John Casmon

Investing in the US with Reed Goossens, Episode 7

A passion for exploring led Reed Goossens to move from Australia to the US. After studying real estate in Australia, Reed was amazed that he could purchase real estate so cheaply in America. However, he soon ran out of money before discovering a new strategy to raise money and syndicate large apartment deals. On this episode, Reed shares his criteria for vetting target markets and sub-markets for large apartments and explains why investing in larger deals is actually less risky than smaller investments. Listen Now!

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Key Market Insights

Started with a Class D, Section 8 triplex in Syracuse, NY
Investing for beginners: Don’t just look at the numbers on the paper
Two things that drain cash flow quickly: deferred maintenance and high vacancies
From small investments to syndication deals: Reed moved from using his own money to buy duplexes and triplexes to using other people’s money to go after bigger deals
The biggest benefit of raising your first $100,000 of investment capital? To build the network and reputation that allows you to close more deals
Biggest mistake people making in syndication deals: Thinking they have to make a lot of money in deal #1
Why international investors invest in America: High yield on capital, US currency is one of the strongest in the world, Long-term capital preservation
View syndication as 2 businesses: 1) Finding the real estate and 2) Raising capital. It’s a team sport
Reed’s personal investment strategy for markets: safe, affordable housing for blue collar renters
Looks at population growth, good GDP, moderate cap rates, household income between $45,000 – $70,000 per year
Seeks 200 basis points difference in national interest rates and local Class B cap rate
Identifies Houston neighborhoods where there is infrastructure growth= Areas where the following are prevalent Amazon Fulfillment Centers, Home Depot, Starbucks, Engagement from city council
How to navigate new markets: examine the data, have a solid team in place, listen to the locals, have meetings with real estate stakeholders
#1 Tip: Get off the couch and cold call people
Do desktop research via Trulia and similar sites to map the data for properties of interest