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Updated over 5 years ago on . Most recent reply

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Caleb Clay
  • Lexington, Ky
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Who is the best MF syndicator?

Caleb Clay
  • Lexington, Ky
Posted

If you had to choose one MF syndicator to drop $100k with, who would it be and why?? I would look for principle protection as well as IRR for the main factors for me. Let me know your thoughts please!

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Ian Ippolito
  • Investor
  • Tampa, FL
1,412
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Ian Ippolito
  • Investor
  • Tampa, FL
Replied
Originally posted by @Caleb Clay:

If you had to choose one MF syndicator to drop $100k with, who would it be and why?? I would look for principle protection as well as IRR for the main factors for me. Let me know your thoughts please!

Caleb, it’s not possible for one operator to be the best multi family syndicator for everyone. A conservative investor will have a very different idea of what best is versus an aggressive one.

Also, the criteria you are using are opposites. Protection of principal is generally diametrically opposed to high IRR.

I would recommend first taking a step back and figuring out how much risk you are comfortable with, and deciding if you are conservative or aggressive or somewhere in between on the spectrum.

Personally I'm a conservative investor and so at this stage of the cycle I am only looking at sponsors with at least one full real estate cycle with no money lost. And if they have multiple cycles with no money lost and that is even better. Sponsors like this will not have the highest projected IRR, and are also generally keeping leverage low, which again drives down the projected IRR.

If you are conservative, then another thing you are going to want to see is a lot of sponsor skin in the game to mitigate the fact that the promote incentivizes them to push the risk envelope. But if you are aggressive, then you'll want to see the opposite so you can get the highest projected IRR.

So it’s important to figure out first where you stand first.

  • Ian Ippolito
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The Real Estate Crowdfunding Review

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