Welcome to the Masterclass with Cherif Medawar

Session 1: Understanding the Real Estate Market Trends

Cherif Medawar:
Welcome, everyone! It’s May 10, and we’re ready to kick off today’s session. Let’s dive right in. First, we have a great question from Clint in Georgia. He’s asking about the rising rents in multifamily properties and what’s driving this trend.

Cherif Medawar:
Yes, Clint. The rise in rents is due to several factors. First, the costs of construction are rising significantly due to inflation and tariffs. The cost per square foot for building is increasing, and many construction projects are delayed. So, the demand for rental properties is increasing, which naturally drives up rents. Furthermore, high interest rates mean that people can’t afford to buy homes, and they’re staying in rentals longer. Landlords are now seeing more demand, and as a result, they are charging higher rents.

Next Question: How do we analyze apartments?
When analyzing apartments, I approach it from a macro-to-micro perspective.
First, evaluate the location. Is the area experiencing growth? Look for indicators of demand—check vacancy rates, and compare rents.
Then, inspect the condition of the property. Are there deferred maintenance issues? Make sure to inspect each unit thoroughly.
Lastly, evaluate the property’s Net Operating Income (NOI), compare the cap rate, and ensure the numbers make sense in relation to market comps.

Session 2: Creative Finance & Loan Strategies

Cherif Medawar:
Next, we have a question from Clint about financing. He’s asking about creative finance options like the FHA 203k loan.

Cherif Medawar:
The FHA 203k loan is specifically for residential properties, not commercial. It’s designed for people who want to buy and renovate their home. But when it comes to commercial properties, the best strategy is to work directly with sellers for seller-financing deals or partner with a local bank or credit union. For example, a wraparound mortgage can be a great creative financing tool. This allows you to buy a property with an existing mortgage and add the seller’s equity on top.

Session 3: Understanding Property Value and Rent Increases

Cherif Medawar:
Let’s talk about determining the value of a property and how rent increases can affect the bottom line. When you’re analyzing a multi-unit property, look at the unit mix, and check what the going rents are in the area. If you find that rents are below market value, consider ways to increase them, such as renovating the property or adding value through amenities.

Cherif Medawar:
In some cases, you can also look at alternative revenue streams—like offering pet services or adding signage for advertising. It all comes down to understanding the value you can add to the property and how that affects future rent projections.

Session 4: Closing Deals & Understanding the Seller’s Position

Cherif Medawar:
Next, let’s talk about working with sellers. A great question came in from Clint: “What are the best questions to ask a seller when purchasing a multi-unit property?”

Cherif Medawar:
I always like to meet with the seller directly if possible. Ask them about the property’s history, the challenges they’ve faced, and their reasons for selling. It’s important to get the seller to open up. If they mention deferred maintenance or unclear numbers, ask for documentation to back up their claims. Always make sure to validate what they tell you with proof.

Session 5: Raising Capital for Real Estate Deals

Cherif Medawar:
Let’s now focus on raising capital for real estate deals. A great question from Danielle in Tennessee: “What are the most successful ways to raise capital from family offices?”

Cherif Medawar:
Family offices are a great source of capital, especially for large real estate projects. The key is building a relationship with the family office leader and understanding their risk tolerance. Once you’ve built that rapport, present your track record, and showcase how your deal will provide a strong return. If they’re not ready to commit, ask for referrals to other family offices that may be interested. Networking and reputation are critical when raising capital from this group.

Session 6: Creative Deal Structuring and Leveraging Your Network

Cherif Medawar:
And finally, let’s discuss how to structure creative deals. A question from Dwayne: “Can I leave tenants in place while working with the management company to secure a long-term lease?”

Cherif Medawar:
Yes, Dwayne, that’s a great strategy, especially if the tenants are already providing reliable cash flow. Work with the management company to ensure they’re aligned on the long-term lease strategy. In commercial real estate, having a long-term tenant in place can increase the property’s value significantly. If necessary, structure a deal that allows you to improve the property over time while the current tenants continue to occupy it.

Cherif Medawar:
Thank you all for your questions! Remember, whether you’re analyzing a property, securing financing, or negotiating with sellers, always approach every deal with a mindset of adding value. It’s not just about finding good deals—it’s about creating opportunities that can take your real estate investment strategy to the next level.

Let me know if you need further adjustments, Cherif!