All Forum Posts by: Ivan Barratt

@Sherman Ragland 's advice is golden.

On my first couple of apartment deals (35 units, 30 units and 15 units) I went the JV route with 1 partner bringing most of the capital. It's less complicated and a path to bigger and better deals. Now I syndicate larger 200+ unit deals with multiple investors. All in legal (ppm, title, survey, op agreements, negotiations, etc) on an acquisition (we also use HUD financing which puts legal expenses on the high side) is usually 30 to 50k.

@Account Closed

Stay away from small deals. Do you know why mice have small balls? They don't sell many tickets!  HINT: it's all about perspective. :)

Get more education (books, courses on multifamily, finance, real estate) and keep your money in the bank until you fully understand scale, forced appreciation, real estate finance at the agency debt level, preferred return, promote, sponsor vetting, etc. 

If any of that was less than crystal clear keep learning!

Happy to chat sometime.

@Chris Baker I highly recommend NOT using home equity loan in syndication or any other long term investment. That's called going long with short money. If the spread between your cost of capital and return inverts (goes negative) because of interest rate environment, deal flatlines or fails, etc you'll be in bad shape.  That's how companies and investors can go bust!

@Ross Ayesh makes some good points about being wary of sponsors that will take unaccredited investors for a low minimum investment.  That should be a red flag.

@Chris Baker keep your cash in the bank and get more education. Wait till you have more liquidity and are able to invest 50k into a deal without breaking a sweat.

I agree with @Heidi Pliam that you should get more familiar with both debt and equity deals and the pros and cons of both.

Take a deep dive and read/listen to actual books on apartments, syndication, and creative finance.

NOTE: The next economic winter is approaching. Good deals are out there but not so easy to find.

Happy Hunting

No leverage?? @spencer keep your money in the bank and get more education. Listen to Grant Cardone's opinion when you only have a 100k. Also, winter is coming my friend.

great post @Teddy T.

Here's some thoughts: (1) Large multifamily (workforce C and B) with permanent debt (Fannie, Freddie, HUD) is the best risk adjusted return of all real estate asset classes period. If you don't know what permanent financing is yet be sure to learn this.

(2)Love the goal of 40k/month! 10X and play big baby! I'm working towards the same figures. To get that you'll need ~4,000,000 in equity (40k x 12mos divided by 12% return on your cash).

(3)Diversification (trying too many real estate ideas at once) is your enemy! read: Warren Buffet or Mark Cuban.

(4)You are wiser than most focusing on your business/day job. To get to your goal you'll need to funnel lots of capital from another source (a business that buys your real estate). read: Robert Kiyosaki. For me, I started a property management company. It buys my apartment communities.

(5)Watch out for risky deals! Losing capital is your enemy. Read Warren Buffett. Stay away from small deals too! Do you know why Mice don't sell many tickets? It's because they have small balls! ;)

Happy Hunting and happy to chat further any time my fellow traveler!

Ivan

LOL! @Jay Hinrichs I am the sponsor! :)  But yes, you are 100% correct. Anything less than the highest of integrity is a quick way to lose investors!

@Jay Hinrichs I feel you brother! That's why we work real hard to get HUD Financing. 35yrs Full AMORT! Boom!

@Paul B. basically any good securities/real estate attorney will require such disclosures in a PPM. They certainly protect the sponsor to an extent and make sure to put limited investors on notice that projections don't always pan out however being a bad actor ISN'T covered.

@Jay Hinrichs great points all around. I for one am very glad to have seen the last crash before starting my company. Lot's of sponsors/developers/syndicators are playing russian roulette right now.

@Justin Westmoreland what are the last 3 real estate courses you've taken or books you've read?  If you haven't read Lindahl's books (his actual books or apartment riches course) get them, listen/read and repeat 12 times. repetition is the key that most people won't do!