All Forum Posts by: Bob Dreher

@Carl Jensen ...yep, you did! :)

@Carl Jensen  ...  On our Subscription Agreements, we offer the following category to allow solo-k investors, et al., to hold title in our offerings:

__ Other (specify: e.g., corporation, partnership, trust, estate, limited liability company, etc.)

Jeff, thanks for hosting such a great event last week in San Jose! The quality of those in attendance was incredible!

Bob

Hi Jeff, I am looking forward to attending the meetup with Brian. May I offer you some help during the evening? Let me know. Thanks, Bob Dreher, Praxis

Eh, howzit @Alex Jaime??

There is some fabulous insight and advice on this thread!! Not the least of which is meant to discourage you from considering LD investing on a small scale. 

Another possible consideration is to look at investing passively. If you can align yourself with an excellent sponsor (ask for references), you may be able to achieve your RE objectives while riding on the back of someone who is already doing it in the markets in which you have interest.

Also, if this sounds intriguing, ask the sponsor to provide you with examples of deals they have done...with an eye toward seeing what they originally projected vs their actual performance. There are two ways sponsors raise capital---first, is to promise the moon to obtain funding...'splaining all the reasons they were unable to hit their numbers---or, by those who under promise with conservative projections...with the news being to the upside. I prefer the latter!

A hui hou

Aloha and welcome to BP @Garrett Hilt--

There have been some very valuable comments posted on this thread...some a bit more self-serving.

You mentioned   [Due to my work and family situation, I am really interested in the vacation rental business]. 

Can you elaborate a bit? Are you in the resort biz already (with direct vacation rental experience), do you plan to live in it at some point in the near to mid term, or do you just like the concept of renting out a place that allows you go play when you want?

The one comment about Hawaiian vacation rentals stated that they "have achieved an 80% occupancy rate average over the last several years". 

My response to that is that "all boats rise on a high tide".

Being that resort destinations generally rely on discretionary $$ to generate demand/revenue, that demand can vanish very quickly. I have been going to Hi for more than 50 years, lived there for a period, and have seen major price fluctuations (up AND down) as a result of the impact of demand drivers. Some of these drivers, like general US economic recessions, can reduce domestic discretionary $$, leading to corrections in the market.

But there are other demand drivers which can also impact values...such as the GDP of other countries, strength or weakness of the dollar, etc. (especially as it relates to Japan and Canada)

Being from California, I have seen first hand, when we catch 'cold', Hawaii catches 'pneumonia'!

So, tread lightly, my friend...while it is sexy to say you own a condo on Maui, it may not be in your best interest to do so.

Aloha hui hou

Working in the capacity of SVP/Investor Relations, I find myself regularly in the trenches trying to get my finger on the pulse of the investor.  Markets have cycles, yes...but so do investors.

When it comes to identifying the potential investor appetite for a strategy that strays from the pack, it really comes down to education and managing expectations.

What was the investment 'du jour' three years ago, may now be completely out of vogue. For example, the Institutional SFR Buy & Hold strategy that was all the rage and generated headlines on a regular basis is now winding down except for a few states which are late comers to the party.

In the early stages of this strategy, you couldn't convince anyone to lift up their mattress and test the water. Of course, hindsight being what it is...we all know about the shoulda, coulda, wouldas.

Having a great story to tell as part of the education process is the foundation upon which traction from investors can be generated. Multiple exit strategies are fabulous, especially since my crystal ball broke, as long as the investor can be educated as to a range of potential returns...with an emphasis on the minimum expected scenario. (managing expectations) 

Of course, a solid, proven track record certainly helps.

@Nick Clurman

Rent is a function of supply and demand. What is the current supply of rentals in the market in which you have interest? Further, consider the pipeline of additional supply which is projected to enter that market over the next few years...

Price to Rent ratios are a good starting place...what are the economic forecasts for continued growth (job creation, wage growth, etc.)? Without sustained wage growth, rents can only climb so high. If buying single family homes, your are then not only competing with other income buyers but also with the amenity buyer (I like the way the kitchen flows into the family room). Again, appreciation is limited by the affordability...(ability of the buyer pool to qualify and service debt) 

Money can be made in any market...it just takes much longer and requires creativity and diligence to identify the opportunities in mature market cycles...in addition to sticking to your financial model...without getting emotionally involved, which results in over paying for deals. Scared money loses!! Patience is a virtue. Good luck.

Hi @Paul Burrowes

Welcome to BP! I think we have similar backgrounds. I served on the Mayor's Advisory Committee in Petaluma, Sonoma County when they were putting together their Green Buidling Initiative. As Director of Housing Development for an Affordable Housing Developer, we were able to earn a Governor's Sustainability award for generating triple the minimum points for being GREEN! We were the first Multifamily project in the city to earn such a designation and the first in the County to incorporate Universal Design features allowing seniors to "age in place". 

I am now fortunate to work for Brian Burke at Praxis Capital in Sonoma County. I know you will meet a lot of wonderful people here on BP and hope our paths cross at some point in the near future.

@Brandon Turner

 If you make two rights by mistake, Brian Burke and I would love to buy you a steak dinner and show you some rentals or flips in Nor Cal!