The Difference Between the Promote and Equity Split
In the real estate finance context, a promote and an equity split represent distinct concepts related to compensation and ownership, particularly in transactions involving multiple parties. A promote is a share of profits that a sponsor or general partner earns after all investors have received a pre-determined preferred return and their initial investment. An equity […]
The Hidden Opportunity in Today’s Market
There is no single “hidden gem” in multifamily real estate that guarantees success. However, several strategies could offer compelling opportunities to an investor where others see pitfalls. Quality multifamily real estate, at its core, exhibits strong physical characteristics that contribute to its overall value to both residents and investors. These include well-maintained structures, modern amenities, […]
The Yield on Last Dollar
It’s an underrated but essential metric. The concept of “yield on the last dollar” or “last dollar basis” in real estate refers to the total capitalization of a project, including all financing layers (such as senior debt, preferred equity, etc.) or a specific layer’s position within the capital stack. The “last dollar yield” is often […]
What Smart Investors are Doing Right Now
The saying “location, location, location” is a cornerstone of real estate investment, and it’s particularly true with multifamily. Investors consistently flock to assets that are well-located with exceptional access to major economic drivers, quality schools, and local amenities. They also seek markets where the demographic trends are positive. Astute investors are keeping a strong pulse […]
Depreciation Download: Secrets of Real Estate Investing You Need to Know
In addition to generating steady income and long-term equity growth, multifamily real estate offers investors distinct tax advantages that can significantly enhance after-tax returns. Understanding these benefits is key to maximizing profitability and planning more strategically for tax season. [1] One powerful tax incentive is “bonus depreciation,” which allows real estate investors to deduct a […]
BAM Capital’s Tested Approach Looks Like a Strategic Continuation
At BAM Capital, we don’t just launch new funds because it’s time—we launch them when the opportunity demands it. Built for today’s market and rooted in our proven playbook, BAM Multifamily Growth Fund V is not a deviation from our strategy; it’s a continuation of it. Grounded in our investment thesis and sharpened by current […]
Understanding The “J” Curve In Multifamily Investment
The “J-curve” in multifamily real estate investing refers to the typical pattern of returns where an initial period of negative or low returns is followed by a period of strong growth, resembling the shape of the letter “J” when graphed. This curve is commonly observed in value-add investments, where capital is initially deployed for renovations […]
Best Multifamily Real Estate Markets
When people ask about the best multifamily real estate markets, they often hope for a quick, definitive answer; maybe Indianapolis, Austin, Atlanta, or Phoenix. But the reality is, there’s no one-size-fits-all “best” market. What matters is finding a market that aligns with your investment goals. Some markets offer steady income and long-term resilience. Others are […]
Differences Between Preferred and Common Equity
Preferred and common equity are both forms of ownership in a real estate project, but they differ in their rights and priorities. Preferred equity has payment priority when distributions are made or a capital event occurs. However, it also carries a target fixed rate of return. Conversely, common equity offers the potential for outsized returns […]
Maximizing Real Estate Investments: A Guide to Return Metrics and Equity Structures
INVESTMENT RETURN METRICS AND EQUITY STRUCTURES I often hear questions about return metrics and equity structures for real estate investments. Return metrics assess an investment’s profitability, while equity structures provide a framework for distributing net cash flow, returning capital, and allocating profits to investors. There isn’t one universal way to structure equity in an […]