In this episode the topic of focus is IRR Hurdles and Promote Structures. Here’s just some of things the Rob and Dave will be diving into:
Defining compounding and cumulative returns on a pref
Advantages of a Promote
Advantages of a waterfall structure
Why/how a passive investor should evaluate a deal from a sponsor’s perspective to see where their incentive lies
How vertical integration of a company could change the way they structure a deal (less focused on cashflow from CoC)
Deep dive into the numbers, covering all of the above on Rob’s underwriting model
***Note: This series is very visual. The first half of the show will be Dave and Rob discussing the theory behind the current topic. While the second half will entail diving into an underwriting spreadsheet and actually crunching the numbers.
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Rob Beardsley has acquired $50,000,000 of value-add multifamily real estate as founder and principal of Lone Star Capital. With a background in business and computer science from Carnegie Mellon University, Rob leads acquisitions and capital markets for Lone Star. He has underwritten more than 1,000 deals and has published over 50 articles about underwriting, capital structure, acquisition strategies, and capital markets. He has a popular newsletter read by hundreds of real estate professionals monthly. Prior to co-founding Lone Star, Rob gained real estate experience through his family’s real estate businesses including development, construction, and sales. Additionally, Rob advises sponsors on underwriting and capital markets through his Greenoaks Capital platform. Rob grew up in Silicon Valley and currently lives in New York City, where he enjoys reading nonfiction, traveling, working out, meditating, playing golf and piano.
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www.lonestarcapgroup.com
Lone Star Capital is a real estate investment firm focused on underperforming multifamily properties in Texas. We structure value-add opportunities that deliver superior risk-adjusted returns by implementing moderate to extensive renovations, improving management, and designing creative capital solutions. Lone Star operates over 1,000 units worth approximately $70MM.
