RG 166 – Changing Investors Expectations in Today’s Economy: Part 2 with John Cohen
John is the cofounder at managing partner of Toro Real Estate Partners and has been on the podcast before on episode 18. John is also the director of his company focussing on acquisition strategy and investor strategy. He has been investing since 2010 and got started by buying tax deeds. John has been involved in over $250 million of real estate transactions from tax leans to personal investments.
John is interested in the changing investment climate – we’re currently in the tail end of the market cycle and everyone is scared of recession and interest rates going up, but these things can’t happen together. John has started looking at deals a little differently; at first he did long term financing and then bridge options and then back to long term. He’s now happy with both scenarios at lower leverage so he’s protecting himself but needs to adjust returns accordingly which helps with his peace of mind. The most important thing for John is super solid, fundamental economics and to steer as close as possible to the million person MSA. He focusses on the top 50-25 markets where there’s more competition but targeting smaller properties – this allows him to excel int eh stuff thats more efficient to operate which was a company wide decision. This way, if we’re at the end of the market cycle he has really good real estate in good locations.
Originally he invested in D class properties with a 20% return however this isn’t possible anymore, the market helped a lot at the time but it isn’t the same anymore so he recommends to students not to go down this route. It’s easier to go for a 6% return and save on headaches. The proof is in the pudding with John because he invests in all the same deals as his investors, as does his family and company, so that he can say to his investors ‘we’re putting 30%’ into this.
Top tips
- Most important habit – Write down everything at the end of the day to read the next morning
- Most influential person – His daughter and wife
- Most important tool – Double checking everything
- contact – tororep.com