Demystifying Real Estate Finance: A Conversation with Trevor Calton

Investing in Multifamily Real Estate: Strategies, Pitfalls, and Insights

Watch on YouTube or Listen on Spotify, Amazon Music, or Castos

Host Steve Seymour interviews Trevor Calton, a real estate veteran with over 18 years of experience in training real estate brokers in the multifamily and commercial real estate investing world.

Introduction

In the world of commercial real estate, knowledge is power. Each transaction can contain a web of complexities, with financial decisions at every turn that can greatly impact the profitability and success of an investment. To shed some light on these intricacies, Steve sat down with Trevor Calton, an expert in commercial real estate financing and the creator of Real Estate Finance Academy, an online resource for investors, agents, and lenders.

The Multifamily Magic: Why Scale Up Sooner

During the conversation, Trevor touched on the importance of transitioning to multifamily and commercial real estate investments as quickly as possible. While single-family residences can provide a steady income, scaling to larger properties provides more predictable cash flows, economies of scale, greater returns, and often less risk. The transition, however, can be complicated by the increase in the number of properties you own. Trevor emphasized that the sooner you start that transition, the easier it will be as every single-family property you acquire makes the shift more difficult.

Delegation and Surrounding Yourself with the Right People

According to Trevor, delegation and surrounding oneself with experienced partners and teams is crucial. Looking back, he would have chosen fewer partners with more experience. This way, he could lean on their shared insights when navigating tricky situations. Also, hiring professionals to handle specific tasks can free up valuable time for investors.

Negotiating on Commercial Loans

In traditional commercial real estate, everything is negotiable. From prepayment penalties and interest rates to loan duration, the borrower can tailor their loan to align with their strategy. Commercial loan brokers, like Trevor and his team at Evergreen Capital Advisors, with their consistent engagement with lenders, know the market programs and trends. At little or no extra cost for the investor but provide an invaluable service in making sure the investor gets the most favorable terms in line with their goals.

Be Ready for Downturns

Even the best strategies can falter during economic downturns. Trevor advises investors to align themselves with advisors and peers who can offer insight and encouragement during challenging times. It's not about avoiding hard times—it's about being prepared for them and having a support system in place to help you weather the storm.

Conclusion

Being armed with the right team, tactics, and tools can make a significant impact on the success of your commercial real estate journey. As Trevor suggests, the rate of scaling up, the ability to delegate, prepare and react to downturns, and always remembering to negotiate your terms are all crucial to thriving in the dynamic world of commercial real estate investing. From multifamily units to commercial spaces, every investment offers its unique blend of challenges and opportunities. By equipping yourself with the right knowledge and team, you can navigate these complexities with confidence.

Chapters

00:00 Introduction and Guest Introduction
00:24 Guest's Journey into Real Estate
02:23 Transition from Analyst to Broker
03:38 Importance of Finance in Real Estate
05:08 Common Mistakes in Real Estate Investing
07:25 Understanding Loan Sizing and Debt Service Coverage
16:17 Challenges in Scaling Real Estate Portfolio
19:51 Exploring Real Estate Syndication
29:53 Tips for Evaluating Syndications as an Investor
37:12 Sharing Functions and Roles in Acquisitions
37:32 The Importance of Outsourcing and Delegation
38:13 Shifting Focus to Current Market Trends
38:29 The Buzz Around Multifamily Space
38:54 Understanding the Risks and Rewards of Value-Add Investments
40:07 The Impact of Rising Rates on Investment Strategies
40:31 Insights from Industry Experts and Conferences
41:00 The Relationship Between Cap Rates and Interest Rates
42:13 The Challenges of Multifamily Investments in the Current Market
42:24 The Return of Retail Deals and Market Predictions
44:30 The Importance of Proper Analysis and Due Diligence
45:29 Negotiating Commercial Financing
46:03 The Flexibility and Negotiability of Commercial Loans
48:26 Understanding Prepayment Penalties in Commercial Loans
49:35 The Role of Commercial Mortgage Brokers
01:01:08 Final Thoughts and Advice for Aspiring Investors
01:04:57 The Importance of Delegation and Work-Life Balance
01:06:20 Closing Remarks and Contact Information

- - -

Real Estate Finance Academy provides real estate finance and investments training for anyone wanting to learn how to become a multifamily or commercial real estate investor, especially for those wanting to learn how to invest in commercial real estate and multifamily properties.

- Commercial Real Estate Courses

- Real Estate Investor Training

- Real Estate Finance Training

- Commercial Real Estate Agent & Broker Training

- Commercial Lender Training

Trevor Calton is a longtime industry professional and former Professor of Real Estate Finance, teaching real estate investment workshops and classes since 2005. His commercial real estate classes and real estate finance development program helps people at all levels develop a successful real estate investment strategy, even with no experience. If you need commercial real estate education, a commercial real estate coach, or a real estate investment mentor, you’ve come to the right place.

Check out the Real Estate Investment Masterclass here.