All Forum Posts by: Vincent Chen

@Luke Carl Thanks for reply. That is kind of what we saw, there is two folds of story:

1. Economics of sale. The number of bedrooms is matters for price and cost. But there is kind of limit here, 900k range house might have better benefit for cost (per room per year) side than the 600k range house? So I think it is determined by so many factors to choose the best sweet, since we only care about the bottom line, which is the net income.

2. Location and features. That is determined by DD process.

What I saw in the market, is that 400~500k house seems to be not so much benefit of cost, and GRM is not so great as well. But when you get into 600+k or even more, the GRM seems to be better and benefit of cost is much better?

@Mark Miles I agree with you for the analysis for the market. But for 900k purchase to generate 150k gross income, which means the GRM is around 6? That is kind of too great? Do you mind to share some of those markets informaiton?

@Peter Lee and @Faith Hill Good to know your stories, just wonder what kind of size of your investment? Looking into this kind of value add strategy, just wonder what kind of size should I start to justify the operation and value add financially, thanks.

@Chris Luth Good plan, just need to make sure your number correct. For your case study, A four-bedroom turnkey vacation rental property for $230,000, with expected revenues of $65,000 and After debt service, the expected positive cashflow is $28,500. That equates to a cap rate of 18.7% and a cash-on-cash return of 83%.

You need to be right for all those numbers, for around 250k price, the expected revenues of 65k and net around half, that should be solid number, not sure that is what I expected in the market now. 

@Ben Leybovich It is really great that you mention this point, I come from finance background, it is important to have the flexible to exit in any good favorable condition, not fixed dates. Not sure how you structure it?

And for all your business plan, I know the property management company(or other operator?) is important, since graduate to increase the rents and finish all the remodeling across the 2~3 year is long time plan, it takes experience and executions. How do you monitor or manage this process? The value add plan, mainly rent increase can come from due diligence and market/competition, but the detail plan (timeline of rehab, graduate rent increase plan)is handled by property management company, so they are the key person for whole plan, do you have any KPI for them to make sure the plan is on the track? And btw, 2 years to increase 350 for all the 100+ units, does it too aggressive?

Last piece, it sounds really great deal, just add 1M rehab and take some time can add great value, so any reasons that the seller is not doing that? All the defer maintenance is come from capital or old management?

If the coronavirus kept in longer time, how does this change the apartment building investment? 

1. Location. For all the location category, A,B,C and D might be changed. Since easy to commute, easy access to life style might be not so much important if work from home is more like routine choice, so maybe we should define A,B, C and D otherwise?

2. Rent Growth. For many industries/companies are expected to be hit, most of high rent market should be correction heavily?

3. Amenities or layout of Room. May need add office room in the house for more attractive?

I think A class apartment building or new building might be hit a lot? So what is best type to survive, B or C? 

Anyone still active in the high end flip or new construction right now?

@Chase Keller Curious where of Florida do you choose your STR? The return does not seems to be so great as far as I know, thanks.

@John Underwood I really believe this is all related to their IPO plan to make sure the number looks great for their IPO

So expect another greater platform for the vacation rental business to come up? It seems VRBO is pain as well, so what is the choice now?