Terebinth Capital

Part 2️⃣ is finally here! It's short and sweet and not exhaustive, but an excellent introduction into how to generate funding to get your next deal start asap! 🏚➡🏡 🤑

It's finally here! Part 2 of our Beginner Series of REI booklets is dropping Thursday... 🚀 🏡

The Undervalued side of the graph here is where flippers can find available upside for their deals, markets where things still have room to grow. Put another way, these are the markets that will suffer a lesser blow to values, should the market actually begin to turn, which is already pretty unlikely. There’s still so much opportunity out there!

Earlier this month, Apartments.com & CoStar Group released their '24 Q1 📰 report on Multifamily 🏢 real estate. Here are the highlights ⚡ + some of the reasons that Terebinth Capital likes the #Houston market... NATIONALLY... 🇺🇸 1️⃣ Rent 📈 increased (nominally), in 43 of the top 50 markets nationwide 2️⃣ Demand for ⭐ & ⭐⭐ properties remains the lowest, while ⭐⭐⭐ properties saw the best performance YoY with a 170% 📈 increase in absorption. 3️⃣ Vacancy is up to 7.8% nationally, driven primarily by an oversupply of newly-finished builds HOUSTON... 🚀 🌒 👨🚀 1️⃣ While the Southern U.S. saw an annual decline 📉 in rents of 3.8%, Houston saw a decrease of only .2%, beating out its neighbors in Dallas (-1.7%), San Antonio (-3.0%) & Austin (-5.7%, a Top 50 market's worst performance) 2️⃣ Buyers in Houston are seeing price drops (13.7%) that put it as a market ahead of both Texas 🤠 & 🇺🇸 the United States as a whole in CAP, sitting at the end of Q3 at a little over 6%. 3️⃣ Unemployment in Houston sits right at the National Average 🇺🇸 of 3.8%, slightly lower than the state of Texas 🤠, at 3.9% Sources: Colliers: https://lnkd.in/gyr3Ht7a CoStar: https://lnkd.in/gxJbj8Vx St. Louis Fed: https://lnkd.in/eNdE9-Y

How's the Multifamily market in Houston? While rents and vacancies are still slightly lower YoY, the trend appears to be moving in the right direction.

CASE STUDY: Creative Ways To Increase NOI ...What other ideas do you have?? ⬇ ⬇ Today's example comes from a Crexi listing I was underwriting. Let's withhold the address, because it's not relevant. Here are the details: 👉 Listed for: $950,000 👉 12 Units, all 1 bedroom 1 bath 👉 Rents for approx.. $800/month (waiting on details from listing agent, but this is reasonable given the location/condition). 👉 Self Managed, Owner pays 🚰 + 🚮 👉 Laundry 👚 on site, but currently unused. So, assuming expenses of 30%... Gross Rents ($800 * 12 Units * 12 Months)= $115,200 Expenses = $34,560 CAP = 8.48% And if that's the case...that's really not too much of a bad deal. But how can we improve? ☑ Tenant Paid Trash 🚮 : Saves approx $25/unit/month = $3600/Yr ☑ 12 Parking 🚗 Spaces: Reservable at $25/spot/month = $3600/Yr ☑ Laundry 👚 Usage: $25/unit/month = $3600/Yr ☑ Flat Rent Increase at Renewal 💵 : $25/unit/month = $3600/Yr ☑ Possible Unsanctioned Pet 🐕 Rent: $25/month (2 units) = $600 Total Potential Gross Rents Increase = $15,000 Gross Revenue Increase 📈 = 13% NEW NOI = $91,140 NEW CAP = 9.59% 🤑 CAP Increase 📈 = 13%

🤔 What's the difference between investing 💵 in real estate 🏡 through Debt vs Equity? Here's the short version... ⬇ ⬇

Some facts 🤓 about Real Estate Private Equity (REPE) Investing... 1️⃣ Investment opportunities made to the public require investors to be "accredited" ✅ , a status which requires certain income/asset levels 💰 . 2️⃣ The General Partner (GP) 🏢 is the legal entity with authority to make decisions for an investment fund. The Fund Manager (FM) 👨🏫 , or their company, actively manage/operate the individual investments. A Limited Partner (LP) 👨👩👧👦 is usually one that puts money into the fund in order to see a return. 3️⃣ Because there is limited oversight 🔭 of such funds, LPs and GPs must maintain a high level of trust 🤝 . 4️⃣ Returns can greatly outpace 🏃♂️ comparable starting assets in stocks, bonds, mutual funds, etc., often returning in excess 📈 of 15% to 20% on an annualized basis, before accounting for any applicable tax benefits. 5️⃣ There is limited liquidity. Unlike stocks or mutual funds, or even an REIT, which allow an investor to sell their asset shares, a sizable investment into an equity fund may not ❌ be eligible to liquidate for a number of months or years. * Terebinth Capital is a boutique real estate equity firm that pools the money of investors into a fund and specializes in coaching them through their beginning as real estate investors so that they too can escape the rat race, build wealth, and live to give to their families and communities. This is not investing advice. Consult a CPA or attorney prior to participating in any investment.

🏡 Real Estate is a better investment than stocks, and we can prove it. We know that we could get a lot of heat 🔥 from this one...but the math doesn't lie. Let's get into it... Depending on which numbers you use, the S&P 500 has given an average rate of return, since its inception, of somewhere in the ball park of 9.9% - 10.26%. That's not bad actually. As long as you never need to sell the stocks. Hopefully they didn't tank right as you planned on retiring. Oh, and don't forget about fees. If you have a financial advisor you can reduce 📉 that by 15%-20%. So, net gain lands you between an AVERAGE of 8.4% to 8.71%. Decent. Now let's look at real estate... Remember that you get to pick the purchase price ✅ . Let's suppose that you selected a perfectly average 😑 house with an ARV of $250,000, that generates, net of all expenses, a perfectly unimpressive 8% annual return. Many investors won't even buy a property unless it nets over 10%. And this is net of all expenses, including property management. But wait...there's more! Suppose your family makes $100,000 a year, including your rental income, and have 2 children 👨👩👧👦. Assuming you take the standard deduction, (because it's easier to calculate, and more conservative), you'll owe ~$8,236 in taxes, before credits. Now, consider something called 'depreciation'. Through IRS code, you are able to use depreciation to reduce your taxable income by roughly $9,000, reducing your tax liability to ~$7,156, an improvement of ~$1,080. Your property is no longer returning 8% a year. It's now returning 12% a year in usable income, every single year. Including expenses, like taxes and vacancies. Right off the bat ⚾ , your single rental property is performing ~50%ish better 📈 than whatever is in the S&P 500. Keep in mind, we haven't even discussed the increased deduction of... - Paid mortgage interest - A cost segregation analysis - Home office, Travel, or regular business ownership expenses - The possibility of deferring those gains when you move into a better performing asset - Pass through deductions on your income But wait....THERE'S MORE ❗ ... 🙊 Because we forgot about APPRECIATION... Suppose you decide to sell the property. If it were to appreciate at a measly annual rate of 3%, you would cash out (or put into your next investment, thereby increasing your cash flow)... After 5 Years... ~$40,000 of equity After 10 Years... ~$85,000 of equity Suppose you planned ahead and purchased an asset for your child, instead of investing into a 529... After 18 Years... ~$175,000 of equity And at this point...we haven't even talked about borrowing tax free against the equity (that someone else paid down)...to purchase another...and another...and another... 🖋 🤑 *Obligatory disclaimer that I'm not a CPA or attorney. You should consult your own.

Our founder Philip Suarez 🇺🇸 is on top of how the market is doing!