Unlock the secret to growing endles EQUITY by connecting directly with Gordon Reese – Principal of Cash Flow Equities
The Firm
A MULTI-FAMILY INVESTMENT COMPANY
Gordon Reese started CASH FLOW EQUITIES, INC in the late 80’s in Southern Calif. Initially the firm was a combination brokerage and syndication company as Gordon had opened the Newport Beach Office of Marcus and Millichap Inc. in 1981. The company continued in this manner thru the 90’s and 2000’s. After that period the company changed entities from a C Corporation format to an LLC format and became exclusively a REAL ESTATE SYNDICATION FIRM.
While Gordon is still associated with Marcus and Millichap, Inc. his focus is exclusively on syndication of Multi-Family Properties. Being based in a brokerage office like M & M provides CFE with early access to both listed and non-listed multi-family assets. CFE raises money from both private individuals and retirement plans. The key to CFE’S ability to raise capital is an 8% preferential return that is paid to all investors annually prior to any profit participation by CFE at time of sale.
Partner with the Cash Flow Equities team today!
Strategy
How it is done
CFE focuses on Calif. Coastal non-rent controlled markets. In these geographic markets the focus is strictly on B and C assets, A assets being newer projects with very high rents often in mainly urban core areas renting to millennials. The majority of purchases are class C buildings that have been owned long term by mom and pop type individuals. These 50’s,60’s, 70’s and 80’s projects are very well located as the original developers had their pick of the prime locations. Additionally density of units back then was very low and these projects have a lot of open space with pleasant landscaping. Unlike multi-story concrete jungles built today. Also earlier construction featured much larger units with larger bedrooms etc. Again unlike micro units being built today. The common denominator of all assets of this type purchased today by CFE is that nothing has been done to them since they were built. Thus an upscale renovation of these assets creates an arguably more appealing environment than even a new project for a family with children. CFE focuses on acquiring well located class C assets and thru extensive exterior and interior renovations transforms them into class B assets.
(Class B and C differ in that C tenants can barely make rent each month i.e no margin for error. Class B on the other hand are lifelong renters but they do have significant discressionary income and they appreciate a pristine renovated complex and will pay significantly higher rent for this lifestyle upgrade) The Key to the Class B & C assets in these Calif. Coastal markets are the barriers to entry.
First rents would have to increase 300% to justify new construction; second homeowners in these markets do not want more apts in their neighborhood; and lastly there is almost zero land anywhere in these dense costal markets zoned for multi-family construction. In Gordon’s opinion these smaller existing apt complexes are irreplaceable assets. All complexes’ are 100% full except for turnover and in the future the majority of increase in population will be living in apts not purchasing homes.
An old saying in the real estate business is “YOU MAKE MONEY ON THE BUY” There is a lot of truth to this. Today the for sale market in multi-family is very competitive often with multiple offers on every deal. Gordon and CFE have developed a solid reputation as buyers who perform and do not needlessly renegotiate deals. The untold truth about the multi-family for sale market is the fact that the brokers control who gets the deal. In this space CFE has a sterling reputation as a no-nonsense repeat buyer. Brokers only want to have to sell the deal once and above all they want a buyer who will close escrow with the least amount of drama. Fully 50% of the deals sold today are sold “off market” as the real estate jargon goes. (an off-market deal is a deal that is not formally listed with a brokerage firm but the owner is selling the property to the first broker who brings him an offer he likes) This is where Gordon and CFE’S reputation and contacts MAKE MONEY ON THE BUY! If you are a buyer off-market deals are what you want to look at. Very few other buyers know about the deal and this lack of competition translates into a better price for the buyer. Taking this even a step further to get an edge on the competition Gordon and CFE often write non-contingent offers and day one pass thru large sums of money to the sellers. Here Gordon and CFE take 100% of the risk as they put up 100% of the money given to the seller. This strategy has enabled Gordon and CFE to consistently purchase multi-family assets at significantly below market prices.
