All Forum Posts by: David Thompson

We invest in both niches comfortably knowing that there are operators who know how to acquire, operate and create value in both MF, SS and MPHs.  Our experience is there are definitely similar deductions you see in MF such as property taxes, interest on loan and depreciation on the building.  

Self storage during the last financial crisis held up better than MF and just shy of MPHs which the latter actually was the only niche that experienced an increase in NOI. The operator in SS we work with (top 25 in U.S.) across their portfolio made money during 2009. Here's a couple links to learning more about the track records of these niches and how they hold up in tough times...including 5 reasons we like SS.

https://www.biggerpockets.com/blogs/9145/74876-gro...

https://www.biggerpockets.com/blogs/9145/70861-top...

I like these 3 for starters based on historicals and how they hold up better than other niches during downturns.  Start there.  There are certainly other factors to take into consideration once you've identified a niche including the specific market, deal and team to further minimize your risks.

https://www.biggerpockets.com/blogs/9145/74876-gro...

https://www.biggerpockets.com/blogs/9145/66626-why...

Andrey,

Here's 10 tips on vetting a sponsor that may be helpful and 25 FAQs that I get from investors that might get the wheels turning.  Ultimately you will come up w/your own take on what's important for you.  The good news is that once you go through the process of finding a good sponsor/operator, you are then mostly evaluating the opportunity (market / deal) itself since good sponsors (integrity, character, conservative underwriting, etc) should be consistent.

https://www.biggerpockets.com/blogs/9145/53959-vet...

https://www.biggerpockets.com/blogs/9145/65780-syn...

Hi Steve,

Vetting a sponsor especially if this is your first exposure with this group is key.  Here's a blog on 10 tips for vetting a sponsor and 25 FAQs you might consider asking as I receive a lot of them.

https://www.biggerpockets.com/blogs/9145/53959-vet...

https://www.biggerpockets.com/blogs/9145/65780-syn...

Andrey,

Once folks get started in syndication and learn more about how it works it is easy to see why folks continue down that path.  Most of my investors are very busy people, appreciate real estate but don't want to be "doing" real estate in their limited spare time or simply like some active real estate that they are doing locally but want to get into other niches and geographies to diversify.  

You may want to explore other REI niches that have performed well over the long term yet offer solid downside protection on pull backs that come from time to time. Here's a recent blog to get you thinking more broadly such as self storage and manufactured home parks.

https://www.biggerpockets.com/blogs/9145/74876-gro...

Mobile home park investing is my favorite asset class for a variety of reasons including the report mentioned.  It can be played via syndication which makes a ton of sense as many are focused on turning around operations as a pool of parks which diversifies your risk a bit more.

https://www.biggerpockets.com/blogs/9145/74876-gro...

https://www.biggerpockets.com/blogs/9145/62927-6-r...

Hi Ashley,

I have big time experience raising capital for syndications.  I've written blogs and been on 10+ podcasts talking about the essential tips.  Here's a couple of key tips for starters.  More nuggets in the blogs that follow.

1) Partner with experts.  That is my number one tip.  If you raise capital on deals as part of the syndication team and those team members have a demonstrable track record or members of the team have solid experiences you are way ahead of the game.  You may need to lean on the property manager, others on the team, but its key.

2) Thought Leadership.  This takes time but if you are going to be a capital raiser and make this a business (it's an incredibly attractive business btw) , don't look at it as a transactional experience.  You need to develop your own credibility by doing a variety of things around increasing your credibility.  It could be blogging, podcasts, newsletters, etc educating and giving away free content to build up your investors interest and database of investors / prospects.

3) Be yourself (authentic) - speak simply, clearly and stay on point about the opportunity and business plan.  Focus on why this deal is in a good Market - jobs/pop growth  / Deal - conservatively underwritten / Team - experienced.  Be in your investor's shoes.  Most investors are interested in cash flow, when they will get paid, when they will get their money back, how will you communicate with me, etc.  Develop FAQs and be confident. Focus more on developing a relationship than selling.  Don't sell period !  Educate / inform / provide the opportunity / ask for them to partner with you / show them how...its that simple.

https://www.biggerpockets.com/blogs/9145/67627-rai...

https://www.biggerpockets.com/blogs/9145/72807-how...

https://www.biggerpockets.com/blogs/9145/65780-syn...

Hi Cherry,

If you are an accredited investor and looking at all your options, you would have plenty.  You mentioned crowdfunding, nothing wrong w/that as that introduces investing in syndication which I like a lot.  Keep in mind it's you and only you evaluating deals online.  You may also like to talk with someone who sees a lot of deals and works in several of these niches to provide you some education and learn more about you to help guide you to the most appropriate investment opportunities.

SInce I'm in the syndication business and talk with a lot of investors, I write FAQs, blogs, and special reports so I can educate more investors in an efficient way.  Here's a couple of ones that might be appropriate as you look into this area.  

10 tips on vetting a sponsor

https://www.biggerpockets.com/blogs/9145/53959-vet...

25 FAQs on syndication

https://www.biggerpockets.com/blogs/9145/65780-syn...

The 3 best niches now for downside protection

https://www.biggerpockets.com/blogs/9145/74876-gro...

Wish you the best !

Hi Matt,

I'm local.  If you'd like to get an overview and lay of the land on syndication let's grab a coffee.  Here's a blog on 25 FAQs I get from investors on syndication.  Good place to start.

https://www.biggerpockets.com/blogs/9145/65780-syn...

Scott,

I think ultimately whether you feel you are more active, passive or a hybrid investor, most serious long term investors will often do both and over time, more assets likely will go to passive investing. Active gives you control of the asset (maybe that is small SFRs close to your location) , gives you some real world experiences to know what that feels like, especially if you are your own property manager to start. However, most investors I talk to go thru the SFR property experience and then after really understanding its limitations like a second job especially at turnover time (lack of scale, time, hassle) and then see they can get even better returns w/experts and save their weekends for more enjoyable family activities will do the shift. I still keep some SFRs in my portfolio for the control aspect but not adding to that position.

Passive syndication would give you access to experts, niches and geographies you know you should be or want to be in but don't have the time, expertise or even interest to be active.  This can diversify you, lower your overall portfolio risk and enhance overall returns if done correctly.  

Here's 10 tips for vetting a deal sponsor you may find helpful if you go this route.

https://www.biggerpockets.com/blogs/9145/53959-vet...

I also like these 3 syndication niches.

https://www.biggerpockets.com/blogs/9145/74876-gro...