Syndicate or Go Solo in Multi-Family - Need Advice

[Thomas Wang]

I am trying to come up with about $250k as a down payment toward a small apartment building in the midwest. After reading blogs and watching youtube of Peter Harris of Commerical Property Advisors about syndications, it made me think. Shall I use $250k as a down payment to buy a small apartment of my own or invest this in a syndication (as a general partner) as a way to transition building my syndication experiences? If I go my own with $250k as a 25% downpayment, I could buy an apartment around $800k to $900k with a preferred Cap Rate of 10% to 12%. Yes, I can meet the liquidity reserve and net worth requirements for this. It will be a bit stretch for me to find a partner/investor to form an LLC and buy a bigger apartment (eg. 40 to 70 units) but I feel that this learning experience will be a good way to move forward toward syndication career. I currently have a few single-family rentals, one 4-plex and a good handyman/project manager. I raised funds for a nonprofit for many years and building relationships and raising funds is pretty natural to me. What would you do in position or advice? Your time, and advice will be greatly appreciated. Thank you very much in advance.

[Greg Dickerson]

Originally posted by @Thomas Wang:

I am trying to come up with about $250k as a down payment toward a small apartment building in the midwest. After reading blogs and watching youtube of Peter Harris of Commerical Property Advisors about syndications, it made me think. Shall I use $250k as a down payment to buy a small apartment of my own or invest this in a syndication (as a general partner) as a way to transition building my syndication experiences? If I go my own with $250k as a 25% downpayment, I could buy an apartment around $800k to $900k with a preferred Cap Rate of 10% to 12%. Yes, I can meet the liquidity reserve and net worth requirements for this. It will be a bit stretch for me to find a partner/investor to form an LLC and buy a bigger apartment (eg. 40 to 70 units) but I feel that this learning experience will be a good way to move forward toward syndication career. I currently have a few single-family rentals, one 4-plex and a good handyman/project manager. I raised funds for a nonprofit for many years and building relationships and raising funds is pretty natural to me. What would you do in position or advice? Your time, and advice will be greatly appreciated. Thank you very much in advance.

It all depends on your return requirements, goals and time available to find, close and manage the asset. You will obviously get a netter return doing your own deals but you have to do everything.

Can you find 10-12 CAP in your market? I haven't heard of any in decent areas. Usually that would indicate a troubled asset requiring significant work or rougher area.