Why Value-Add Deals Have Lost Their Value with Spencer Gray
Updated: Jan 28, 2021
Spencer Gray did his first real estate deal out of high school and was hooked. He started investing on the side and went all-in on commercial real estate investing in 2015. He founded two firms, one for active investing and another for passive investing, Gray Capital and Gray Properties. Spencer is based in Indianapolis, IN, and focused on value-add deals before pivoting his approach.
When looking at a market, Spencer focuses on population and job growth. He loves the Indy market and shares why he prefers the fact that the market flies under the radar. In fact, he says he prefers markets that have strong fundamentals without the competitiveness that bids up values and prices in popular multifamily markets like Phoenix, Atlanta, and Raleigh-Durham.
In this episode, Spencer shares his criteria for selecting markets, finding deals, and operating his assets. He shares why value-add deals are so competitive and why he has more appeal for newer, core plus apartments. He also talks about his newsletter, Gray Report, which aggregates industry news and keeps his investors informed.
Partner: Text: “EQRP” to 72000 and receive a special eQRP report on taking control of your retirement money
Key Insights on Selecting Strong Markets that Fly Under the Radar
First real estate deal right out of High School
Building two companies: Gray Capital for active investing and Gray Properties for passive investing
How Spencer is using the synergy between his two companies for a smart investment strategy
The benefits of the Indianapolis real estate market vs. other markets
How Spencer analyzes markets for optimum investment success
We try to identify markets that are growing, that check all of your demographic boxes, but are flying under the radar and not on the top of competitors list.
Significance of Indianapolis submarkets and how they relate to the macro MSA
What to look for in submarkets
The 3 elements that Spencer analyzes when looking at a deal and/or market
The Market (right demographic trends)
The Market Fundamentals (Can you buy and achieve your return metrics)
What’s the Story on the Market and Deal (Executing your business plan)
How to understand and tell the story of a potential property investment
Why Spencer created an investor newsletter and why investors love it
Other factors to consider when evaluating a new real estate investment opportunity
We won’t choose a market that has peaked with flat growth, we are looking at a market that has sustainable growth for years into the future.
The importance of understanding your property management logistics
Why Spencer focuses on Core Plus assets vs. value add assets
Partner: Download our Sample Deal Package
My first real estate deal in high school was a failure on ROI, but it showed me that real estate was a possible option.
Webinar Jam (webinar platform)
Most Recommended Book:
Never Split the Difference (Chris Voss)
Workout, 20-minute steam, and meditation
Wish I Knew When I Was Starting Out:
Networking is key
Inflation vs. deflation and where the US will go
Best Place to Grab a Bite in Indianapolis, IN
St. Elmo’s Steakhouse
Gray Capital, LLC (sign up for his weekly newsletter)