All Forum Posts by: Trevor Ewen

@David S.

Welcome. I am a passive investor like you. Once you embrace it, it's an excellent way to go. Here are some of the strategies I have pursued over the years:

- Turnkey properties.
- Buying multi-family with management and team in place (on turnkey).
- Private lending.
- Syndications.

Each has played a role in my experience, I can definitely speak to each at length. Beyond this, I find many ways to stay 'involved' in real estate. My hands-on involvement (outside of finance) usually amounts to digital and marketing strategy for deals and partners that I have worked with. There are a million ways to add value, and I am sure you can find more than one, once you get started.

@Jackson Malace

Great time to be selling homes in Central, OR. I imagine business has been decent this year. 

I often tell my clients that it's really a question of opportunity cost. When you spend time creating relevant content, it's quite an investment. If you're truly passionate and plan to keep it up, then it's worth the cost. If you are just trying to increase traffic and get people on the phone, then there are other routes.

1. This is a question of the quality you provide. You would be better with 1 a month that will definitely be shared and read than 3 a week that may lie dormant. The keywords are helpful, yes. Backlinks are way more helpful. Writing good content takes a lot of time and effort. Also, people trying to sell something start at a bit of a disadvantage, because sophisticated readers can see through the content. The best content starts from a place of providing organic value to people, whether or not they plan to buy something (like a house in Bend). 

2. Similar comment, although this is lower investment. One thing I like about social is that it allows you to use other content to start a conversation. For instance, if you know a writer that specializes in outdoor activities in Bend, why not post their items? You're helping them, it has much lower investment from you, you likely get the quality push (assuming the writer is decent). For homebuilding Facebook seems like the right platform, but I would definitely consider LinkedIn as well. That is where I do most of my lead generation.

3. Always, and you should have specific ones that you target. You'll also want to target items that are lower on the popularity level. Becoming #1 for 'homebuilding' is nearly impossible. Becoming #1 for 'central Oregon green homes' is probably much easier. Still, same comment applies as #1. You have to lead with quality.

4. Both Youtube and Yelp are smart ideas. Unfortunately, Yelp will come primarily from your customers. Although, you can set it up with good photos. Good ratings, you will do fine. Bad ratings can really hurt you. So you want to get out ahead of the commentariat. Youtube is great for homebuilding and real estate in-general. It's a very visual medium, and people love walkthroughs. A picture is worth a 1000 words, and video is better. For busy people, Youtube is easier than writing and editing content. In this space, it's potentially more valuable.

@Yinglu Wang

Meetups have typically been in-person in the past. Therefore, I have never attended ones for the markets I invest in (a notable disadvantage). However, I meet with my local partners or service providers, regularly. Since they may be virtual now, there is some sense to finding them. But I would be careful not to jump too fast. It's very likely that realtors will spot you early and get you to speculate before you really know the market.

@Yinglu Wang

I started my process nearly 8 years ago in a very similar situation. I highly recommend investing out-of-state. NYC has very poor dynamics for cashflow and value capture. The regulatory environment has gotten worse over the last decade. Finally, the current crisis has shown even more weakness in the NYC market. Granted, there will be value to find if we fall into a depression. That said, valuations have been so astronomical for years, it may still be a tough sandbox to play in.

To your questions:

1) Home value for money, regulatory environment, local economy, low exogenous risk (i.e. natural disasters) and available, capable management nearby.
2) Yes, but you are going to need management, good systems, and you are going to have to buy things that cashflow with some cushion. If you are too close to the edge, you'll spend every year giving your profit to service providers, since you are not in-person. You lack the edge of being in the local market. Your edge is the fact that your salary and resources are affected by a different (and often more rewarding) economic area.
3) Management has a lot of control over the information flow. Bad managers will take advantage of this and realize you have little room for negotiation and awareness. Good managers will recognize an opportunity to build a long-term relationship, but you will still end up paying them early and often to get things done.
4) If you're working with a realtor, they should be able to provide it. If you're working with a turnkey operator, you can find other operators that have listings to compare to. I think there is a lot to learn about the 'flavor' of a neighborhood. Being in NYC, you understand this intuitively.

