All Forum Posts by: Ryan Daigle

Thanks for this info, @Ellie Perlman. What is your source for this info?

@Casey Maeda I hear you about seeing what average returns look like now. Though I think any operator that was still pitching 20%+ returns even pre-COVID was doing a dis-service to their investors. This will definitely expose some people!

@Casey Maeda I agree – the line about MFH being resilient is one you hear all the time, often with no supporting evidence.

However, I think when we look back at this recession, MFH will hold up well relative to other asset classes (which is the whole point). Nobody claims it's recession proof. Just that it's disconnected from other asset classes and less volatile. Which it is displaying already.

I'm not sure any are going to "thrive", but there will certainly be stratification based on tenant base. I've seen justification for every side of the argument. I think we're just going to have to wait until 3-6 months from now to start getting a good feel for what's actually happening on the ground. I've been pleasantly surprised by my C+ assets. But will that hold?

@Tony P. if you want a high risk/high reward type of equity, you could look at a REIT like SPG or travel stock like CCL. Or an oil play like USO.

Just hang on to your britches, and don't be surprised if you find yourself walking around naked at some point 😬

@Geoffrey Morales this is such a market-specific question that I wouldn't put much value on yes/no answers from investors not in your area.

In general I would say to use data and experience to guide your decision vs. others' advice. For instance, you can float a small increase for existing leases and if you get pushback can scale back. You'll have a much better idea of what your tenants can bear this way.

Also, there's more to a lease than the rent. You can toy with the lease length too.

In some of my properties we're going forward with soft increases because our tenant base has shown an ability to absorb it. But if we get pushback we keep them at their current rate for a 6 month lease. So it prevents a vacancy, but doesn't lock us into a lower rent for a full year and gives us optionality earlier.

Lots of different approaches are available to you!

@Tiffany Elli make sure you account for more than just the financial aspects of the comparison. Think about the administrative complexity and time overhead associated with a portfolio of SFHs vs. a single MFH. If the returns are within a few percentage points but one is going to take a lot more of your time then you should be sure to account for that cost.

Another thing to factor in is the predictability of your projections. SFHs fluctuate much more since their value is based on personal whims of local buyers. MFHs offer a much more deterministic formula for value which is more in your control. There's great value to that predictability.

I recently LP'd on a 100+ unit in Jacksonville and have a 12-unit under contract here NC as a GP w/ private money. Though I'm pessimistic on the short term impact of covid, I'm also still a long term bull on the fundamentals of multifamily.

@Chris Brandon ask, but verify (especially w/ what rents are). There are some financials you can only get from the current owner/agent - like T12, expenses, etc...

But for rents, I would do your own research or contact your own PM company to determine what market rents are for the property. What the seller tells you and what you're going to actually see as an owner are probably not at all the same thing.

I don't think you can make such an absolute statement as "won't be affected" without some additional parameters. MFH has already been affected if you just look at April collections. You're probably talking more about to what degree it will be affected, and how it will fare relative to other asset classes?

I do think MFH has the benefit of being supported by several long term demographic trends so I'm very bullish long term. But you can't just wave away the ripple effects of such a deep economic distress as what we're experiencing now either.

I'm still very glad I own apartments and not strip malls!