Inefficient PursUITS
My name is Bob Flynn. I’ve been in the investment business for nearly twenty years. Here at the inefficient pursuits blog you can join me on my journey to identify inefficient asset classes & inefficiently priced or mispriced assets. Join us and get my free weekly newsletter.
A Better Investment Process
For insights into how each deal should express your view of the world.
RESIDENTIAL REAL ESTATE
We seek to identify less competitive residential real estate markets where one is paid for providing quick access to capital
COMMERCIAL REAL ESTATE
We evaluate and report on the inefficiencies within several sub institutional scale commercial real estate property types
LENDING mARKET
We explore whole loans secured by real estate. This includes both newly originated loans and secondary market purchases of loans
Why Invest In Inefficient Asset Classes?
For the experienced and informed investor the answer is simple: greater returns per pound of risk. Though we expect to explore several inefficient asset classes, we will initially look at residential and commercial real estate. Both broad asset types have a number of hallmarks of inefficient markets. They reward informational asymmetries, have high levels of both search and transactional costs, have fragmented decentralized markets, are heterogenous (literally no two buildings are the same), trade with varying levels of liquidity, are valued on a lag (via appraisals), and display return momentum/predictability. If your curious what this is all about and why it matters, you are in the right place.
Most Popular Articles
Non Performing Loans: Trade Construction, Adverse Selection & Marshmallows
I’ve previously discussed purchasing a basket of nonperforming second mortgages a few years ago. Below is a discussion of the reasoning behind the trade. My hope is this will begin to help you better understand how I broadly think about trade construction as...
Competing with the Big Boys
Institutional investors have become big players in the hard money business. They bring with them a huge appetite to buy loans. For example, Alphaflow purchases newly originated loans at up to 85% of the as is value, up to 90% loan to cost and up to 75% of the after...
Making Good Loans as LTVs Creep Up
In funding real estate loans with my partners over the last year, it’s been interesting to talk with hard money lenders around the country. They have different models and very different costs of capital. One broad trend that I’ve observed is that most hard money...
Defaulted Second Mortgages
When I had a realtor drive by the house, prior to purchase, it looked like the owner was renovating it. In 2018 I started finding fewer investments that met my criteria. I had pivoted from flipping houses to building houses and it wasn’t the right fit for...
Investing vs. Other Games: How We Keep Score Matters
In Bill Brewster’s (on Twitter @BillBrewsterSCG) interview with Adam Robinson (on Twitter @IAmAdamRobinson), Robinson distinguishes between two types of games. These are Games that you should play to win andGames that you should play not to lose Initially, I thought...
A Burnt Out Mixed Use Building, Another CRE Cigar Butt
Mac was the first GC that we brought to our 2nd Street project. He started years earlier in the trades as a framer and had gone on to build hundreds of homes in his career as a GC. When we arrived, Mac pried the plywood covering off the door frame and peaked into...
Pursue Inefficiently Priced Assets With Me
Get our newsletter delivered to your inbox once a week. Nothing else. No SPAM.