All Forum Posts by: Trevor Ewen

@Tracie J.

I would agree with others here. However, I would make one distinction.

I would definitely pay the higher price, as long as your numbers are still yielding in a positive range. The second your numbers (with available maintenance allowance) are coming in negative, you've tipped into a range that will dog you for a few years. If this is the case, it's possible that both the properties in the 'normal' and 'better' areas are too pricey. The bad one can make the numbers work, but it won't really, because you'll have problems that come from the instability. The good one will be negative in the normal course.

There are plenty of markets and property types that are overheated in my opinion. Some lucky people will take winning bets, but it's not based on rigorous analysis.

@Justin Goodin

Absolutely. I partner with operators on passive deals (private loans & syndications). 

For properties that I have acquired on my own. I have partnered with friends and family to inject more capital into the deal. These are typically smaller, residential projects. They are a great way for anyone I know to get their feet wet and get comfortable with the idea.

@Account Closed

Sadly, that's the reputation. I would say the private money, impact route is your best option, but it's an uphill battle. Good luck with everything. Would be interested in hearing how you manage to get this done. I think the material would be incredibly useful for others that have interest in the space.

@Account Closed

Completely get the challenge with resident funds. 

From a marketing perspective, you may want to consider an impact investing approach. There are certain private lenders and equity investors attracted to that kind of model. Because this is more experimental, but has the eco-friendly aspect, it could definitely work to attract a different (and likely smaller) investor pool.

@Duke Giordano

Tax issues >> talk to a CPA, as mentioned.

As for choosing deals. Plenty of good syndicators and good syndication experiences on BP. No need to start with a $200k min. There are plenty of decent projects with $50k minimums. The lower threshold would let you try out several strategies and return models. Eventually, you will get into a groove with a mix of ongoing relationships and deal styles that work for you.

@Account Closed

This is interesting. Reminds me of something my wife and I looked at about 4 years ago in Philly. Community was buying a big plot to build a tiny home community and wanted investors to buy the units.

Why not offer this as a turnkey or new development model? And then your residents can fund the development, since they are the ones most aligned with the vision. If you rehab the tiny homes and sell them, you can make some additional capital on the spread.

If it's startup costs and infrastructure, then I imagine you would have to go the non-refundable route with this. To be honest, I don't see how you could take this kind of risk without making it non-refundable. Worst case (assuming project completion), buyers can still sell later if they decide not to live there.

@Jason Powell

I am definitely in the camp of modern portfolio theory outside of my real estate investment. I do 50 / 50. 50% in the public markets. 50% in real estate. However, I used leverage on the real estate side, and I don't trade on margin in the public markets. My primary interest in real estate is the tax advantages, and also the fact that the market is still less 'efficient' than typical equity and bond markets. 

You'll get every possible opinion regarding allocation on this forum. The important thing is to choose a mix that gives you the right return / risk mix. The less sophisticated comments tend to focus on either return maximization or risk aversion, only. Both should be part of your analysis. Keeping the two in balance will allow you to sleep more soundly.

Interesting article this week from Bloomberg: https://www.bloomberg.com/news/articles/2019-07-09/deutsche-bank-lured-staff-to-florida-what-comes-next-is-secret

We're seeing the Deutsche Bank fallout in NY and London. I would bet that the Jacksonville office stays strong. Good news for the jobs future of the market. I have been very impressed with the growth and resilience.

@Kayla V.

Definitely go to meet them. See the market. 

18% IRR does sound a bit high for a 5-year, but it's not out of the question. People who've seen my comments around here know this, but I always say: "I would rather take bad numbers from a good operator than good numbers from a bad operator." It's ALL about the operator and their ability to deliver and protect on the downside.

@Janel F.

I've been an out-of-state investor for my entire investment career. As such, I am definitely biased here. For landlords that have a lot to lose and don't want to master the legal headaches, I would start developing plans for other markets. If you want to learn to master the legal headaches and partner with government (as needed) you will become useful in providing supply for the inevitable housing shortage that will occur / has occurred as a result of state policies.