All Forum Posts by: E. C. "Stony" Stonebraker

@Trent Hicks, I agree with @Alicia Marks.  She has a number of good recommendations.  I also recommend you hire an inspector to give you an assessment before you negotiate a final deal.  Try to get one who will explain what he is looking for to you as he inspects the property.  Then, whether or not you get the deal, use the estimate report for this and future properties to learn how to estimate repairs and rehabs yourself.  

Good luck to you!  It looks like you are on the right track.

@Donald Howaniec.  It depends.  Are you talking about a Delaware Statutory Trust or a Deferred Sales Trust?  A google search will turn up a number of firms that can help you and have tutorials explaining more about them and the details to set them up for you.

@Jonathan Bell, some good advice from @Aaron W. and @Jared Prevost here. Recommendations will also depend on your goals. Do you want to start out in smaller properties or work with an experienced syndicator to learn the business of larger investments? If the latter, meet with brokers, explain your situation, and ask them if they know investors who might be open to helping a new investor by letting you help them in whatever role they have. Most people I know starting out have attended CRE events and, over time, found compatible partners to work with who have complimentary skills and different levels of experience. There are also lots of good (and some not so good) coaches if you want to get a jumpstart in learning and meeting fellow investors. Contact me if you want to talk further. Good luck!

@Chrissy Severance, if you want to continue and grow in investment real estate, I’d recommend you pursue the CCIM designation. Check the website at CCIM.com and look over the topics for the courses.  It’s very valuable for any commercial real estate and investment properties.  Contact me if you want to discuss it further.

@Maria Makkas, keep looking, but have patience.  We are in a long term growth market cycle which doesn't have clear indications it will slow significantly.  Plus, the whole real estate business is changing because many more people have access to information about investing in real estate than ever before.  So it is very competitive.  

Acquisitions of a few years ago which seemed overpriced, are now trading at even higher prices.  I think this will continue for a few years because of mutliple demographic trends and the information age.  But for how long?  That is the question. 

You might also try looking in growing areas of Jacksonville.  Maybe new growth and construction pops up around an older property that could use renovation.

Good luck to you.

@JP Donoso, my email is in my signature block.  Send me an email and we can set up a call.

@Tushar P.  That's a different story.  Owners of REITS don't own any real estate.  They own shares of stock in a company.  The company owns the real estate.  

GPs and LPs own an actual % of the property(ies) they invest in as proven by the K-1 tax statement they file with their tax returns every year.  When they drive by the property, they can say I own X% of that property.

Now, they can claim what you say, but that is completely misleading.

@David C., many of the operators more accurately express the units or dollars as AUM or Assets Under Management.  This is a clearer way of being accurate and transparent.  Virtually no operators own the 1,000s of units and $ millions outright, so it is not dishonest or misleading because it is basically an industry standard metric.

What is misleading and not as honest is when an operator includes their LP investments mixed with their GP investments in their totals.  You should ask the operator if their number reflects AUM or if it includes any LP investments.  

There are other roles people can play in the deals that may be limited, yet the person can count the deal in their numbers because they are technically a GP in the deal.  This just means if there are 8 GPs in a $10 million deal, eight different people can claim to have $10 million in AUM.

A sponsor, syndicator, operator, etc. are interchangeable terms for the persons who are part of the General Partner team.  It doesn't matter what their roles are or how much value they bring to the team.  If they have GP equity is a deal, they are all called those terms.  Legally (I am not an attorney - you should speak with any number of attorneys in the business and on this forum), persons only raising capital cannot be paid for the amount of capital they raise.  They have to be part of the GP team but adding value otherwise, such as perform asset management, provide risk capital, underwrite the deal, etc.  Re: finding and vetting sponsors: they attend any of the numerous conferences, summits, etc. that are held throughout the country along with investors, lenders, attorneys, and others involved in the business.  Many if not most of the people posting podcasts are sponsors, so look for those.  To vet sponsors, ask anyone in the business about them, check other investors, attorneys, lenders (same folks you can meet at those events I talked about earlier).  For more details, feel free to contact me and schedule a call.  I'll be glad to suggest other ways.

@Tony Clark, I agree w @Bjorn Ahlblad regarding which tenants to address first.  If the tenants are reliable, pay on time and take good care of the units, you could renew them at gradually increasing rates until they were at market rates.  If you want to bring them up at once, get your marketing plan in place before notifying them.  You want to refill the units as quickly as possible after they vacate. If the units need renovation to make them competitive, you want to get contractor quotes for the cost of rehab, too before vacating them.  Congratulations on your first property!  You are on your way!