All Forum Posts by: Cal Rohrman

My partner and I recently closed on a 20unit apartment complex. We now own and manage 62 rental units. I am wondering if there is a great book out there for managing rental units at scale. Any recommendations would be greatly appreciated. Thanks!

Back in early June my company RAD Properties closed on an off market duplex located in North Milwaukee. We purchased it for $60,000 ( I raised 60K @ 5% for 6 months), I stuck $15,000 out of pocket for rehab which included a complete remodel of the interior, new roof, gutters, & soffits along with other misc repairs. Rehab took less than 1 month. I rented out both units for $850 a side and plan on refinancing this property in 6 months with a projected ARV of $130,000. If everything goes as planned with our ARV, at closing I'll receive around $91,000, pay off my investor $61,500, pocket around 25K, have 30% equity in this property and cashflow around 1K each month moving forward. This will be my 69th unit under ownership which that number is tempting to stay at ;) but I already have a SFH under contract to repeat this process!

Welcome to Wisconsin @Joe Marshall! We're glad to have you in our friendly and highly motivated state. I have a SFH in Racine that does very well. That city has seen massive growth in the past and it looks as if its growing in the right direction once again. Feel free to reach out anytime, i'd love to assist anyway I can.

From someone who invest in Milwaukee and surrounding areas. These past few years we've seen massive growth, which does make it more difficult to find the 2% deals. That doesn't mean they are completely gone though, you just have to search and network harder to find them. For instance, my company just completed a duplex in West Allis earlier this week that we now have no money in with both tenants paying $2,200/mo. We found this deal by establishing a great relationship with a well-seasoned investor in our same market. @Chyniece Cox I applaud your thread for creating this important discussion to give everyone more insight on where and what to spend your time on while trying to grow in this state.

Hey guys,

Someone reached out to me today in regards to receiving a HML of $200,000 for 5 years at 15% annual interests. I personally don't have the money to lend him but I have the resources to syndicate and raise that much. I need help structuring the deal with my personal compensation. Do I take a fee of the top? charge it to the investors or person wanting the HML? do I approach my investors with a 10% return and take the 5% for myself? it would be 30K over the course of 5 years. I would like to see what suggestions you guys have for this specific situation. Thanks in advance!

That's not true at all. If you've done any research you'd learn that limited partners in syndications receive anywhere from 6-10% (from cash flow, not appreciation). I know many syndicators that only offer 6% returns and they do very well. Look at the stock market over the years, i'd take 8% over 6-7%. My investors know this was a conservative 8% return. 

You may be thinking of real estate investors that invest in "themselves" and are responsible for putting everything together. Note, this is a 100% passive investment for my limited partners. 

Yes, Micheal I may be growing at a fast rate but please note I'm prepared to buy in downturns. I'm not maxed out and unable to make capital improvements and future investments in case of a downturn, in fact i'm moving at a steady pace and beyond ready to take full advantage of a downturn with the investors I have lined up, capital reserves, and most importantly the connections I continue to make. 

Congratulations on taking advantage of the last recession, it seems you were prepared and executed to your fullest, well done. 
 

Thanks for the advice Marcus. You make very good points, but please keep in mind i'm ready to buy more in case of a downturn. I will always have reserves. I also have a property management in place so from a capital improvement standpoint it's tough but I am always thinking of ways to receive more rents and improve the properties I own. Thanks again for your advice, I really appreciate you looking out. 

Every capital contributor is considered a "limited partner". You still need to use a syndication attorney for the SEC, loan approval, and just to make sure you are covered. I would highly recommend using an attorney for every large investment you make.  

Thanks @Luke Miller. I raised the capital through relationships made in the past that knew what I've been doing for the past 3 years. Once we ran the numbers and knew we liked this deal, I created a pamphlet that outlined important details and met with each investor to go over everything in depth. As expected I was denied on multiple occasions, but in the long run I was still able to raise enough to close.