Let's breakdown the difference in investing philosophies that new investors have and that old school investors have. Specifically with how they handle their Cap-Ex and Op-Ex (capital expenditure and operational expenses).
Generally, your Cap-Ex is going to consist of one time payments, like a new roof, or replacing a boiler. And your Op-Ex is going to consist of reoccurring expenses, like insurance, utilities, smaller repairs, etc.
Here's where new and old investors differ... new investors want to add value and amortize a lot of the cap-ex costs over the life of a deal. They're worried about monthly cashflow for their investors.
Where as older investors, who may not even have any LPs in the deal, want to tack on as many of those costs into their Op-Ex budget as possible.
Why? Which way is better? Find out on this week's episode of Multifamily Investing Made Simple.
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