All Forum Posts by: Brock Mogensen

Quote from @Greg Scott:

Quote from @Henry Clark:

Quote from @Greg Scott:

I have invested in over 50 syndications, of which about 45 are still active.  I have also done four syndications myself.  Of course, on the syndications we put together, we get some compensation for our efforts, so I'll ignore those when discussing my returns below.

Of the 11 deals we've had that have gone full cycle, we are averaging about a 40% annualized rate of return.  Of those 11, only one had net loss, and clearly the others did very well with outsized returns.

Of the 45 that are still active, the returns have been a little softer the past two years, and we had two small capital calls.  On the other hand, we also had three provide cash-out refinances.  My quarterly cash distributions hit bottom about a year ago and have been on the rise since then.  About 1/3 are still not providing distributions but their cash position is strong and I'm not concerned about them potentially selling at a loss.  Six of them just launched this year, so I wasn't expecting distributions anyways.

These syndications have change life.  I am truly blessed.

However, you should know that these syndications are not available to everyone.  I am a member of a private group that puts these syndications together ONLY with members of the group.  They have rules and best practices about how we put these deals together which has collectively saved us from much of the pain being experienced right now in the multifamily space.

 Thanks for insight.  When you say 40% annualized is that per year or over the entire life cycle.  Example if 3 years then say 13% return each year?  Or 40% each year for 3 years?  

Great job on the due diligence or Operational process you have going.  

This image summarizes my syndication returns on deals that have gone full cycle.  I haven't added the 11th, the one that lost about 60% of value.  They haven't fully closed out the deal yet, so I don't know exactly where it will end up.

 Solid returns!!!

Truthfully if you want 100% passive, investing as an LP in syndications/funds may be a better option. I think even if you find the best PM company in the market, you still need to oversee the property/business. Investors that close on a property and just hand it off to their PM without any oversight many times doesn't yield the expected result.

Good syndicators will have all of this data for their business. I agree on a key metric to track is proforma vs actuals. We track that on a quarterly basis, as I think it is the best way to hold yourself accountable.

Start with learning the fundamentals of real estate investing then vet a ton of different syndicators/fund managers. Stay on their email list with updates, choose the operator that has the best investment thesis, track record/experience, and deal.

Start talking to investors before you lock up a deal. A common rhetoric is "if you find a good deal, the money will come"..in my experience that is false. Start building a network of potential investors that are interested in your investment thesis.

Also, what is your edge? Why would someone invest with you over someone that has been doing it for a long time? You will want to nail down what your investment thesis is, buy box, and why you are better at that investment niche than others

Investing as an LP in syndications/funds can be a great way to gain real estate exposure with minimal time commitment.

It's key to invest with the right sponsor that has track record of delivering returns (ideally been through at least one downturn). Also want to make sure they have a solid buy box.

Happy to help provide insight. I'm an investor in the NNN Industrial space (~$35m portfolio)

Sounds like a solid deal!

However, worst case scenario is the warehouse sits vacant for a year after the sale-leaseback term. Have you modeled out a vacancy period post sale-leaseback term? Did you include a TI budget for the new tenant? Do you have a plan in place for the re-lease?

Short-term sale leaseback deals are a great value-add opportunity, we do lots of them. Just need to make sure to have these points buttoned up. 

Took me about 3-4 years, through syndication deals.

Networth is a great goal, but also want to ensure cashfloooow is strong

Syndication deals can be structured many different ways. The key is to understand how to underwrite a syndication structured deal.

GP/LP splits, acquisition fees, asset management fees, refi/sale periods..among many other things that vary when underwriting a syndication deal vs traditional purchase.

Happy to share my model for underwriting these deals if you want to shoot me a DM.