All Forum Posts by: Jeffrey Goddard

Looking in the area for somebody who invests in  Commercial/Office RE, anybody you know?

No, but not because of the price. that would definitely be worth it. My concern is why. Are you calculating needed repair costs? At the end of the day, though, two doors is too risky. One tenant moves out, say it takes me a month to fill it, and I lose half my cashflow for the month. can I cover that debt service now?

I agree with @Account Closed. It is probably the simplest way to get involved in real estate with no experience and still get a decent return without taking on too much risk. 

The majority of your efforts will be vetting sponsors. Make sure they assess risk like you do, make sure they have some experience themselves, and what kind of returns they actually get. Once you have decided to invest, stay close and learn all you can.

Based on your current financial position, I would say you have more than a fair chance to reach your goal if you work at it. I'm not a financial planner, but I would be happy to share my thoughts based on similar situations I have seen and my own situation. PM me sometime if you'd like to talk.

If there are a lot of new builds in your market, don't go too nice. The luxury/class A inventory is growing much more than other classes, you will be much more competitive by staying in class B. Personal preference, but it is much more stable to put a little into rehab and increase the rents a little in a class with a great occupancy rate than to put a lot into it and start competing with new builds in a class where occupancy rates may be struggling or might soon be. Of course, you will know the market needs better than somebody who isn't there.

what does the contract say? A good contract covers all concerns the landlord has.

You notice a film/staining on the paint after a while.

Just some terms (in my own words) to help you communicate with people better here (and more importantly, not run into trouble with the SEC).

Syndication- In real estate, the purchasing and operating of a property by sourcing the funds from others in one of various ways. It is often used where it shouldn't be, and not used where it should be, learn where it belongs, and where to use a different term, @Alina Trigubhad a great point to that effect.

Syndicator- More commonly called a sponsor, this is the individual who is buying the real estate, and in responsible for the both the property and the funds invested from others.

Investor- The person bringing the money to the deal for purchase, to share in the profits but not in decision making. Careful not to call somebody who is not an investor by the term. Know the difference between the investor, the partner, and the lender relationships as it relates to funding.

The most important part is what you have already done: due diligence on the sponsor and the deal itself. But stay involved. Ask questions, learn everything you can. You have a responsibility to be an educated investor, make sure you take it as seriously as you do any income generating activity. 

You've got more than enough to get your juices flowing here. Just a quick tip to avoid concerns down the way: rule 506(c) allows for general solicitation, 506(b) does not. I would be wary of anybody you meet on BP or in a networking event that immediately jumps to investing. The SEC is fairly rigid on what a prior relationship looks like, and Facebook friends doesn't cut it. There is some grey, but do you want to be open to the risk by playing in the grey? 

As an LP/investor that may not affect you from an SEC standpoint, but as a rule I do not do business with people that cut corners so dangerously, and would suggest you don't either. Whether through ignorance or willfulness, they open themselves up to risk, and do so holding your money. Something to think about. But, as always, an attorney well versed in securities law is going to be your best asset.