All Forum Posts by: Daniel Reyes

Hi again Kelly,

I'm happy to see all of the feedback you have received! I'm encouraged by your willingness to jump into this without the conventional accounting/law background by the way :). I was interested in circling back one more time to your original reply:

Yes, for these dynamic calculations (capital infusions/draws, etc.), it may be in your best interest to set up the waterfall tranches in Microsoft Excel. You will be in good company, as many institutional investment companies in real estate portfolio management still perform these kinds of calculations in Excel. And if you are maintaining the income statement in Quickbooks, you will be able to "close out" net income to current year retained earnings once per year, or more often if you prefer (in other words - move net income from the income statement to the balance sheet).

I do have a general question for you: are your partners subscribing to the fund, or LP, via a Private Placement Memorandum, and/or do you have an LPA (limited partnership agreement)?

Please feel free to send me a PM or reply here if you prefer. The setup of this on an informational level in Quickbooks can be made simple. We just need to ensure the income statement is structured to work in tandem with the balance sheet, not completely separately. A wise man used to ask me, "does your balance sheet balance?" ;)

Thank you!

All the best,

Daniel Reyes

@Daniel Soyars Hopefully not too different as your idea is a good one 😉. Feel free to send me a PM, we can discuss more! Thank you, Daniel.

@Mark Dolfini I think it illustrates the point nicely, I agree 😁

@Justin Fishman This is a great analogy! I’ll put this one in my pocket, lol. Thank you, Justin.

@Don Konipol Thank you, Don! I certainly appreciate the portfolio management/investment monitoring level you included. So asset management is a strategic role enabling a solid return on the lifecycle of the individual investment, and portfolio management is concerned more broadly with asset allocation and risk management. Love this, thank you.

@Seth Nadreau Thank you, Seth! In other words, PM keeps the doors open, and AM is coming alongside the investor to lead ROI. Very good.

@Daniel Soyars Hi Daniel, Great name, and really good question! Thank you for posting. Yes, this is called real estate syndication. You can be the Syndicator, and form a limited partnership with other investors. The correct way to do this is through a real estate syndication or a securities attorney. The idea is a good one, just ensure you have at least one attorney and accountant to work on the formation of the business. Please feel free to connect with me if you have any other questions. I am happy to help! All the best for you and the family. Nothing to be nervous about 😊. Daniel Reyes

@Jason Dixon Hi Jason, Thank you for posting. More importantly, thank you for serving our Great Country! I would be cautious to put a 10-15% ROI in a legal agreement, especially without first defining precisely what “ROI” is really referring to. Is it return on initial equity? Over what period of time? Is there a waterfall distribution being done after sale? These are a few questions that first come to mind. You’re wise to want to deliver and not over promise. This can be one of the trickier parts of investing with family. On the other hand, your uncle will be hard-pressed to find any investment manager willing to guarantee returns; they are far and few between for good reason. If I were you, I would offer him a percentage of profits on sale. But you don’t want to infringe any securities laws! So please make sure you consult with a syndication attorney first. Please feel at liberty to reach out if you need any more help. Happy to connect! All the best, Daniel Reyes

@Angelina King Hi Angelina, Thank you for posting! Yes, with regard to lenders, it’s much simpler to get a loan once they get to see your professional experience. Essentially, they want to know you present a low risk of default to them, so they’ll ask for seemingly arbitrary items like this. A solution I would propose is to find a different lender to work with. There are other mortgsge financing companies that are more willing to partner on deals like this. Perhaps even consider a non-bank lender. Of course, please feel at liberty to reach out to me directly if you would like to discuss further. Happy to connect! All the best, Daniel Reyes

@Nicolas Beck Hi Nicolas, Thank you for posting! I agree, you’re likely paying retail for the property insurances. Ideally, you would have a master policy to cover all of them, and acquire a discount from the provider for the quantity. Franklin Street in Tampa, FL does deals like this. Please let me know if you would like me to put you in contact with anyone or if you have any questions. Happy to connect! All the best, Daniel Reyes