Real estate capital raising and syndication
Real Estate Investor Mandate: Logistics and Flex for Yield
Real Estate Single Family Investor Mandate Interview
Real estate sponsors and brokers who want to know what a yield-focused family office buys, and investors who want a due diligence approach for income properties.
What stood out
- Yield drives the whole mandate. The family office invests for current return because the family uses that income for philanthropy and expenses. Its goal is stable cash flow, and it looks for double digit cash flow by year two.
- No construction risk. Irwin says the office takes no construction risk. Shutdowns were halting local construction and he did not expect crews to finish work on time. The focus is on assets already in place with known tenants.
- Multi-tenant flex and industrial first. The top target is multi-tenant flex and small bay industrial. Irwin says it spreads risk, much like a 300 unit apartment building, where in his experience most units should stay full. In his experience, single tenant buildings carry more income risk when the tenant leaves.
- Location means access, not glamour. The office searches near interstates 65, 75 and 85 north to south and 20 and 80 east to west. It also likes sites within a few miles of a port. Irwin prefers B and C locations that stay full over a shiny new building that sits empty.
- Make your money on the buy. Irwin says not to overpay and count on value add or rent increases later. He also audits cash by comparing two years of bank statements to ledgers and receipts, and he interviews tenants about their space needs.
What this talk covers
Irwin runs the mandate for a third generation real estate family office with $850 million in assets under management. The office invests for current return because the family funds its philanthropic work and pays bills from that income. It is buying logistics and flex space, avoids construction risk, and looks for double digit cash flow by year two at the latest.
Richard C. Wilson asks about yield targets, asset types and advice for other investors. Irwin points to multi-tenant flex and industrial space near major roadways, rails and ports. He stresses buying right, auditing historical cash, and talking directly with tenants and sellers. The talk was recorded days after US business shutdowns began, so it also covers how proof of funds helped his team compete.
Facts from this talk
- The family office is third generation and manages $850 million in assets.
- Irwin describes buying near a 10% unlevered return, which becomes about 15% current with 60% leverage.
- His team put up a sizable deposit to compete for a property near the Port of Baltimore.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Real Estate Single Family Investor Mandate Interview. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around lender cash flow terms, purchase contract deposits and investment structuring. Do not use AI to write your own legal agreements.
Worth quoting
"I would say that you've got to make your money on the buy. So you can't really overpay."
"We almost do an audit. We vouch cash. I look at the last two years of bank statements. I compare them to the general ledgers and the cash receipts."
"It spreads the risk. It's almost, you know, like the same risk sharing profile as having an apartment building of 300 units."
- 1Review two years of bank statements
- 2Compare to general ledgers
- 3Compare to cash receipts
- 4Interview tenants about space needs
- 5Estimate worst case after closing
Related questions
- What is a joint venture equity partner in real estate?A joint venture equity partner in real estate is a partner who puts up equity capital for a project while another party, the sponsor, finds the deal and runs it.
- How do I raise money for my first apartment deal?Start with the deal, because a good one is far easier to fund than most first-time sponsors expect.
- How do I raise capital for build-to-rent communities?Start with the exit.
Questions about this video
What kind of real estate does this family office want?
Irwin wants multi-tenant flex and small bay industrial space, plus logistics. He is pursuing another five or six million square feet near major roadways, rails and ports.
What returns does the office look for?
It looks for at least double digit cash flow, though not necessarily on day one. Irwin describes buying near a 10% unlevered return in upstate New York and reaching 15% current with 60% leverage.
How does Irwin check a seller's numbers?
He audits the cash by reviewing two years of bank statements against the general ledgers and cash receipts. He also speaks with tenants to learn whether they will renew, expand or give back space.
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