Line Ventures

Why pursue the value-add strategy when buying multifamily? Pictured is an asset in Denver we that was purchased in our fund with VareCo last year. We bought this deal because: - We could acquire it at a 2016 cost basis. - The after-repair value was appraised at $6m, we paid $3m. - The deal was owned by a legacy owner who needed out but had substantial equity. - The area where this asset is located is underserved when it comes to safe, clean affordable housing for workforce residents. - We knew at our cost of construction plus the low occupancy when we purchased, we could restabilize and double NOI (or more) within a year. These are the kinds of deals that are gritty. You have to earn the substantial upside you reap, however, they are rewarding on several levels. - Improving the local communities - Massive equity upside - Incredible tax advantages In 2024 we're looking to do a lot more of these deep value add deals in Denver while we focus on other, more stabilized assets with 7-8 caps upon acquisition in other markets.

When I read Rich Dad Poor Dad I (like everyone else) got hooked on the concept of living off of the cash flow your assets produce. "If you want to increase your lifestyle, buy another asset that cash flows enough to offset the increase in your lifestyle costs." -Kiyosaki That book was published in 1997 when the average cost of a house was $124,000, housing supply was balanced compared to demand and the average wage was about 1/5th of the cost of a home. What's my point? Today, it's not as simple as buying an asset with the hopes of generating cash flow. For example, many of our multifamily investments are all value-add properties that require a lot of cost in the form of capex to improve the properties and bring them up in value. The long term upside is nice but the short term cash flows are thinned as a result. It is rare if not impossible to find a property that: a) produces substantial cash flow (think 8% ) b) offers a chance to improve value based on cosmetic/mechanical updating c) is located in a growth market with a lot of geographic upside. That's why investors who are looking strictly for cash flow need to consider other alternative investing strategies. We're launching an opportunity at the end of the month that produces 14% annualized returns paid quarterly to our investors. Subscribe to learn more and stay tuned when we launch! https://lnkd.in/g4dYkpMF

After investing in $22,000,000 worth of real estate in 2023 here are the 2 asset classes I remain bullish on heading into 2024 and where I'll be focusing my energy: 1. B&C Class Multi-Family - We want to be there to capitalize on debt positions coming due as well as a cooling effect on cap rates due to inflation and rate hikes. - Must have a level of seller distress (operational or balance sheet distress) - Targetting opportunities where short-term debt is coming due - Long-term ownership, we want to buy properties with legacy owners who need out - Favorable long-term growth markets with limited regulatory burden and economic upside 2. Debt - Due to interest rate hikes there is a market opportunity for investors to have a significant return on invested capital through short-term debt offerings. Banks are tightening and conventional financing is off the table for many operators. - Special Servicing Debt - bridge financing for operators who need to clear short-term balloon positions. - Liquidity - Investors love having the ability to access their principal investment during uncertain economic times - Fund Structure - capital is spread out over dozens of loans across the country - Senior Security - we only take on debt offerings backed by a first position in the capital stack allowing us to claim back the property if the operator defaults. - High LTV - we only take on debt offerings that have a 40-60% LTV Anything I bring to the table for my investors has to have a competitive mix of minimized risk and above-market yield. As the year progresses I'll be looking out for other competitive deals in other asset classes however, this is where my focus will be for the beginning of 2024 and the foreseeable future.

When I started Crowell Capital in 2022 I though of it as a side project and a way to introduce passive investing to a few close friends and connections who needed the types of deal flow that I was accessing every month. Little did I know I'd find such a passion for capital raising, investor relations, and the process of identifying and negotiating deals on behalf of investors. One year in and I've raised & closed my first fund that went on to secure 282 units worth of multifamily real estate in two separate markets. Some of those deals are already set to re-sell in 2024 at 60% IRRs! Moving forward, I'm thinking BIGGER, which is why I rebranded Crowell Capital into Line Ventures. The name comes from surfing. When a surfer paddles out to the break and calls out their "line" they are notifying everyone of the path they've claimed in the water. We're doing the same thing in the real estate investing arena. Calling our line and including others on the wave. In January we're going to release two deals that you don't want to miss. One provides long term growth & upside and the other provides immediate cash flow, allowing investors to think both short and long term. Head over to the page and give it a follow so you don't miss an update from us! I can't wait to show you what is next!

"Why is now a good time to buy real estate?" Yesterday I was on a call with one of my multifamily partners who is aggressively buying distressed apartment buildings in Denver and Des Moines. While not everyone is prepared to take advantage, there are 6 core reasons that this part of the market cycle is one of the most opportunistic times to be an investor. 1. Skilled Workforce - The level of unemployment is low and the level of housing supply is also low. People need a place to live and are gainfully employed. 2. Insurance cost rising - Interest rates aren't the only variable on the rise. Insurance premiums for commercial and residential real estate have doubled or even tripled in some cases YoY. This keeps competition without a quality insurance provider sidelined. 3. The Renter's Economy - High-interest rates, low supply, and a lack of ability to develop anything but Class A apartment buildings has created a major gap in the marketplace between renting and buying. Often today it is 2x more expensive per month to buy than to rent in American cities (on a monthly basis). 4. Rising Rates - Variable rate loans and loan maturities coming due in multifamily real estate is very much a trend that will dominate the next years worth of winners and losers in acquiring property. 5. Acquisitions down 60-80% - JLL says that property acquisitions in the sub-institutional space ($5mm-$50mm volume) are down 67% YoY. 6. Treasuries Rising - The risk-free rate measured against other asset classes like the stock market makes investing in anything other than real estate less appetizing. That's because on a risk-adjusted basis real estate still offers healthy double-digit returns backed by the equity of the property. Money is flowing to treasuries as a place to park short term liquidity waiting on great deals to jump on. That's why myself and my investors are prepped to JUMP all over these distressed properties and use this time to buy as much as possible. Moments like this only come around every so often, if you're a current or prospective real estate investor now is the time to get your team in place and get prepared.

"Stu, do you still sell real estate?" "Yes of course!" In fact, I started raising capital specifically BECAUSE I wanted to help my clients access the best deals in real estate beyond simply helping them to buy or sell a home. My sales process all comes down to building long-term relationships with my clients. A part of that process is getting to know their goals, what they want their futures to look like, and what they're doing in the moment to get there. Over time, I've realized that I can add a lot more value to my clients' lives by opening up opportunities to invest alongside me with investments I'm already making. They get to use me as a bridge for ALL things real estate, not just buying or selling. And because I've done it myself through a lot of trial and error, I can point out the potholes and snake pits along the way so that they don't have to make the same mistakes I did in my own wealth-building journey. So now, I get the honor of helping someone buy or sell a home in Denver and then continue to help them build their wealth and legacy, all through real estate.