All Forum Posts by: Andrew Hogan

Thanks for the info @Demetrius Brown.

What do you think this means for multifamily this year?

Hi @Account Closed, welcome to BP. 

Once you qualify as an "accredited investor" it opens up many opportunities in the syndication / private equity world.

There are hundreds of forums on this. Perhaps try searching what others have previously discussed about vetting reputable sponsors.

As a general rule of thumb, you should be betting on the jockey, not the horse -- meaning, focus on the sponsor, their team, and ability to execute the track record ahead of attempting to underwrite individual deals better than folks who underwrite 24/7.

Happy hunting!

Quote from @Rodney Sums:

Quote from @Andrew Hogan:

There's a lot of uncertainty floating through the air recently.

When you speak to hundreds of investors each month you begin to notice trends.

With the recent down-turn in the stock market, speaking with investors recently has given me deja vu with similar conversations in 2020.

I'm seeing the most wealthy investors allocate much more heavily into tangible, cash flowing, inflation-hedged illiquid assets like our multifamily communities.

At the same time I'm seeing many smaller "retail" investors be more skittish. They want to wait for the stock market to go back up before investing away from the equities. 

Why do you think that is?

Doesn't it make more sense to cut losses and reallocate before stocks take a worse hit?

 I'd say the reason they don't do what the ultra rich are doing is because they're not as informed as experienced as them.

Investors interested in real estate likely share your sentiment of having a preference for real estate investments over the hopes of stocks going up.  

I'm willing to bet the skittish retail investors you have talked to missed out on the 2020 sell off or benefited from it and are hoping they can do it again.

 Each cycle in the economy presents its challenges and opportunities! 

Quote from @Nick Barlow:

@Andrew Hogan because the ultra rich consistently have spare cash as an asset, meanwhile on BP there is one post per week inquiring how to “invest cash reserves” …ya know, those holdings for short term emergencies where the timeline for compounding is comically irrelevant…for the best returns.

The ultra rich also aren’t W2 wage slaves, and as others have mentioned, focus on preserving assets, because they already have the scale needed to be FI.

It’s a great point you’re making, thanks for posting

@Nick Barlow, it's crazy how Apple, Google, Amazon, and the other largest companies in the world all have massive amounts of cash reserves but find ways to invest and grow with OPM "other people's money"

@Chris Mason the downside there is that REITS are just another form of paper or stock and doesn't have any tax advantages... unless of course you lose money lol

@Ryan Taylor

It's the government's way to try and protect investors from losing money or getting tied up in illiquid assets... but they allow you to invest in gamestop. Kind of silly but it's likely a large contributing factor to the growing wealth gap.

The SEC recently expanded the definition of an accredited investor. Look for other ways you coul qualify.

There are also vehicles such as a regulation A and a 506(b) offering that allow non-accredited investors. 

At the end of the day, you need to vet and make sure you're partnering with the right group that you would trust with your hard-earned capital.

Good luck!

@Jacob Rosenkranz

What's the risk associated with 31%? 

What's your comfort level / how aggressive are you willing to be?

31% is definitely doable but I would not feel comfortable with that being the expectation out of the gate but rather the pleasant surprise at the end.

Love it @Chris John. 

My comparison to 2020 was merely on the similarity with larger investors being less fearful.

If we're talking economics, a lot of smart people are debating whether we're in the 1970's or 1940's -- both of which were a time of high inflation and a great time to own cash flow producing assets.

@Evan Polaski I guess I'm just too much of a coward to go long on the stock market no matter the depth of my pockets :) 

Nobody has a crystal ball to know where the stock market will be in a month or a year as it fluctuates with market sentiment. 

As long as a smaller accredited investor has enough reserves, say 3-6 months of emergency money at hand, and doesn't want to lose their hard-earned capital, then cash flowing illiquid assets are a no-brainer to me. I've made some great returns in equities but don't understand or trust it enough to keep a significant portion of chips allocated there.

Also, not every smaller investor is deciding between real estate or the equities. Many are choosing between a syndication, or doing nothing at all and sitting on the sidelines in fear.

Perhaps what many investors need is to be educated on real estate? If only there were some sort of forum website that did that... 

@Scott E.

Totally agree there are deals to find in any market. The speculation and emotion can come from listening to all the noise going on.

I guess that example as from two specific investors that represent the larger group of fearful investors (typically retail investors) to me but ultimately to me there's people who charge ahead and those who want to "wait it out" but end up missing out.

It's that same fear that paralyzed some retail investors in 2020 while others (typically wealthier investors) weren't listening to all the noise and doubled down on their multifamily allocations.