The Multifamily Real Estate Group

The Multifamily Real Estate Group LLC

Unlocking the potential of multifamily living

Manny J. Herrera founder and CEO

My name is

Manuel J. Herrera, a Florida

licensed real estate agents associated with

Dalton Wade Real Estate Group and founder of THE Multifamily Real Estate Group LLC

We provide comprehensive support in connection with the acquisitions, sales and Financing of multifamily real estate Investment transactions.

Our Vision

Our Vision is to revolutionize the multifamily property market, becoming the foremost platform that empowers investors and property owners to seamlessly buy and sell multifamily properties, setting a new standard for efficiency and security in the industry.

We believe that multifamily housing is critical to our society. It is the most efficient way to increase the supply of housing necessary to accommodate employment, support community stability, and enhance the quality of life.

Our Core Values

Transparency:

We believe that transparency is the cornerstone of trust and confidence. By offering complete and easily accessible information about properties, market trends, and transaction processes, we empower our users to make informed decisions.

Collaboration:

We recognize that multifamily real estate transactions involve a multitude of roles - from buyers and sellers to brokers and bankers. We strive to create an ecosystem where all stakeholders seamlessly collaborate, leveraging each other's strengths to achieve mutually beneficial outcomes.

Awareness:

We are committed to raising awareness about the multifamily real estate market, providing our users with the knowledge and insights they need to thrive.

What is a multifamily property?

Definition

A multifamily real estate property is a single or multiple building set up to accommodate more than one family, living separately.

Multifamily real estate can range from a duplex to an apartment complex with hundreds of units.

A building with two houses side–by-side , sharing a common wall

A building with Four housing units.

Low-rise Apartments

An apartment complex is a group of buildings that contains multiple rental housing units.

Garden-Style Apartments

Atlanta GA

Our Team

In multifamily transactions, real estate agents plays a pivotal role by facilitating property transactions, guiding clients through complex processes, negotiating deals, and ensuring smooth communication between buyers, sellers, and other involved parties.

The Title Insurance Company

The Title Insurance company is crucial in multifamily transactions as it provides protection against potential ownership disputes, ensuring clear property ownership records and safeguarding against unforeseen legal issues related to the property's title. Also The title Insurance company acts as the escrow agent for secure fund distribution.

The Mortgage Bank

The banker is essential in facilitating financing for property acquisition or rehabilitation, offering diverse options such as conventional mortgages and government-backed loans like Fannie Mae and Freddie Mac loans. Their role involves a thorough evaluation of the borrower's creditworthiness and an assessment of the property's financial performance.

Management

The multifamily real estate management company is vital as it oversees property operations, tenant relations, maintenance, and financial aspects, ensuring efficient and profitable functioning of residential complexes.

Multifamily Real Estate Investment

Definition

Multifamily real estate investment entails the development or acquisition of properties designed to accommodate multiple households, aimed at generating rental income and potentially realizing long-term appreciation."

Multifamily Real Estate Investment

Manny J. Herrera

Here is the way it works

Our focus is on multifamily real estate that it is acquired and then rented out to Tenants .

Tenants, pay rents to live in the properties. Some of the income from the rent is used to pay for operating expenses , such as:

u Property taxes,

u Utilities,

u External illumination,

u Trash collection,

u Maintenance,

u Management expenses, etc.

After subtracting the Expenses from the total income, we arrive at THE NET OPERTAING INCOME.

Multifamily Properties Investments , as any investment instrument, are valued based on their Rates of Return. (CAP RATE)

The example shows a 4plex with a total gross rent in the amount of $47,532.00 . Other incomes and concessions , minus total expenses , bring to the owner an annual net operating income of $36,304.40.

Notice the property valuations a different Capitalization Rate.

Business Model

Existing Property

ü Acquisition: Property bought based on a predefined strategy.

Acquisition

Renovation

ü Renovation: If needed, the property is upgraded.

ü Rental Phase: Property is rented out for specific duration.

ü Stabilization: Rents are adjusted to market.

ü Sale: Property is sold once it appreciates as desired.

Rental

Stabilization

Sale

New Development

•Acquisition: Secure land in opportunistic markets.

•Equity Capital: Obtain initial funding from investors.

Acquisition

Equity Capital

•Financing: Secure bank funding for construction.

•Construction Completed: Oversee timely and costeffective construction.

•Property Occupied: Implement marketing to attract tenants.

•Property Sold: Evaluate optimal timing and execute strategic sale.

Financing

Construction

Occupied

Sold

Appreciation

" Appreciation" is achieved by:

o Improving operational efficiencies,

o Actualizing rental income.

o Reducing expenses, and

o Optimizing management. These actions directly impact the property's value, resulting in capital gains upon sale.

Features and benefits

Investors benefit from predictable cash flows ( the rents), and capital gains (property appreciation).

Cash Flow and Capital gain

• Multifamily Real Estate Investment is not as risky or volatile as stocks, and

• It offers higher potential returns than most fixedincome assets.

Low Risk / High Returns

The investment is backed by hard assets: the building and the land.

