All Forum Posts by: Daniel Spear

My experience with Three Pillars was 100% positive. I signed on to one of their prior deals as a Key Principal. That deal closed at the end of September 2018. It paid 1% in the first quarter after take over. It has paid about 2.75% through the second quarter after take over, so for this calendar year we are well on our way to getting above an  8% return.

The Three Pillars team grouped me with three other KP investors and offered us with an "overflow" deal that was too small for them. While we did most of the work ourselves, they connected us to mortgage brokers, an attorney, insurance brokers and offered timely advice throughout. They also went our of their way to connect us with existing investors. In short, I have never been so thoroughly set up for success in any aspect of my professional life. My partners and myself closed on the building last week and are well on our way to growing our own real estate careers. 

So I was a Key Principal on a Three Pillars deal  and I did not sign on the mortgage note or put up any of my own  net worth or liquidity. That came from the TPCG principal team itself. As a KP I was not subject to any mortgage risk.

I'm not sure how other companies structure their KP opportunities, but at Three Pillars mortgage risk was not part of the equation. 

Hello:

Are there any recommendations from the group for the best bank to set up a business account with?.  I am looking to mostly do real estate syndication while also possible wholesaling some smaller deals that I might get through direct mail but won't have the ability to execute. I do a lot of banking through capital one, and they have good products; however, I want to be able to have some face-to-face relationship with a local bankers, as well.

I will mostly be using the bank account for normal business expenses, generally training, travel, direct mail and modest (I hope!) legal expenses. I intend to store money in a savings account from rent and from wholesaling.

I have also heard from a few people that they were able to get a meaningful chunk of cash ($3,500) when they opened an account to start their house flipping business. If anyone knows the trick to getting an early infusion like that, I am all ears!

If you have money to burn I strongly suggest researching various real estate training programs and then investing in one. A good mentor will help you sort through the different kind of investments that you want to make and help you gain the skills necessary to make good investments. I would recommend REMentor, but there are many out there.

I have a very promising 11-plex that I am looking to partner with investors on. One key piece that I am missing is a more experience investor to sponsor the deal. Does anyone have any suggestions on how to find sponsors? I do know that lending can be complicated with a sponsor and a less experienced person on the deal, but I know a good lender to go through, so I am confident that it will be possible to overcome that obstacle.

In addition, this is a relatively small deal. It is not a 100 unit behemoth. Are sponsors willing to go in on smaller deals?

Finding investors for my multi-family deals is a challenge. I have seen a few accredited investor list services for sale online. If I have to plow through a ton of cold calling to get my investors than so be it! :) Do any of you have any experience with accredited investor lists? I would appreciate some feedback before I invest money and time in the getting a list and then calling the people on it.

Guaranteed was my word. Not an accurate one. Basically, I took this as the ability to use the cash flow to offer a good return on a potential investment of XXXXXXX dollars + the balance of the existing mortgage would = the proposed cost of the building. However, the disinterest in simply offering price guidance seemed odd to me.

Thank you all for the feedback. The seller seems to be using this as a proxy to establish the price for the building. This seems unusual to me. 

Hello:

I have been talking to a multi-family property owner who has said that he is considering selling equity in his property to an investor for a guaranteed return. This seems like a great way to leverage your cash flows to get immediate equity out of a building. It is also an interesting way to create valuation for a building. Basically, you take the existing mortgage amount and add however much it would take to keep the investor whole in his or her return.

What are the downsides of this approach? I imagine that the legalities are complicated and if the building fails to cash flow at the expected amount or the owner needs to sell and cannot get the assumed equity out of the building then the investor might be unhappy. What sort of risk premium is typically applied to this sort of practice?