All Forum Posts by: Anthony Chara

What @Nick L. said!!

No Ryan, you do not need to have a license to take advantage of these things with the exception of being a PM and NOT being an employee of the owner. In other words, in most states, if you work directly for the owner, you don't have to be licensed to manage their property. However, if you're employed by someone else whose contracted with the owner to manage their property, you may have to be licensed.

As for finding a mentor, just ask around at your local RE club to see if you can find someone that's already doing what it is that you want to do. Not sure you'll find one that will let you learn from them for free, but it doesn't hurt to ask. You can also ask RE brokers, PM's and financiers in the area if they know anyone that is doing what is is you want to accomplish as well.

You could also take a class or two from someone that teaches these topics as well and pay them for learning what they've learned from their own experiences.

I'm biased Ryan, I think you should always have a mentor. Someone that's been there, done that. However, there's no harm in multi-tasking either.

If you wanted to start from the inside out as a PM and gain experience from that perspective, that's a good idea too. Just remember, that when you do buy your first property you should not be the PM!!!! It needs to cash flow properly to pay someone else to run it for you.

Lastly, you could do all 3-4 things you have listed to maximize your learning curve.

For me personally, I started as an investor just buying property not really knowing what was the right way to do it. Then, I received my RE license to learn more. Then, I found a mentor and got an education. Wish I had started the other way around. It would have save me time and money in the long run.

Good luck to you Ryan!!!

I'm biased Ryan, I think you should always have a mentor. Someone that's been there, done that. However, there's no harm in multi-tasking either.

If you wanted to start from the inside out as a PM and gain experience from that perspective, that's a good idea too. Just remember, that when you do buy your first property you should not be the PM!!!! It needs to cash flow properly to pay someone else to run it for you.

Lastly, you could do all 3-4 things you have listed to maximize your learning curve.

For me personally, I started as an investor just buying property not really knowing what was the right way to do it. Then, I received my RE license to learn more. Then, I found a mentor and got an education. Wish I had started the other way around. It would have save me time and money in the long run.

Good luck to you Ryan!!!

I'm biased Ryan, I think you should always have a mentor. Someone that's been there, done that. However, there's no harm in multi-tasking either. 

If you wanted to start from the inside out as a PM and gain experience from that perspective, that's a good idea too. Just remember, that when you do buy your first property you should not be the PM!!!! It needs to cash flow properly to pay someone else to run it for you.

Lastly, you could do all 3-4 things you have listed to maximize your learning curve. 

For me personally, I started as an investor just buying property not really knowing what was the right way to do it. Then, I received my RE license to learn more. Then, I found a mentor and got an education. Wish I had started the other way around. It would have save me time and money in the long run.

Good luck to you Ryan!!!

Great advice @Steve Vaughan. Yes, Jimmy, have a reputable RE Attorney review the contract. Ask around at your local RE Investment Club for referrals.

Just let your attorney know what you want to accomplish and they'll make sure it goes into the correct section of the PPM & OA.

Yes, their ownership would be adjusted/compressed based on their original ownership stake and the exact formula would be shown in the OA. I agree with @Paul Haviland's calculation above.

To answer the latter part of your question, Daniel, it's all set up in advance in the Operation Agreement. However, if you have a 'liquidation event' as you put it, doesn't that mean that you've sold the property entirely? In which case, the investors would receive a payout of 80% of the equity according to your example.

If you plan on paying them back their equity stake at a refi, then again, how their equity stake drops will be outlined in your OA. I would suggest that you get them their preferred return for the 5 years you're showing above, plus, an extra bonus at the time of refi. That 'bonus' is up to you to determine, but that will make the reduction in equity easier to palate. Perhaps, since they currently own an 80% stake, you give them 80% of the cash out money once all expenses have been paid pertaining to the refi?

Hi Daniel, you can set up your partnership anyway you choose.  The question is, "do the investors agree with the way you have the deal structured"? If the answer is 'yes', they invest with you and give you money. If the answer is 'no', then they don't like something about the deal and they don't give you money.  Perhaps they don't like the property, the city, the classification of the building, the size of the property, the deal structure or even you.  (BTW, anytime someone tells you NO, always ask them why.) Sometimes, they're just lookie-loos asking about your deal so they can get ideas for their own deals.

As for your deal itself, you can certainly set it up in advance that their equity stake drops after you pay them back. Since their risk has now been eliminated, their reward could also be adjusted. You could even structure the deal that upon refi and payback that they are out of the deal completely if you wanted too.

Good luck to you Daniel!