All Forum Posts by: Joe Potenza

@Todd Dexheimer Very helpful thank you. For the equity I already have raised, I presented a 1.0% acquisition fee, no AM fee and a 70/30 split (LP/GP) with an IRR hurdle of 15% that bumps to 60/40.

Thanks!

@John Blanton Appreciate the feedback! Make sense, I have not had someone commit less then 100k, but was recently approached by a friend asking if I would consider a 20K investment so was to good to hear your opinion on the equity contribution. Thanks again!

Bigger Pockets LP investors and multifamily syndication professionals, I am curious to the parameters and investment criteria you all require and search for?

I am currently putting together a multifamily value add syndication. To get the conversation rolling, figured it would be best if I explain the basic investor package I am providing friends, family and colleagues. My team is offering 6-7% preferred return (tax benefits discussed with our CPA) distributed bi-annually, an estimated project IRR of 15.5% (in our base case), and hold period of 5 years. Our projected average CaC is 8.4%, after completion of our value add initiative (40 units).

My teams experience is in private equity space, so am curious to what non-institutional LP's look for in deals.

What are the minimum preferred returns?

Projected minimum IRRs?

Hold period, and distribution preferences?

Minimum equity requirements?

Looking forward to getting some different opinions on the matter!

Bigger Pockets LP investors and multifamily syndication professionals, I am curious to the parameters and investment criteria you all require and search for?

I am currently putting together a multifamily value add syndication. To get the conversation rolling, figured it would be best if I explain the basic investor package I am providing friends, family and colleagues. My team is offering 6-7% preferred return (tax benefits discussed with our CPA) distributed bi-annually, an estimated project IRR of 15.5% (in our base case), and hold period of 5 years. Our projected average CaC is 8.4%, after completion of our value add initiative (40 units).

My teams experience is in private equity space, so am curious to what non-institutional LP's look for in deals.

What are the minimum preferred returns?

Projected minimum IRRs?

Hold period, and distribution preferences?

Minimum equity requirements? 

Looking forward to getting some different opinions on the matter!

@Duke Giordano Surprisingly I have not seen any price concessions on the multifamily deals I work on. I do agree that current potential buyers are hesitant about going to market in this environment (low supply of new deals). The economic stimulus is propping up the multifamily market (at least in the b/c class assets). I have very little deal experience on the A class or even higher B class assets so I will refrain from any insight on that. I anticipate seeing some more distressed property probably around Q1'21.

Thanks for a great post!

Working on some information regarding cell tower leases. I am curious to other investors experiences. Would love some stories, success and failures around the topic. Please comment if you have any experience with them and if you would pursue cell tower leases again.

@Brian Burke and others, I am stoked I found this thread. I have been running a wholesale business and flipping in Connecticut. Reason I am excited about this thread, is I am currently half way raised on my first multifamily apartment syndication. Do you have any advice for a first timer on the apartment syndication side of things? For the projects I am looking at I would need $1.2-1.4MM in equity (including the value add strategy).

@John Lazzarini Personally, I would be hesitant to invest out of state, unless you are looking at larger apartment complexes 16+ units. While I do not own any SFH or sub 16 unit multi family property out state (so I very well may be a horrible person for this advice), the management seems like it would be difficult.

@Remington Lyman I would love to better understand how the management of out of state SFH / 2-4 units would work. Is is similar to what one would pay on a 25 unit building, 5-8% of collected rent?

Justin, great article. I recently completed a residential house flip. Property was 1350 SqFt, 3 bed 1.5 bath. My two pieces of advice for any trying to estimate renovation costs; is (i) whatever you think your cost is going to be, add 25%. The second (harder to do strategy) is network with other successful higher end flippers and developers. By doing so, you can ask them if they are renovating a new kitchen, to utilize some old but nice cabinetry or appliances. 

For example, I have a relationship with a luxury interior designer. On high end projects the developers are constantly throwing out great hardware, appliances and cabinetry. While on a luxury project you need your kitchen and bathrooms to be A+, if you are renovating a working class house, you can still create a fantastic product with second hand finishes.

@Taylor L. I appreciate the guidance this is very helpful!