Cash Flow Guys Podcast

In this episode of the podcast, I interview returning guest Ben Leybovich (of Bogger Pockets fame) and his partner CPA Sam Grooms.  The three of us have noticed a trend of “ambitious” underwriting in the last few years of many multi-family investment opportunities.  I for one, think that sometimes certain syndicators are doing deals purely for the front-loaded fees in the deal, so they can eat.  A bold statement? Yes, however, if you look around, you will find tons of “moral hazard” in many of the deals being pitched in the last year or so. Be careful of situations where the operators get paid up front.  Everyone needs to eat but to suck the equity out of a deal up front, tends to increase the risk of the transaction from that day forward.  Ben, like me, has been very outspoken about investors overpaying for investment properties and with good reason. This is not to say that a sponsor should not be paid for bringing a deal together in the front end, however, some meat on the bone should be left for the middle