All Forum Posts by: Trevor Ewen

@Yazan Dabbagh

Welcome and soon welcome to software development. That is my line of work and it pairs very nicely with real estate.

A market that is already exploding is likely to be tougher to find deals in (like Austin, Portland, etc.). I would consider another route if you have the flexibility. I would consider places that are still small-ish but up and coming in the tech space. In some cases, they have great real estate prices to boot. Some that come to mind are Huntsville, Alabama; Provo, Utah; Waterloo, Iowa. There are more than half a dozen articles a week like this: https://www.globest.com/2019/10/30/10-emerging-tech-cities-to-watch that can help you get an idea.

I would have a theory about a place, spend some time on the ground, and then use your sense of tech and knowledge industries to know if the community can retain the growth. A university presence is a very good sign, I would not even consider a metro without a university to feed the local tech talent pool. 

@Ian Forde

Yes, but I would not invest with someone who had never raised money from some outside parties before (friends and family is usually the first step). I would still want those other experience points, but I would want to see this specific item as well.

@Jared Lomker

It's a desirable place to live (or has been). In the last decade, inward migration has brought many white-collar buyers. They build very little housing in comparison to the actual need. Standard supply / demand pushes prices up. Policy makers have responded by imposing higher regulatory burdens on landlords. This is a double threat. 

In pure economic terms, California is hard to make work given the retail competition and low inventory. When you throw in the regulatory burdens, it starts to look even worse than comparably valuable markets (certain parts of Florida would be a reasonable comparison). All investors have opportunity costs when they decide to invest in a market. If policy-makers make a rental environment less friendly for landlords, they should not be shocked when those landlords (with huge opportunity cost) take their interest to other states. I have watched 10 straight years of former New York and New Jersey landlords slowly move their operations toward the south. The same thing happens in California, and will continue to happen in the status quo.

@Ian Forde

I am a syndication investor, so I am on the money side.

You're unlikely too attract much outside money for your first project. I would realistically determine what you could raise from friends and family and target that for project #1. This will establish your track record and allow you to bring that record to others.

@Dillon Fraioli

I would recommend getting out-of-state. There's a reason we're losing population and no one talks about cash flow in New York State. The way tax policy and rent regulations are going, I don't see it getting better in the short-term. 

To be honest, the whole Northeast is pretty dicey territory. Pennsylvania has some opportunities left, but they have also disappeared, quickly. 

@Kai Van Leuven

I definitely think you bring up some good points. There is a blind optimism you see in this forum and other parts of the real estate world that I don't see in any of the actual investors I know. Real investors plan for downside risk and understand those scenarios and what they may entail. You can never have a 100% watertight plan, but you diversify, and understand what it means to have a rainy day.

#2 on your list has always been of interest to me. This was actually the big prediction at the end of the 90s. People would choose space and material quality of life and we'd all be telecommuters as early as 2002. Obviously, the exact opposite happened for the knowledge industries and many of the people affected. 

That said, I think we are finally going to see some of the return on that prophesy. There are a growing number of tech employers in my industry fed up with the coastal cities that refuse to build housing. Furthermore, these cities have made a small brand for themselves antagonizing the industry. With people starting families, remote work is a bigger part of the picture, and certainly something I have made a bigger part of my strategy (in the tech business) moving forward.

Here is where I see opportunity in that, however. San Francisco's poor governance is to the benefit of real estate investors in Boise, Idaho. I do think a number of mid-size, sleepier markets like that are ready for revivals. For the well-positioned investors, it's good news.

Not full safety by any stretch, but there's two sides to every negative forecast. We should never assume what worked in the past will always work in the future. If we can stay nimble, we'll stay on the right side of history.

@Ian Forde

You may want to consider some other nearby (or far away) markets. There is almost nothing in the NYC market that creates a favorable dynamic of wholesaling, let alone some of the other supports you would need to successfully run that business. Land value is so high here that there really are not too many 'distressed' opportunities that actually have the prices to match.

@Todd Smith

Given that you trust your sponsor as much (or close to as much) as you trust yourself to execute, the question becomes one of opportunity cost... primarily for your time. 

There is a lot of spilled ink on the fees associated with syndications. Those fees are the kind of thing that you will pay in your own time which could be put to better use. If you have no better use (which is fine, some people have time to do this), then I recommend going it on your own. If you have a great job, other projects, other ambitions, a desire to spend more time with loved ones... the cost is nominal in comparison to losing focus in other areas.

If you don't trust your sponsor, then I wouldn't invest. There is no choice in that case. This is why I took it as given up front.

Every now and then I just zero-in and write (way) too long of an answer. That said, I copied this one down for later so I can use it again :)