All Forum Posts by: Colton Hahn

And the goal is maybe around 70% cash flow and 30% equity growth, so definitely interested in more cash flow. Also, maybe a 40% risk profile, so some risk is fine, but rather be a bit safer.

Cheers!

I would invest in real estate syndication, not only do you get the obvious passive investment returns but you also get the tax benefits as well. The biggest hurdle is finding an operator you trust, in a region and asset class you believe in. The whole point of investing is to get high returns with little work, and those opportunities provide that :)

0 Votes

San Francisco, California

Quote from @Account Closed:

Hi!

I am a newbie and am currently learning as much as I can before jumping into my first deal. I plan on buying small multi family properites in the Midwest but am having a difficult time choosing my market. I want to focus on cash flow as a goal for my properties and that is why I am interested in the Midwest. I have read that there is great potential for cash flow in the area. I'm interested in choosing Cleveland and having been researching the market but am wondering what other cities people recommend as great options in the Midwest? Any other tips or advice is greatly appreciated!!

Places like Columbus, Ft. Wayne, Indianapolis, Des Moines, Cleveland, Evansville are pretty good markets

1 Vote

Cleveland, Ohio

Quote from @Seth Baumgartner:

I've been looking into using my VA benefits to pay 0% down on a house that plan on using as a rental. I know you can only have one VA lone at a time, so can I refinance from a VA loan to some other loan?

As others have said the bigger issue is you cannot use a VA loan for an investment property but you can house hack with it. Also you can have two va loans out at the same time technically, but they would both have to be small loans.

2 Votes

Quote from @Austin Griffith:

Hello! I'm looking for some advice/direction from the community for my next real estate investment.

I completed construction on my home in the Hudson Valley in 2020. Acting as my own GC, I was able to save quite a bit, and only took out a small loan, so I wound up with about 500k in home equity.

I briefly considered selling, but decided against it partly because I have been Airbnb'ing when I'm not there and the cashflow is great, and partly because of my emotional attachment to my first build!

So I've been trying to decide what the best next project would be to pursue. Some options I'm considering:

- Build another home in the Hudson Valley: Either to Airbnb or sell. Advantage here is that I know the area and contractors well at this point.
- Fix/flip in the Hudson Valley: Again, either Airbnb or sell.
- Fix/flip in Detroit or Kalamazoo: My fiancé and I are both from Michigan, and we are planning to start a family in the next couple of years. We don't have plans to move there, but we have friends and family to check in on things and it would be nice to not have to stay with in-laws every time we visit :)

Any of the above would most likely be financed by a HELOC and, depending on the investment, either refinanced (hopefully rates go down in '23) and held as traditional/Airbnb rental, or sold.

Any opinions or advice are welcome!

Its been said before that "cashflow is king"

In all seriousness it depends what you want to do next. I talk to many people who parlay their success into multiple properties. Then they realize how much work that can be, and go full passive (ie syndications). Others like the grind and go even bigger, hiring a team to manage the properties with them.

Happy to talk more!

1 Vote

Upstate New York, New York

100% agree that getting to know people in the industry who are brokers, lawyers, lenders, even other newer syndicators who are around 1-100m aum to get a sense of how they are dealing with the process of getting their business started.

Once you see how the sausage is made, you may choose to not move forward!

0 Votes

Quote from @Tony Kim:

Quote from @Colton Hahn:

Quote from @Lane Kawaoka:

a) How can I trust he is putting in $1M of his own money.

When people are new (under $250m of AUM) I would want to see 10-50% of the capital required. Granted when people are new their net worth is low so they probably don't even have more than 200k to throw into the raise.

b) I have done LP deals in professionally managed syndicates by PE firms before. First time doing Tenants in common. Are there things I need to watch out for

Do you background check. I would personally not do a deal with anyone who has less than 1B in AUM unless I knew them personally, had the ability to take over the GP, and there was an big split for me coming in and giving a newbie a chance (90/10 LP GP split for example).

c) Any other things to be careful about investing with a first time syndicate

Good luck... I would not do it but hey its your money.

90/10 split? Thats a red flag that they are desperate for capital IMO

True, but I think equally bad is having a fund with a 60/40 split between 15% to 28% IRR. Won't mention what it becomes above 28% as the mere mention of that split would scar me for life.

Let me know when you come across the 10/90 split I recently saw from a prominent sponsor, might want to have a defibrillator handy! They don't seem to be having issues raising capital.

