All Forum Posts by: Brendan Miller

For those LP syndication investors out there, what is your minimum criteria for investing in a fund? (Target CoC, preferred return, equity split, target equity multiple, target hold period, operator requirements, etc)

@Rodney Sums i think there are better people within BP to give a market synopsis of ABQ than me, but I believe it's a great market for long term investing. There are definitely good and bad pockets so you need to be aware of where you're buying and not focus strictly on the low prices. There are really good areas within Nob Hill, Northeast Heights, Rio Rancho, Oldtown, etc that should hold value well over time and have good demand. I will say that it's very competitive just like anywhere else right now, so it's been tough to find deals that truly cash flow (after PITI, CapEx, Maintenance, etc). There are a lot of investors out buying right now that don't care if it cash flows, so that's been tough to compete with. Long term I think Albuquerque has a lot of undeveloped land to grow in population, and large employers are starting to move increase operations there. I would personally would definitely buy in Albuquerque if the right deal presented itself.

@Isaac Hayes I'd go with Option #1, I have similarly done this myself. I keep all of my cash reserves in a mutual funds within a non-qual brokerage account that i use as my real estate fund. I've been investing in real estate with it rather than keeping in the stock market, mainly because I believe in real estate more long term than the stock market. With Option #1, focus on a good deal, don't just rush into something. Make sure it covers your expenses, debt service, and gets you the return you're looking for. What I like about real estate versus stocks is the loan paydown; you can take out a $1M loan and have someone else pay it off over time, including principal and interest. You get the tax benefits of owning it through the interest (that someone else is paying) and the depreciation. You also hopefully get cashflow and rent/value appreciation over time. It's hard to find all that within stocks.

@Michael A Silva-Sampaio your lender should be able to confirm for sure, but it really just matters where you classify as your primary residence on paper (i.e. tax returns and USPS address). The intent of that stipulation is really to prevent mortgage fraud, not to penalize professionals that travel often for work. If your wife is still living in the house then then I'd say you're good to go.

I'd like to invest in at least one or two more 506b syndication funds before year end 2021 

@Deepak Arora I would typically say MFHs should have a lower price/SF than SFH because of the economies of scale (they are more densely packed than SFHs). For example, single story homes normally have a higher price/sf than multistory homes because they may have the same size footprint, but it may take a larger lot to achieve that, more foundations, larger roof, etc. There are a lot of variables that can go into, but in general I believe supply/demand have a big play in it, especially within the current market.

@Steve Adler gotcha, I could have read your 2nd sentence better. I think it's definitely doable but will take a lot of hustle to do it. I would work backwards like I did in my previous response; at 3 years you need a property that produces $60K net profit (after expenses + debt service). If you applied the BRRRR strategy within years 0-3 and focused on short flips to quickly increase your money, you'd have a sizeable downpayment at year 3 to leverage a property big enough to generate those returns. It really depends how much time you have available within years 0-3 to focus towards real estate.

@Deepak Arora i'd say it's highly market dependent and it depends on the asset class of property. Some markets I see MFH homes higher than SFH in price/sf and in other markets I've seen the inverse

@Steve Adler it'll be tough to accomplish with a fully leveraged property. You'd need to get a discounted property offmarket, likely with some seller financing to make those types of numbers. $5K a month in pure cashflow (after all expenses). For $60K annual cash flow (NOI), you'd need a $1M property at 6% CAP to achieve that, before factoring in debt service which will likely eat up a good chunk of that $60K. Is 5k a month your immediate goal with the 200K investment, or is 5K a month your long term goal to be financially free (at some point in the future)?

@Valerie Bergmann yes, start the eviction process