Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
Many of us choose a market and focus on a relatively small area like a laser. What are the significant attributes that you have considered which makes your market a winner going forward.
How do these attributes play into your exit strategy.
Some markets may be better for buy and hold while others may be more conducive to fix and flip strategies.
Where do you invest? What is your strategy and why is your market the best for you to achieve your goals?
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Austin is tops on almost every list. I realize that in certain areas of town the prices already reflect this enthusiasm, but locals have an advantage because they can scout deals quicker than out-of-towners buying in to the Austin craze.
East of downtown has a lot of city money pouring into it and is being gentrified due to Austin's extremely bad traffic problem. What was once a less desirable area of town is quickly turning into a great place to invest. We have a few deals going there that should deliver 40% unlevered. With financing the project-level returns should be 3-4X that number.
I buy all sorts of ways. We buy value-add deals and sell and rentals with nice financing in good rental areas. We build new houses in a few spots. I also buy apartment complexes and have been exploring development deals recently due to the lack of fully-developed lots that meet our criteria to build.
We buy some properties for cash flow and some for appreciation. I think a healthy mix along with a healthy mix of other assets is good for one's portfolio. Our securities have delivered very nice lift recently. Over the last 8 years this has delivered us 21.5% (arithmetic mean) returns overall. I am sure others have done better. The last few years have brought our number down and I find that as our portfolio grows I have a harder time keeping the equity operating optimally without making large and risky bets.
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
Originally posted by Michael Lauther:
Thanks for you detailed reply Zachary. I would not characterize your market as boring it sounds like a solid investment environment. Your strategy appears to be working leveraging your investment and mitigating risk by offering competitive rents in an escalating market with NO vacancy and minimal maintenance. I expect that diligent research to find distressed properties or distressed situations will make your good credit and solid cash flow a winner for your market. I would be interested in how your efforts in rehabbing the old office building turn out.
I will give you guys an update once we formalize a plan. Right now we are trying to do all the due dilligence and planning with the contractor and city so once we put this into motion, there should be minimal set backs.
Turning a 15,000 sq ft. former public school administration building into an 18 unit apartment complex isn't the best way to get a start in rehabbing!
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
Originally posted by Jon Klaus:
Originally posted by Zachary Dosch:
Turning a 15,000 sq ft. former public school administration building into an 18 unit apartment complex isn't the best way to get a start in rehabbing!
That IS a tough project. 18 new kitchens, bathrooms, etc. But you are probably in the right place to do it. What's the rehab budget?
Right now we are looking at 1.3-1.5 million. The key to why this works is I can get the building and the land for like $50k. Seriously. The cashflow is a little tight but the upside is so high im having a hard time not moving forward with this.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
14y
That is ambitious, Zachary. What about the time budget? I'd be concerned that the ND boom might be winding down by the time you are really ready to rent units in 12-24 months. I know this is going off topic--have you posted elsewhere about this project?
Bismarck, ND · Member since 2011 · 142 posts · 16 votes
14y
Originally posted by Jon Klaus:
That is ambitious, Zachary. What about the time budget? I'd be concerned that the ND boom might be winding down by the time you are really ready to rent units in 12-24 months. I know this is going off topic--have you posted elsewhere about this project?
I have and I resurect the topic once they give me a solid estimate on the cost. Im just as leery as you about this but its such an amazing building as such an apazing price that I would feel terrible if I didn't find a way to capitalize on it is some way. Perhaps if I resurected the thread now it might be fun to bad some ideas around.