All Forum Posts by: Devin James

@Devin James I try to buy properties where there will be solid appreciation. However if there’s not also some cash flow I won’t do the deal.

While I do take into consideration all the relevant expenses when I vet a property I still like to see at least $200/door cash flow so I can more easily build up my reserves and have some money to work with.

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When running numbers on an investment property, I focus more on equity growth than monthly cash flow.

Here’s why:

If I can acquire a property at a low basis and add significant value, I can:

1) Sell and reinvest elsewhere

2) Cash-out refinance to recapture my investment. Id be happy to break-even with the rental income if I get all of my invested capital back.

At this stage in my life, these equity plays are more impactful than holding onto a property for a couple hundred dollars of monthly cash flow.

What’s your take? Do you prioritize equity growth or cash flow in your investments?

During period of low interest every post on BP was about cash flow - now that cash flow upon acquisition is dead the only option is equity which is also reeling because price appreciation is finally back to reality

personally I buy for growth because I buy to hold for 10-20 years or longer. I am 100% ok with my w2 providing me income to maintain my life and grow a nest egg for the later aspect of life 

I definitely get where you're coming from. Focusing on equity growth makes a lot of sense if you're in a position to take advantage of those opportunities. Adding value to a property and then either selling or refinancing to pull your capital out is a solid way to build momentum, especially if you're okay breaking even on rental income. Cash flow is great, but it can feel incremental compared to the boost you get from equity plays.

For me, it's more situational. If the market is appreciating rapidly, I'm with you—equity growth takes the lead. But in slower markets or times when cash flow can provide stability, I'd lean that way. How do you balance the risks of holding during a market dip versus the rewards of appreciation? Always curious how others strategize around that.

It doesn't have to be condos or apartments necessarily. Smaller homes are not for everyone, but they almost always work for two very important parts of the homebuyer demographic: retirees and first time homebuyers. A lot of jurisdictions dislike density, particularly if parking is an issue and mass transit is not readily accessible. Both of these are legitimate concerns. I like what I'll call the "west coast model" since it's mostly happening out here (though I'd love to be wrong about this!) which is allowing homeowners to build an Accessory Dwelling Unit (ADU) on their property. That unit can either be the one the homeowner chooses to live in or it can be one they rent out for revenue or to offset a portion of their housing expenses. I see SO many properties in the upper midwest that have ample yards or even existing structures like carriage houses and detached garages yet prohibit ADUs. Allowing someone to do this on their property can significantly increase housing density and affordable units without increasing the jurisdiction's footprint. Some areas of the west coast are allowing multiple units to be built out on a single parcel and in these higher COL areas, it's a boon for the homeowners, renters, builders and even for the local governments that are collecting the building fees. I'd like to see more of this happening everywhere. My sons are of homebuying age but the barriers to entry are so much higher than they ever were before. Having the ability to offset their mortgage with an ADU would be a game changer.

I think that when one is young, idealistic, and altruistic, the idea of building smaller, dense, housing, and attempting to make it affordable appeals. It, in theory, makes a lot of sense! 

If we build more, dense, "dormitory-style" housing or similar, we can more efficiently house people, bring down costs, and everybody wins. 

The problem with that is this:

- It just doesn't make economical or practical sense for the newest housing to be the cheapest. 

Any new housing that is constructed reduces the cost of all housing downstream from it. 

Cheap housing only reduces the cost of other cheap housing. 

I am not going to move into a dormitory style house and raise my two year old in a location with poor schools and incredibly dense housing, unless I have no other option. 

If I have the option, I am going to move into a nice house, in a nice school district, with a yard, a couple of bedrooms, and the space to set things up the way I want them. 

When a builder builds a new house that meets my requirements, in my price range, I move out of my duplex and into that new house. 

This event is the act of making housing more affordable. 

Now, the older, house-hacked duplex comes on the market as a rental, lowering rental prices as another option available.

Someone else moves out of their rent by the room unit, and upgrades to the duplex. That unit goes on the market, giving the next person an opportunity to move out of their parents basement, or get their first apartment. 

The nicest, most expensive housing should almost always be new construction. And, capitalism works to lower housing prices when this process is allowed to go into effect. 

Austin, TX is the poster child for capitalism working to this effect. 

Most new construction in Austin are luxury new apartments. As folks move from older buildings to these swanky new apartments, their old units come on the market. Austin, TX rents are down nearly 12% YoY. VERY little of that new construction is affordable housing. 

It's the building of the nice, new stuff, that makes the older stuff affordable. 

And so the cycle continues, and the standard of living in capitalist societies steadily improves.

@Devin James ok now you got me "thought vomiting" here but just hang with me a moment cause maybe there will be something. 

Can you do underground parking? 

I know, big expense right. But, if doing small row-style townhome clusters, call it 4 and 6 unit clusters. "What if" did groupings of these clusters in horse-shoe, so 3 4/6 plexs with walk-out to shared central courtyard. 

