All Forum Posts by: Chris Levarek

@Robbie Best We syndicated a 16 unit as a 504, something not as popular these days yet it can be done. Of course just because it can be done, doesn't mean it is worth it from a profit sense. As I grew my company, we worked for free for the first two years on that one. 

Ensure you understand what you sign up as a sponsor. You have a duty to perform for your investors and if the deal is thin, that might mean tightening your own belt buckle. 

Read "Best Ever Syndication Book" if you haven't by Joe Fairless.

@Nathan R Andersen You are on the right path. Scaling is about partnerships and picking a role in said partnerships based on experience, capability and time. I'd add a fourth option called personal enjoyment or desire in the role, but the afore mentioned three are usually the logical choices for selecting your role. 

So if you have the capability to fund a deal and someone else has the experience and time, you have the answer. If you have the time and funds, you need someone with experience, etc.

My suggestion is do not chase trying to do it all. You won't scale as fast and it won't be as easy.

If you want cashflow, try being a private lender instead as in the current economy, this is a very important position with priority on cashflow.

Some other suggestions :

Monitor your HELOC interest as they are variable in most cases. This could be drastic if you loan out the capital at a lower rate.

Invest out of state if you numbers don't work in state. Find a partner.

Don't force numbers.

You can split the partnership any which way. 50/50, 30/70, 20/80, etc.

All roles have value. It's up to the partners to decide how much.

@Chris Anderson If you are working with lenders who understand syndication, they won't be looking at that unless an LP owns majority or over 20-25%. If you are working with more residentials banks or smaller banks not used to syndication you'll face issues. 

My suggestion with smaller banks with JVs, Syndication, LLC partnerships, etc. is create your entity and basic op agreement first with only 1-2 owners, then open your bank accounts and loans. You can avoid much of the hassle by then changing the op agreement and adding LPs after the fact. Of course this must be done before anyone signs your PPM. In some states you will need to notify the state of ownership changes.

Again, to avoid issues or risk however, ensure no LPs have majority share or simple work with lenders who understand syndication. Also get legal counsel familiar with this topic.

@Tyler Solomon We've done this multiple times. Essentially syndication simply means partnership. However if you mean sell securities through a 506b or 506c entity, in most cases a fund will be best. 

If you tie a single 506b or 506c entity to a property, as mentioned, your costs will be quite high. $10-15k for creation per entity, so your gross income should make that expense worth it. Most STR's simply won't push those numbers to make it worthwhile. An often rule of thumb is anything under a million purchase price, syndication won't make sense (debatable but still a rule of thumb).

However, if you run through a fund, your creation of paperwork is one time for say 12 months, or even evergreen in some cases. Meaning your costs are spread over multiple properties.

You can visit my profile to see some of the deals we've done this with. Good luck!

Together with Ashton and Christopher Levarek of Valkere Investment Group, Real Estate Investing Made Simple will be hosted by Travis Hill via zoom sessions every last Thursday of the month. Listen to experts as they emphasize on networking, real estate, and expanding your business.

Joining us this month of October is the Investor Relations Specialist, Don Spafford of Happy Camper Capital.Don has an educational and professional background in Finance and Securities Investing. 

He has held several management and leadership positions in his corporate finance career as well as various volunteer service positions.He grew up most of his life around Omaha, Nebraska and now lives in Idaho Falls, Idaho. He bought his first property, a four plex, in 2017. Then he began to scale into commercial real estate including ground up development projects and joined Happy Camper Capital in 2021 where his team focuses on syndicating RV Resorts. He enjoys it and really enjoys providing great returns to the investors. He enjoys spending as much time as he can with his Family to create lasting memories. He loves to serve and help others. His hobbies include coin and bank-note collecting and traveling. He has been married for over 21 years and has 4 children. He also is fluent in Spanish.

Connect with Don Spafford

Happy Camper Capital

@Sarah Msuya I'd say a joint venture will work. The key is simply ensuring the private investor has active involvement. So this could mean a monthly meeting with a docusign termed "monthly minutes" for example, scheduled email updates, etc. 

In the end, it's Active participation versus simply passive investment. How you choose to do define that separation, that is up to you but it should be defined. Consult an attorney of course, the above are just recommendations from experience.

It's also worth mentioning, if they don't have ownership, you aren't really selling a security. If you aren't selling a share but using debt instead(private lender), thats not a security. Sounds like you are though...

@Damon Aniton Sounds a lot like my previous life! I'm a veteran and was an overpaid IT professional for 12 years :) Currently, full time in real estate and multiple properties at this point. 

Let me offer some advice on remote markets. Do not pick markets only on desirability. Make sure you factor in some other logic. 

What is desirability? Well, "I go there alot" or "my fiancee is from there". Both are more based on emotion and personal desirability. 

It's fine that they play into the decision, but be sure and focus on rent growth numbers, population growth, landlord friendly (you got this one maybe), etc.

I would also say knowing you have family in the area does not make a market a good market. It makes it an easy decision for you. 

I wouldn't rely on family to be good investors, partners or assistants unless you are 100% confident in their ability in real estate ventures.

Instead, partner with experts who are available in every market, if you spend the time to call them and develop a relationship. Take the time to call agents, property managers and the like to scope markets. They have a far better grasp on what's going on I assure you.

I've been there, and I've seen it so this is just my advice after many multifamily and sfh acquisitions and management. 

Much success!

I am a college graduate. I've attended 5 different colleges. I hold three degrees which took me over 7 plus years in 4 countries to achieve. 

One year at an Arizona College, two years in France, 3 years online colleges and 2 years at an Arizona College. During this time I lived in four countries, completed 4 years active duty and had a blast. I did it for me and nobody else. It was not to get wealthy but all because it was fun. 

I consider my collegiate experiences as some of the best and most pivotal experiences of my life. Then again, most people going through college are going through at a period which biologically defines who they are. 

Biologically, our brains are defining our character and habits for our life up to around age 25 and then that's it. So for most, those time periods will be considered foundational for life regardless if it was in college or not.

As to did it make a millionaire? In my eyes, everything contributes to your success. No experience was without merit.

Yet if I was going to pinpoint it on a certain area, I'd say Partnerships and relationships are what make millionaires. 

The vehicle isn't important, it's the people along the way.

So whatever experiences enable a person to interact with others, understand them and develop relationships, those are the ones to seek if millionaire status is desired.

@Elisa Sacchetti If you house hack this, you can perform the renovations slowly over time as you live in the house. Options in this manner include interest only private lenders, credit cards at 0% interest for 12-24 months, loans on retirement/insurance plans, personal loans from banks, etc. 

You then refinance at a later date and pull some of the capital back out to pay off your original loans to private lenders, credit cards, etc.

I bought my first duplex with a private lender and did these methods for the renovations.

There are many who've been very successful with seminars and mentorships. There are many who haven't.

There are many who've been very successful going alone and actively scaling deal by deal. There are many who haven't.

Isn't that the way the world works? Isn't that free market capitalism.

You make of your experience what you make. 

We all learn with every experience and should look to see the benefit of each experience. This is how you truly become successful. 

Those who reflect on the past in the negative, often miss the positive future outcomes.

It's really all about the journey anyway, you can't take it with you...