John Casmon

Key Factors for Multifamily Investing with Ellie Perlman, Episode 93

With a background as an attorney negotiating bank contracts, Ellie Perlman knew she wanted to be on the other side of the transactions. As she sought fulfillment, she recalled watching her business school classmates raise $50 million. This lit the path for her next move into multifamily investing. Today, Ellie is the founder and CEO of Blue Lake Capital and controls over 2,000 units worth over $200MM. On this episode, she talks about her finding her path, selecting markets for multifamily and making conservative assumptions.

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Key Market Insights

Worked as property manager in Israel
Moved to the U.S. from Tel Aviv
Motivated by passion, was missing a lot of the action
Went to business school at MIT
Worked on 150-page contracts, negotiating with banks
Classmates raised over $50 million for a project
Like Texas and Florida due to population growth, two states with highest internal migration
Dallas added over 100,000 jobs in the last 12 months
Things Ellie Looks for in a market for multifamily: population, job and rent growth, landlord-friendly state
25-30 mins away from downtown in hot markets
Looking at single family home prices, need a gap between rents and mortgage payments
Assume a refinance in 18-24 months to return a portion of the investment, but does not include in modeling
Organic rent growth assumed at 2%, even where there is actually 5% growth
Exit cap rate, assumes 50 basis points (0.50%) increase
Working on a passive investor program