All Forum Posts by: Gregg Cohen

@Alex Talcott - Hi Alex!  I'm not sure exactly what you mean with missing middle.  We focus on single family rental properties here in Jacksonville that provide both positive cash flow and above average growth over a full market cycle.  The above average growth comes from the Jacksonville market overall which has earned 24% more home price appreciation on average versus comparable cash flow markets since 1982 (Dallas, Memphis, Cleveland, Kansas City, and Birmingham.)  We typically don't offer apartments or multi-family as we feel the best market opportunity for our clients in Jacksonville is single-family.

@Aj Parikh - Nice to meet you as well!  I'm one of owners so let me know how my team and I can help.

Hi @Jag C., thanks for the kind words!  Yes, we offer turnkey investments for clients who purchase through us and we also perform property management services for clients who already own the assets.

@Cher Li - Nice to meet you.  I'm one of the owners of JWB.  We offer investments that produce positive cash flow right off the bat and provide better growth due to the Jacksonville market.  I think it would be great for you to chat with the team so you can take a deeper dive into the numbers to see how the cash flows work. 

However, let me be the first to point out that cash flows in Jacksonville are lower than in many other cash flow markets out there.  They are still positive, but not as positive as other low priced, low growth markets. 

The reason Jacksonville shines is because it has 24% more home price appreciation per year on average than other comparable cash flow markets out there.  If you want to buy and hold for a full market cycle, that's how you win.  

Also, there's the vertically-integrated component.  JWB clients have experienced 79% more home price appreciation than the average Jacksonville investor since 2013.  That's because of our VI approach and the fact that we are committed to only one market.  

Hope this helps you in your decision!

Hey @Jack Bobeck - Nope.  It's hard to make the numbers work for positive cash flow there.  In fact, we haven't really been investing in those 3 neighborhoods ever since we started in 2006.  We love the westside, southside, arlington, northside.  Most investors would be surprised to know that you get positive cash flow in those 4 neighborhoods and above-average appreciation.  In fact, many of the neighborhoods where we had the highest appreciation in the state of FL last year were in Jacksonville's northside (source: zillow.)  

Hi @Carl West! Hiring a property management company vs. doing it yourself all depends on how involved you would like to be in the property. Though being involved is great it can also be a full-time job. Collecting rents, maintenance requirements, and finding a resident can be a lot and may not be the best use of your time on a per hour basis. Having a property management company in place allows you to reap the benefits without a lot of the headache.

I run a property management company in Jacksonville, FL that manages over 4,400 rental properties so I thought it would be helpful to share the way I would go about choosing a property manager.

The first thing to consider when hiring a property management company is whether their goals are aligned with you as an owner of rental properties. As an owner, you want a high return on your investment and you achieve that through high rents, low maintenance costs, low vacancy costs and low total property management fees over time.

The typical property management company only signs 1-year leases with a limited focus on lease renewals or rent increases. The result here is a tenant that stays a short period of time which means the property management company puts a new tenant in place and charges another tenant placement fee. This cycle of higher turnover leads to higher maintenance, vacancy, and property management fees - and a lower return on investment - for you as the owner.

The way to solve this problem is to sign long-term leases (with rent increases included) and achieve high lease renewal rates. This leads to a consistent renter and a long average duration of resident stay.

There is a direct correlation to the average duration of resident stay and increased returns on investment for you as an owner.

So, my advice would be to ask the new potential property management company these questions:

1. What is your average duration of initial lease signed? (Our is over 26 months)

2. What is your lease renewal %? (Ours is 73%.)

3. What is your average duration of resident stay? (Ours is 54 months.)

4. How do you make more money when the resident stays longer? (We make more money when clients buy homes with us. If we keep your residents in your homes longer, we know we will earn less in tenant placement fees, but clients will have a higher return on investment, and they come back and buy more properties with us creating a win-win.)

Hope this helps!

Yes, I am!  My company bought 992 properties in Jacksonville last year.  We absolutely believe in this market and you can get positive cash flow.

Existing inventory is definitely tight which is why a large portion of our purchases are in-fill lots.  I love renos and new construction turnkey properties in Jacksonville because you get both cash flow and above-average appreciation.  Most investors have to make a choice between one or the other in your typical cash flow markets.  

Here are the zip codes in Jacksonville we buy the majority of our properties in:

32218, 32208, 32210, 32205, 32244, 32211, 32207

Happy Jacksonville investing!

Hi @Jim Cellini.  Great to hear that you're investing in rental properties.  Sorry to hear that you're between property management companies at this time due to a poor experience.  

I run a property management company in Jacksonville, FL that manages over 4,400 rental properties so I thought it would be helpful to share the way I would go about choosing a property manager.

The first thing to consider when hiring a property management company is whether or not their goals are aligned with you as an owner of rental properties.  As an owner, you want a high return on your investment and you achieve that through high rents, low maintenance costs, low vacancy costs and low total property management fees over time. 

The typical property management company only signs 1 year leases with a limited focus on lease renewals or rent increases.  The result here is a tenant that stays a short period of time which means the property management company puts a new tenant in place and charges another tenant placement fee.  This cycle of higher turnover leads to higher maintenance, vacancy and property management fees - and a lower return on investment - for you as the owner.

The way to solve this problem is to sign long-term leases (with rent increases included) and achieve high lease renewal rates.  This leads to a consistent renter and a long average duration of resident stay.

There is a direct correlation to the average duration of resident stay and increased returns on investment for you as an owner.

So my advice would be to ask the new potential property management company these questions:

1. What is your average duration of initial lease signed?  (Ours is over 26 months)

2. What is your lease renewal %? (Ours is 73%.)

3. What is your average duration of resident stay? (Ours is 54 months.)

4. How do you make more money when the resident stays longer?  (We make more money when clients buy homes with us.  If we keep your residents in your homes longer, we know we will earn less in tenant placement fees but clients will have a higher return on investment and they come back and buy more properties with us creating a win-win.)

Hope this helps!

Hi @Elijah Williamson, I really love the fact that you are going down the path of analyzing opportunities and putting yourself in a position to invest.  Most investors sit on the sideline so going through this exercise is beneficial for you even if this isn't the right deal.

My first thought when reading your post was that there is simply not enough profit potential and too many risks to do this deal compared to your other opportunities in real estate. 

It's a lot more fun to invest in real estate if you are rooting for your resident to continue to keep current on their rents and take advantage of their right to purchase agreement. However, in this case, there's just not enough profit to justify if that happens.  You have a potential profit of less than $5k (taking out closing costs on both sides).  Essentially this is a short-term flip deal and your profit potential should be roughly 10-20% of the sales price.  

You are also taking on a tremendous amount of risks.  You'll be responsible for maintenance and vacancy costs as well as any eviction costs.  Those can very easily add up to more than $5k.  I see a high probability of break even or even ending up under water in this transaction. 

The only way it would make sense to me is if the property were worth a tremendous amount more than $125k and there was no right to purchase agreement with the resident. 

Maybe go back to the original seller and ask them to settle the right to purchase agreement with the resident?

Hope this helps!

Our pleasure @Nate R.!

A simple rule to follow is to invest in metro areas that have over 1 million residents.  You also want to look for strong economic anchors such as Fortune 500 companies, military bases, etc.  This approach decreases your risk of a single employer leaving town and it having a drastic negative effect on the local economy.  Remember, at the end of the day, this investing model is based on your residents' ability to pay rent and remain in your home for a long time.