All Forum Posts by: Dave Morgia

Hey Daniel,

Would be worth reaching out to my friend Eric Upchurch over at Active Duty Passive Income, they set people up to invest with their VA.

Dave

@William Washington Like everything else there isn't a one size fits all answer. While a +\- 8% pref is more of the industry standard the number should also be derived from the details of the deal. Coming in with a higher pref to entice investors since you are new may have the opposite effect if you don't have the cash on cash to support it. An investor may at away if you have to raise additional capital up front just to cover the delta between the investor pref and annual CoC return. With that said if the bidding plan supports a higher pref then it definitely could be a good way to get the deal funded.

Hi @Amit Shah. The best thing to do in my opinion would be to speak to an insurance broker in your area. Your annual insurance premium will be directly affected by the flood zone you reside in, and the broker would be able to pin down the costs associated with that.

This makes much more sense Michael, using vertical integration to reduce costs essentially is delaying payment to the PM and construction arms until the refinance. Thanks for clarifying

Without seeing a specific deal @Michael Ealy, I would assume a deal with a project IRR of 40%+ would be a pretty intense project with a very high risk profile. In your example, you choose to do a 20% NOI reduction across both investments. To me, the deal with a potential for a 40%+ IRR would have to have a much larger downside potential compared to the first, otherwise the risk reward profile doesn't make much sense. And if that's the case, offering the 70/30 deal for a projected 18% LP IRR with a lower risk profile should be more attractive than the 30/70 deal with the same projected LP IRR. I suppose a higher cumulative preferred return could help mitigate this, but again, hard to say without numbers.

Great discussion though, would love to hear your input on the types of projects you're accomplishing this model with.

Hi Chris, where in NY are we talking? I'm from Central NY region and now live in NYC, depending on where you are investing I may have some input.

@Steve Veen:

As @Amy Wan said, you need to be very very careful when proposing to bring equity to a deal in exchange for part of the GP equity. This alone is illegal because you aren't playing an active role in managing the deal; you are essentially acting as a broker without a securities license. What you can do, however, is bring skills/duties/responsibilities to the table in exchange for that 'slice of the pie'. Keep in mind, the role you play should be commensurate with the portion of the GP equity you are entitled to since legally that should be the only determining factor in your cut. The LP equity you bring to the deal should technically be just the icing on the cake.

My team based out of Manhattan syndicates 100+ unit apartments in Florida markets (Tampa, Jacksonville, Orlando). I see you also invest in Binghamton, I went to BU. Message me if you'd like to connect. 

I do the same. Send me a PM if you'd like to talk shop 

@Greg Corbett what type of multifamily are you typically involved in?