All Forum Posts by: Alanna Wojciechowski

I'm in Las Vegas (specifically the Summerlin area) for the next couple days looking to connect with any RE professionals or investors in this area. Any meet ups this week? Thanks!

@Logan McKay Zylstra appreciate the feedback! All very valid points and some I'd like to be more clear about when I am explaining to those who are interested. The feedback is definitely helpful!

Most owners who are interested in this offering are looking to scale into a commercial offering without having to deal with maintenance or operations (also they don't want to be locked up 3-5 years like some syndications), have accrued taxes through multiple 1031 swaps, or those who are seeking estate/inheritance simplification.

Seasoned investors have no issues with 1031's but we've also gotten into conversations with a lot of folks who get caught in the 45 day time crunch and haven't planned enough to place their capital in a better investment than what they originally started with. Also, some just get tired of running away from a tax bill through the swap until you drop method. 

So, we wanted to make an offering that eased the pressure and allowed them to 'park' that net equity until they were ready to move it again - or they'd be satisfied enough to keep it in the fund (our goal). The fund is an evergreen fund, so its more liquid than a normal syndication type of deal. 

Lastly, and I'd love to hear your insight on this, to speak to the point you made about the "fair net equity" we've started to think how we could set up a true up into the contribution. A true up is a payment made post-closing to adjust for any difference between the two purchase prices.

The net equity wouldn't really be the question, it would be the market analysis and value that needs to be evaluated and agreed upon. The management team does our own market analysis in the property area, gets feedback from the owner, and speaks with local brokers. We 'negotiate' a bit on the market value as we don't want the owner to feel like they are being cheated out of any extra value they would be getting by taking the property to market. We aren't looking to make any money during this analysis, we just have to make sure our own expenses are covered when it comes to closing costs/titling/etc. The true up would come into play if we decided to 1031 or dispose of the property that was contributed, we'd add any extra capital to the investors units that was over the agreed upon market price after that disposition.  

Thanks again for that feedback and like I said, very helpful. A main point I get back is the comparison to taking the property to market - and I believe we have good solutions for that but just need to iron out making those solutions clear and concise. Also, knowing this isn't for everyone. 

**ONLY looking for FEEDBACK here. Negative feedback is encouraged**

BACKGROUND INFO: I have an innovative investment strategy that gives folks a unique way to invest in commercial RE without having to move capital. This offering allows investors to contribute their property into a commercial RE fund through a tax deferred event, receiving fund units and immediate cash flow on the full equity contributed. 

MY QUESTIONS TO YALL:
What are the negatives you see through this process?
Why wouldn't you consider this option?
What 'holes' do you see? 
(Flip side) any good things you'd highlight? 

Timeline goes as follows:
1) Intake: Property owner completes intake form detailing property specifications
2) Assessment: management team completes market, sales, and property analysis
3) Net Equity: Property Value-Owner's Debt-Estimate of Closing Costs=Property Owner's Net equity
4) Contribution: Property owner contributes property into the fund. Property owner receives units equal to total dollar amount of net equity
5) Dividend: Property owner immediately begins to receive passive dividends and any tax benefits from the fund's diversified pool of assets

Obviously, we think this is a great idea and opportunity for folks to capitalize on appreciation, defer taxes from 1031 swaps or cap gains, continue to cash flow on their investment while handing over maintenance and operations, possibly absorb any unfavorable debt that's currently in the property, and make their investment more inheritable/transferable. 

The investors we've recently had success with was a guy who wanted to defer taxes from multiple 1031 swaps while forging owners operations and another who wanted to capitalize on build up equity and appreciation. 

Any feedback would be awesome. Thanks yall!

Nothing, because no one owes me anything. It's up to me to figure it out, crunch the numbers, and have the gut to take a crack at the deal. Being self reliant while staying humble is huge for anyone in this business. Always be learning. 

Brian, in my 30s as well - I've been in similar situations. Have a lot of cash, wanted to get involved in real estate and started with single and multi family homes in residential real estate. Quickly found out that I'd have to scale rapidly to mimic that of a W2, also it required a lot of time and moving parts. Don't get me wrong, there are tremendous tax benefits when building a large portfolio - and I still own some residential rental property - but I quickly shifted to commercial real estate and put the precedence on being more passive. So, I started building a long term strategy while putting value on liquidity and diversity. A lot more zero's and commas with syndication and commercial deals, just my thoughts and personal journey though. Take it with a grain of salt! I'd suggest you reach out to those involved in syndications and commercial offerings. Happy to connect further. Cheers and happy investing!

@Tim Mieney, I am invested in residential and commercial real estate in the south east and would love to connect further. Congratulations on a flourishing entrepreneurial career and cheers to many more years of success! I look forward to connecting. 

Syndications or funds would be a good place to start. Something that is liquid would be ideal. As you mentioned above - the market will ebb and flow (especially with the rising rates) so, I'd suggest finding something that gives you a bit of flexibility. Depending on your financial status (accredited/non-accredited) you can look into different syndication offerings - which could allow you to diversify a bit as well. 

Elias, I've got a great DFW connection that could help you get up and running if you're looking for something in that area. You might also look into diversifying into a commercial fund or syndication - it's passive and lines up with some of the key factors you're looking for. Happy to connect further if you'd like! Cheers and happy investing!

Paige, congratulations on making the decision to start investing in real estate. A couple things...take these with a grain of salt as this is my own journey and everyone is different and not one real estate investment story is the same. 

-My husband and I lived in Baltimore, Federal Hill - in 2019 and 2020 (he played for the Orioles). So, folks from B-more are near and dear to my heart. Let's connect!
-You can gain a lot of passive income via real estate but as always (and I'm sure you know) - it's all about the long game. Set yourself up for success, 10-20+ years in the future through wise and calculated decisions now. 
-When I first got into residential real estate, I listened to every podcast I could (bigger pockets, cash flow connections, etc.) and read as many books as I could (investing in real estate, tax strategies, BRRRR, investing with no money down, etc) and dabbled a bit in single family and multi family. I quickly realized that in order to make passive income that matched a w2 in residential RE, you'd have to scale and take time to build quite a large portfolio with a fair amount of moving parts. All good to some who love it - but I wanted a few more 0's and commas without the hassle of capital expenditures and owner's operations. So, I turned to commercial real estate.
-Passivity and long term growth was important to me as well as diversification. I found that owning a few single family homes for short term (and one for long term) rental was enough for me on the residential (mind you, I also have a PM) side, but I wanted to see more consistent returns and have favorable timelines/exit strategies. 
-Syndications and funds will typically give you timelines and exit dates, passivity and diversification - bingo, hit the nail on the head for me. 

So, my suggestion would be to connect with fellow syndicators or those invested in funds or REITS - find some folks who you assimilate with and start making connections. The more specific you can be about what you're looking for, the easier it will be to find the right group or firm you want to invest with.

Also, my last suggestion - value liquidity right now. With the market ebbing and flowing, you don't want your capital locked up for long durations of time. 

Cheers!

@Scott E. thank you! I'm looking for a more seasoned group. I appreciate the insight, though!