Escaping the Corporate World for a More Predictable Future w/Jeremy Roll
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Jeremy Dyer welcomes Jeremy Roll to today's episode covering diversification, asset classes, sponsors, market cycles, and more.
Jeremy started investing in real estate and businesses in 2002 and left the corporate world in 2007 to become a full-time passive cash flow investor. He is currently an investor in more than 60 opportunities across more than $1 Billion worth of real estate and business assets. As Founder and President of Roll Investment Group, Jeremy manages a group of over 1,500 investors who seek passive/managed cash flowing investments in real estate and businesses. Jeremy is also the co-Founder of For Investors By Investors (FIBI), a non-profit organization that was launched in 2007 with the goal of facilitating networking and learning among real estate investors in a strict no sales pitch environment. FIBI is now the largest group of public real estate investor meetings in California with over 30,000 members. Jeremy has an MBA from The Wharton School and is an Advisor for Realty Mogul, the largest real estate crowdfunding website in the US. Jeremy welcomes e-mails (jroll@rollinvestments.com) to network with or help other investors and to discuss real estate or business investments of any size.
CONNECT WITH JEREMY ROLL!
LinkedIn: https://www.linkedin.com/in/jeremy-roll-655107
Email: jroll@rollinvestments.com
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: Evaluate Distressed Properties
Jeremy emphasizes the importance of assessing distressed properties before investing, cautioning investors to consider the potential risks involved. He advises asking probing questions about the operator's involvement in such deals, highlighting the significance of understanding current distress levels to make informed investment decisions.
"Have you taken on any floating rate Bridge Loan deals in the last several years? Are you involved in any properties with a debt coverage ratio below 1.2? These are critical questions to ask to gauge the operator's exposure to distressed properties."
Tip #2: Scrutinize Assumptions in Underwriting
Investors should scrutinize the assumptions made in underwriting, particularly regarding rent increase assumptions and vacancy rates. Jeremy recommends challenging operators on their exit cap rate projections and carefully evaluating expense ratios to ensure conservative and realistic estimates.
"Look at the exit cap rate assumptions and vacancy rates. Challenge the assumptions made in underwriting to ensure they align with current market conditions and provide a realistic outlook for the investment."
Tip #3: Prioritize Cash Flow
While many investors focus on IRR, Jeremy advocates prioritizing cash flow and annualized total return. He suggests assessing cash-on-cash returns and annualized returns to gauge the investment's viability, especially in uncertain economic times.
"I prioritize cash flow over IRR. Assess cash-on-cash returns and annualized total returns to ensure the investment generates consistent cash flow, particularly in volatile market conditions."
Tip #4: Understand Economic Cycles
Understanding economic cycles is crucial for making informed investment decisions. Jeremy advises investors to consider the timing of their investments relative to economic cycles, emphasizing the importance of being cautious during the late stages of a cycle.
"Investing at the beginning of a cycle provides more value-add opportunities, whereas investing at the end of a cycle poses higher risks. Be mindful of economic cycles and adjust your investment strategy accordingly."
Tip #5: Focus on Execution Over Presentation
Investors should prioritize operators with strong execution capabilities rather than relying solely on polished presentations. Jeremy underscores the importance of assessing an operator's track record and execution skills to mitigate investment risks.
"I'd rather invest with an operator with the best execution and the worst documents than vice versa. Focus on operators with a proven track record of execution, as it's crucial for investment success."
Tip #6: Diversify Investment Strategies
Diversifying investment strategies can help mitigate risks and capitalize on different market conditions. Jeremy suggests considering a range of investment opportunities, from value-add deals to stable income-producing properties, to build a resilient portfolio.
"Diversify your investment strategies to minimize risks and take advantage of various market opportunities. Explore different asset classes and investment approaches to build a well-rounded portfolio."
Tip #7: Stay Informed and Patient
Staying informed about market trends and economic indicators is essential for making strategic investment decisions. Jeremy advises investors to exercise patience and wait for opportune moments to deploy capital, especially in uncertain market environments.
"Keep yourself updated on market trends and economic indicators. Patience is key in real estate investing, so wait for the right opportunities and avoid making rushed decisions."
Tip #8: Prioritize Asset Quality
Quality assets should take precedence over attractive deals, especially in volatile market conditions. Jeremy emphasizes the importance of conducting thorough due diligence and prioritizing investments in high-quality properties with strong fundamentals.
"Focus on quality assets rather than chasing attractive deals. Conduct comprehensive due diligence and prioritize investments in properties with strong fundamentals and long-term potential."
Tip #9: Plan for Economic Uncertainty
Preparing for economic uncertainty involves assessing potential risks and maintaining liquidity to weather market downturns. Jeremy advises investors to anticipate recessionary conditions and adjust their investment strategies accordingly.
"Plan for economic uncertainty by assessing potential risks and maintaining liquidity. Anticipate recessionary conditions and have contingency plans in place to safeguard your investments."
Tip #10: Seek Expert Guidance
Seeking guidance from experienced professionals can provide valuable insights and help navigate complex investment landscapes. Jeremy encourages investors to leverage the expertise of advisors and mentors to make informed decisions and mitigate risks.
"Don't hesitate to seek guidance from experienced professionals in real estate investing. Leverage the expertise of advisors and mentors to gain valuable insights and navigate challenging market conditions with confidence."
