All Forum Posts by: Austin Fowler

Hi Gregory, I currently own 32 long-term rentals and they are all managed by property managers but even then there are enough annoying tasks that I don't plan to increase the number of long-term rentals. From renewing rental licenses, to renewing insurance, to approving major repairs, to pulling the trigger on evicting someone, long-term rentals, while sometimes these and other tasks are handled hands off, in other cases the properties do demand some of your time even when you have a property manager. In my case, when it comes to investing larger amounts of money, it's all passive multi-family. Higher returns and more hands off if you know how to choose deals well.

Hi V.G., the goal is to encourage actual real estate experts, actual people that operate at this scale, to share techniques that work at this scale and help educate people to head in that direction as well. If you anyone wants to operate at this scale, they need to focus on learning techniques that work at this scale. When it comes to building wealth, you can waste decades of your life learning labor intensive techniques and building a portfolio that simply doesn't scale.

Okay, now you have a slightly less than 50% chance of having $20M assuming you could find a place that would take a single bet at this level. What would you do with $20M?

Hi Chris, is heavy apartment rehab an area you have worked in before? Would love to hear about some of your prior experience in this area.

Thanks Becca, have you invested in NNN property before? If not, do you know people that have built NNN portfolios?

The post If you had $1M, how would you invest it? sparked off some great contributions and ideas from the community, so let's up the amount! If you won or inherited or otherwise suddenly had $10M in cash, how would you invest it? Looking to hear from people that know how to handle large sums of money and make them grow strongly. Would you need a team of people or could you easily deploy the amount yourself? Would you need to build any tech or do you already have everything in place? How much work would it take you to begin to get $10M working for you? How long would it take you to get all of the funds into investments and growing? What kind of return would you target? Would you focus on one strategy or multiple? Aspirational ideas welcome. Stories from people with experience at this level especially welcome :-)

Crossing 5 will be taxed as long term capital gains. Just double checked this with the operator.

Ground up multi-family with hundreds of units does indeed get leased up and stabilized before sale. Part of the reason these projects take multiple years from the point of view of the investor. There can be some depreciation associated with participating, and this will be recaptured, so this is not where the bulk of my deductions come from. I still have millions in banked bonus depreciation from when I bought 33 houses in 18 months during covid. Those houses continue to generate additional depreciation deductions each year. I also run a personally guaranteed debt fund, and that generates very substantial interest deductions, over a $1M a year. That business itself also has substantial costs to run that become additional deductions. In summary, the multifamily is taxed as capital gains, but my deductions come from elsewhere.

Sure, happy to elaborate. I currently have a $31M portfolio spanning cash, stocks, renewable energy, 33 houses, 7 flips in progress, and an LP stake in 2200 doors of multifamily. LP is short for limited partner, and just means you contribute capital to a big deal managed by general partners (GPs). Being an LP in a multifamily deal means you are totally hands-off. You do the due diligence on the GPs (the operators of the deal) and the deal itself, choose the best operators with the best deals, and then you wire money into their deal. There are many, many different ways to invest in multifamily. My personal preference is development since I like being part of the process of increasing housing supply. As with anything in real estate, you do best when you find something you really enjoy. I *really* enjoy participating in building things. My current multifamily portfolio spans 15 addresses across 8 states, and 8 different operators. The multifamily properties range from just 32 units to 330 units. Each unit is a door. The next deal (Crossing 5 from BAM capital) that I'll add to my portfolio will be a mix of multifamily apartments, townhomes, fully serviced with pickleball courts, community center, etc, etc --- an entire community totaling 315 doors. The general parameters in multifamily development are frequently approximately four years to take dirt, build a community, lease it out, and sell it to a pension fund. The finished product is viewed by the pension fund a bit like a bond. If 5% income generated on capital (plus depreciation tax benefits and asset appreciation as rents grow) is deemed acceptable then a building generating $10 million of net operating income (NOI) each year would be worth $200 million. A typical development deal at the moment tries to build a building at a cost such that net operating income is around 7% of the total build cost. In other words built for significantly less than it can be sold for. Using the above numbers you would need to complete the building using under $143M to hit 7% NOI. In my case as an investor I generate massive cash flow by getting involved in a series of development deals: wire money in, four years later get more money back with the upside taxed as long-term capital gains, and the tax due only if I haven't generated sufficient deductions in prior years from other assets, and generally speaking I have more deductions than I need to zero out my income on paper each year. It's a conveyor belt of deals rather than holding assets long term for cash flow. Each development typically targets doubling the money you put in over those 4 years. Putting $1M into a single deal may seem like a lot, but it is less than 5% of my total portfolio, so it is an appropriate addition to it, and it will bring my total doors as an LP to over 2500. I currently have approximately $8M total invested in multifamily. Happy to connect with anyone that wants to learn more.

In my own case, I'll be putting the $1M in Crossing 5 from BAM capital. That's what I actually plan to do IRL. This is just the latest deal due diligence has been completed on, I've got no financial connection to the project. I like ground up multifamily development, and participating in such projects as an LP. Love addressing housing shortages. This will take me from 2200+ doors to 2500+ doors as an LP.