What would you suggest is my next step?

Question

I'm currently in the slow but steady process of approaching my first deal. Looking to purchase and reposition an apartment complex via syndication as my first deal. As of this moment, I am making progress across several short term goals simultaneously:

- analyzing deals I receive from brokers regularly.

- securing financing via my network. Any suggestions on syndication deal calculators (which would also help with my presentation in raising money)?

- speaking with various local lenders about commercial loan packages

- initial discussion w/in the next couple of weeks with a real estate attorney about the process and possible entity formation. If not now, when should I be thinking about forming an LLC?

- persistently learning via multiple sources including books, podcast, REI meetups, etc.

From this quick overview, any suggestions on what I should be doing now/next to achieve my longterm goal? Thanks in advance for the helpful responses!

Alina Trigub · Answer

@Vincenz DeCastro

It's not clear from your post whether you're an experienced investor or not. So in order to start syndicating deals you must either have

1) experience buying commercial properties

OR

2) partner up with an experienced operator

I would discourage you from syndicating as a first deal otherwise.

Tj Hines · Answer

@Vincenz DeCastro Any suggestions on syndication deal calculators (which would also help with my presentation in raising money)?  @Michael Blank Syndicated Deal Analyzer (SDA)

If not now, when should I be thinking about forming an LLC?  I would preferably create one when you're confident enough to start submitting LOIs / Offers on properties.

From this quick overview, any suggestions on what I should be doing now/next to achieve my longterm goal?   Just keep taking massive action as you're already doing putting one foot in front of the other every day.

Charles Seaman · Answer

@Vincenz DeCastro the steps that you're taking are all good steps to move forward with multifamily deal syndication.  The one major thing that's missing is building relationships with potential sponsors.  A good sponsor will be an invaluable part of your team because you'll need them to sign on the mortgage and you'll also use their reputation to get better deals from brokers and to raise money from your investors because of their track record.

Vincenz DeCastro · Answer

@Charles Seaman @Mike Vann Thanks for the insight! Definitely learning a lot. Fun times! As I expected, that was the direction I find myself lately as I slowly moved forward, looking to partner with an experienced sponsor whether it be in Austin or other markets. Currently networking around BP and REI meetups feeling out different people.

@Greg Dickerson @Alina Trigub "Looking to purchase and reposition an apartment complex via syndication as my first deal." Thanks for the response. Raised a decent amount of money (but more is always better) from my network and was originally looking at class B&C properties with 20-80units around $2-3million to slowly add-value to units around 5 years holding it. After loan discussions, will likely need a high net worth sponsor. But lately, I may have to adjust these goals as Austin is a tough market and I don't want to bet on appreciation especially on a first deal. Plus as mentioned, partnering up may adjust my search. In regards to my credibility, I can only answer subjectively. But objectively, I've met various personas in different professions ready and willing to meet and chat with me so I guess i'm doing enough to get the conversation going.

Greg Dickerson · Answer

@Vincenz DeCastro there are a lot variables at play to answer your question.

What is your background and experience? What type, size and location of properties are you after? What is your financial position? Can you qualify for a loan?

Have you packaged yourself from a credibility standpoint?

Next steps will greatly depend on these answers.

Mike Vann · Answer

So far you’ve taken some good steps. This is a relationship business so meeting w/ brokers, property management companies, lenders, and attorneys is essential.  Don’t worry about an LLC until you get a deal under contract. You will do that when you form your purchasing entity.  Most important right now is learning how to underwrite deals.  Get @Michael Blank syndicated deal analyzer and go through the videos to learn how to use it and underwrite deals. You can use loopnet deals or your current deal flow to uw as many deals as possible to practice.  During this time you need to be building relationships w/ potential investors and sponsors who you can bring value to so they will want to partner with you when you find and bring them a deal and you will be able to raise money.   Hope that helps and good luck on your journey.

John Fortes · Answer

As @Greg Dickerson mentioned there are many aspects for you to sift through. Do you have partners to pair up with to be able to meet lender requirements? Do you have the experience per @Alina Trigub. Who are you seeking guidance from as @Todd Dexheimer mentioned? These are stuff you have to have lined up.

Todd Dexheimer · Answer

Find partners, mentors or pay a coach. Keep learning, reading, analyzing and networking. Most importantly, be patient. Smart investors are not buying a lot of deals right now, but being very selective.

What would you suggest is my next step?

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