All Forum Posts by: David Thompson

Brian,

My experiences with an ongoing capital raise right now is the following 3 keys to success:

1) Right Market - is it a market over $250K MSA  where jobs and population growth are strong w/ good job diversity.  Catalyst:  new company HQs moving in like we see in N. Dallas w/Toyota.

2) The Deal - is it a great deal? Bought well under comps for similar B/C class of similar age, unit # sold w/n last 18mos and rents below comps in the area like our case. Room to raise rents to just below market to achieve 10% CoC and + 20% IRR w/5yr hold. Conservative underwriting.

3) Team - track record of sponsor. 10% CoC and 20% + IRR. Sponsor puts money in own deal.

I was able to raise $1M in two weeks w/a deal like this w/a network that came mostly from:

a) Personal contacts (work, friends, etc)

b) Bigger Pockets

c) Local Multi family meetup.

Hi @Mike Wire,

Yes, we are active.  I will PM you for discussion. 

Great work Brian.  For those who missed Brian's deal, we've one upped him w/a 320 unit in north Dallas, TX that we are working on funding.  Give me or Joe Fairless a shout if you'd like some education on this deal.  Toyota moving its HQs from CA to TX 10mi from community will be icing on cake.  Dallas one of the strongest job growth, rental growth markets in the country.  Rents 20% below market, solid B - to reposition to a B+ in a A area demographic.  Great value re-position play.

Real estate is unique, deals are unique, local economies are unique.  Case in point, I have a friend who is working w/3 builders in and around north Houston, ground zero for oil crisis if major MSA is criteria.  Exxon is moving its headquarters there and hence, a ton of jobs.  Jobs and increased population drive local real estate and unique real estate plays.  I called him expecting the worst the other day and he says his business is still thriving.  

I am working on a large apt syndication in north Dallas right now.  Same thing.  Toyota is moving its NA headquarters over the next 1-2 years in north Dallas.  This will create 4500 jobs in the area at an average salary of $104K and an economic impact of $7.2B.  That will drive the opportunity and the deal success.  Go do the research and find where jobs and pops are moving even w/n bigger cities (sub markets) that you have heard about for many years now and think just must be topped out...ain't necessarily happening.

Ironically I had conversations with two folks over the past few days who have significant gains in property sales and are under pressure to decide where to reinvest.  The more sizeable the gain the more challenging and increase risk of rushing to select the wrong property given the 45-day identification rule. One person had a large land sale and essentially is at a time in their life where they just don't want to hassle about running around every weekend frantically for 6 weeks looking for something else to invest in and appears willing to just pay the taxes.  The second person had a large gain from a home on the west coast and is more active, wanting to look for a small apartment community to test their management skills outside the state. Talking to this person I could hear the frantic tone in their voice on what to do.

I was talking to both of them because they are both accredited investors that I have an existing relationship with.  Neither had thought that there are some passive opportunities to put some of their funds into solid apartment syndication deals using the 1031 exchange.  Developing a relationship with these sponsors would be wise, getting their newsletter, etc and keeping up on deals that are in funding stage.  Deals come up that may fit both the strategy and timing to move some money into these offerings.  By splitting funds up or giving some breathing room, its a strategy that I think works and not a lot of folks are aware that they can use 1031 exchanges to invest in a partnership or syndication deal.

Jorge,

To add a bit more confusion, in commercial space we talk about Class A-D property and Class A-D location.  For apartments, one of the best strategies for re-positioning (moving from a lower class to a higher class property by renovating it) is to select a C class building and re-position it to say a B class in a B or A class neighborhood.  You get a lot of value add by doing that.  What you don't want to be doing is buying in the opposite direction.  In other words, you don't want to buy a A/B class in a C neighborhood.  Pretty soon your A/B class will look like a C class.  

Hi Chris,

Yes, I did go to your website.  I know you like craft beer and I have a craft brewery business so I mentioned that.  If I sent the wrong message to another person by mistake then please disregard.  I'm all about education and sharing.  There are many folks that have no clue where to start.  Either education, connections, etc.  

Hi Chris,

I've talked w/BP reps and due to strict SEC laws posting deals on the site is not recommended.  I know crowdfunding sites offer some deals like this but to sign up, you have to fill out some information including your accreditation status.  You can check track records but you have very little opportunity to get to know the sponsors, talk to them and gain confidence, trust and learn your criteria.

Understand experienced sponsors of apt deals like to work in more subtle fashion on the BP site and build relationships which is the right way to go.  I for instance would contact you offline and have a conversation with you first about who you are, your real estate goals and objectives and what might be suitable for you.  We would also ensure you are accredited to look at deals.  I would then keep you informed, perhaps send you a newsletter which offers more education on apt investing and may mention from time to time deals that come up you may want to review and participate in.

There are some great deals and great sponsors with excellent experience that are BP members.  I'm more than happy to talk to you about what I've learned along this path and get you to the right folks with deals.  There are also some great coaches and learning material should you want to eventually do this on your own in a more "active" role on smaller apts or syndication w/larger apts.   We can also discuss that once I understand your objectives more.

I have some new consyruction duplex and fourplexes ideas for you in good areas of NE San Antonio. SA has all the marks of a solid growth market (2016 Forbes top mkts for investors). Can share mkt data. PM me to understand your objectives and can share pics, financials. Experienced Prop Mgr in place that several BP folks are using w excellent results. Great for out of state passive investment. CoC 9% and mid-teen ROIs leveraged. New brand new construction, no R&M to worry about for some time, hi mkt rents as renters love new. Nice features in home. I own several myself.

Hi Baron

I know a developer in San Antonio that focuses on building sites for duplexes and fourplexes.  PM me and I can put you in touch with him. I met with him last week ironically to checkup on some builds he's doing for me so he knows me well.. He's  knowledgeable, experienced E2E and TX friendly.