What is working / what are you investing in today?

Question

What asset class / market / strategy are you focusing on today? I'd love to learn what others are doing right now to be successful in this market.

Personally, I invest in value add multifamily in the new england market. I purchase properties that need love, either operationally or capex-wise, and improve it along with the NOI in commercial multifamily assets. I typically target buying portfolios of properties ranging from 10-50 units. Its been successful but is definitely harder to find deals in todays market.

Stuart Udis · Answer

Let’s start with the realities of owning and operating real estate today. Construction costs, capital expenditures and operating expenses are all elevated. These pressures disproportionately affect lower-tier properties, particularly Class C and below, as well as markets where property values do not keep pace with replacement costs. If you are going to own residential rental real estate, properties with values and rents capable of absorbing these costs are generally going to be more sustainable. NNN tenants and residential units with direct exterior access can also reduce the property owner’s operating exposure.

As for specific real estate products, I would focus on mixed-use or commercial real estate incorporating credit tenants offering essential services under NNN leases; for-sale luxury housing designed for downsizers and higher-quality single-family rentals for families who historically would have purchased homes but are delaying ownership because of higher housing costs, student loans and other financial obligations. Numbers are broken for many strategies, these aren't.

Ken M. · Answer

I'm in AZ and when the MLS gets tight, you just have to source differently, that's all.

Since I only buy off market taking over the seller's loan, I'm not using new bank financing, and I don't use realtors, I usually pay 75% to 80% of value and I typically turn around and sell using a lease option with 10% option fee.

That gives me immediate cash back of $30,000 to $40,000. My buyer does all of the repairs and maintenance. I have a spreadsheet that compares that approach to the usual scenario of using an agent and the MLS market with a bank loan and I go with the path that makes the most sense. So, my spreadsheet favors profit and I usually can see pretty quickly whether the deal works for me.

If I was working full time, I'd have someone else looking for me, because one needs to be available when the calls come in and to know how to deal with potential sellers.

I still use my "ugly postcard" and get good success. Phone calls still work. But a note of caution to those who are chasing pre-foreclosures, they have become tightly watched by authorities so make sure you do those correctly.

Chris Seveney · Answer

we are buying non performing mortgages. we are seeing a big uptick in defaulted loans from investors on DSCR and on fix and flip projects. The institutional lenders are selling as many are not built to manage defaulted debt, so we are stepping in, buying at a nice discount and eventually existing based on multiple strategies.

Jake Wheeler · Answer

RV parks and campgrounds for me. I’m focused heavily on the underwriting side — especially separating seller-reported performance from what the property actually supports, then stress-testing DSCR, seller financing, value-add and the eventual refi/exit.

Outdoor hospitality can look fantastic on the surface, but small changes in occupancy, expenses or financing assumptions can completely change the opportunity. I’ve gotten pretty obsessive about modeling those scenarios before getting emotionally attached to a property.

Curious what you’re seeing in outdoor hospitality right now, Andrew. Are you finding more opportunity in existing cash-flowing parks or heavier value-add?

Garrett Brown · Answer

I think the beautiful thing about real estate is that what works for one person may not work for another. I am heavily in short-term rentals and outdoor hospitality commercial real estate (RV parks, campgrounds, etc). I genuinely enjoy operations and hospitality, though. I'm moving into boutique hotels now. Most people would probably hate it unless they enjoy the same things. We crush it and make around 1.5 gross million a year from 18 cabins, and our 12-unit boutique hotel is projecting 1.5-1.7m in gross the first year. Tons of expenses and headaches come with this game, though, and we net around 19% right now. I personally think RV Parks are an amazing asset class to go into but it is a more niche style with plenty of cons still.

What is working / what are you investing in today?

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