Viet Ha Do is the CEO and Chairman of a Tennessee-based real estate investment and advisory company, Habringer Group, Inc. She is a graduate of SUNY Geneseo with cum laude distinction and holds an MBA from NYU Stern School of Business.
Beginning her professional journey at Merrill Lynch, she worked for several investment firms on Wall Street, before transitioning to the real estate sector. In 2009 she became involved with real estate investing and management focused on multi-family residential assets.
In November of 2013, Viet Ha Do joined forces with a seasoned real estate investor, Paul Folkes, to form Habringer Group, Inc. 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. The company was initially headquartered in Midtown Manhattan. In 2016, headquarters were moved to Memphis, while retaining a presence in NYC until March 2020. While active primarily in the Mid-South real estate market, the company maintains strong ties with its NYC roots and international investor partners.
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 continuously seeks 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 had the opportunity to connect with Viet Ha Do to discuss more about the Habringer Group and some of her challenges and successes as an entrepreneur.
How does the Habringer Group make money?
The key to our success lies in the ability to identify undervalued and often distressed, multi-family assets which can benefit from capital improvements and competent day-to-day management of the property.
We make money in two ways.
First, by making significant value-add exterior and interior improvements, we can raise rental rates and improve occupancy and collections at the property in the short and medium term. Long term, we vet our resident applicants very comprehensively. We pride ourselves on bringing our communities responsible residents who have a steady source of income (either through employment or verified City or State subsidies), have satisfactory credit and criminal records, and have solid references from their previous places of residence.
Second, we strive for a significant increase in the overall valuation of the property as a result of improvements to the physical condition of the property and remarkable increases to both top-line (rental collections) and bottom line (Net Operating Profit). As a result, we are then able to use the improvement valuation to put favorable long-term financing with a "cash-out" component on the property. Depending on the strength of the market, we may decide to exit the project via the sale of the property.
How long did it take for you to become profitable?
The first years of most businesses are difficult as you work out operational and logistical aspects. This is especially true in the case of distressed real estate investments, which require significant upfront equity and debt capital to be deployed.
We strive to make our projects cash flow positive within an 18 to 24-month time frame from the time we acquire an asset.
How did you find your first multi-family investment project?
It was extremely important to make sure that the first project would turn out to be as successful as possible. After several months of searching for the appropriate acquisition target, I came across an absolutely unique opportunity. It was a 200-unit apartment complex, which was going through a foreclosure sale. We were able to make a firm offer on the property before it made its way to being publicly listed for sale.
Despite having great potential, the property was mismanaged for many years and needed both renovations to be conducted and strong management to correct all of the deficiencies. We were able to do both successfully and after holding the property for 4.5 years, we sold it a few years ago for a total project return exceeding 200% over the holding period.
What is the toughest decision you've had to make in the last few months?
It was tough to draw a line identifying my and my company's limitations in light of current overall real estate market dynamics.
In this presently volatile market where the real estate prices climb above justifiable levels and shortage of both materials and labor persists, I had to be prudent in taming our appetite for portfolio expansion.
We have been observing the market's supply of available apartment complexes. From the Fall of 2020 until the Summer of 2021, we encountered 3 potential acquisition targets for our company that were of great interest to us. We lined up funding for these projects, compiled renovation budgets after consulting with contractors, ran thorough financial projections, and conducted every other aspect of due diligence. After careful review, however, we decided to pass on these deals due to the current market environment and the resulting risks involved.
What is one strategy that has helped you grow your business? Please explain how.
Having a trustworthy team was the key to growing our business. Since we internally handled all aspects of day-to-day property management, renovations, and maintenance for different properties, it was impossible to be at several places at the same time and do multiple tasks at once.
Knowing that my competent and accountable employees and business partners were taking a lead on the key projects allowed me to focus on the priorities that I could simply not delegate out since they required a multifaceted approach.
What is one failure you had as an entrepreneur, and how did you overcome it?
Several years ago, my team and I had spent several months working on an acquisition of a very attractive multi-family asset with nearly 600 residential units. It would have been the largest acquisition thus far for us and a true game-changer. We gave it all we had and exerted unfathomable efforts to bring this deal to a close. All looked great - our offer was accepted, we put together a group of investor partners, conducted thorough on-site due diligence, and were preparing for closing.
At the eleventh hour, I got surprise news that the leading investor partner needed to withdraw from the deal, effectively terminating the planned transaction.
I will never forget the feeling I experienced at that time. I was beyond devastated and did not even know how to explain it to my team, other investor partners, intermediaries involved, and most importantly the seller of the asset who acted in good faith all along.
I decided to immediately confront the reality of the situation head-on and had several very, very difficult conversations right away. It was very challenging, but someone had to do it, and since I was the engine driving this entire project, I knew that the burden fell on me.
In the end, while everyone was very disappointed, they appreciated how I handled the situation and we moved on to other very successful projects.
