All Forum Posts by: Darrin Yon

After my first one I felt utterly wrung out! My husband joked that I didn't need to do all the hard things on the first deal But they don't really get easier, just different problems to solve.

Our first was a small 506(c) syndication for a 50-unit in SE Idaho. I found it on FB from a local friend who was thinking about selling it and just posted: it pays to have a network doing what you want to do!

Since then, we've done more deals as joint ventures with a couple of big check writers, and last year started closing deals as a club that pools our cash and negotiates for better terms, kind of like capital raisers, so we are small % non-managing members to help on asset management and protect our investment: when you bring in enough cash, you can choose what job you want!

After months of rejected funding, finally got a 250k HELOC. I've been looking for weeks, there's literally nothing out there cashflowing enough to pay Loan, HELOC, management, and all other rental expenses.

I fear it may be too late to enter the game at this point. If anyone has a legit portfolio or other cashflowing homes that aren't rehabbed, ductaped 30k projects, I'm ready.

Raising money is not easy. Especially when you don't have a big track record.  On my first equity raise I was lucky enough to have a partner that had experience, so I was able to leverage his experience to raise the capital.  This is a good strategy to maybe follow.  Find a partner with experience that can help you on the raise..

@Darrin Yon, you are right!  The first deal is really tough.  You have to keep the faith that even if the next deal doesn't close, there will be others after it.  Be sure to build relationships with fellow investors and syndicators and treat everyone well.  This is a team sport and people have to know, like and trust you and vice versa.  Networking is critical.  Also offer to help others in their deals, even if you don't get compensated, as long as you learn.

I built a team of GPs who had been LPs and had raised small amounts for other syndicators' deals, then we found a deal ourselves and had others as GPs in our deals in return for helping with asset management, loan co-signing, capital raising, etc.  Adjust your target deals to the capabilities of your team.  And if your team needs expertise of a certain type, keep networking, attending meetups, conferences, etc. to find a partner to fill the gap.

Good luck!

 @Darrin, by Capital Stack, I mean all the funds needed for the project to be successful.

e.g. Sr lender will be 70% of the capital stack, LPs will be 25%, GP will be 5% of the project.

So for a $15mm property purchase, the lender would bring $10.5mm, you (the sponsor) would put in $750K and raise the other $3.75mm (plus any additional working capital, capex, etc).

It will be hard for a first-time sponsor to find a single equity partner willing to write a $3-$5mm check.

There are various ways to structure raising funds from multiple investors, a popular one being a Reg D syndication. 

The loans are typically non-recourse and not considered a contribution by the sponsor per se (at least not an equity contribution).

Depends on what you want your role to be. Typically the 3 biggest roles are finding the deals (marketing to brokers or sellers and underwriting deals), raising cash for it if you're using some additional OPM, managing the deals (or managing the property manager). If there's value add there's also possibly construction management but some would say that falls into the asset management category. 

Once you find what you want to do or like to do, look for partners who fill in the other gaps. Nothing beats in person networking in my opinion, my best results have been in masterminds or conventions that costed a bit of money to attend. 

 Equity partners look for:

1. Preservation of capital

2. Someone with experience, integrity and can communicate

3. Preservation of capital

If you are looking to raise $, investors want to see a proven track record, a thorough PPM to understand the business plan, terms, risks and details of the deal.