All Forum Posts by: Julie Silvestro

 Thank you I think I like your idea about simply saying 60% return, let them sort out the accounting. We just want to show that adding our service is a good investment and had a good return. 

 Mr Fegan,

This was helpful, thank you. My question still looms, what will market better Cap rate or ROI for an ancillary service? Are you suggesting to use IRR in our marketing ? Perhaps a better/cleaner metric?

 Patrick,

We are selling Internet that apartment owners can profit from. Its a add on. We are not trying to collect rents nor are we a  management company. I'm sorry for the confusion.

 Patrick,

I agree with you that it is common that the higher the return the higher the risk. That's not this. In my opinion that usually applies in the "Investor mind set". There are many people that are getting HUGE returns in life and it's all low risk. I mean that's the point of entrepreneurship to have huge returns. Of course I would never just give someone a 60% return if I could get it myself. The relationship of our services is that both the business owner (us) and the apartment owner NEED each other to achieve these types of returns. In fact its more like a partnership in that regard.   

As to a your question of guaranteed returns, the short answer is yes (actually its SRP is $50) BUT there is a caveat to that answer. You see if we sell our Internet service to the owner for let say $20 per unit and they would have to actually include it in the rent or add it to the RUB's for $50 to make that return (150% annual return). Further, if we include the cost of the sytem, not just the NOI then we would have closer to a 65% Return on investment (est. $10 per unit in cost).

I have no doubt this is a gold mine for both our business and apartment owners, my only question is how to SPEAK in a way that apartment owners will hear the opportunity?

As Kenneth said, this sounds "to good to be true", is that out problem? 

Kenneth,

Thank you for your reply, if you would throw it away I fear others would also. I feel we do have a service that is to good to be true, the trick is conveying that without looking like spam, or seeming unreal.  Soon every property owner will want to make this type of easy ancillary income, it's just not the trend yet because folks don't know what's actually possible. 

To answer your question on what we do, we have released one of the first revenue generating internet systems of its kind. You can now own our proprietary internet delivery system, allowing apartment owners to profit from the Internet services that their residents are already consuming. You own it, we manage it. 

Basically we have given the apartment owner the ability to become a small Internet company without the worry. Why not own it if they have access to small cities worth of residents? 

Do you think their is a better way of saying  "you can make $30 a door in profit if your willing to pay $20 in overhead (i.e our service fees)"? Perhaps cap rate is being used in the wrong context, that's what I am trying to get to the bottom of. 

Julie 

Hi All,

I would like to play a game inside of the Bigger Pockets forum; nowhere else can I get the opinion of so many valuable industry professionals. The game is what do y'all think is a better word for my marketing purposes? Cap Rate or ROI?

In order to answer that you will need some context:

I am working on some content for a marketing piece, i.e post cards via snail mail. I can't decide if using Cap Rate vs. ROI in the messaging is witty or will disconnect us from our readers.

The post card will be going out to Apartment Owners and I want to illicit the best response possible. What a better way to get real data before we launch then to ask the community!

We are claiming our services can provide up to 60% Cap rate/ROI in most cases. I understand that Cap Rate is basically {Net Operating Income/Property Price} vs ROI is {Net Profit/Cost of investment}.

I feel that since it's not an actual Real Estate Investment but rather a supplement to real estate in terms of NOI, that it may sound weird to use it in this respect.

On the other hand I want to connect to the apartment owners with language they actually use; the problem with ROI is mainly I feel it has less of an industry flare and will not resonate.

There is much more to the post card than the following but this is where we are stuck. Please review the two sentence choices, vote on one and share your rationale.

1) Introducing a Revenue Generating Internet System - You Own it - We Operate it. ROI as high as 60%

2) Introducing a Revenue Generating Internet System - You Own it - We Operate it. Cap Rates as high as 60%.

Also, does anyone have a good reason why I should not use Cap Rate in this context?