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- Mar 15, 2018
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Hi @Ginotocino
First of all, congratulations on what you are doing. I think flipping SF homes in SF area is very hard work. You never know what you find when you get into renovation.
We are a merchant developer and do not hold any properties. Part of scaling up when you have limited capital is syndication of equity. In our GP/LP structures, developer gets what is called a “promote” using a “waterfall distribution“ structure. This means that I make more money by selling than by keeping. And since we do not do any projects under 100 units, keeping a project would lock down too much of my own capital. All this is to say, that unfortunately I am not of much help to your plan!
But I will say that yield in secondary markets are much higher than in primary markets today. The pandemic made a shift to secondary markets. You should be able to better control both the costs and achieve higher rents in secondary markets. The metric we use is a Capitalization Rate (CAP) when selling our projects for income valuation.
Hope this helps.
First of all, congratulations on what you are doing. I think flipping SF homes in SF area is very hard work. You never know what you find when you get into renovation.
We are a merchant developer and do not hold any properties. Part of scaling up when you have limited capital is syndication of equity. In our GP/LP structures, developer gets what is called a “promote” using a “waterfall distribution“ structure. This means that I make more money by selling than by keeping. And since we do not do any projects under 100 units, keeping a project would lock down too much of my own capital. All this is to say, that unfortunately I am not of much help to your plan!
But I will say that yield in secondary markets are much higher than in primary markets today. The pandemic made a shift to secondary markets. You should be able to better control both the costs and achieve higher rents in secondary markets. The metric we use is a Capitalization Rate (CAP) when selling our projects for income valuation.
Hope this helps.
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