All Forum Posts by: Chris Levarek

Good advice! A common theme here is know what you are doing :) I've been in every spot but the number one, I still keep my 3br house even if we could upscale to larger(Let's me invest the extra instead). 

I think for those who use debt, conservative is the name of the game right now. 

If you don't know how to buy with conservative numbers, it could be wise to not invest with debt right now. This means, exit cap rates higher than entry, below expected ARV projections, added reserves for capex, higher refinance interest rates or exit interest rates(similar to exit cap rates), etc.

If these don't make sense, proceed with caution as an active investor. This being said, I've been cautioned to not buy real estate with debt since 2018. There is plenty of opportunity in an up or down market and arguments on both sides of the coin for debt or cash investors. 

Case in point, I am seeing hard money lenders are at rates of 7-10%, for 6 months with 1/2 point at 80-90% LTV! Opportunity for the right investor. Disaster for another. Fear and recession creates opportunity but if you don't know what you are doing, be cautious.

@Eric Grunfeld I agree with @Paul Moore and @Evan Polaski. Some great advice from some knowledgeable people in the industry. Let me add to it!

I'll preface by saying, syndication is not a hands-off game. In most cases, syndicators either play the role of deal finder, capital raiser, asset manager or property manager in some format. The easiest entry into active syndication is usually raising capital for a deal and so I will focus on that. 

1. Build a Brand or Credibility

2. Define an Audience

3. Build a Funnel

4. Attract an Audience

5. Form relationships

6. Raise Capital for a deal, team or venture.

Now, all of this requires credibility and a brand takes time. So you will spend 2-3 years perfecting these steps and getting your brand to where you want to be. Syndication is often related to as a marketing business first and a real estate company second for many.

Now if you have experience in real estate, you can jump in to acquisitions/underwriting, asset management and property management with greater ease and play a role on a team there. 

So in final, if you are not interested in spending 2-3 years building a brand/business OR have some decent experience in real estate, syndication isn't usually the best thing to jump into. This being said, mentorships can speed things up but you still have to be committed to building a business/brand.

Of course, I'm also talking about being a successful syndicator as well in the advice above. There are plenty of flash in the pan groups who usually fizzle out after 1 deal :)

True, but the question is on raising capital. So I guess what I'm saying is, understand who you trying to raise capital from. If the end product does not focus on capital preservation at this point in the market cycle, I think you are doing a disservice to your investor base.

Now, there a plenty of strategies focused on building wealth but if you want to risk investor capital from newer investors in that area at this stage, you had better know what you are doing. BRRRR's, Flips, Development, are getting slimmer on margin unless you know what you are doing...

There will always be deals. In an up market, in a down market. With interest rates high and with interest rates low. 

I'd say work on partnering up and building your brand. Find capital or private lenders. Or find another person like you with capital, to do the next deal. You have some experience now, so use it. Talk about what you are doing to everyone. To this forum. Discuss what you are looking for. Ask for private lender partners. Discuss great deals you have found. Get on calls. Build your brand, you!

You are not wrong. This has been the case for the last 8-10 years. The only thing is those numbers have been based on a market in expansion. At present 12%-16% are for more realistic for a 5 year projection. If a group is giving you the 20% projection return in five years today, ensure that the exit cap rate and exit interest rate projection of a buyer match up. With interest rates rising, a new buyer will of course be buying different in 5 years.

@Greg Bly "Search your feelings..." - Yoda

No but really, noone on here will give you the best option without knowing what your goals are. Only you can determine that. 

I suggest listening to 50 BP podcasts that catch your eye. Then selecting the top 3 strategies that are of interest. Then posting this same question on those top 3 strategies.

This will get you on the path far quicker. 

@Deborah Fung Start with your goal. 

1. If it is to learn how to do real estate so you can continue to invest & grow your own portfolio, then I suggest you 
Listen to the BP podcast. Start at the beginning even and just work your way up to today. You will learn alot. Listen to the audiobooks. This will give you an idea of what you would like to do. Pick a strategy or person, and copy them. Leverage key experts in the lending, legal and property management sectors for advice. Take it slow.

2. If it is to simply create cashflow and you will not have the time to grow your portfolio, manage an asset and manage a property manager or property, I suggest you do the above learning yet perhaps partner with someone or invest passively. In my opinion, you probably have your hands full. Sometimes it can be more beneficial to partner with someone, an expert, versus go it alone, especially when you have a busy life already. You do not need to know it all or do it all. You simply need to partner with the right people.

My opinion. In either case, learning is the first step.

@Mason Haley There are also some properties that have some loopholes to benefit from cost seg while not being a real estate professional. A short term rental for example that you manage can have some of these benefits, allowing for depreciation to be used. Of course, the right CPA is needed who understands the concept.

Hi @Shannon Park Here is some choices : https://www.biggerpockets.com/... . Additionally I did a presentation on this a few weeks ago, just dm and I can send you the link if you are interested. Otherwise link above is good start!

If you have 10+ investors, you definitely want to structure a syndication with a securities attorney. Have a call with a few to see pricing, it's free.

If you can do the deal with under 10, consider a simple JV and/or property held in a LLC with partners