All Forum Posts by: Joshua Ferrari

Roughly $20K was all closing costs. We gave our investors 80% of the equity. No Preferred Return on this one because of its size. Investors will be fully liquid at year 5 & total ROI is 98.73%

Depends on a wide array of factors. With the market being affected by COVID-19, lending as a whole has tightened up, and most due diligence-related businesses have shut their doors. 

Even with things being virtual, everything can be expected to be 30-60 days longer than before. If you want some more detailed info go check out our blog on our website!

Investment Info:

Small multi-family (2-4 units) commercial investment investment in Mobile.

Purchase price: $175,000
Cash invested: $153,250

Syndication on a Quadplex. 16.89% IRR is the estimated return for our investors after 5 year liquidity event.

What made you interested in investing in this type of deal?

I’m a multifamily syndicator who specializes in the Mobile, AL market

How did you add value to the deal?

Renovations were extensive. It took over a year to finish. We brought the value of the asset from $175K to $360K after being all in at $328,250. Property was 100% vacant and we turned it around to 100% occupied within one month of completing renovations.

@Joe Bardinelli

 There’s a lot to learn! I recommend finding a mentor that’s already done what you would like to do & follow in their footsteps. There’s MANY different ways to invest in real estate so first thing to accomplish is deciding what is your niche market & what are your goals in real estate investing. That will narrow down where you should start! 

I’m an investor down here in Mobile, AL. Let me know if there’s anything else we can do to help! 

Yes, those were high end REIT numbers, but they stem down the chain into the more non-institutional syndications.

For example if REITs are dropping $390K to $275K per unit, than you can expect the other asset classes of multifamily to drop as well, based on market-by-market and asset-by-asset. 

I suspect somewhere in the ball park of 6%-8% cap rates could be the new market rate for the foreseeable future (as opposed to the 4-6% it used to be). At least until the market stabilizes and renters get back on the pay schedule. 

I had an absolute HORRIBLE experience with a 203K loan. We bought a fourplex to house hack. It took over 5 months to close, we finally closed and three months in we had to fire our contractor. (They doubled the budget and tripled the timeline) meanwhile we had another contractor lined up immediately, but it took the lender 4 months to finalize paperwork before they would let the new contractor touch the property so we got eaten alive in holding costs. Once we got the new contractor in, he informed us of all the many, many issues that weren’t found by the first contractor. ($50K worth of issues) Our contingency was only 15% of the estimated renovation portion of the loan, which didn’t cover the $50K so we ended up coming out of pocket almost $40K just to get everything done because the lender refused to pay the contractor out of the contingency reserve until the project was totally complete.

All in all, it took us 2 years to renovate something that was supposed to be 6 months, max. I chalk it up to lack of experience, 203K loan, and not that great of a deal. 

It turned out alright though. After two years we have all the units rented with all expenses paid and $700/month in cash flow. With a forced appreciation of $350K giving us $70,000 in equity. 

The pro was definitely the 3.5% down and low interest rate. Our seller even paid $12,000 concessions at closing and paid our interest rate down. 

If it were me, I’ll never do it again. But if it makes sense for your deal and your contractor is okay with being paid on the back end of everything being finished, then it could be something to consider. 

