All Forum Posts by: John Fortes

Congrats on your first deals and more importantly the fact that you've scaled your learning curve by "doing". As previously noted regarding the types of syndications to be involved in, the risk vs the reward = the return. If you have a riskier appetite for those types of investments that involve the development then you can sleep at night not really worrying about the deal you have invested in. 

For me personally, I'm more of a singles and doubles type of investor. I review & invest in conservative types of syndications. Those look like a typical 5 to 7 year hold, kick off cash flow and if they turn into triples or homeruns that will be a massive upside. I'm not going out there looking for the homerun deals because its a whole revamp to my criteria and research for investing. Once I have determined my criteria and investment style it has been easier to be able to parse through investments and weed out the ones that don't meet my criteria. If any of that is helpful for you, please feel free to steal that approach and reach out if you have any questions. 

Happy investing!

@David Hanson thank you David! Appreciate your kind words.

Finding the investors is a strategy if you don't have connections to high net worth individuals. You either create a meetup for real estate investors, have a platform of some sort and all while doing a ton of networking. I mean a lot of networking. 

Ask yourself this, how do investors know what you do if you don't publicize it? When you look at it from that lens, you will begin to be in front of the type of investors you are seeking. 

Happy investing! 

Last thing, the fund could be costly and you are aware of the syndication fee but also consider ACH payments, accounting fee's and travel to review assets (if you offer that type of service). 

Just stumbled upon this question and I'm pretty sure you already moved in some sort of direction but I created a database that I work off of regarding fund of fund structures.

I found that this is the cleanest and best way to raise capital, specially if you are starting your own real estate investment firm. It will keep your investors in house and you won't have to worry about operators sending other investment opportunities to your investors.

First and foremost, consult with a securities attorney such as @Amy Wan who has provided me with a ton of information.

Figure out if you can accept fees based off the formation of the fund, exempt RIA form requirements and more, Amy will guide you in that retrospect. Get your own documents drawn up and create the fund before investing it any opportunities. You can get creative and implement a GP catch-up if you cannot implement fees in your fund. 

Decide if you will go 506b or 506c. From what I understand, a 506b fund cannot invest in a 506c offering as a LP. The deal would have to be a 506b.

Decide the size of your funds total raise that you will be seeking to deploy in other investments as a LP.

Aim for lower fees

Decide how many deals your fund is going to deploy into. For instance, if you raise a $5M fund, you may invest $1,000,000 in 5 different investments which really diversifies the fund and investors. 

How are you forecasting your projected returns to your investors? That is very important to have it properly modeled as well as track the performance of your funds returns to your investors. I had to create my own because there isn't a fund of fund forecaster out there, till I created it. DM me if you want more specifics on that.

Here is an example that is forecasted a 6% preferred return of a 5 year fund that diversifies.

There are also ways to create a fund that only invests in JV partnerships and not traditional syndications. Hope this information helps. Happy investing!

Just stumbled upon this question and I'm pretty sure you already moved in some sort of direction but I created a database that I work off of regarding fund of fund structures. 

I found that this is the cleanest and best way to raise capital, specially if you are starting your own real estate investment firm. It will keep your investors in house and you won't have to worry about operators sending other investment opportunities to your investors. 

First and foremost, constult with a securities attorney such as @Amy Wan who has provided me with a ton of information. 

Figure out if you can accept fees based off the formation of the fund, exempt RIA forms and more, Amy will guide you in that retrospect. Get your own documents drawn up and create the fund before investing it any opportunities. 

Decide if you will go 506b or 506c. From what I understand, a 506b fund cannot invest in a 506c offering as a LP. The deal would have to be a 506b. 

Decide the size of your funds total raise that you will be seeking to deploy in other investments as a LP. 

Decide how many deals your fund is going to deploy into. For instance, if I raise a $2M fund, I may invest $500,000 in 4 different investments. 

How are you forecasting your projected returns to your investors? That is very important to have it properly modeled as well as track the performance of your funds returns to your investors. I had to create my own because there isn't a fund of fund forecaster out there, till I created it. DM me if you want more specifics on that. 

Here is an example that is forecasted a 6% preferred return of a 5 year fund.

Hope this information helps though its a year too late from your original post. 

Happy investing!

Investment Info:

Large multi-family (5+ units) commercial investment investment in Chattanooga.

Purchase price: $1,815,000
Sale price: $2,600,000

Vista Ridge - 41 unit

What made you interested in investing in this type of deal?

Great opportunity for a cash flowing asset and a value add business plan.

How did you find this deal and how did you negotiate it?

Relationship with investors that had access to the opportunity.

How did you finance this deal?

Community bank financing

How did you add value to the deal?

Renegotiated contracts and unit turns. Maintained tenants with light rent increases as well. Staggered leases to coincide with unit turns to maintain the business plan target.

What was the outcome?

Exit within 15 months of holding for a 1.5X equity multiple to investors.

Lessons learned? Challenges?

Learned the value add model is the business plan to carry forward. If another investor decides to through capital at your current asset, compare that to the remaining years of operations and make the decision to exit or move forward with the asset.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We executed the plan as expected because we underwrote it conservatively, had the necessary reserves & leveraged great long term debt that didn't not come with a high prepayment penalty.

@Joe S. There are podcast that interview fund managers, investor relations personal and discuss processes, steps and ways to raise capital for your deals. Its all about how you view the content. Hope that helps Joe!

@Joe S. Tons of podcast out there as well. Search for passive investing or passive investor on your podcast platform.

Analyzing personal real estate investments could be a hassle. Are you a passive investor who invests in real estate, passive investments such as multifamily, self storage, mobile home parks or real estate targeted funds? 

How do you manage your investments between different private firms with different investor portals? 

We'll as long as you have the projected returns from the investment summary, you can line them up against real time cash flow and exit distributions. 

✅ How do you compare your projections to actual results?

✅ Compare markets or direct location of your investment?

✅ How do you compare sponsors and know who performs better with certain asset types?

✅ Confirm asset type investment (multifamily vs self storage vs mobile home parks, ect)

✅ Real time analysis

I created a easy way to affirm, compare, analyze your real estate investments in real time with this offline investment tracker.

www.projectedreturns.com