RG 126 – Why is the U.S. the Best Place to Buy Commercial Real Estate? with Andrew Cushman
- Andrew invests in multifamily properties
- Andrew graduated as a chemical engineering
- Andrew invests in secondary and tertiary markets.
Nuts and Bolts
Andrew Cushman started flipping real estate in Southern California in 2007 and in 2011 he transitioned into multifamily investing. Since then he has purchased over 1800 units across the country. Andrew made his first dollar at 5 years old, he made $17.50 collecting lost golf balls from the edges of a neighbouring golf course and then selling them back to the players for a dollar a ball. Andrew studied chemical engineering at university and graduated to work at a food company. He married and started small businesses on the side with his wife, selling things like flavored popcorn but they quickly realized that they couldn’t achieve financial freedom doing this.
In 2007 Andrew learned about flipping houses and when he did his first flip he made as much in one deal as he did in a whole year at work. After this he quit and did flipping exclusively for 4 years. The next step was the rental market after the recession when everyone needed somewhere to live but couldn’t afford to buy a house yet. Andrew and his wife were successful during the recession because they would buy a property for 50% of its value, fix it and then sell for 80% of its value. They always made sure to sell under value so that all of his properties sold in under 30 days. They both recognized the huge value in Southern California because there is more demand for rental accommodation than supply so they can afford to be selective and charge premiums.
Andrew had also expanded into secondary markets in places like Phoenix and Georgia. Andrew now prefers these secondary and tertiary markets because you can get a better return on investment and they are more stable. When looking at a new market Andrew checks the median income of the local property market to make sure that it’s 30% or less of the median income. This means that most people will be able to afford the rent in the area. He also looks for a recession resistant economic base, for example a university, medical centre of airforce base because these function independently of the economy. Andrew funds his purchases with non-recourse debt through an agency, he tries to get fixed debt if he can’t get agency debt, for example a 5 year non-recourse bridge loan that can be transferred into agency debt later.
- Most important habit to keep on track to goals – Getting enough sleep and exercising regularly
- Most important tool – todoist.com
- Most influential person – His mentor Tim Rhode
Contact – Vpacq.com