All Forum Posts by: Chris Sawtelle

Thanks for the suggestion AJ that is a great idea. If I get some time I will post what I make here, in the meantime if anyone has any sources like lists of documents or mock-ups they can share here for people to come across starting out that would be awesome too. 

Hey all thanks for posting. I haven’t syndicated yet but I’ve gone through the process as a limited partner and as the principle but the deal fell through.

Wow 2 years have gone by and I learned so much since this post. If you boil it down to first principles.

First you need a property. So likely you need some contact who can get you a property before it hits the MLS or you will have to compete till the deal isn’t worth it. You could call them “The Insider”. Most likely a realtor but could be a friend of a friend of a friend who is thinking of selling. 

Then you need someone who has a lot of experience with real estate. This person just needs to know how to run a rental, how to find a good property manager, how to tell if a property has potential, etc. “The analyzer”. The lender will do enough due diligence to make sure they don’t lose their investment but that doesn’t mean the deal is going to make money.

If you want to do a syndication you need to have a high net worth or someone who will work with you to be the anchor for the loan. The lenders need the partners to have net worth equal or greater than the loan. This is “The high roller”

So you could play all of these roles as the principle partner but more realistically you will need a team of people to fill these roles. Once you have these “a good deal funds itself”

I am running 7 units now and getting ready to clean house and start syndicating something bigger. I am happy to chat about syndications with anyone whose interested. Thanks all

@Nicholas Aiola I know you have mentioned many times that an LLC is a legal entity and not a tax one, however with the new $10,000 limit on deducting state, local, and property taxes I was wondering if that is for individuals or businesses?

I have a multi-manager LLC that holds multiple rental properties and is in the business of BRRR. Just the property taxes here exceed the 10,000 limit. Is this not looked at as a business expense?

@Nicholas Aiola thank you so much for this thread. I have a learned so much. I have a question regarding de minimis safe harbor.

I have a property with two small homes and each one needs a new roof. I was able to purchase separately the materials required to do the job which were less than 2500 per roof. If I replace the roof myself, and the total replacement of each roof is less than $2500 can I use de minimis safe harbor to expense it rather than capitalize? 

Provided this is allowed, can I then do the same for the second home? Is there a limit to the number of DSH elections you can take in one year?

@Brian Larson thanks for weighing in. I also have a detached 2 car garage in the back of the house. Did you decide to extend it because you found it cheaper, space concerns, or something else? Would be thrilled to hear more about your project.

I own a SFH about 10 blocks east from SJSU in downtown san jose. The new google facilities are going to about the same distance the opposite direction. The property has long term tenants and is zoned for two family residential. I am thinking of adding an ADU due to the relaxation of regulations and I have been weighing the options between a manufactured or modular (not mobile) home and doing new construction. My in-laws just completed a 640 sq ft stick built ADU that cost nearly $200,000 with them doing a lot of work on it. It seems that if I was hands off the cost could be 250k+, and I would expect to only be able to get 1000-1400 in rent. Does anyone have any experience for doing this?

@Teresa Buchanan That is awesome! I would love to connect with you and talk about your experiences in Redding and exchange ideas.

@Leslie Pappas Thanks for the welcome! I hope I can discuss syndication with you in the future.

If this in the wrong place or anyone needs more details let me know!

@Karen Margrave that sounds like a very exciting plan. I have heard of people who have short term rentals along Whiskeytown Lake that do extremely well, however these are more like single family experiences. As a wedding venue I think it could be really great as well. I know that some of the golf courses around town get significant income from weddings. 

I wish I could say more but I don't have that much experience with larger venues. Overall I like the idea!

Hello everyone! 

I am a real estate investor in California who started out researching single family homes and ended up investing in multifamily. I have been studying up on syndicating and really want to dig into the nitty gritty with someone who has experience. 

My intent is that I will collect investments from friends, family, and colleagues (all non-accredited investors). I understand the trials and tribulations of working with friends and family, but I am willing to take these on for my first deal.

My experience in real estate isn't super extensive but I am a data engineer for my day job with a background in statistics and finance. This is all to say that I feel confident that I can manage a distressed apartment complex with fairly good numbers and a few issues. I could be crazy, that is not what I want to talk about. :)

My question is what are the options for financing a project ~$1-2 million dollars if I can come up with agreements to collect a down payment of what I am assuming would be 30%. Also assuming the legal side is taken care of such as filing with the SEC, although advice on that is appreciated.

1) What kind of lenders would make this deal?

- Are there specific deals for this type of arrangement?

- Are interests rates similar to investment properties at this level of financing?

- Can it be done without a balloon-type loan? Ex traditional 30yr or even 20yr financing?

2) What are the personal requirements to get this kind of loan aside from property numbers like debt coverage ratio?

- Cash reserves requirements?

- Experience requirements?

I am sure this can be just a kicking off point for extended discussion if anyone is willing to engage. :)