Taking action with limited partner engagements!

[Bryan Lyde]

Investment Info:

Large multi-family (5+ units) commercial investment investment in Lexington.

Purchase price: $6,900,000
Cash invested: $50,000

Contributors:
Matt Faircloth

LP in a great value add 166 unit property, partnering with Matt at the Derosa group.

What made you interested in investing in this type of deal?

To become a good syndicator and steward of OPM, I decided as part of my strategy to obtain credibility, build relationships, and get in the game, to begin with an investment as an LP to understand the process and learn to emulate those who are successful. I reached out to Matt Faircloth from a webinar to network and continued the conversation about my goals. He happened to have a deal closing in the next 30 days that met my criteria.

How did you find this deal and how did you negotiate it?

In networking with Matt from the webinar here on biggerpockets, he provided the OM. I had my team review and provide a recommendation to proceed.

How did you finance this deal?

I used my HELOC for this LP investment. I'm paying 5 points there and with an expected COC around 13% for a spread of 8% plus any tax incentives.

How did you add value to the deal?

As a limited partner I'm bringing capital and in return I'll gain insight on the money raising process, asset management, and build partnerships and contacts for my own deals in the future.

What was the outcome?

The deal closed at the end of the year and they're off to the races! I had an opportunity to meet Matt in person here in Dallas recently as part of a REIA meeting and was afforded the opportunity to learn over lunch. Awesome progress on my path!

Lessons learned? Challenges?

If you would like to take action but are not comfortable buying a property just yet, perhaps consider investing as an LP in someones deal who is established and credible. The education is worth it and can begin to expand your network which is key.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I have on my team a great CPA at provision (tom wheelwright's firm in Phoenix), and my local attorney Kyle Carlton to help review the OM and PPM to ensure it meets my criteria. Also consider Matt Faircloth as an advisor on my team and great resource of information. I am a member of Michael Blanks Mastermind as well and look forward to closing my first larger deal this year by partnering with guys like these.