All Forum Posts by: John L.

+1 for Michael Blank’s SDA

Joe Fairless and Theo Hicks also provided some calculators/analyzers at https://joefairless.com/apartm... as part of their syndication school to evaluate and qualify a Multifamily property. 

There a lot of variables to consider. But I'd say most deals with preferred returns often include a heavy value-add component. You also consider the lending side. Here is a rough example: If you buy a $1M property at a 7 cap, you would expect $70k return. Suppose you finance the same property, put down $200k and loan $800k (at about 4%) for $50k/yr in debt service. Now you have 20k (70k-50k), so CoC is 10% not 7% like the cap rate. In addition you could have interest only payments to further boost cash flow.

@Nicholas Patrick I’m in Cincinnati as well. Let me know if you have any questions or reach out to connect!

@James Wilcox DM me and I can likely  refer a PM.

It’s worth noting that in some ways the taxes don’t matter when starting out. If you have passive income outside of real estate (or one specific syndication) then you can use depreciation right away to offset taxes due on the proceeds from the specific deal and other passive income. If you don’t have any passive income outside of this investment and the tax depreciation exceeds the proceeds, then it accrues until you can use it. So, in  the future the depreciation can offset the gains in a sale. 

Cons that jump out to me are:

1) Can the property make a return to you without the 4th rent (and do you care in this situation)? 

2) Preparing for capital expenses seems important since you are ultimately paying them.

3) It will be hard to have a contract around this since the lender will most likely ask your brother if the down payment is borrowed. Having documentation to the contrary could be problematic.

I would make use of not just the cash from the brownstone but also get more leverage on your residence and maybe even cars. Interest rates from 2% to 6% for debt on your residence and cars are low compared to the returns on the real estate mentioned. 

Keep some cash liquid but put most in diversified syndications. 

Has anyone found a good source for this info?  I've used https://www.freemaptools.com/f... but I would be interested in comparing it to others.

I would assume money lost pre-closing is either the sponsor’s or otherwise arranged on the GP side. The risk is greater and not equal to the standard LP returns.

Have you run any test ads or do you have proof that the market will fill these?