Looking for low LTV apartment syndication opportunities to Invest

[Jeremy Diviney]

I am fairly new to multifamily investing, and am looking to build a base of diversified syndicated multifamily investments. Almost every syndication opportunity I have researched so far uses a 75%LTV value-add strategy. I certainly think this is a great strategy, and will be making some investments in these type of deals. However, I am really looking for deals that utilize lower or no leverage acquisition strategies. I am fine with trading IRR for lower risk, but not sure how to find these types of deals. I would appreciate anyone pointing me towards these type of deals.

The memory of the housing crash is still very fresh in my mind, and I want to be more conservative with at least half of my capital.  Perhaps I am being too paranoid, I worry about a large apartment investment deal being forced to liquidate during a downturn, perhaps this doesn't happen often.  I would love some feedback from anyone that invested through the housing crash or other significant downturns, and has any thoughts on how many syndicated deals got into a worst case scenario, and couldn't just hold through the downturn.

Thanks

[Holly Williams]

I hear you...nothing goes up forever.  I look for four things to mitigate risks when evaluating a deal:

1.  Population trends and job-creation engines in the market.

2.  Property must be sustainable at a 75% occupancy rate.  Before acquisition, it should be at 90%+, so already cash-flowing.  

3.  Must be a SOLID B- to B.  Most major markets are getting saturated with Class A properties.  When things get bad, people trade down.  When things are good, people trade up.  Again, more options to attract good tenants.  People have to have a place to live.

4.  Underwriting must include enough reserves to weather a pretty major downturn, and extendable financing so that there is not a situation where an immediate exit is required.  

Plan for the worst.  Then plan for worse than that.

Hope that helps!