All Forum Posts by: Adrian Clapp

I have found there to be a real shortage of long-term rentals in Ludlow and the surrounding area. It would be great if your rental could also work financially as a long-term rental if the STR market changes. Or perhaps medium-term rentals in the off-season?

 The Florida MF deal was from Feb. 2021 to November 2023 and the ATL hotel deal was from March 2021 and is still ongoing (planned exit in 2026 but is infinite returns so I'm in no rush!)

Be cautious.  AirDNA bases its rental data/projections on asking rates and doesn’t account for owners discounting when asked by prospective guests.  This happens A LOT in over-saturated markets where competition is fierce.

AirDNA data does not account for "discounting" by hosts.  In over-saturated areas like Scottsdale, hosts are often asked by guests to discount their nightly rates (especially for extended stays) and many hosts accept the discounted rates because they know that if they deny the request, the guest will simply book with a different host that will extend a discount.  If AirDNA sees a property is "booked", it just takes the number of dates booked and uses the list rate.  I confirmed this issue with AirDNA data with the AirDNA team at their 2023 BPCon booth.

I’ve been in a similar situation with a commercial office building in the northeast.  Two lessons I have learned: 1) CashFlow is critical and 2) Sometimes it’s good to sell when things are going well- I bet you weren’t considering selling when it was worth $2.7M.  At least with residential Multifamily your building is more likely to increase in value again.  With the current positive CF and interest rates hopefully falling in the near future I would hang on for now until the rates come down and values start increasing again.  Especially since you haven’t seen any suitable replacement property.

I will add that you will probably feel really good in a couple of years when you sell it.  It’s probably still a significant amount of work for $1500 per month CF.

Make sure you review the surrounding area and watch out for the RE "doom loop" 

https://www.wsj.com/real-estate/commercial/doom-loop-st-loui...

I've invested in 20 syndication deals over the past three years. I've had one recent multifamily deal in Florida exit with a 32% IRR and one hotel deal in Atlanta refinance and return 110% of the original invested capital through dividends and the refinance and the hotel continues to make regular 16% distributions. That's the good news.

Many other projects have reduced or suspended planned CF distributions and I've also had a few capital calls in which I did participate since the business case still made sense (the MF in Florida had a capital call to finish construction and get through stabilization and it still returned the 32% IRR).

I expect almost all of the deals to be OK, just later exits than originally projected.

I am very concerned about one project and have already written it off in my head.  If I receive anything back, I'm considering it a win.

I've learned a lot about investing RE syndication deals over the past three years and have refined my criteria for investing.  I plan to continue to invest in a mix of both RE syndication and our own rental properties going forward depending on what makes the most sense and offers the best returns.

Local/Regional STR owner associations as well as AirBnb and VRBO often lobby for common sense regulations.

 https://floridapolitics.com/archives/664278-lawmakers-pass-s...