30 Year Real Estate Veteran on Rate Caps and Rates of Return w/Irwin Boris
Watch on YouTube!
Or listen wherever you podcast!
Episode Description
Welcome to the Freedom Point Real Estate podcast! Today's experienced guest, Irwin Boris, joins Jeremy Dyer to share his hard-earned wisdom on topics including risk management, asset classes, and long-term wealth.
Irwin is a member of the Investment Committee for Heritage Capital Group, a 3rd generation real estate family office. He has been the Head of Real Estate for several Family Offices, I advise investors on existing and potential investments and provide asset management services. Irwin has more than 30 years of experience in real estate finance, investment, asset management; and has participated as a direct lender, principal, investment banker and advisor in more than $5.0 billion in real estate transactions.
CONNECT WITH IRWIN BORIS!
Website: https://heritagegroupcapital.com/
LinkedIn: https://www.linkedin.com/in/irwinboris/
Instagram: https://www.instagram.com/irwinb_61/
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Understanding Risk Tolerance
Irwin emphasizes the importance of assessing one's risk tolerance as an investor. Understanding how much risk one can afford and being clear about the potential consequences of investment losses are crucial aspects of making informed investment decisions. By knowing their risk tolerance profile, investors can align their investment strategies with their financial goals and comfort levels.
Tip #2: Accessing Comprehensive Information
Irwin advises investors to seek comprehensive access to information related to their investments, such as historical appraisals, engineering reports, and environmental assessments. Having access to updated information allows investors to stay informed about the performance and condition of their investments, enabling them to make timely decisions and mitigate risks effectively.
Tip #3: Focus on Cash Flow
Irwin highlights the importance of prioritizing cash flow when investing in commercial real estate. Rather than chasing high internal rates of return (IRRs), investors should focus on investments that generate consistent cash flow over time. By prioritizing cash flow, investors can secure steady income streams and build long-term wealth through sustainable investments.
Tip #4: Assess Asset Classes
The discussion explores various asset classes within commercial real estate and identifies preferred investment opportunities. Irwin emphasizes the importance of selecting asset classes with favorable characteristics, such as industrial properties with triple net leases or grocery-anchored retail centers. Assessing different asset classes allows investors to diversify their portfolios and capitalize on emerging opportunities in the market.
Tip #5: Positive vs. Negative Leverage Dynamics
"I'm not going in at a six if I'm financing at a six I gotta go in minimum on a real good value at at least 100 basis points wider..." - Irwin Boris
Irwin discusses the dynamics of leverage in real estate investments, emphasizing the importance of maintaining a positive spread between interest rates and capitalization rates. By ensuring positive leverage, investors can enhance their returns and mitigate risks associated with financing costs. Understanding the relationship between interest rates and cap rates enables investors to make strategic financing decisions that optimize their investment outcomes.
Tip #6: Value-Add Opportunities
"So, on a value-add, I still want to buy at 100 basis points above the going-in-place cash flow in some places..." - Irwin Boris
Irwin underscores the potential of value-add investments in commercial real estate, highlighting the opportunity to acquire properties with significant upside potential. By purchasing properties at favorable terms relative to their current cash flow, investors can implement value-add strategies to enhance property performance and increase asset value over time. Identifying value-add opportunities allows investors to capitalize on market inefficiencies and generate attractive returns.
Tip #7: Alignment of Interests
Irwin emphasizes the importance of aligning interests between investors and sponsors in commercial real estate investments. Investors should seek sponsors who demonstrate a genuine commitment to the success of the investment by investing their own capital and prioritizing investors' interests. Ensuring alignment of interests fosters trust and transparency, creating a mutually beneficial relationship between investors and sponsors.
Tip #8: Due Diligence and Transparency
Irwin advocates for thorough due diligence and transparency in commercial real estate investments. Investors should conduct comprehensive assessments of potential investments, including reviewing financial statements, conducting property inspections, and evaluating market conditions. By prioritizing transparency and accountability, investors can make well-informed decisions and identify investments that align with their objectives for steady, long-term returns.
Tip #9: Continuous Education and Learning
Irwin highlights the value of continuous education and learning in the field of investing. By staying informed about market trends, industry insights, and diverse perspectives, investors can expand their knowledge and make informed decisions. Engaging with various resources, such as podcasts, books, and seminars, enables investors to refine their investment strategies and adapt to evolving market dynamics.
Tip #10: Long-Term Perspective and Patience
Irwin emphasizes the importance of maintaining a long-term perspective and exercising patience in commercial real estate investments. Investors should focus on identifying opportunities with sustainable cash flow and value appreciation potential over the long term. By staying disciplined and resilient, investors can navigate market fluctuations and capitalize on favorable investment conditions for lasting success.
