All Forum Posts by: Jim Froehlich

BP Members, I've been trying to pinpoint parameters by reading other posts on this subject, but I'm getting conflicting information. I was recently told that I can only get non-recourse loans (residential rentals) for over $1M (generally for portfolio loan). I saw in a post that someone mentioned ability for N/R at as low as $50K. What I'm trying to do with a team of family/friend investors is team up to buy properties cash, but then refinance these rentals within 6 months for 60% cash out. Is that feasible? 2nd question: if placing these properties under LLC that I manage and where 10 people own 10%, if we have to do recourse loan, do ALL 10 people have to give credit, assets, etc.? Can one owner be the "recourse sponsor"? I know there are better financing options if putting properties into S-Corp or C-Corp after buying FNMA rates, but we don't want to be dependent on personal credit for these buys, rather the assets until the overall portfolio is stronger. Thanks for any thoughts/info! Jim

@Bab Adetiba, the syndication I was referring to was done back in 2005.  The book above that I recommended to @Bernadeau C. is just a resource I think is really helpful to people trying to figure out options related to Syndication and partnerships in commercial real estate.  As the experts on this forum have noted, there is no substitute for an experienced attorney, but I think that book is pretty up to date as it includes changes from the 2012 Jobs Act that affected securities laws and made certain syndication and crowdfunding opportunities more accessible to non-accredited (i.e. not wealthy) investors.

@Tyler Kastelberg, thanks for this awesome advice! Please let me know if you've ever done or considered buying the whole thing outright with your group and then re-financing up to 70% after forcing small amount of extra equity. Also if you know agencies that will offer only 20%/30 yr amortization. The best I've found in MA so far requires 25% minimum recourse and 35% down for non-recourse. 10 year (5 fixed,5 ARM),25 yr amor. and some early payoff penalties. That's local commercial for over $2M. thanks!

@Chris Grenzig, thanks for the great advice!

@Peter Tverdov, thanks for the insight and explanation on fees! If you or anyone else has opinions on turning SFR on major campuses into AirBnB units, please let me know if you think that could yield higher returns. If I'm able to move forward, I'm considering taking 1-2 units and bringing them up a level to become Short-term rentals because I've heard that large campuses are good for such rentals via a few podcasts I listened to in past. I'm beginning to think a partnership over syndication might be better avenue. Thanks again!

@Bernadeau C., I have only does one syndication in past (and it was family), but I have been studying it a bit and doing preliminary planning and have found this book by Gene Trowbridge to be very helpful on details and differences.  https://www.amazon.com/Its-Whole-New-Business-how-ebook/dp/B00Y1Q9HFS.  warning: it is a bit like an accounting or legal classroom booklet in my opinion, but it seems like a great reference as I've come back to it many times to look up answers to my questions.  Good luck!

@Matt H., thanks for that input! In response to a more specific post I made on this topic @Peter T. from NJ stated his investors expect 15% CoC, which seems hard to achieve in MA, but I will keep running numbers and figure out where I land. Thanks!

@Peter Tverdov, @Ryan Cox, @Todd Dexheimer, and @Mark Allen...thank you all for taking the time to read my post and responding.  These were all helpful tips.  To answer @Ryan Cox question, the state of properties is not yet under contract as I'm awaiting rent rolls/expenses to estimate and structure deal.  I do have a good and experienced attorney, but I'm waiting and assessing how much I'll have to pay him depending on direction I take.  An experienced investor told me yesterday to expect as high as $30K if I syndicate, which is not doable for me at this time.  @Peter Tverdov, I was wondering what you mean by "fees eat into profits too much"? which fees? Thanks again for your helpful comments...I will see what offer makes 15% COC achievable as appreciation is not a problem. I will post back to this forum if I close the deal or if I don't and explain why.

for syndicators on this thread, how do you view SFRs used as student rentals relative to your Multi-family goals or other SFRs (in terms of cash on cash and/or per room flow)?  Do you think most investors view it the same as apartments?

Hello, I am looking for replies from anyone experienced or educated in the subject of syndicating for multiple single family homes (i.e. raise capital for down payment/CAPEX/reserves, while getting blanket mortgage for remainder). I have great near-campus properties, but not sure what good cash-on-cash should be for investors (10%, 15%, 20%?) or which Reg D exemption I should target (I'm shooting for family/friends, but may have to extend PPM to reach goals). This is state of MA and one commercial bank has given me guidelines for how they could do recourse (25% down) or non-recourse (35% down), but I'm not sure if there are other approaches I should consider. Any legal or accounting thoughts welcome too; my accountant advises one LLC per property, but that means I would have to create 10 right away. Thanks for any thoughts!