end of the year.

📉 Tumbling Profits: CBRE Group Inc., the world’s largest name in commercial property brokerage, saw its third-quarter profits fall 56% and is prepared to take cost-cutting measures amid ongoing market challenges.

🏢 Biden Backs Conversions: The Biden administration has announced federal financing and other incentives designed to convert high-vacancy commercial buildings in downtown spaces around the country into residential in an attempt to increase housing supply.

👑 The New King of Retail: A major shopping center owner is spinning off all its strip malls into a new $1.7 billion REIT as suburban strip malls thrive in a hybrid work environment.

_{🎙 THE BEST EVER SHOW}
A ‘ONCE-IN-A-LIFETIME’ OPPORTUNITY

🏢 While the current state of the office real estate market might raise some eyebrows, it's not all doom and gloom. Despite a significant decrease in tenant demand that’s put older office properties in a tough spot, leading to distressed sales, this situation might just be setting the stage for an exciting opportunity — investing in Class A office space.

While older properties from the 1960s to the 1990s are facing reduced demand, it's a different story for office spaces built in the last two decades that are better equipped to thrive in the current landscape. In addition, suburban office spaces, especially in walkable suburbs, are witnessing a surge in demand. This trend is making Class A office space an increasingly attractive investment option, and there are several reasons for this shift.

🕊 Flight to Quality: During challenging times in the office real estate market, there is a "flight to quality" occurring. This means that businesses and tenants are seeking high-quality Class A office spaces as they provide better amenities, modern infrastructure, and a more attractive environment.

📉 Discounted Prices: The market is currently offering Class A office properties at a discount. Investors may be able to acquire Class A properties at a 30%–40% discount compared to their pre-pandemic values.

💪 Historical Resilience: Class A office properties, especially those built since 2005, have historically been more resilient and have better performance during market fluctuations than older properties.

💵 Stability and Lease Rates: Some Class A office properties are achieving stable lease rates, even in the face of market challenges.

Considering all these factors, it's crucial to keep in mind that the opportunity to invest in Class A office space isn't a one-size-fits-all deal. The scenario can vary significantly depending on the location and the specific property you're eyeing. Furthermore, the entire office market is still grappling with some uncertainties.

So, if you're thinking about taking the plunge, take your time to thoroughly evaluate each investment opportunity. As always, it’s imperative to factor in your long-term goals and personal comfort with risk before making any investment decisions. 

👉 Discover more by listening to the full episode. 

_{💻 GSP REI}
FREE WEBINAR

Investing in affordable housing is a time-tested, proven investment strategy, and current economic conditions are creating an unprecedented affordable housing crisis with increasing high demand and historically low supply.

🎓 In this 30-minute webinar, you'll learn:

• The Benefits of Affordable Housing: Understand the advantages of incorporating affordable housing investments into your real estate investment portfolio.

• Proven Strategies: Learn how to execute a successful SFR strategy and review core competencies like capital, construction, and property management.

• How to Make a Positive Impact: Learn how affordable housing investments can contribute to your long-term wealth-building goals and positively impact communities.

• Key Residential Market Insights: Gain valuable insights into the current economic environment and the demand for SFRs, particularly affordable housing.

👉 Register here to join us at 2 p.m. EST on Wednesday, November 8.

Can't make it on November 8? Register anyway, and we'll send you the replay.

_{✍️ BEST EVER BLOG}
TOGETHER WITH RENTEC DIRECT

🤔 Searching for property management software can be overwhelming. You're constantly bombarded with misleading ads, unrealistic demos, and bad information from pushy salespeople. It's a jungle out there. But the truth is, it’s not about finding the best property management software. It’s about identifying the right software for your unique business.

Here are a few tips to help you choose the right property management software for your business:

✍️ Define Your Unique Needs: Gather input from your team on your biggest pain points and must-have capabilities. Do you need help screening tenants, collecting rent, and tracking maintenance? Are streamlined accounting, marketing, and tax prep among your greatest needs? Keep these priorities top of mind when evaluating options. 

🔒 Assess Data Security: While most vendors have security protocols, protections vary, so you must do due diligence. Ask targeted questions to understand how data is handled and stored. Property management data is highly sensitive, so prioritize platforms with ironclad encryption, permissions, and compliance.

🛎️ Don’t Sleep on Customer Service: Resolving issues quickly, providing ongoing training and support, and responsive account management are all hallmarks of great customer service. Prioritize U.S.-based support that is licensed and trained in property management. Look for providers that have won multiple awards. One provider that checks all these boxes and more is Rentec Direct.

It’s a jungle out there, and selecting the right property management software is a process. But you’ll reap the rewards for the work you put in now through optimized efficiency, reduced headaches, and improved profitability as the right property management software solution helps you grow your business.

👉 Read the full article for more tips. 

_{🏠 DEAL BREAKDOWN}
TWO YEARS, FIVE UNITS, 72.8% IRR

Elijah Brown sold this property after two years at a 2.7x equity multiple and 72.8% IRR. Here's how he did it. 👇

• 🏢 Property Details: Five units in Tucson, AZ, purchased in May 2020. Class C, near the University of Arizona. Great neighborhood, 100% occupancy.
  

• 💸 Finances: Purchase price was $520,000 with $390,000 seller financed 3.5%. Raised $186,000 in capital in a JV structure with two other investors.
  

• 💼 Business Plan: Standard value-add. Renovation of all units — kitchen, bathroom, fixtures, appliances. Raised rents to market rates.
  

• 🍾 Results: Sold for $950,000 in May 2022, resulting in a 72.8% IRR and 2.7x equity multiple. Exited via 1031 exchange into a larger property in Phoenix.

With the 1031 exchange, Elijah and his team bought a 13-plex in Avondale, AZ, with a similar value-add business plan. They paid approximately $2.1 million for it in July 2022, and it is now estimated to be worth $3.6 million. They financed the deal with a private lender and approximately $812,000 of 1031 exchange cash. They combined the proceeds from two different property sales in a Tenants-In-Common agreement to purchase the property.

If you have a deal you'd like us to feature, share it with us!

_{🎓 EXPERT RESOURCES}
FREE DOCUMENT DOWNLOAD

☎️ 19 Proven Strategies to Attract High-Quality Tenants to Your Rental Property

Now that you’ve acquired a property, the next step is to fill it up with high-quality tenants. Here are 19 creative and effective ways to market your rental listings, get the residents you desire, and increase overall occupancy.

👉 Download now!

If you like the Best Ever Newsletter, check out The Rollup!

The Rollup is the most interesting finance newsletter on the internet. 🤙 Featuring non-mainstream investing news from Substack, Twitter, YouTube, and more. Get The Rollup for free, straight to your inbox every Thursday and Sunday.

 👉 Subscribe today! 

🙏 Thanks for reading!

Let’s keep in touch! If you received this newsletter from another source, feel free to subscribe here. We’re also available on LinkedIn, Instagram, and YouTube.

Have a Best Ever day!

—Joe Fairless