Answering the ROI Questions Every Investor Must Know

Guest Bio and Links:

Tide Eldridge is a Partner & Chief Operating Officer at Comfort Communities.

Listeners can connect with Tide Eldridge on LinkedIn @TideEldridge

Benjamin Schuster leads Capital Formation and Investor Relations for Comfort Capital.

Listeners can connect with Benjamin Schuster on LinkedIn @BenjaminSchuster

Notes:

• (0:00) Welcome to the CashFlow Quest Podcast!
• (0:10) Blake introduces today’s topic: Top ROI Q&A”
• (0:30) Top searches and ROI in real estate
• (1:30) The 1% rule and finding deals
• (3:00) Cap rates vs. interest rates
• (8:00) Creative offers and structuring deals
• (11:00) Deal structure - raising equity vs. debt risk
• (14:00) Conservative underwriting & building trust with investors
• (16:30) Patience, compounding, and playing the long game
• (18:30) “I should’ve bought more, and I should have bought less.”
• (21:30) Market selection & the “strike zone” strategy
• (25:00) Step-by-step ROI, cash-on-cash & cap rate breakdown
• (32:00) Pro’s and con’s of hiring a third party property management
• (39:00) Importance of legal, insurance & due diligence
• (45:00) The danger of scaling without operational depth
• (48:00) Importance of market focus
• (53:00) Latest investment news
• (1:15:30) Diversification and investment strategies

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Blake Comfort, Co-founder of ComfortCommunities and Comfort Capital in 2008, embarked on a journey to acquire manufactured home communities, laying the foundation for the investment and management company we have today. In 2009, Comfort Communities acquired its first manufactured home community, and since then, the company has continued to expand, purchasing and managing numerous manufactured housing communities. Blake oversees all capital market functions, acquisitions, and deal sourcing forComfortCommunities and Comfort Capital. When he’s not working, Blake cherishes spending quality time with his wife and two young children and occasionally takes to the skies, flying around San Diego.

Jennifer Purcell, Co-founder of Comfort Communities and Comfort Capital, was raised in a real estate-loving household with her father being a general contractor and developer of over 4,000 units in San Diego County. Her mission is to change the perception of “Trailer Parks” and create exceptional living environments with top-notch service for residents. A San Diego State University graduate, Jennifer previously worked with R&V Management for their multi-family apartment portfolio at a leading global corporate housing company. Since 2009, she’s been instrumental in building Comfort Communities management team and fostering relationships with trusted investors and advisors, contributing to Comfort Capital’s success today. When she is not operating mobile home communities, she loves spending time outdoors, throwing the ball for her dog, and spending quality time with her husband and her two young children.

Definitions:

1. Cap Rate - A metric used to evaluate the return on a real estate investment, calculated by dividing the property’s net operating income (NOI) by its purchase price.

2. Cash-on-Cash Return - The annual return made on the cash invested, calculated by dividing annual pre-tax cash flow by the total cash invested.

3. IRR (Internal Rate of Return) - A percentage that estimates the profitability of a potential investment over time, factoring in time value of money.

4. Seller Carry (Seller Financing) - A financing arrangement where the seller of a property finances all or part of the sale, allowing the buyer to pay over time.

5. 1% Rule - A quick rule of thumb that suggests a rental property should rent for at least 1% of its purchase price monthly to be a good deal.