What kind of returns do we generate?

“I’m looking for a 15-20% IRR… can you guys get me that?”


And not because our projects are incapable of delivering returns like that. Under absolutely optimal conditions (like we’ve had over the past couple of years), we can.

But I’m categorically unwilling to quote IRR numbers to anyone.


Because doing so requires forecasting the price at which the property will sell. And I won’t do that.



  1. Anyone who tells you she can predict where interest rates (which are highly determinitive of pricing) will be in, say, 18-24 months, is full of it;
  2. Anyone who tells you where investor sentiment  (another critical factor in pricing) will be in 18-24 months is full of it.

I pride myself on not telling investors things I don’t know to be true. Since I don’t know where pricing will be when we’re done with a project, I’m not quoting a sale price. And since I’m not quoting a sale price, I’m not quoting an IRR.

Here’s what I’ll say, for every one of our projects:

  1. We will minimize risk
  2. We will return 75-100% of capital invested within 24 months (hopefully in less time and definitely without borrowing so much that the property is in danger of default if the rents dip)
  3. Depending on how everything works out, thereafter the yield on whatever capital remains in the deal will be very attractive, somewhere between 10% / year and infinite

We work with investors who can get their minds around that story.

Note: IRR is internal rate of return; it’s a measure of how much money a project makes, weighted by how long it takes to make it.