The Multifamily Real Estate Experiment Podcast

MFREE 108 Trailer # 3 with Axel Ragnarsson: Are You Locking In Your Wins on Day One?

Shelon Hutchinson Season 3 Episode 108

Aloha, It’s Shelon "Hutch" Hutchinson here! If you’re enjoying 'The Multifamily Real Estate Experiment' podcast, please like, comment, and share our episodes to help us reach and inspire more people. Thank you for your support!

In this segment, Axel Ragnarsson lays it out plain: the most important move in a real estate deal isn’t mid-renovation or at the sale—it’s on day one when you buy.

He breaks down:

 👉 The three key moments that shape a deal’s returns

 👉 Why the purchase price outweighs almost every other factor

 👉 How buying below market creates a built-in safety net for LPs

 👉 Why a strong cost basis gives you room to breathe when things don’t go to plan

It’s a simple but powerful reminder—start strong, and the rest of the process gets a whole lot smoother.

#BuyRight #InvestorMindset #DeRiskYourDeal

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hutch@hsquaredcapital.com

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xel Ragnarsson1:

The day that you buy and you lock in your basis in terms of what did you pay for the property is the most impactful financial decision from a mathematics standpoint in the entirety of the investing process, right? So be because that's the biggest number. If you're gonna spend a hundred thousand dollars per unit, you know, and$10,000 in closing costs per unit, I mean, that's, that would be really high. But just for round numbers, you know, and you're at 1 10 cost basis per unit, you're probably only gonna spend in multifamily anywhere from 5 grand to 20 grand just for round numbers on the unit in renovations. Right? I mean, it's a small fraction of compared to the purchase price. So when you're able to reduce that to 90 k, you know, 10% below market, 90 K instead of a hundred, that's a massive delta that. Drastically impacts your returns down the line as an investor. So not only do you, you know, obviously you lock in the ability to earn higher returns, but you're also de-risking the remainder of the process in terms of, okay, you went over a little over budget on your renovations. That's not the end of the world because you bought it at the right price and you created a buffer there.