Christopher Larsen is the founder and Principal of Next-Level Income, leveraging over 18 years in the medical device industry to help others achieve financial independence through education and investment opportunities. With 20+ years of experience in real estate, he specializes in diverse areas such as development, private lending, and syndications, managing assets spanning multifamily, self-storage, hotels, and more, totaling over $1.5B in acquisitions since 2016. Chris holds a B.S. in Biomechanical Engineering and an M.B.A. in Finance, complemented by a decorated cycling career. Based in Asheville, NC, he enjoys outdoor adventures with his family and their Vizsla, Lucy.
Episode Highlights Here:
Chris You know, it really cuts into your cash flow. So you have to say, Okay, what do you do? You know, we have good fundamentals and all of our properties. So why would we sell if we have good fundamentals, and we expect lower interest rates now, as the Fed has started to start the halls where we can have ways to refinance? Yes. So then you kind of understand the other part of your question: what are we seeing, you know, sellers aren’t selling and buyers aren’t buying? Are we seeing that start to change? Brett Do you feel like sellers are finally starting to realize that, hey, values aren’t here anymore? They used to be. But they’re also you know, those that can hold on or like, I can hold on, right? You know, it’s like, I mean, listening to single family worlds, like I have the 30 year lock. It’s like the three year freeze, they’re like, why would I sell my house when I have a 2.5 to 3% interest rate fixed by six or 7%? Like, it’s crazy, right? I’d rather just stay in my house and not sell. But commercial real estate is completely different, right? Where it’s typically locked for three to five years, seven, or 10, if you’re really lucky, but most of these rate caps are expiring, and now they’re facing, you know, negative arbitrage situations. So talk about navigating all that. Chris Yeah, so it was into, like, want to have reasonable amounts of debt, you want to pay your debt down, you want to really start to build cash as well, during again, during this part of the real estate cycle, you can still get good deals, you can still get good cash flowing assets that are out there. But what we’re seeing now, as you mentioned, is because the Fed has just driven rates higher faster than we’ve ever seen in history before, you know, a lot of people with floating rate debt. And look, we have some more progress with floating rate debt and some of those interest rate caps that you mentioned. You know, it really cuts into your cash flow. So you have to say, Okay, what do you do? You know, we have good fundamentals and all of our property. So why would we sell if we have good fundamentals, and we expect lower interest rates now, as the Fed has started to start to pause, or can we do have ways to refinance? Yes. So then, you know, kind of the other part of your question is, what are we seeing, you know, sellers aren’t selling and buyers aren’t buying, you’re always seeing that start to change. So there’s always sellers, there’s always buyers in different parts. Right now, it’s definitely no, it’s, it’s hard to say if it’s a buyer or a seller’s market, because there’s not a lot of inventory, whether you’re talking about residential or commercial. But one of the things we are seeing specifically in the mobile home space, is, you know, sellers that a couple of years ago, were saying, hey, just give me cash, give me the money. I don’t want to own finance. They’re saying, Well, hey, Chris, you know, what we’ll take, we’ll take the carry back at six or 7%. And when you’re, you’re buying these properties and an effective seven 8% cap rate, and you can get, you know, an interest only seller carry back loan at 6%. Sometimes they even delayed payments or waive payments. Like we’re working on a deal right now where there’s no interest for the first year. Now you’re back into that positive arbitrage situation right, Brett, where you have a cap rate that’s higher than those interest rates. So I think we are starting to see that we’re starting to see some sellers figure out, like, what their price of their properties are. They’re like, I want to sell it. And I’m just gonna dig my heels in when the right buyer comes along and nobody comes along. So we’re definitely starting to see some of that open up. But it’s definitely a much leaner market than it was from a deal perspective in the last few years.
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About Chris Larsen
Christopher Larsen is the founder and Principal of Next-Level Income. After 18 years in the medical device industry, he dedicates his time to helping others become financially independent through education and investment opportunities. Chris has been investing in and managing real estate for over 20 years. He has experience in development, private-lending, distressed debt as well as commercial office, and syndications including assets across: multifamily, self-storage, hotels, mobile home parks, car washes and senior housing. Since 2016 he has been actively involved in over $1.5B of real estate acquisitions. Chris holds a B.S. in Biomechanical Engineering from Virginia Tech and a M.B.A. in Finance from the Pamplin School of Business. In addition to real estate, Chris was an All-American cyclist while in college and has held multiple state championships, podiums in national championships as well as top-10 in world championships during his cycling career. Chris lives with his wife, two boys (and Vizsla, Lucy!) in Asheville, NC where he loves spending time with them outdoors and enjoying the food and culture that the region has to offer.
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