Competence amongst investors

[Vlad Denisov]

I am just starting out, so I don't see the whole picture of multifamily business. How many people there really know what they are doing? I think, I can get at least some kind of picture by asking on BP, because right now I have no clue. Let's say we have 5 groups of syndicators based on their competency.

Very bad

Bad

Average

Good

Very good

1. The sum is 100%, what percentage would you give to every group?

2. What is a relationship between average investor's competency now and 5,10,20 years ago?

3. Is there a difference in competence of the investors who are selling now and those who are buying. Is there an answer to who is more sophisticated?

[Joe Splitrock]

@Vlad Denisov I am not a syndication expert, but in my 20+ year professional life, I have learned the Pareto principal is applicable in every aspect of business. That would mean out of 5 groups of syndicators, 1 is having 80% of the success. The other 4 are sharing in 20% of the success. Your goal is to find the 1 in 5. 

One risk I see now is that everyone wants to be a syndicator and there is even less good deals to be found than a few years ago. 

The other risk is that a syndicator may show you historical performance of their last few deals, but those deals were done in 2010, 2012 and 2014, so the performance was propelled up by market forces. That same force is not going to be there (as strong) over the next five years.