Viet Ha Do – The Current Lending Environment, Multi-Family Assets, and Managing Your Portfolio 

After graduating from SUNY Geneseo with cum laude distinction and completing her MBA at NYU Stern School of Business, Viet Ha Do began her professional career at Merrill Lynch. She worked at several investment firms on Wall Street before switching to the real estate sector. 

In 2009 she became involved with real estate investing and management focused on multi-family residential assets. She went on to join forces with seasoned real estate investor, Pual Folkes, to form the Habringer Group, Inc. in November of 2013. Viet Ha Do is currently the CEO and Chairman of Habringer Group, a Tennessee-based real estate investment and advisory company. Since its founding, Habringer Group focused its activities on identifying and investing in underperforming multi-family and commercial real estate assets located in the Mid-South region of the United States.

Throughout her career, Viet Ha Do has played a central role in value-add processes by bringing superior organizational skills, attention to detail, and a positive attitude to daily work. She does not rest when a real estate project’s goals are met. Instead, she seeks new and innovative ways to continually improve day to day management of multifamily and commercial investment properties.

Viet Ha Do is constantly seeking out new real estate projects where she can apply her experience from the financial sector and 12 years of wide-ranging experience in multi-family real estate investment, management, and development.

We were able to sit down with Viet Ha Do who spoke to us about everything from the changes she’s currently seeing take place in the market to what an investor should look for when considering multi-family assets. 

With interest rates on the rise, will rental growth be strong enough in these multi-family markets? Has the current lending environment been too aggressive?

I believe that there is a chance of some dark clouds gathering over the rental real estate market brewing in the near to midterm. Rising interest rates are always a big negative for all sectors of real estate. 

After a period of unprecedented rise in rental rates over the last two years, it is doubtful whether this trend has much steam left in it. Lenders have been quite eager to deploy all of their excess liquidity recently, however, I do not believe that it bears much resemblance to the lending practices of 2005-2007. 

What changes are you seeing in the debt market?

Lenders are becoming visibly more cautious and selective with deals, often requiring higher equity levels to finance deals than before. There is a palpable concern over rising interest rates affecting current lofty price levels in many real estate sectors, including multi-family.

What should an investor look for when reviewing multi-family assets?

There is nothing more important than cash flow in a multi-family asset. One needs to carefully and accurately assess the realistic rental collection levels versus ongoing operating expenses and debt service. 

The most significant mistake made by investors when evaluating multi-family assets is being too optimistic with rental collection levels while underestimating true operating and maintenance costs related to the asset. 

How do you decide which properties to hold in your portfolio and which to sell? And how long do you typically hold onto these?

We have greatly reduced our portfolio holdings over the past three years, taking advantage of the current market conditions. 

Periodically we will evaluate the estimated value of assets in our portfolio and juxtapose the current market price against the net operating income being realized from the property. If that metric suggests that it is more attractive to sell the asset versus holding on to it then we make a swift decision to divest a particular investment taking advantage of market conditions. 

Our typical target holding period for an asset is three to five years. 

What are some of the biggest transactions you’ve been involved in since inception and what did you learn from them?

We have had a number of quite significant transactions in our portfolio over the years. Each transaction brought with it a unique learning experience, especially those which were purchased in special situations such as foreclosures and bankruptcy settings.  

One learns quickly not to repeat mistakes in spotting potential problems when millions of dollars are at stake with each of these transactions.