All Forum Posts by: David Thompson

Hi Josh,

Darn, I wish I received this in December as I was in your country just a few weeks ago.  Great place, friendly folks and lots to do.  Scuba diving in the Great Barrier Reef was definitely a highlight of the trip !  I did actually meet a BP investor in Melbourne and we chatted about MF investing.  We are doing a lot in Texas.  I'm also from Phoenix but not connected there in MF at the moment. 

More than happy to give you some tips on where to start so just reach out.  I guess my first question is are you looking at this from trying to put together a team locally in the states and be active or more passive approach thru syndication?  Lots of things to think about but being so far away seems like passive would be a great place to start.   Earn and learn as a limited partner. 

Agree, read some good books "Steve Berges - Complete Guide to Buying and Selling Apartments" and Dave Lindahl's MF MIllions are good starting places.  Some starter blog articles to get you thinking about this area from a passive investor standpoint (Investing from Abroad; Why I Like Large Apartment Investing; and 25 FAQs on Syndication).

https://www.biggerpockets.com/blogs/9145/54830-inv...

https://www.biggerpockets.com/blogs/9145/53820-why...

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

Hi Mushfiq,

I'm aware of some emerging opportunities that would take some non-accredited investors. Please send me PM for more info on what you are trying to achieve to direct you correctly. What I think you are describing is a preferred return. Many deals will offer say a 8% pref to limited partners which is not a guarantee, but the next best thing in that the LP get paid first any distributions from monthly cash flows or capital events (refis, sales) before the GP get their split cut. Most do returns on a monthly or quarterly basis. Most min investments are at the $50K level. Returns typically are 8-9% CoC and 16 - 18% IRR in this market for value add plays.

FAQs on syndication may help you understand this angle (link below to start).  It sounds like that may be one avenue that might work for you.  Some are geared towards accredited investors and some take a handful of non-accredited.  There are crowdfunding sites and private deals thru knowing the sponsor / relationships / referrals as most don't advertise due to how they operate legally.

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

David,

I get into commercial RE, learn, invest there.  Quit monkeying around w/tweener stuff.  Think big.

https://www.biggerpockets.com/blogs/9145/61278-wor...

Hi Louie,

Great, work together and do some research on MF. Syndication is a good place to start if he doesn't have experience.  Partner vetting, and finding deals in strong markets, conservatively modeled / assumptions and experienced team are important.  Here's a few articles to continue the learning process.  I'd also advise looking at spreading some of that into multiple syndicates, geographies.  Value add a must.  There are other types of niches that have fairly good "all weather" holdings such as mobile home parks and self storage.  It all starts w/having a strong operator, doing your homework and patiently moving into on opportunities.  These are fairly illiquid asset holdings so make sure he understands that as well.  

With this much capital, he might even be able to play into the GP side of things as another angle.  With proper vetting of sponsor, even look at leveraging this wealth by being a guarantor on a non-recourse loan to gain GP fees / equity.

Vetting a sponsor, why I like investing in large apartments and 25 FAQs on syndication......happy reading.

https://www.biggerpockets.com/blogs/9145/53820-why...

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

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

Hi Tim,

The quick answer is you are evaluating the market, the deal and the team.  Strong markets, conservative modeling / assumptions and an experienced team.  Here's some deeper thoughts on it.

https://www.biggerpockets.com/blogs/9145/66259-apa...

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

Hi Ricardo,

I like syndication deals as a limited partner in large value add apartment plays in some of the strongest markets like DFW, self storage in SE markets and mobile home parks nationwide. We have lots of opportunities emerging in 2018 that you can play across niches, sponsors and geographies. CoC in the 8-10% range, w/IRR over 3-5 year typical holds of 16 - 20%. Couple blogs to get the wheels turning.

https://www.biggerpockets.com/blogs/9145/53820-why...

https://www.biggerpockets.com/blogs/9145/54155-sel...

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

Look forward to attending and networking w/some great speakers, peers and new attendees in the areas I focus on including MF apartment syndication, self storage, mobile home parks and capital raising.  Had a great time at last year's event. Like to see some new BP friends come check it out like @Annie Dickerson@Spencer Hilligoss@Weina Shi

Kevin,

You are probably looking at low 5 caps in DFW where we are focused on value add properties in the A- arena. There are some solid plays in the strongest submarkets w/an exit in the high 5s in 2-3 yrs. I don't see anything short term that derails opportunities in these markets. With conservative underwriting we are still seeing upside in the 8-9 % CoC and 18% IRRs with opportunities for supporting higher returns w/supplemental loans end of yr 2 upon successful re-positions. Don't shop specifically by cap rate. Look for strong, experienced players that can add value in coveted submarkets w/n the strongest overall markets and can ride out downturns when they arise.

Acquisition fees and asset mgt fees keep the engine running from the beginning thru the hold period, the real money is made by the GP at sale or some portion at refinance / supplemental loan when property renovations are complete / value optimized.  Back end loads in the 80% of compensation is what I see a lot.

In general, most of the investors I talk with, going beyond 5 years is not something that excites them unless the market is down and we need to hold longer for the upswing.  Keep in mind, thru 1031 exchanges, investors can accomplish a lot of the same things as a longer term buy n hold strategy.