All Forum Posts by: Damian Leonard

@Craighton PoonJust remember what Robert Kiyosaki says, "There are three sides to every coin, heads, tails, and the edge." Do your own diligence, deals are everywhere, just depends on your strategy, experience, comfort level, and amount of time or money you want to spend, and if you want to go alone, or would rather just partner and get mailbox money as a passive. We deal with syndicates for larger apartment complex purchases, and hire the best property managers to run the day to day of the asset. If there is ever an out of town asset, that isn't performing it is up to the lead sponsor to handle the PM, so they have to be managed too. I could list several reasons to look outside of your area of CA. But I think you need to do your own research before making a decision. Appreciation isn't the only thing to look at, like Mr. Faulkner seems to be referring to, which is what CA, has but is the Cash Flow there for you if you buy big apartments and have professional managers? Cash Flow is still king and CAP rates in your part of CA for larger apartments isn't as high there, as it is in other markets. The CA market does have the appreciation others don't but we've seen that bubble pop before, so be careful with that. One important thing to consider, is the market landlord friendly? Can you evict if they don't pay? Or are they very liberal, and make evictions hard? Important items: Jobs, Growth, Low Cost of Living, Low Taxes, Low Vacancy, Landlord Friendly....I like to buy for Cash Flow 1st, as it is more predictable than appreciation. Find a good mentor that is doing what you want to do. I thought I was going to do it alone and buy small 8 plexes or maybe a 20 unit, but found out the returns are as good or better in big deals, and even as a passive partner. Sorry for the rant. Cheers.

Damian

@Hersh M.Connect and message me and I will share more details. There are many options to learn more about apartment groups. 

@Dennis SanchezI've found in apartment investing, that the banks look harder at the actual investment than they do you. So if the deal qualifies, and you are credit worthy, and have the money, they will do the deal, just depends on %down, usually 25-30% down works. Maybe find a small complex you can buy and possibly live in and rent the rest. Sounds like you are wanting to be hands on. If you prefer more hands off approach, we pool money with other investors and buy bigger ones than any one of us could do alone. Like my most recent one, was 216 doors and over $13mm, so a few dozen investors pulled together to get the deal done. There is a lot to it, but that is a quick run down. If you are swinging through DFW, touch base and we can chat more. Cheers

Damian

@Eddie T.We average about $50k per deal invested as a partner. Thank you

@Brandon TurnerThank you Sir! I do appreciate it. Love your podcasts! Keep it up my friend. I get a lot out of your interviews with other investors out there. Cheers!

Damian

@Rico S.I think they are totally different in many ways. For one is the financing, will be a little harder to get on a trailer park, and they might not loan up to 80% LTV, like they do in apartments. I do think the cash flow aspect of trailer parks is something that could be much higher returns, from what I have seen. They will be able to teach you the trailer park model, and if you like them and want to go that route and try it out, I say go for it. That doesn't mean you can't be an investor or buyer of apartments down the road. If I was located near a profitable trailer park, I'd be interested in it, if I knew I could get a good property manager to run it. Good luck!

Cheers! 

Damian

@Hersh M. I am involved/invested/partial owner/key partner in 5 deals in a year. It is still early to say exactly what the cash flow is while we are still renovating and bringing some of these properties up to market rents. We get monthly reports, but not monthly checks as passive investors, so answering your question is not as straight forward as you would get in a SF. Some will be quarterly distribution, some may take a year for a distribution while they are being turned around. These are mostly value add, and we are looking at low double digit cash on cash returns this first year so far. I'm getting distribution checks from two and returns are in the low double digit range, average about 11% so far, but growing. Does that answer your question? Happy to discuss further if you message me. 

 Ask me anything Aaron... I am transparent and will tell you I own from about 2%- about 15% of any one of those deals. Headlines are meant to grab attention, not mislead. I gave factual information, and as with anything online, there is more to any story if you dig a bit and ask questions. 

It is meant to be a discussion of possibilities and let people know it can be done. I don't have any alterior motives, other than to network with like minded individuals that I can learn from and bounce ideas off. and maybe meet a new partner one day. Braggadocious I am not. I didn't mention the skyscrapers and malls and hotels I own!!!!! In REITS, thanks for the reminder, forgot about those! 

Yes it is a bit of a pat on the back, but the forum is meant for some sort of this. I'd be happy to discuss anything and get to know you better and tell you about my journey. I'm a normal guy, and don't pretend to be smarter than the next. Happy to discuss if you'd like. 

Cheers,

Damian

 @Eric M. 

I knew I couldn't do this by myself. I seeked out local guys, successfully doing it already, joined one of the local mentors network and education groups, looked at many deals with many different deal sponsors, and chose the deals based on my comfort level of the deal and the deal sponsor. They are all group purchases, where the lead investor secured the deal, and syndicated it to raise the funds. All done above boards, SEC compliant, with lawyers, PPM's and all the legally required paperwork to do such a deal. The deals vary in size from 32 units to over 200 units, and price range from $1.5mm to over $13mm. The minimum investment was $25k, but the average was about $50k in these deals.  I've looked at some deals, where the leads were more experienced, but the minimum investment was $100-250k. I chose to diversify my funds across more deals, more sponsors, and gave up a little bit of experience, but they all had done something prior in MF. 

If I were to do anything differently, I would have set up my Self Direct IRA sooner, because it takes time, and when a deal comes, they don't wait on capital, you have to make a decision and take action or the deal will pass you by. Or I thought hard about paying the penalty and withdrawing it from the IRA. I probably would have Self Directed more in the earlier Passive Investments, and saved more of the liquid capital to do more deals as a Key Partner, and given me more liquid to do my own deals. I went a little backwards with the funds, but at least I have cash flow I can use today vs in retirement. So now we are left mostly with my wife's old IRA, and just enough liquid capital to do one maybe two more deals on our own right now, with out doing some no money down deal. But I think the lead should have skin in the deal, and when I say skin, I mean hard cash left in the deal, in addition to time spent putting it together. It is not how they all do it, and I don't belittle any that don't put their hard cash in the deal, or take it all out at closing. I just know what I would want from my lead, especially if they are a newer lead sponsor.

But all in all I took action, which is one of the hardest parts to get past. Just deciding to take a leap of faith, and spending money for the education, to have the mentor teach me some things I didn't know, and to build my confidence level to do deals. 

@Bobby NarinovWe are partners in 5 separate complexes with small groups of investors, the total doors across those 5 deals is 633 doors. This is common language in the multifamily arena. We own between 2-12%, depending on the deal. Each deal has a different deal sponsor. I am a Key Partner of one of the Fannie Mae deals, and a passive investor in the rest. Deals range from 32 doors to 216 doors. The most investors in any one of those deals is probably around 40 people. I'm looking to be a lead on my next deal, and have offers on the table waiting to see what happens next.