Why Invest In Built-To-Rent with Flint Jamison

Flint Jamison – was born in Billings, Montana. Exhibitions of note include Cubitt, London; Artists Space, New York, New York; Air de Paris, Paris, France; Centre d’édition Contemporaine, Geneva, Switzerland; and Castillo/Corrales, Paris, France. He was included in the Liverpool Biennial 2014, United Kingdom, and the 2017 Whitney Biennial, Whitney Museum of American Art, New York, New York. Jamison is the founding editor of the ongoing project Veneer Magazine. Jamison’s writing has been featured in Artforum and Frieze, while reviews of his artwork have appeared in The New Yorker, Art in America, the Wall Street Journal, the New York Times, and Mouse Magazine. Jamison received a Master of Fine Arts from the San Francisco Art Institute and a Bachelor of Arts from Trinity Western University, Vancouver, BC. He co-founded Yale Union, a contemporary art center in Portland, Oregon.

Episode Highlights Here:

Flint:

The cool thing for the investors is that a lot of cash flow continues to flow while we’re doing renovations, and cash flow gets better and better. Now, put that into new development.

Brett:

What’s the number one secret to investing in, you know, build-to-rent and commercial real estate that you have found so far?

Flint:

Yeah, so let’s unpack this. Let’s rewind this train. I got started in multifamily and apartment buildings. And essentially, what we do is buy underperforming or distressed apartment buildings. And we flip them like you flip a house; it’s a value add scenario. When you flip the house, you sell it later for more money. But what we do in apartment buildings is convert it over multiple years and keep occupancy high, right? We will do 10 units at a time renovation, then put new tenants in at higher rents and keep churning. But the cool thing for the investors is that a lot of cash flow continues to flow while we renovate. The cash flow gets better and better. Now, flip that into a new development. You don’t get the cash flow. There are no occupants. Investors get in when we cut are. You can get in with from a purchasing standpoint, purchasing land, you get in with this, this big loan builders loan that you only pay interest on as you draw it. So then we got dirt, put roads, put utilities in, and then we turn around and start building the homes. We call it horizontal multifamily. So we’ll make these tiny starter homes, like 1000 square feet, 1500 square feet, two bed three bed. Rather than living in an apartment, you’re living in a small house. We have property management, site maintenance, and all the amenities. It’s like an excellent Class A apartment complex, but we’re building it with single-family homes. So out of all of this, you create this community that is worth a ton of money, and you buy in for very little because, for one, you bought a piece of land, and then you turn it into roads and sidewalks and utilities. And then you turn it into these single families. As we build these single-family homes, say we do ten at a time, we start filling 10 at a time that we work on the next step, and the cash flow starts flowing from there. But you can imagine we buy a piece of land, I’m going to use made-up numbers by a piece of land for a million dollars. We put 10 million into it to build houses. And it sells for 30 million. So the growth of your money is quite significant. And there’s a bit of cash flow. It just takes a little while to get there.

Brett:

Okay, cool me on Pakaloa That, so maybe the most traditional value add real estate is you buy an existing building, rehab it, and keep cash flow along the way. And then you sell it for a profit. And your model is and or you’re just building single-family homes by themselves. Your model was more like, hey, created by a big giant piece of land. And let’s make 150 units. 150 homes are individual and suitable, but there are detached 1000 square feet two or three-bedroom units. It takes a little while to get it going, Because, you know, develop the land. But you’re all in for about 11 million, say On 150 Homes, and selling it for the entire project for 30 million. Is that a fair summary? Yeah,