All Forum Posts by: Chris A.

@Patti Robertson It is a calculated risk for sure, and agreed that there are unethical people in the business, and sometimes ethical people can do unethical things when faced with a lot of challenges in the business. 

@John Woodrich Agree that things will become more challenging over the next two years. Our deals are conservatively underwritten and the operators that I work with turn away a lot of good deals to find the best markets, deals in those markets, include a margin for unforseen market conditions. While I do have a lot invested in RE syndications, I do not place more than 30% of my net worth in it, and it is split between IRA and non IRA funds.

@Brock Mogensen Thank you!  I have found it to be a great way to be more passive and continue to grow in my W2 job until it is time to retire and I can have the time to be more active in Real Estate. 

Thanks @Scott Price, Looking forward to it!

@Patti Robertson  @Scott Mac  Thanks for all the tips!  I will pass that to our director of operations in case it has not been thought of already.   Appreciate all of the comments. 

@Patti Robertson I am not sure, I will pass that question over to the GP team and see.  We are not doing any major changes to the outside, all work is interior (which makes permitting much easier).  Our GC has lots of experience in the Annapolis area doing interior and exterior rehabs on historic buildings, so he is well versed and well connected in the area.  

@Scott Mac  Thank you!  It is an exciting project to be a part of.   The return projections only account for hotel income but we are already looking at capitalizing on additional streams of income.  There is a professional grade kitchen on site, a bar, and the grounds are beautiful and have been used for weddings and other events in the past.  

@Patti Robertson, 

I understand your concerns. The mitigations I use are to only invest with deal sponsors that I personally know and have seen their work, also diversify geographically and with different operators. All investments have some level of risk, but multi family real estate seems like a better place for consistent gains right now than stocks or other investments (and I already have lots of exposure to equities through my TSP/401k). There is a housing inventory problem right now, and shortage of affordable housing, which provides a layer of insulation if there is a major correction/crash.

@Taylor L., Yes this is Ocean View in Norfolk VA. There were some immediate capex upgrades and there are also annual capex upgrades budgeted for, this will also correlate to updating individual unit rents to near market values.

Investment Info:

Other commercial investment investment.

Purchase price: $4,650,000

Contributors:
Jonathan New

Syndication Investment. The US Naval Academy Alumni sold this portfolio of 3 properties with combined 12,000 sf. of space, it will be converted to a boutique historic inn that will have 20 suites.

What made you interested in investing in this type of deal?

The location and the business plan. I think that this will be a huge success due to proximity to the Naval Academy and the tourism in the area.

How did you finance this deal?

sale of a triplex in Portsmouth VA helped to fund this investment.

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $2,875,000

Contributors:
Jonathan New

Syndication investment, Limited Partner
28 Unit portfolio of multi family properties in Ocean View.

What made you interested in investing in this type of deal?

Every since investing in Marina Point in 2020, I have grow to appreciate the true passive nature of syndication investments. This has allowed me to progress in a very demanding career while expanding my multi family portfolio.

How did you find this deal and how did you negotiate it?

I was approached through the operators of this syndication.

How did you finance this deal?

I was able to use some bonds that were paying a much lower rate of return than what is projected for this investment.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Portsmouth.

Purchase price: $215,000
Cash invested: $36,000
Sale price: $280,000

Contributors:
Anthony Pinto

This was my first partnership and (almost) turnkey quality property. It just needed appliances and a fence installed. The partnership was established through an LLC and property management was put in place to manage the tenants and any minor repairs.

What made you interested in investing in this type of deal?

One of the partners approached me with the opportunity and I decided to take the plunge. Having never done a partnership, I was a little hesitant at first, but super thankful to have the opportunity to be involved with it, gain some valuable experiences and step outside my comfort zone.

How did you find this deal and how did you negotiate it?

Anthony found the deal (on the MLS I think), and he brought it to me. I had known him via a common connection and attending several REIA and meetups in the area. The three of us came up with the structure and splits, then created an LLC to establish the partnership. Once that was complete the partnership purchased the duplex.

How did you finance this deal?

I brought 3/4 of the down payment, Anthony got the mortgage with a local lender and the other brought the rest of the down payment.

How did you add value to the deal?

We added appliances, a fence and some foundation/ crawl space work. The rest of the value was based on the rising market/increased demand.

What was the outcome?

It was an excellent experience, being able to sell in about 2 years for 65k extra was nice for sure. I think the real value was in the experience of partnering with others, forming the LLC and working together. Through this investment I have become more comfortable with other types of investments, partnerships and syndications.

Lessons learned? Challenges?

There were challenges though, some tenants decided not to pay during COVD which hurt the cashflow for a while, also we had to do pretty extensive cleanup and some repairs when they left. The appreciation was good and that made the overall investment returns turn out really well despite the cash flow challenges during the pandemic.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Dan Grub with AB&B Credit Union was great to work with.

@Scott Price 

Great, I am looking forward to it!  I will add the facebook group and be looking out for the next meetup (virtual or otherwise) when I return. 

Thanks, 

Chris