Keep in mind it's all about risk adjusted returns, some investors are willing to eat a split 80/20 all the way for a deal that may have more operational (sponsor) risk. Others are willing to take on less operational risk to work with a sponsor whose track record speaks for itself :)

0 Votes

Quote from @Lane Kawaoka:

a) How can I trust he is putting in $1M of his own money.

b) I have done LP deals in professionally managed syndicates by PE firms before. First time doing Tenants in common. Are there things I need to watch out for

c) Any other things to be careful about investing with a first time syndicate

Good luck... I would not do it but hey its your money.

90/10 split? Thats a red flag that they are desperate for capital IMO

0 Votes

Quote from @Gregory Kraft:

Hey everyone. What are some cities that are very landlord friendly? Looking at Tampa, KC, and Indianapolis right now. Any thoughts and/or advice would be greatly appreciated.

We love Indy and Des Moines IA :) great returns to be made in those cities!

1 Vote

Quote from @Logan L.:

Hi BP community!

I am looking for some advice. I am a newer investor located halfway between Raleigh and Fort Bragg, NC. My wife and I currently have two investment properties and our primary residence.

House 1 is located in Fayetteville. It is a 4 bed 3 bath that I purchased for $145k. Mortgage is $920, it’s currently rented for $1,700 and is worth approximately $200-220k.

House 2 is located in Spring Lake. It is a 3 bed 2 bath. Purchase price 93k. Mortgage is $500, it’s currently rented for $1,400 and worth approximately 145-155k.

We have about 90k in savings but would like to keep at least 30-40 in reserve after our next investment. I am 28 years old, active-duty military and my wife is finishing up grad school this winter. I have read several books from BP and am an avid listener of the podcast so I am familiar with most of the common investing strategies. In general, properties to the south of my location tend to be cheaper while north of me are more expensive to due the Raleigh/Durham area expanding south. I feel a bit conflicted about what my next step should be. Do I continue buying mostly turnkey single families? BRRRR? Multifamily? Should I target cash flow or appreciation primarily? I would appreciate any thoughts and feedback you have for me, thanks!

First off thank you for your service, and congrats on getting this far!

It really depends what you want to do. Often times the people I talk to get into more and more properties and eventually liquidate to invest in syndications to get the tenants and toilets off their plate.

Entirely depends on your goals. Do you enjoy the grind of owning real estate and find it fullfilling? Then start scaling into MF. If not, then maybe put together a plan to start moving to syndications in the future so you get the benefits of real estate without the headaches.

0 Votes

Raleigh, North Carolina

Quote from @Kyle Curtin:

Goooooood morning BP!

For my next property, I have had the vision to break into the small commercial multi family space (6-25 units) on a local level, and have taken action and started the journey down that path. I have pivoted everything I am absorbing (podcasts, books, folks I reach out to to connect) towards this sector of REI and have a written road map with my business partner on how we are going to get there and the forecasted steps that need to be taken. My main question is, I have about 70-80k in equity that I am hoping to leverage via a HELOC on my househack in the coming months on an 100% LTV. It was my intention to leverage this capital as skin in the deal when a worthwhile opportunity arose and still do, but do you think it could be worth it to invest as an LP on another group's deal FIRST (I have one in mind) to be able to have a hands on approach of the aspects of investor relations, structure, analytics, presentation, and how to handle that effectively, etc.? I really like the idea for the education in the macro but also am keeping in mind if my heloc capital is tied up for a year-2 years in the micro, it could really delay things. But also, that is just MY personal capital. We will begin starting to raise capital and learning the intricacies of it soon, and I have heard many stories of people putting together big deals for the first time with none of their own cash.

What do you think?

Have a great day!

Kyle

I would recommend being an LP first, talking with your GP and learning what they do and why. You may find out how the sausage is made and prefer not jumping into syndication just yet. Happy to chat as well :)

2 Votes

Worcester, Massachusetts

All Forum Posts by: Colton Hahn

Colton Hahn has started 5 posts and replied 313 times.

Post: Hypothetical Question: Where would you invest 1M right now?

Post: Advice for Midwest Market

Post: How to use VA loans.

Post: 500k of home equity... What to do next??

Post: Apartment Complex Investing

Post: How to trust new syndicate

Post: How to trust new syndicate

Post: Landlord Friendly Cities?

Post: What would you do in my situation?

Post: Apartment Investing/Syndication- Is it wise to be an LP first?