Some questions I would ask: Is the are on an upswing? Is the area stable? What kind of work do the people who live here do? Is the area known for a lot of crime? What are the schools like? What would attract someone to this neighborhood? What is a typical unit in this neighborhood like (for instance, 3Br 2 Bath or 4Br 2 Bath)? 

I would develop your thesis around the 'why' for the neighborhood. Not every place can or should be Williamsburg. Consistent, working class neighborhoods are some of the best places to find cashflow and keep from getting in a bidding war. I often find investors from the coasts have a hard time envisioning this, because they've often had solid white collar jobs and lived in cool or affluent neighborhoods. 

Finally, once you identify specific neighborhoods, come back to the forum and ask people who have invested in those exact places. You will always get a few people that think every neighborhood is terrible and a few that think every neighborhood is the next Williamsburg. Learn most from the people that have a track record operating in those neighborhoods. There are no free lunches, so anyone who thinks a place is perfect and manages to cashflow is probably a realtor with a bridge to sell you. Tradeoffs are the name of the game here. You just need to decide which ones to live with.

@Kevin Pfeil

+1 to the nature of your question. I think this is the right way to approach the problem. Even for people who travel less, if you're in a punishing investment market or you're very busy in your profession, long distance and passive is still a strong approach. That is my approach, and it has worked very well.

Things I wish I knew back then (or better understood):

1) Why you may want to accept lower monthly returns for higher property stability and presumed (future) sale value.
2) The overwhelming importance of good management (and why it's worth paying for).
3) The benefits that come with scale.

If I had $80k:

Find a syndicator you like and consider the minimum investment. If you're looking for a safer route to build relationships, private lending is very nice for a quicker turnaround and better protection of principal.

It's a strange time right now (to say the least). Anyone who 'knows' what's going to happen is lying to you and themselves. It may be worthwhile to pause for a few months, regardless of your choice.

@Adam R.

There are some investors that present offerings in a pure fund model, and would have more of the characteristics you're looking for. Syndications tend to max out at 7 years because the eventual (projected) sale is such a part of the value-add, value-creation. Also, typical RE syndications are attached to a single property. Funds tend to be attached to a portfolio of properties. Things move in and out according to their plans.

Because they have lower transparency, you want to go heavier on your due diligence. Getting to know the fund sponsor and how they do projects is critical.

@Gavin D.

I don't think I was advocating statewide projects. Specificity is the name of the game for me.

@Greg Todrank

I think this will vary immensely by tenant class. Since I am focused on class C, then we do much less for the most part. Some of the buildings will centralize WiFi and Cable Plans. For SFH, we make sure we have quick re-key locks, but that's about it.

For short term, vacation, etc, I would say it's essential. For class A, it's probably seen as a nice perk / expectation as well.

@Jeff D.

Prediction at this point is a fool's errand, so here goes:

I would avoid so-called superstar cities (like where I live). They are expensive, highly regulated, and dealing with state budget shortages that may get very nasty. Granted, this advice was very true pre-pandemic. 

As you pointed out with Oil and Cruise industries, you are subject to job market risk in those areas. But it's also important to recognize that oil will come back (although it could be a decade), it is an opportunity to buy at a discount in cities that produce many high-paying jobs in a good market. If you are sitting on those homes at the right time, it can be very lucrative. Just ask Texas investors that bought homes in the 90s.

State budget issues are really where I have focused my attention. A very successful real-estate investor once told me that he only buys buildings and state government bonds. Not advocating that limited strategy, just an insight here: His strategy was to buy bonds for states that had no income tax. This was on the expectation that they could raise them in the future and cover budget shortfalls. The high tax states will have to cut services and reduce quality of life in many cases, mostly due to their long-term obligations and powerful entrenched interests. Low-tax states tend to be affordable already (so the inventory is there), on top of that, I could imagine them seeing better public investment in the future, since they have a chance to raise the money down the line.

I know this is somewhat ironic coming from a New Yorker. But, I don't live here for great governance.

@Thomas Lanzano

It's probably one of the best price points in the tri-state area. There is a lot to love about the transportation and state government infrastructure. That said, we have experienced slow growth with our investment there. NJ taxes do their share of damage as well. It may be one of the best value plays in the state, but you may be better served heading farther south.

In the 30 year timeline, it may be something special. Access to Philly is very nice. NYC is also reasonably close. You gotta have a long hold plan though.