All Forum Posts by: Joe Archbold

Hey Russel,

Admittedly, I do not know BAM; I am curious about what is driving your interest in/decision to invest whether its a preferred return or more back end equity, or just tax advantages.

The market has definitely put some operators' projects in distress, and it is very unfortunate, but the flip side is that other operators are able to use stabilized financing to acquire these distressed assets.

Our operator partners are seeing an almost 20% discount as they are acquiring assets today. Consider a top-performing operator who already manages assets in the market and has strong renovation skills, is using less leverage, as these deals are starting to pencil out. 

In today's Wall St Journal- Fortune Favors Early Movers in America’s Property Crunch
Investors willing to buy buildings when everyone else is running scared typically get the biggest rewards. By Carol Ryan Check it out.

 This is why every investor should understand each investment opportunity. Sure there are large Vertically integrated operators- they have their own property management, renovate at scale with their own teams, etc. But there are also smaller nimble groups that have a completely different strategy. They might find an off-market deal from an in-market top-performing property management company.
To access the deal and immediately have (in-house) PM capabilities they bring them into the deal as LP or part of GP side. Both have a fit and as part of a broker-dealer group we see both.

@Forest Wu,

Forest please feel free to DM me. Glad to discuss

Joe

Forest,

Access is the hardest/ most complicated piece. If an operator/syndicator is using a 506B to raise capital, he cannot advertise. If they use a 506C, they can advertise but usually have a narrow window as they are raising capital for an existing project. That raise will include prior investors, GP partners investing as LP, and other HNW investors adding $50K to $1M to the raise. So, for many Syndicators with powerful track records, the raise may fill very quickly.

If you are looking to gain access to live deals, evaluate projects in various markets, and even access projects in varying asset classes such as value-add multifamily, industrial, self-storage, etc., then you should consider connecting with a broker-dealer group.

Broker-dealer groups provide access, due diligence review, and regulatory compliance for evaluating and participating in the syndication space.

Always interested to connect and chat.

Joe

Unfortunately, this should be a place where active investors can share/grow/ learn from each other. For the #1 contributor to the Syndication and Fundraising space to post-
 "Anyone considering sending money to a syndicator should have their head examined by a medical doctor for signs of life.
And then go on to attack a real investor over a misspelling on his website? Whats the value in this?

To the contrary, Investors should wisely consider their portfolio and determine what if any portion they want to deploy and determine their best approach based on their goals. If the benefits of adding real estate make sense, great, then connect with guys like Jorge here on bigger pockets and network to find your investment niche.

 Jorge,

Great post. There is lots of negative sentiment towards syndications currently. But there is also a ton of dry powder waiting for opportunity in multi-family. Investors have a choice they can either go and try to acquire an asset and manage it themselves, find another asset class, or they can do some homework and join a syndication. The interest rates hurt a lot of deals we will not see that rate of rise again for some time..

These are apples and oranges- Yes both real estate, but with significant differences.

Some questions? 

What's the likelihood that the CA duplex increases in value organically? I assume you will self-manage? Purely buy and hold.

In these uncertain times, why wouldn't you consider a preferred position with the syndicator?  Sure, over the last several years, there was an unforeseen interest rate climb that hurt many very good operators, and LPs are upset. The market can move in three directions: up, down, or sideways. Where are rates in the cycle? Of the bad deals out there, I wonder how many deals went bad solely due to interest rates.

What about diversification? How much other real estate do you own as an asset? Syndication provides a window into other markets, different asset classes, and a completely different strategy.

Lastely, whats your time worth? Yes there is a lot of front end due diligence work to invest via syndication but they aren't going to call you in the middle of the night to resolve a leak, tenant issue, fire, or eviction. 

Already, good operators are buying broken deals at very smart levels, if their track record proves their worth, leveraging their expertise is what you are investing in.
How about stretching and doing both? Theres no right answer its all about taking action.

The question is Rent Growth How? Through Supply and demand economics vs having an asset that renters prefer over the one across the street.

LOL?

Im sure you have a strategy for Industrial Syndication that suites you.

The data itself doesn't breakdown asset class. Was this all Class A assets? Did they get any response from Class B or C assets? Curious what that mix is. And what are the occupancy levels?
Is it oversupply or Concessions from new assets? Is this just a cooling off after a crazy run up in rents?

SF and Multifamily investors with a strategy for deploying capital either on their own or through a partnership realize the data is broadbrush of information.

For a buy-and-hold investor this is potentially useful. But for someone investing in an asset or market, planning a Value-add strategy to bring an older asset back to life, this may not matter. 

So rents are down 2-5% so what. is that 50$? If you have an escalation built into your lease that is 4-5% that's that. What will you do with your asset to achieve rent growth regardless of the above data?

As an Investor what do you do with this information? Does this keep more investors on the sidelines?

My Buy and Hold portfolio is still cash-flowing with rising rents in Chicago Suburbs.

The In-migration and flight from certain markets may continue. Maybe diversification is key or is it the strategy?

For Value-add deals, there are concessions for new tenants but lift from renovations seems to outpace any decline that we hear from operators.

At the end of the day NOI growth is Key.