All Forum Posts by: Eric Hempler

I'm in the Minneapolis market and I'm aiming for an 8% Cash on Cash Return. 

I'm buying for cash flow and I'm coming up with about $75K per unit while the comparable sales that are listed are about $150K per unit.

I'm not sure but it looks like most deals are selling for twice the price per unit they should be OR people are buying at negative cash flow, making large down payments or my numbers are way off. 

I'm also just getting started with looking at deals, but I feel I understand the material well enough to work through a model and put something together. 

Although, I do recognize the need to find a spot I can run my figures by to see if I'm overlooking something. 

I'm looking at Michael Blank's mastermind...any other recommendations? 

I'll try to be as detailed as I can to see what recommendations you might have for how I could get my first deal. 

I'm most interested in apartment buildings and retail spaces with strong tenants. 

Background

I've flipped a few homes in the past

I've worked for my dad, who is a commercial appraiser. We mostly appraised apartment buildings. I've worked in accounting for the past 20 years mostly for real estate companies. Could do the entire accounting process including month end and asset schedules. I have access to a real estate tax person, but I primarily do the bookkeeping and accounting and save the taxes for someone with a little more expertise in that area. 

I have a list of real estate owners I've been able to put together and leaning toward contacting them to see if they might be interested in selling. 

Unfortunately, I don't have any cash to put into a deal. I have a home, but can't access the equity due to how we structured the loan even though I'm on the title. 

Right now I'm trying to figure out how I could acquire my first property and looking for some ideas on what this community recommends. 

That sounds good. 

Right now I'm thinking through how I might structure the first deal. 

I have a list of properties and owners. Just thinking through a few things

I'm looking for some resources to help me determine the compensation to investors in a syndicate. 

Attached is an example of what I found from someone else. 

Since I'm looking for my first deal, I would be contacting people I know and pooling the money together. I'm unsure if the above example would make sense in this situation, but I'm primarily looking for a resource I can use as a guide to help me determine the compensation I would come up with from those I borrow from.

I've worked in accounting for a number of years not and coincidently it's been for real estate companies. 

I've flipped a few homes and worked with my dad when he owned an apartment building. 

I've done the appraisal side as well, mostly apartment buildings. 

I started learning more about private money and that lead me to something I hadn't heard of, syndication. 

I recently read, How to Legally Raise Private Money by Kim Lisa Taylor. She also has a marketing package that can be bought. 

I've also come across goodegg, which also has marketing mentoring to sell. 

As I'm looking at all of this material I'm wondering if it would be better to work with/for someone that is running syndication or do need to find good partners to start my own? 

I'm thinking about what step I should take next. Might be a thing where It would make sense to sit down with someone and explore the different options.

ok...I think I'm finding the private lending course I took might be slightly dated. This means, that what I should be searching for is real estate syndication info. This seems to tie into some of the previous comments about different equity positions and returns. 

@Percy N.Not sure we're using the same definition for Private Money. 

When I say private money I'm referring to individuals and not businesses. 

The other thing to keep in mind is my intention is to buy and hold. 

I plan to invest in multi-family buildings and small retail spaces.

Ideally, I'd like to have private lenders that are long-term.

I'm looking to streamline this a little bit, but still trying to nail down an approach that might make sense. 

The way I was thinking about it is I used Bankrate.com and looked at the different term length they had for CDs

On a monthly CD it's 0.2% on Bankrate, adding 3% to that would be 3.2, rounded up to 4% (I can see where this may need to be higher due to inflation....maybe those that receive a monthly payment should be 6%, that way it's twice the inflation rate?)

The longest term had 3.5%, adding 3%, bringing it to 6.5%, rounding up to 7%

I'm leaning towards offering 4% for those that want a monthly payment and 7% for those that are interested in letting their money grow. 

yes, these would be private money lenders

My rationale for using Bankrate is it's using data from several banks and I can see who's offering the highest. And it's also easy to navigate and find the info I'm looking for.

I'm not sure what other sources I should take into account, but this is the starting point I've been playing around with. 

In looking at the stock market, I see one source says it's about 10% a year..how many people are actually receiving that though? 

This is the area I'm trying to iron out right now. Otherwise, I have a pretty solid accounting background for this. 

I talked with an SEC attorney last week and he said you can really do it just about any way you want. I'm really trying to nail down something that makes sense without additional items like points, the share of the investment, etc. It's just a dollar amount and I pay simple interest to use those funds. 

I'm open to other ideas, just seeing how simple I can make this before I look into other ideas. 

I would be contacting individuals to raise funds to purchase small rentals, apartment buildings, and small retail spaces. 

I was looking at rates for CD and trying to come up with some ideas I could offer. 

I'm leaning towards simple interest payments to the individuals of 

If they want a monthly payment it would be 4%. 

If they're interested in letting the money accrue I was going to do 

6% if they let it accrue 2 - 3 years and 7% for five years or more

I'm planning to buy and hold the properties. When someone is looking to cash out I would put another invester in place. 

I'm still trying to find a SEC attorney. Haven't gotten responses yet out of the 30 I've tried to reach