Rehab Before/After
Escondido – 20 Units
The Team
Principal
Gordon Reese started CASH FLOW EQUITIES, INC in the late 80’s in Southern Calif. Initially the firm was a combination brokerage and syndication company as Gordon had opened the Newport Beach Office of Marcus and Millichap Inc. in 1981. The company continued in this manner thru the 90’s and 2000’s. After that period the company changed entities from a C Corporation format to an LLC format and became exclusively a REAL ESTATE SYNDICATION FIRM.
It is my pleasure to announce that Gordon Reese, Senior Vice President Investments of the Newport Beach office, has reached his 25-year anniversary with Marcus & Millichap.
Acquisitions/Investor relations
Frank grew up in Northern California and attended both California State University Chico and The University of Southern California, Marshall School of Business during his professional real estate career in Southern California. Frank resides in Corona Del Mar and Park City, UT.
Fund Raising
Dave graduated from the Univ. of Missouri and began his business career at the Xerox Corporation in Denver, Colorado where he ranked No. 1 in the US for sales of his specific product type. After several award winning years with Xerox Dave left and began his Real Estate Career with a local Denver Syndicator who specialized in raw land. Dave was instrumental in raising millions of dollars for the various partnerships. When economic conditions in Denver soured Dave moved on to the real estate brokerage firm Marcus and Millichap, Inc. in the Denver, Colorado office. Dave thus began a 20 year plus career with the firm. On 3 separate occasions Dave ranked in the top 10 nationally in fee generation. In the 90’s Dave moved from the Marcus and Millichap Denver office to the Newport Beach Calif. office. After a few years Dave then moved on joining a local boutique mortgage banking firm. Here Dave specialized in lender/developer joint venture acquisitions. Today Dave spends his time investing in Southern Calif. multi-family projects as well as fund raising for CASH FLOW EQUITIES Multi-Family syndications.
Property Management
Pan American has been a fixture in the Southern Calif. professional property management business for approx., 40 years. Geographically they cover all Southern Calif. in the following sectors: Multi-Family, retail, industrial and office. Over the past 40 years they have been involved in the Multi-Family sector as an investor as well as property manager. Operating on both sides of the aisle as they do gives them an owner/investor perspective in addition to simply the property management platform which is the case with most professional management companies. Pan American has earned the following designations; CPM (certified property manager) and AMO (accredited management organization) Pan American has their own inhouse mait. staff which is especially ideal for smaller apt complexes. On the Tech side, they are state of the art with all managed complexes having specialized management software and computers. Pan American oversee’ s most of the rehab on CFE’s various projects in addition to handling all the rent collection and bill/pref payments. Gordon Reese the principal at CFE has over a 30-year relationship with the firm as both an investor and apt owner. Pan American’s Corporate offices are located in Tustin, Calif.
Financing/Debt
Marcus & Millichap Capital Corporation
19800 MacArthur Blvd Suite 150
Irvine, Calif. 92612
Marcus and Millichap Capital Corporation has over 90 offices in the US and Canada. Their annual loan volume gives them tremendous clout with all lenders nationwide. This is a special benefit that accrues to all clients in terms of better rates and special boutique loan programs. Additionally at the end of the underwriting process they are very effective negotiating more favorable terms than the lender initially offered.
Legal and Tax advice
611 Anton Blvd, Suite 1400
Costa Mesa, Calif. 92626
Rattan and Tucker practice extends Nationwide, while maintaining a connection to the fabric of California. They are one of California’s largest full service law firms with several of their attorney’s selected as Southern California SUPER LAWYERS for 2017.
Accountants for Tax Reporting and Advisory Services
4100 Newport Center Dr. 3rd Floor
Newport Beach, Calif. 92660
Squar milner is one of the nation’s 70 largest accounting firm’s as well as one of the largest independent accounting and advisory firm’s in California
Branding / Website Development
Jesse Hopkins is the owner and creative director at Jesse Hopkins Design (JHD). Over the past 15 years Jesse has devoted his professional career to assisting businesses create professional, creative and consistent brands with strong marketing messaging which reaches their target audience and generates results.
Graphic Design
Bryce Dunks runs the day to day operations side of the Marcus and Millichap, Inc. Irvine/Newport Beach office. Bryce has a back ground in graphic arts and assists during his off time in doing all prospectus design for CASH FLOW EQUITIES.