Must Read: The Seven Rules of Multifamily InvestingI've been involved in the tech community online for over a decade. But I'm still relatively new to the rich community of CRE professionals online, so I'm always on the lookout for new and interesting people to read about. A great place to find these people are on LinkedIn Groups. I get daily digests for a number of CRE-based groups, where seasoned experts share their blog posts.
One such expert is Charles Dobens, a lawyer out of Boston specializing in Multifamily. When he's not advising clients, he's running the Multifamily Investment Academy, which helps investors understand the pitfals of Multifamily investing.
He has a lot of great posts on his blog, but my favorite is his series on the Seven Rules of Multifamily Investing. His first post asserts "the biggest lie in Multifamily is the asking price" and goes on to show a number of different ways the deal can be manipulated. The second part of the post is especially interesting, as it talks about the different ways that the income and expenses can be manipulated.
These types of manipulations are the exact reason why we built AdvancedREI. These days, PDF files are the de-facto way to share financial details. But a friend of mine in the tech world who tweets about employment and other political data said this one day:
It's true when the Bureau of Labor and Statistics publishes employment data, and it's true when CRE brokers publish real estate financials. The easiest way to manipulate the numbers is to distribute them in a format that actively discourages their use.
Putting data tables in a PDF is a red flag. It's a clear communication that you don't want me to check your numbers.— Political Math (@politicalmath) September 5, 2014
AdvancedREI tackles that problem by handling all of the calculations for you, giving you new and interesting ways to slice and dice the numbers, and then sharing those numbers in a way that is, God forbid, actually usable.
There is one more important way that the asking price is a lie, but we'll have to save that one for next time. In the meantime, be sure to spend some time on Charles' blog... it is a fantastic resource!
Hope you have a fantastic and productive day!