• John Casmon

How to Invest in Apartments like a Lender with James Eng


Banks provide the majority of capital for apartment acquisitions, so you might expect that they have systems and processes to evaluate deals and determine if they want to make a loan. Considering the sheer volume of deals they review, they’ve been able to create shortcuts to determine the level of risk a deal poses. James Eng from, Old Capital believes investors can learn from this approach.


James Eng has over 15 years of experience in commercial real estate lending, starting his career as a loan underwriter at GE Capital Real Estate. In 2015, he joined Old Capital where he is currently the National Director.


He has worked with hundreds of investors to help them acquire over $1BN in multifamily properties totaling over 14,000 units nationwide. James combines his finance, risk, and investor background to find the best loan for clients and to be an indispensable advisor throughout the life cycle of a deal. In this episode he shares the three things he examines closely on a deal, insights on the Dallas-Fort Worth market, and the importance of branding and content creation.


Listen Here:

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Tips to Review Deals like a Lender

  • While on the corporate finance track he started underwriting commercial real estate where he saw financial statements and how much money these investors were making!

Growing up, I thought being a doctor, lawyer or attorney would grow my balance sheet, but turns out you can invest in commercial real estate and make good money for yourself.
  • Got ousted at GE, James went to a smaller investment firm O Capital, which taught him how to be a better investor

Not until you have tribal knowledge of a market do you become a real estate expert in that market.
  • Starting with one deal a quarter in the Dallas-Ft. Worth market

  • Protecting yourself and your investments in any market

  • Focusing on cash flow with light value add plays

  • What’s happening behind the financial scenes in multifamily and commercial real estate

  • Increasing your leverage based on loan type

  • The financial games Freddie Mac and Fannie Mae have played and are currently playing

December 2020 had the highest amount of multifamily sales in 10 years!
  • Looking at Deals in 2021, and how Fannie Mae is getting less stringent on reserves

  • A lender’s perspective on the biggest mistakes that investors are making in underwriting deals today

  • 3 Things that James looks closely at on any deal because they make him nervous

  1. Predictions on increasing rents

  2. Projected taxes

  3. Insurance

  • What James likes to see rent growth projections based on

Show me a comp in a one to two-mile radius that is already getting the rents you're projecting, and I’m comfortable with that.
  • Marketing tactics and building the Old Capital brand

  • Starting with a podcast, went on to produce conferences then was forced to market on YouTube because of COVID, and it’s working!

  • How James is using YouTube and it’s search function effectively

  • How Old Capital uses marketing for strategic partnerships

  • Finding the next deal, the next investor by providing value through helpful content


Bullseye Round


Apparent Failure:

When we had the layoffs at GE, many went to find similar jobs, where I looked at it as an opportunity to do something else.


Digital Resource:

Canva

VidIQ


Most Recommended Book:

The Most Important Thing (Howard Marks)

The Purple Cow (Seth Godin)


Daily Habit:

Walking twice a day


Current Curiosity:

Entrepreneurship and small business


Wish I Knew When I Was Starting Out:

Be willing to fail

Be willing to take a role with no salary to learn the business


Best Place to Grab a Bite in Frisco, TX

Fadi’s


Get in Touch with James:

Old Capital Lending

jeng@oldcapitallending.com