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Episode 40: Michael Becker – Commercial Real Real Estate Investing

Michael has a background in property management, banking, taxation and real estate. He worked at Wells Fargo overseeing lending for multi-family apartments deals before he realized that there was more money to be made as an owner. Going out on his own had a certain degree of uncertainty after coming from the corporate world. He started out with a couple of small single-family homes in 2010 which he renovated and became a landlord. Then he reconsidered what he was doing and realized he couldn’t scale so he transitioned to apartment deals.

He helped start SPI Advisory, a firm which invests in apartment complexes. They look for value-added multifamily real estate opportunities in Texas.  They then work with passive investors to raise the capital via a syndication using a private placement. This way you can own a small percentage of a large apartment complex. The firm has done nearly $500m and has over 300 investors. They only work with accredited investors and have a minimum of $100k USD.  Investors can use both IRA and NON-IRA funds to invest.

He discusses various tax strategies like depreciation and cost-aggregation studies.  This allows the owners to use the tax code to their advantage by accelerating depreciation earlier for some areas of the building.

He also provided everyone with a “Multi-Family Financing Cheat Sheet” which provides the reader with everything they need to know about Financing a Multifamily apartment building.  You can download it for free via our website via this link.    It’s helpful to get the fundamentals of how financing is structured.

He provides some strategies for structuring loans and utilizing supplemental financing to gain a liquidity event vs. disrupting a low-interest rate loan by refinancing to pull equity out of the property. Michael also talks about the various approaches one may use for doing value-added real estate.

Going forward when looking at deals it is imperative that one evaluate each budget item such as property taxes, insurance, payroll, etc.    As inflation rises, these costs will rise so it’s important to plan for those in advance.

You can contact Michael through http://www.spiadvisory.com/team/ and his podcast can be found here.

Talking Points From This Week’s Episode
• Investing in Multi-Family Apartment Complexes.
• SPI works with accredited investors to offer opportunities to invest in real estate.
• Bond market appears like rates will rise from here.
• Some expenses in the real estate markets have been rising.

About Our Guest
Michael Becker is a Principal at SPI Advisory LLC and heads SPI’s Dallas, Texas office where he oversees all aspects of property operations, including asset management, property management oversight, accounting and taxation, capital improvement and renovation projects and investor relations. Michael is a lifelong resident of North Texas and a graduate of The University of North Texas with a BBA in Finance. He is married and has two young children.

Michael is a 15-year veteran Commercial Real Estate Banker and has originated and managed numerous portfolios of permanent and bridge loans in all major asset classes. Over the last 5 years of his banking tenure, Michael focused exclusively on multi-family properties, where he was the number one loan producer for his division at a Top 3 National lender for his last 3 consecutive years.

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