Solid Collateral

Repairs, Renovation costs, maintenance, and depreciation

are tax deductible.

Tax Efficient

Multifamily Real Estate is 1031

Exchange friendly

• During the recession, the demand for multi-family real estate grows.

• During inflation, rents go up and multi-family property prices rise.

• During recovery, they stabilize

Economic resilience

Multifamily Real estate is leverage efficient, because It lets buyers use 75 to 80 % financing to purchase a property while your returns are based on Cash on Cash invested.

As a consequence of being leverage

efficient, Multifamily Real Estate

investment is readily Scalable

Scalability

Investors purchase price

Scalability

$2,879,995.80

$14,399,979.00 $16,551,700.00 $24,827,550.00 $33,103,400.00 $41,379,250.00 $49,655,100.00

$3,310,340.00

$4,965,510.00 $6,620,680.00 $8,275,850.00 $9,931,020.00

1 2 3 4 5 6

Investors $2,879,995.8 $3,310,340.0 $4,965,510.0 $6,620,680.0 $8,275,850.0 $9,931,020.0 purchase price $14,399,979. $16,551,700. $24,827,550. $33,103,400. $41,379,250. $49,655,100.

Leverage Purchase at 80% LTV

Acquisition Strategies

Strategies we Support

Core

1. Acquire stabilized Asset type A, and B+.

2. Keep them as they are,

3. Hold them for some time.

4. Sell them in the future,

Core Plus

Value-Added

1. Acquire Asset type B, B+.

2. Make minor Improvements,

3. Update rents.

4. Improve management, marketing ,

5. sell them, in the future, .

1. Acquire Asset Type B-, C. 2. Complete a major renovation that takes months or years to complete,

3. Hold them for some time.

4. Refinance loan

5. Sell them in the future.

1. "The 'Core' strategy is widely recognized as the safest option, closely resembling fixed income (bonds) in terms of risk and potential returns.

2. This strategy employs lower leverage than other approaches, while thtypicallye property's essential characteristics remain relatively stable, ensuring steady and predictable cash flows.

Core

3. Properties pursued under the 'Core' strategy are often situated in major urban centers, where demand is consistent.

4. This approach suits passive and conservative investors seeking steady, higher-than-average market returns. and potential for capital gains.

5. With attributes such as low capitalization rates and extended holding periods (typically 5 to 10 years), the 'Core' strategy offers a stable investment avenue."

1. Acquire stabilized Asset type A, and B+.

2. Keep them as they are,

3. Hold them for some time.

4. Sell them in the future,

1. The 'Core Pluss' strategy is widely recognized as the next level of safety, offering higher potential returns than fixed income (bonds) while maintaining a reasonable risk profile.

Core Plus

2. This strategy often employs more leverage than the 'Core' approach, involving noticeable property enhancements that result in improved cash flows.

3. Suited for investors who are less conservative and seek higher-than-average market returns, the 'Core Plus' strategy combines income generation with some potential for capital appreciation.

4. Typically, investments under this strategy involve holding periods of up to 5 years or less."

1. Acquire Asset type B, B+.

2.Make cosmetic Impro vements.

3. Update rents.

4. Improve management, marketing ,

5. sell them, in the future .

1. "The 'Value-Added' strategy stands out as one of the most lucrative options. This approach offers the potential for double-digit returns, with a substantial portion stemming from capital appreciation.

2. Unlike other strategies, 'Value-Added' tends to utilize more leverage, often involving loan refinancing.

Value-Added

3. Distinctive for its significant property changes, this strategy may experience fluctuations in cash flows due to higher vacancy rates during renovation periods.

4. It's ideally suited for aggressive investors seeking elevated cash-on-cash yields and an opportunity to participate in capital appreciation.

5. The 'Value-Added' strategy often comes with a shorter holding period of 5 to 7 years.

1. Acquire Asset Type B-, C. 2. Complete a major renovation that takes months or years to complete,

3. Hold them for some time.

4. Refinance loan

5. Sell them in the future.

Risk Levels

PROCESS

Market Identification

Acquisition strategy

Property selection

Underwrite property (Financial analysis )

Issue letter of intent

Invite banks

Invite investors

Tour the property

Conduct due diligence

Sign P&S Contract

Closing

Identifying Emerging Markets

Emerging Markets are new growing or correcting markets with the following profile:

u Growing job opportunities and employment rates that surpass the national average.

u A growing population that is forecast to continue growing.

u Future real estate development plans.

u Affordability (based on price to rent ratio)

u Increasing absorption rate. We actively pursue multifamily real estate properties in emerging markets at any given time.

Thank you

Dear Mr. Liang,

Thank you for your consideration.

Your experience and enthusiasm aligns perfectly with our vision to revolutionize the multifamily property market. We're dedicated to empowering investors and property owners, setting new benchmarks for efficiency and security in the industry.

Your appreciation for multifamily housing's vital role in society deeply resonates with us. We sincerely believe in its power to enhance communities, support stability, and elevate overall quality of life in our society.

Thank you once more for considering joining our mission. The prospect of collaborating and creating a significant impact together is truly invigorating.

Warm regards,

ManuelJHerrera