My MF journey, right or wrong, started in 2010 with Brad Sumrok. Let me be clear, not the 5 units some speak of, but the 60+ units, usually 100+ apartments. All of the deals I've seen are via a Private Placement Memorandum (PPM) most using the SEC Reg D 506(b) exception, which requires a Sponsor knows Investor before the deal.
[There is also the (C) exception; advertising is allowed but no sophisticated investors are allowed.]
To create a MF syndication, one needs a resume to impress the broker and seller, funds to bribe the seller, pay the SECattorney and the contractors for due diligence, and plenty of qualified contacts with money to invest. In a seller's market, Sponsors have to put down some serious hard-money (potentially non-refundable) to get a deal started. Less so in a Buyer's market.
To invest in MF via a syndication, one has to be Accredited (rich) or Sophisticated (knowledgeable) as the law protects the poor and stupid, preventing they from investing in PPMs. You can simply say you're sophisticated, but it is so much better to learn and know what you're doing. One has to have contact with one or more of the Syndication Sponsors. And you need the money to invest; these are non-liquid 3 to 5 year deals, do not invest your emergency fund! Typical minimums I've seen are $50K.
My knowledge of other Mentoring programs is limited, but I think they are occasionally TRAINING (Buy my books & tapes at the back of the room), occasionally PROSPECTING (I have a deal; come invest with me), and occasionally more.
I was lucky enough to find the "more" with Brad. Not unlike others, he has a introductory/recruiting event, his R2R (Rat-race to Retirement, which happen 3 times a year). The R2Rs are two day events. They give a great overview of the MF process, allowing the neophyte to decide if this is where he wants to be. And they include a bus-trip visit to 3 or 4 properties that students own to see what the investment looks like.
There are two levels of membership: Personal Student and Foundations Student. The Personal includes "hand-holding" & personal coaching; these are the folks that are potential Sponsors. Both levels include on-line training about the MF acquisition process, multiple all-day Networking Events each year; these events consist of bus trips to visit 5 or 6 properties that are for sale followed by a post network meeting and usually a dinner. Most of the activities are in DFW, but DFW is the MF hotbed! The bus trips are both instructive and facilitate making those necessary contacts (Sponsors with Passives).
As I see it, a coach/mentor brings experience, knowledge, access to contacts, credibility, access to a team, etc. I think it can be done without a mentor, but having a mentor allows one to do it faster and without paying for big mistakes.
The group did 52 deals in 2018 and 58 deals in 2019. Many deals had new Sponsors teamed with seasoned sponsors and it was not hard for Passives to deploy some money in to deals.
One of the most remarkable stats on the group is that over 170 members have increased their wealth by $1M in the past 6 years that Brad has had the Sumrok organization.
NO, I DO NOT WORK FOR HIM! I do volunteer at his events as he has made me rich!
Regards,
Charles LeMaire
