All Forum Posts by: Jeff Greenberg

Andy,

The first thing I would do is throw out the word "spend" . If you want to spend your money, you can buy a Bently or a Rollex. I assume what you mean is invest. There are as many questions as there are answers and most have been discussed in these forums. Intially i would follow Jerry's advice and put it in the bank, if it is not there already. Next, what are your goals and requirements. Are you looking for cashflow, or equity buildup or both. Do you want to be active or passive in the investment? What is your risk tolerance and how aggressive do you want to be? What is your time line?

When you can answer those questions, you can look at the many ways to make your money work for you in RE. This can be done as passively as being a private lender for a hard money lender to actively fixing and flipping.

Once you answer some of those questions, then get yourself educated in the different options. I love buying MF properties from investors that had money, but had no clue how to run the investment they got themselves into. Don't be one of those.

@Barry Harsa welcome to BP. You are in a good market for mf.

We are also looking in SA.

@Zara Nguyen

Welcome to BP from a fellow Southern Californian.

I have been many of their events, was a member of their club, and been to the syndication event. They put out a lot of good information in their podcast, but pretty general for the most part.

They totally missed the housing bubble and even made jokes as it came down on us. Shame on Russle who is the numbers economics guy. High leverage did hurt a lot of people.

After being at several events with Trowbridge the guys event was lacking in information and completeness. They did have a very experienced (>100 syndications) Syndicator that saved the day for me.

I have yet to go on their cruise, but the thought of having some of the industries big hitters stuck on a ship for a week is interesting to me.

Their big push now is property in Belize

In conclusion, the podcasts are good, BP is better. Gene's syndication workshop is probably better, but 4 x as much.

I would like to hear from someone that has been on the cruise.

Years back I did use their lawyer for a Syndication.

Welcome fellow Californian. BP is a great place to start.

As previously stated "if there was not a sufficient cash flow for them to receive a minimum of 8% annual return, then they would receive all of it". The preferred return is now satisfied. The sponsor now gets to catch up until you are at your promised split. In this case 50/50. Once this is reached it goes to a 50/50 on all additional funds. We accrue only to the end of the year..

@Thomas Moore The preferred return is there to give the investors the confidence that there would get that return before the sponsor gets any. As we do it, it does not eliminate the split, but does protect the investor. You scenario provides some meager returns for the sponsor. Getting a 4% of a 16% cash flow is not very exciting. At this point I would be getting a 75/25 split.

All of this is negotiable up front.

As far as taxes, we treat distributions as return of capital. This incures no taxes until all capital has been returned.

Congratulations @Jean Bolger a bold step, and I wish you luck.. You have a lot of good people rooting for you.

Who will have management control. Check with your SDIRA custodian for clarification as to what role you the individual can have over your SDIRA.

@Lane Beene The preferred return means that if there was not a sufficient cash flow for them to receive a minimum of 8% annual return, then they would receive all of it. In this scenario of a 50/50 split the investors would get the 1st 8% and the sponsor would get the second 8%. It would be 50/50 after that. This is how we structure our deals. So if the cash flow is 72k, the investors get 36k and you get 36k. If the investors put in less than 450k, they have bettered the preferred return. If all they put in was 60k and received 36k per year, that is a 60% annual return.

@Jared Foster your example is a little muddied if you are assuming that the principle is also an investor. Also the 8% is an annual return not quarterly.

@Brian Burke is correct it depends on what the investors are interested in investing in. We talk to our investors about the type of return they might expect and if we have a deal that will fit that expectation than we offer it to them. We fully disclose our cut, but that comes later after we look at the projected returns. The emphasis needs to be on what they will get. I assume that there will be an exit on this deal so the projected return on sale can add some to the discussion.

Be aware that if these are passive investors and their profit or loss depends on you, you have just created a security and will need to have a PPM and play by the SEC rules.

I am not a lawyer, but if you commingle the funds you may as well keep the one LLC. You are piercing the corp veil if you share funds.