Under which is underground parking. 

And in underground parking is mechanical's. Because now we eliminated the foot-print of autos. Thus increasing density ratio. And via the clustering we are utilizing green-space in a communal manner thus reducing foot-print of that BUT retaining such perception as each unit has walkout to what seems a BIG green space. By moving mechanicals out of unit we now have reduced that impact to foot-print. 

Use of Euro-style wall units for air-con.. 

End units are the "premium" units of course. 

I wonder if the change of density could off-set cost of underground enough to make it make sense.... 

I'd like to understand @Devin James, from the domestic developer mind of things; 

If there stands a confusion, lack of comprehension on how to address housing compilation in a given region, city, MSA etc., why not look to Europe? 

I mean, it's simple math, right. 

Many European cities have existed far-far longer than the USA has even existed. When Columbus sailed, there cities were old and had long addressed housing issues generations before. 

So why not look to Europe and say "Huh, how'd they deal with this"? 

Austria, Germany, Luxembourg; these immediately come to mind as "ancient" developed areas in contrast to the "infant" that is USA, and they seem to be doing very well, very efficient, very well setup and established across the strata's. 

We have data to look back to for direction on our path forward, do we not? 

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Hey @Devin James

Your thoughts on affordability and density resonate with me. I’ve seen developers in Phoenix transform underused lots into thriving micro-communitie. One developer I worked with built smaller homes around a central courtyard, and buyers appreciated the balance of affordability and community.

In San Diego, where I’m based, density has taken a different shape...like ADUs (Accessory Dwelling Units) that maximize land value. I read something recently in The Economist about how smaller units increase land efficiency.

Have you explored micro-communities or shared amenity setups in Orlando? I’m curious how those resonate with buyers there.

My first home here in Orlando had an ADU. Great use of space and provides additional income to offset the monthly payment.

Orlando, and many other cities, have a "missing middle" problem in regards to housing. 

Municipalities either want Class A multifamily, or 2000+ sqft homes on .25 acre lots. 

There's a huge demand for Townhomes, Duplexes, Triplexes, Quads, and smaller multi's.

I love cities who can implement those micro communities. I can see the vision but they are not yet put to use here in Orlando.

It's great to hear your first home had an ADU...those are game-changrs for both space efficiency and offsetting costs. You're spot-on about the "missing middle." I've seen this issue in San Diego, where a friend of mine worked with a city planner to rezone a lot for duplexes and triplexes. They framed it as a way to provide workforce housing, and the project not only sold out but became a model for similar developments.

I read a piece in Forbes recently about how smaller multi-units are reshaping urban housing. In Omaha, smaller multi-unit builds with shared amenities like co-working spaces are cacthing on. People appreciate the balance of affordability and livability.

What’s been the biggest hurdle for Orlando in pushing these types of projects forward? Zoning issues? Or are developrs hesitant to take the leap?

Love to hear it!

Mostly zoning issues. 

Specifically for us, we focus on the outskirts of Orlando. Many of our developments are turning unprofitable citrus groves into SFH's.

I do think there's a trend towards BTR (Horizontal Apartments). Here's a project we sold to Taylor Morrison that will have this new type of housing. Super cool apartment style living, but all one story.

Repurposing citrus groves into SFHs is a smart move...turning underused land into vibrannt communities. I’m also a big fan BTR developments, especially horizontal apartments. They offer renters a unique option that feels like home but without the long-term commitment.

A developer friend of mine in San Diego recently completed a BTR project on a former industrial site. I saw a report in Forbes about how BTR developments are shaping suburban rental markets. The concept of single-story units with private patios caught on quickly, especially among young families and empty nesters.

Do you think these horizontal apartments in Orlando could help bridge the gap for middle-income renters? Or are they more likely to appeal to renters in the higher-income bracket?

100%!!

Im a huge fan of them

I think both - they will bridge the gap with middle-income renters and also appeal to the higher-income bracket. As you said, younger crowd & empty nesters

So you’re talking apartment units and condos.  There is nothing new there.  

Plus building in the middle of an old orange grove isn’t the way I would go if I was wanting to address that economic group.  I would knock down an old building structure in or off downtown.  Closer to entertainment district, services and mass transit.  

Someone mentioned Omaha above.  They knocked down the warehouse district near downtown and built condos.  Big entertainment area.  Just north of town 10 blocks they built about 100 mini houses about 300 square feet.  Waving normal setbacks.   Target low income and transient groups.  

 About 30 blocks west of downtown they did the Blackstone district.  Basically gentrified an old neighborhood.  

I would look at your target and identify what they want besides just the living unit.  

There have been a lot of posts about failing syndications.  Most of the ones failing have been due to lack of appropriate financing or inappropriate product mix.  I would check your market analysis.