All Forum Posts by: Brian Toy

@Todd Dexheimer I heard the point about making sure the GP don't live off acquisition fees.  Practically, how would you figure that out?  

Thanks everyone for the great tips!

@Brian Burke Thanks so much for all those links.  I really enjoyed your two articles, Colossal Fail and Multifamily Myths.  Your articles brought me to a couple of other questions:

1)  Great point about a downturn in the economy and how it creates this snowball effect on Multifamily.  If there is a downturn is it even really that safe to invest?  If we're possibly at the peak of the cycle is there really any reason to invest in property knowing that properties can go down 30% and vacancies can increase?  

2) Is there any real benefit in being a Limited Partner in apartment syndication if I'm willing to put in the work to do BRRRR for single-family homes? I thought about being an LP to diversify and expose myself to a new area but if I know and can do BRRRR is there really a reason to be an LP? By being an LP, there's a lot more homework with knowing the GP, vetting them, etc. And at the end of the day, you're still trusting someone else with your money. It seems like the LP route is for passive investors but if I'm willing to be active with single-family homes should I even consider being an LP in apartment syndication? Which brings me to a third question.

3) If doing BRRRR is so much easier because you control so much more of the process than being an LP in apartment syndication, what's the draw of syndication? I haven't been around Bigger Pockets for too long but does anyone who has been around sense this trend of going towards syndication and everyone wanting to be a GP? I think I read in one of Brian's articles or one of the comments that said that with the upturn in the economy, it's easy to be a GP doing syndication. Has this been a growing "cool" trend which will end in a downturn because it sifts out all the amateur GPs?

Thanks to Brian and everyone else in advance for your responses!

I'm exploring being a Limited Partner in an apartment syndication.  In general, what are some red flags or specific things to consider?  Is there an element of trust that is needed at the end of the day because you are ultimately depending on the General Partners to perform?  Is there an industry of General Partners who go around creating deals to get the acquisition fees but not really follow-through with the overall investment strategy because they made their cut getting the investors on board?  Any other tips on what to look for as a Limited Partner would be much appreciated.  

Wyatt, what's your current housing situation?  That might affect people's advice for you.  Are you living at home still, already bought your own place or are you renting?  

I agree that your figures would only get you to break even if all goes well.  If there is a correction, then you're stuck with the property and breaking even at best.  But if you can deal with breaking even, the appreciation in the Bay Area is great.  You'll just need to hang on.  Prices are high now and if there's a correction, your equity might not go up pass your purchase price for awhile.  

I am born and raised in SF and I can't invest in the Bay Area.  When I was starting off, I stayed at my parents for awhile and then rented a room from a buddy for dirt cheap in SF and was able to save money that way.  I spent the money saved on my first property which wasn't my primary residence but a rental.  I'm glad it worked out that way.  This got me ahead as I generated good cashflow.  Either rent a room for cheap, get a 4plex, or buy somewhere cheaper.  Parts of the Central Valley in CA were cheap until the last few years but now even those areas have gone up a lot.  Out of state is a no-brainer to start with.  You'll get instant cashflow.  At least in that situation, you're not under the pressure of breaking even every month.  Good luck!

Wyatt, what's your current housing situation?  That might affect people's advice for you.  Are you living at home still, already bought your own place or are you renting?  

I agree that your figures would only get you to break even if all goes well.  If there is a correction, then you're stuck with the property and breaking even at best.  But if you can deal with breaking even, the appreciation in the Bay Area is great.  You'll just need to hang on.  Prices are high now and if there's a correction, your equity might not go up pass your purchase price for awhile.  

I am born and raised in SF and I can't invest in the Bay Area.  When I was starting off, I stayed at my parents for awhile and then rented a room from a buddy for dirt cheap in SF and was able to save money that way.  I spent the money saved on my first property which wasn't my primary residence but a rental.  I'm glad it worked out that way.  This got me ahead as I generated good cashflow.  Either rent a room for cheap, get a 4plex, or buy somewhere cheaper.  Parts of the Central Valley in CA were cheap until the last few years but now even those areas have gone up a lot.  Out of state is a no-brainer to start with.  You'll get instant cashflow.  At least in that situation, you're not under the pressure of breaking even every month.  Good luck!