HOW REAL ESTATE DEVELOPERS MAKE MORE PROFIT OFF OF LOW INCOME HOUSING
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- เผยแพร่เมื่อ 11 ส.ค. 2020
- In this clip, real estate mogul Brandon Rule broke down the steps that real estate developers take to receive tax incentives for low-income housing developments. #realestate #BrandonRule #taxcredit
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This is the interview that made me go all in on real estate development. Since watching this in 2020 I've learned financial modeling for real estate, I read The Peebles Principles often & other books about development, and finally got to meet Brandon in person at Black Real Estate week in New Orleans in 2023.
I'm forever thankful for EYL for putting this out!
As an affordable housing advocate, I can attest that this is solid info and an industry that our people are left out of. We don’t have enough black-owned developers leveraging tax credits as a financing tool to provide housing for minorities and stop the gentrification of our neighborhoods.
Why would you want to stop gentrification?
Imagine of its a white person saying. We should stop black people from gentrifying our neighborhood. Stop being racist and stop thinking about race.
I’m looking into this as an up and coming developer! And I totally concur with your statement.
@@marywashington-lewis1656 I must not have known what it meant at the time
This is GOLD! I just started my research into affordable housing development. Thank you for breaking this down.
This was explained perfectly. A lot of verbiage in the affordable space and Brandon made it all easy to understand.
Problem Solvers make profits.
Great info from Brandon, definitely going to get The Peebles Principles.
I also love that point quoted from Magic Johnson " The same amount of time it takes to do a deal for 1million it takes to do 100 million".. GOLD!!!
This is so dope 🔥 and I stumbled up this video while trying to figure out how to develop the vacant lots and land in my home town. Definitely subscribing to the channel and any points in the right direction to help me get started!!!
I love this platform so much man
Thank you King for the knowledge
I love your channel. The content is amazing and actionable.
Thank you!
I love it. Its the same energy it takes to do a small or big deal. However, the upfront fees and costs matter when considering big deals. Additionally, you have to consider plan B if your LIHTC application does not get selected for awards. From a recovering law school graduate and a new LIHTC black developer in Montana. Peace, Love, Life.
I am pick up a lot of game from this channel.
Definitely going get that book - The Peoples principles
It’s The Peebles Principles”. It’s a solid book too. He definitely gives insight to starting out in development.
It’s a good read, straight to the point
It was a pretty good book, I listened to the audio book a few times after this interview
Cabrini Greens was section 9. Also Section 8 is still widespread. In fact, with RAD its become an even bigger source of housing.
B Rule dropped gems on this episode 💪🏾💯
C Greene YES YES 🥰🤩🥰
more than ja rule.
@@mafriqaful FA SHO 🤗🤗🤗
mafriqaful FACTS
Real estate developers make money in a many ways. One of them is quite similar to that of hedge funds and private equity firms. I will try to explain that in following example.
Suppose condominium complex would cost 100M$ to develop and build. The real estate developers first borrows 60M$ to finance part of the deal (basically an LBO similar to what private equity firms do).
The real estate firm then would accept down payments and deposits from its customers lets say they would only finance 20% of the whole deal thus providing 20M$.
Finally the real estate firm would add in 18M$ in the form of equity provided by investors, like Institutional investors ( other real estate developers, Asset Management, Private equity firms, Universities through their endowments & Hedge funds) and wealthy individuals these are called LPs or limited partners. The real estate firm is called general partners or GPs puts in 2M$ of its own money in the deal.
So basically they put in 2 million to control a 100 million dollar asset?
@@charlesoliver2581 And then they hold the property while raising rents to increase the overall cap rate. Once they reach an attractive cap rate, along with a renew lease %, they sell the property for 140, 160 million.. Depending on how that property values. Location, overall safety score, CAP rate, etc. After a couple flips, the firm amasses serious cash and starts to play serious monopoly.
I have a Facebook page I wanted to share this video on. In 2025 I plan on running for Mayor of Seattle.
Hand raised for sure playa playas - "the same amount of time,(comma,pause) that it takes to do a deal for a million(comma,pause) : (drum-rolls please) it takes to do a 💯 million fire 🔥 fire - dang I just burnt myself ; gonna go cool down after that one. It's slow - but it "fo sho"wks!
GREED is the downfall....Targeting those on low income triangulating them out of housing will in fact create higher crimes as well as wars. ESPECIALLY if the costs of living and wages are not equaled into the equation. Consider that part. *Everybody wants a piece of that pie* #humanrights
R.i.p Barry Farms
Got 1st summer job w, his program. He was hated bc he helped blk ppl. Wish I was in late teens when he was Mayor 4 life.
Barry Farms isn't named after Marion Barry. It was around long before him. But still RIP Marion Barry ! They are planning to demolish Barry Farms.
You should check out what Germans do. When they build new housing developments, they build affordable housing, middle income, and high end all on the same block, along with commercial at street level. This way the people who work in those shops and offices can just walk to work, same the as the people who own those busiensses. It's how we made cities for thousands of years before the car was invented. You get the urban renewal, but without pricing out all the essential workers. It also avoids the pitfall of funneling every low income person into an area that's exclusively low income, which has never worked out well in the history of the world, no matter what your ethnic background may be.
THIS is the component of these conversations that's always missing!
I'm an affordable housing developer. A lot of this is good; however, do more homework on the technical aspect of LIHTC.
This model is going to have a HUGE DISPARATE IMPACT for the NEGATIVE for all those human beings living inside affordable housing units. Especially those who figure out their personal lives become founder for data extraction. This is financing BIG BROTHER
Since construction costs are so high now after the pandemic you would be taking a loss
What is you have the money to build is it still convenient to build low income? It seem like this is only a good route to go if you dont have all money. Someone correct me if im wrong
Building low income housing can pencil out for cheap land but in expensive downtowns you need the government subsidy (in this case tax credit) to justify charging less than you would be able to
Love the game that’s being shared..but damn they’re sitting close to each other 🤨
Did that turn you on?
He from Wisconsin?
Yes
How tall gonna start a video right in the middle of another conversation? Lol
The link to the full video is in the description.
This does not explain what it is well
Kanye net worth more than Peebles even without a university degree
Kanye west spends more on luxury toilet paper than peebles net worth lmfao
Things have changed, but only for Kanye... not Peebles 💅🏽
Shouts out to y’all for repurposing this content. This interview was formidable for me-even serving as the basis of an LLP. formation focused on equity + partnership here in Atlanta’s built environment. #Indebted