Originally posted by @Account Closed:
Originally posted by @Bryce Bunton:
This is amazing and where we are headed too! We started 2021 with 2 properties, we are going to close 2021 with 7 properties (sold 1 and 1031 it into 3 new properties) and now at that tipping point and momentum is rolling! Have another portfolio purchase we are working on that has 7 properties in it and hopefully can get locked down in the next week or so.
Any tips on how you financed the larger properties so quickly? This is my new hurdle we are working on overcoming...We looked at a 108 unit building but just didn't feel like we had the financial status to make that leap yet, but I feel like we are really close. We have a great college town market that is serving us well.
Thanks, Bryce
You become a syndicator, use other people's money, but there are many laws you need to learn and abide by. While Ms. Barker's story sound inspiring I have two old saying that say, "never believe what you hear and believe only up to 2% of what you actually see" and "never count someone else's money because the totals are not usually what you've been told'.
I've been involved with syndicated real estate since about 1980, look at the numbers frequently, flew to Ohio in September to look at multi-unit properties, did the numbers for many apartment buildings for syndicating real estate and never came up with numbers that made sense to me. Maybe, Ms. Barker has more brain power and some things I don't have.
The problem I come up with in investing in Ohio is the prices per rental units are as low as $50,000 per unit, but the rental income is low and the property taxes are 4 time that of California. If the property taxes eat up all your gross income and you can't increase rents a decent amount every year then you won't make enough profits to pay your limited partners in your syndication.
The way I've seen the syndicated real estate deals work is you cannot advertise to take on limited partners. The people you take money from have to be Credited Investors meaning they need to have something like $1,000,000 in personal assets, or something like that. Then, you need to have an attorney who specialized in syndicated deals and the attorney is not hard to find. You sign an agreement with your limited partners for something like 5 to 10 years and you promise to pay them 5% to 8% on the money they invested every quarter. Then, when your agreement expires in 5 to 10 years you get to own (control) the entire property by paying your partners about 30% of the price the property appreciated.
Syndicating properties can make turn you into a filthy rich real estate investor where you end up owning thousands of units, but as the old saying goes, "poop happens" and you also commit yourself to paying a very high rate for the money your limited partners invest. If you pay your limited partners 8% plus 30% of the appreciated value you may end up paying 14%, or more and I would personally prefer to pay only 3.2% and purchase properties with my own down payment since I have cash, but for investors with less cash the syndicating could be good for you ONLY IF YOU CAN DELIVER ON YOUR PROMISES TO YOUR LIMITED PARTNERS and that is where I have not seen good numbers in Ohio nor in any other state, at this time. A few years ago, when multi-unit prices were doubling almost every year the market was ripe for syndicating, but with today's prices, I have two fairly sophisticated spreadsheet-type calculation apps and I cannot find any properties that are a sure thing, but maybe other investor know better. So, don't listen to what I say.
I look at Ms. Barker's post as soliciting to attract venture capital since it is not legal to straight-out advertise for venture capital for syndicated real estate and there is nothing wrong with what she is doing as long as anyone who invests with her understands the risks in regards to whether or not she has the abilities to analyze investment properties and to deliver on her promises.
I requested that Ms. Barker post some numbers a few time and did not receive a response for those requests. So, either her numbers are some sort of trade secret, or there is some other reason she remains tight-lipped about them. It bothers me when people make claims about their success and them refuse to post any details about the numbers. So, I take everything with a grain of salt (whatever that means).
