Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
I would say nothing should. If not educated, get educated. You could get a coach for that. With that, you could find deals and wholesale it or negotiate to be part of the GP syndication team. Lacking experience, go pull together team members with experience. Lacking capital, I raise capital part time for a syndication team that needs money. I leverage their experience, good mkt, good deal, and simply educate accredited investors to invest in it. I get part of the GP by marketing the deal. Be creative, don't take the easy way out behind no money, experience, time, etc. Where there is a will, there is a way. More than happy to share ideas with anyone on this topic.
Chicago, IL · Member since 2016 · 238 posts · 68 votes
9y
Capital. That's it. I'm aiming to get four 2-4 unit buildings here in Chicago and then hopefully leverage those into an apartment complex here of at least 18 units. At that point, I hope to go into real estate fulltime.
Pittsburg, CA · Member since 2015 · 40 posts · 13 votes
9y
im with sam on this.. I like the diversified look of smaller multis. May do some larger multis in the future if I find something that makes my gears turn.
Chicago, IL · Member since 2016 · 9 posts · 5 votes
9y
Finding good deals in Chicago. I am looking for 3-4 units on the north side and I have seen that most of the properties I look at are not great deals unless they are purchased for $200,000 below list price.
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
I would say nothing should. If not educated, get educated. You could get a coach for that. With that, you could find deals and wholesale it or negotiate to be part of the GP syndication team. Lacking experience, go pull together team members with experience. Lacking capital, I raise capital part time for a syndication team that needs money. I leverage their experience, good mkt, good deal, and simply educate accredited investors to invest in it. I get part of the GP by marketing the deal. Be creative, don't take the easy way out behind no money, experience, time, etc. Where there is a will, there is a way. More than happy to share ideas with anyone on this topic.
Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
9y
I'm good syndicating deals up to $20MM in total cap. Although the numbers rarely pencil, deal flow is fairly steady and I get invited to B&F nearly 100% of the time.
Most deals were lost on price or some combination of price, terms and experience (lots of buyers out there with a thousand doors under their belt).
Unlike aggregating a few balance sheets for the debt -- which can get messy during offering -- the ability to have leveraged a single deep pocket balance sheet up front would have turned a handful of those deals my way.
How deep? >= $20MM NW with $6MM+ liquidity would be optimum. Even 10 with 2 or 3 would do it.
Investor · Takoma Park, MD · Member since 2016 · 166 posts · 147 votes
9y
Math. Math is keeping me from buying large apartments right now. Commercial stuff is just too expensive right now relative to what it generates. When interest rates rise back up and institutional money starts chasing returns somewhere else, then the math might start to look better. Not saying you can't find a deal, but it takes a LOT of legwork at a time when there are still lots of compelling options in the SFR and small multii space.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Chris Tracy good question and I imagine you will receive many responses. For me it is having a solid lending institution that is national as I don't invest in my backyard. Additionally, what concerns me most is the holding cost for large apartment buildings. In my market and with the 1-4 units I invest in, typical holding(Fixed) costs are less than $175 per month for multi-family units. I spend more than that on coffee per month! LOL. So that's my hangup. Always remember to persist and you will WIN!!!!
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Not just money, but dumb money, and lots of it flowing into this asset class right now. This tells me that great deals are likely on the horizon shortly ...
Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
9y
Two things:
1. Sellers who want to sell on pie-in-the-sky proforma instead of their actual NOI less deferred maintenance.
2. Competition that is willing to accommodate those sellers.
Case to the point - I underwrote a particular property to $10M and so did two smart competitors. However, the seller wanted $13M and none of the smart competitors including myself did even bother to submit an offer.
1. Sellers who want to sell on pie-in-the-sky proforma instead of their actual NOI less deferred maintenance.
2. Competition that is willing to accommodate those sellers.
Case to the point - I underwrote a particular property to $10M and so did two smart competitors. However, the seller wanted $13M and none of the smart competitors including myself did even bother to submit an offer.
The real question is: What did it sell for? Assuming you and your smart competitors are realistic and intelligent investors that did their underwriting properly (which I assume is true), then if it didn't sell or sold for around $10M, then the seller was crazy ... if it sold at ask for $13M, then the market is crazy ...
1. Sellers who want to sell on pie-in-the-sky proforma instead of their actual NOI less deferred maintenance.
2. Competition that is willing to accommodate those sellers.
Case to the point - I underwrote a particular property to $10M and so did two smart competitors. However, the seller wanted $13M and none of the smart competitors including myself did even bother to submit an offer.
The real question is: What did it sell for? Assuming you and your smart competitors are realistic and intelligent investors that did their underwriting properly (which I assume is true), then if it didn't sell or sold for around $10M, then the seller was crazy ... if it sold at ask for $13M, then the market is crazy ...
Math. Math is keeping me from buying large apartments right now. Commercial stuff is just too expensive right now relative to what it generates. When interest rates rise back up and institutional money starts chasing returns somewhere else, then the math might start to look better. Not saying you can't find a deal, but it takes a LOT of legwork at a time when there are still lots of compelling options in the SFR and small multii space.
Interesting. Here in Texas I feel exactly the opposite. SFRs are just too much work and not a lot of returns while out MF deals generate great returns.
I would say nothing should. If not educated, get educated. You could get a coach for that. With that, you could find deals and wholesale it or negotiate to be part of the GP syndication team. Lacking experience, go pull together team members with experience. Lacking capital, I raise capital part time for a syndication team that needs money. I leverage their experience, good mkt, good deal, and simply educate accredited investors to invest in it. I get part of the GP by marketing the deal. Be creative, don't take the easy way out behind no money, experience, time, etc. Where there is a will, there is a way. More than happy to share ideas with anyone on this topic.
This sounds dangerously close to a violation of SEC rules with hefty consequences. It is one thing to be a syndicator and another to raise funds for and get paid by a syndicator (a SEC violation).
What stops most people in any real state investment is almost the same across the board and ii is just one word - FEAR. I have said before and will say again, the rich act in spite of fear while others allow fear to stop them.
Experience, knowledge, and capital can all be overcome with the correct desire, determination, and ability to go out and get educated on the topic.
Hey Will, can you elaborate on this? I'd love to hear a bit more about how raising the funds is a violation? If you're part of the GP how can that be true? Even if you are only part of the GP because of your ability to raise funds, I don't see how that can be true. Everyone brings something different to the GP - ability to find deals, to close deals, to execute on deals... and the ability to raise money.
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
9y
Definitely have to hunt for good deals in North Texas right now. I would say that confidence in cash reserves beyond just down payment is holding me back.
Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
9y
My sense is the whole Dallas market is starting to slow down. I don't know that we are in a bubble or a recession. But I Am fairly certain we will see and end to the massive run.
And I am fairly certain the multi family rental prices aren't keeping up with the increase in property values.
There are a LOT of multi families going up.
Demographics says to me the place to be is in single Family properties. and I am not so sure I don't want to be outside of the Dallas city limits.