October Newsletter! _________________________________________________________________________________________________ Hello fellow investors/entrepreneurs! I'm so glad you've taken the time to read my very first Newsletter from Provident Properties LLC. My goal with these will be to add tremendous value, talk about any deals we have, go over the current market trends, and be in communication with every single one of you! _________________________________________________________________________________________________ For this months newsletter, I'm going to be teaching on how to passively invest in real estate through Real Estate Syndication. _________________________________________________________________________________________________ If you’re interested in building wealth, you’ve probably wondered about real estate investing. On the one hand, it seems like a great idea, especially if you live in an area with a booming real estate market. But on the other hand, you may not be ready for the commitment. _________________________________________________________________________________________________ As recent as last year, only 15% of Americans were investing in property outside their primary residence, according to a RealtyShares survey. However, while real estate investing is not exactly widespread, most Americans think it’s a good investment. _________________________________________________________________________________________________ What holds people back? The costs, skills, and time needed to get started. Only 38% of those surveyed thought they’d actually be able to flip a house start to finish, and more than 80% of millennials wished that real estate investing was easier. _________________________________________________________________________________________________ Let’s be honest. Investing in real estate is a big commitment, and it’s important to really understand it before you dive in. I never want you to invest in something you don’t understand—especially real estate. Is it really worth all the effort it takes? Is this type of investing reliable enough to be part of your retirement plan? Is active or passive investing the better route to take? _________________________________________________________________________________________________ Whether or not real estate investing is a smart idea totally depends on you, your financial situation, and your goals for the future. It’s not for everyone, but it can be a great wealth-building tool when it’s done the right way! _________________________________________________________________________________________________ How-To: Real Estate Syndication _________________________________________________________________________________________________ What is Real Estate Syndication? Real Estate Syndication is an effective way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own. _________________________________________________________________________________________________ So how does a syndicated deal work? Real Estate Syndication is actually quite simple. It's typically a transaction between a sponsor/general partner and a pool of investors. They are typically formulated under an LLC and then the LLC purchases the property and splits the equity between the investors and the sponsor based upon how much was invested. _________________________________________________________________________________________________ So what's in it for me? How do I make money investing into Real Estate Syndications? What's the difference between investing in a syndicated deal vs. investing in stocks or the open market? These are all great questions and I will gladly answer them in the paragraphs to follow! _________________________________________________________________________________________________ How do I make money investing in Real Estate Syndication? Well typically you make money based on how well the property does and how much you invest upfront. For example, If you invested into an apartment complex that was bought at $2,000,000, had a $200,000 NOI (Net Operating Income), had 100 units, was 100% occupied, and was bought at a 10% Cap Rate with just $25,000, then at the end of 5 years, lets say the property did great and was sold at a 8% cap rate, you would make a 188% ROI (Return on Investment) giving you back the $25,000 that you invested plus an additional $47,000 that you got for simply putting in the investment and watching it come into your bank account! Now not every investment is going to go perfectly, but your chances of success with Syndication vs. in the stock market, is much greater. _________________________________________________________________________________________________ So what is the difference between investing in a syndicated deal vs. investing in stocks or the open market? In a typical stock market investment you can expect to get anywhere from 5-14% annually and as you saw in the previous paragraph, syndication can bring you anywhere from 12-20% annually. Investing in the stock market is pretty risky when you think about the fact that you have very little control over how well the stock does. Real Estate Syndication however; brings you MUCH more control in the investment. _________________________________________________________________________________________________ With Real Estate syndication you can do things like raise rents, decrease expenses, renovate the building, add amenities such as a swimming pool, spa, or gym, hire new property management, add units, add services such as laundry, valet parking, or online rent payments, and much more. When you do any one of these you do what's called "force appreciation". All that means is that you add value to the property in some way, shape, or form, increase your NOI, and cause your property's value to rise. For example, if we use the numbers in the previous deal at $2,000,000 Value, 100 units, 100% occupied, 10% Cap Rate, and $200,000 NOI and we raise the rents by just $25/month, because we'll say the previous owner had rents just barely below market value, then that will bring our new value of the property up to $2,300,000! We'll increase our NOI by $30,000 annually and it will bring a $300,000 increase in value overnight! Talk about a great return! The simple calculation for that is Value = Investment/Return. So with Real Estate Syndication there are many ways to control the assets and be sure that you are getting the best possible return and that is why I personally prefer this method of investing. _________________________________________________________________________________________________ What's in it for me? I hope I've provided enough knowledge to acclimate you with how syndication works and give you the tools to decide if that is something that you would like to do or not. If I could give you one last tip on Syndication it would be this. Make sure that you have the utmost trust in the sponsor that you choose to invest with. They control the deal and make sure that you get the best return possible. If you do nothing else, vet your sponsor carefully and be sure that they have your best interest in mind. All in all Real Estate Syndication is a great way to passively invest and create enough passive cashflow for you to be able to quit your W-2 job, achieve financial freedom, retire early, spend more time with your family, start your business, or any number of other opportunities that passive investing can open for you. _________________________________________________________________________________________________ Current Deals: _________________________________________________________________________________________________ We are currently heavily in the market for Apartments and Mobile Home Parks. We have some deals that we are analyzing, but nothing is concrete just yet. If anyone is interested in investing or partnering with us please don't hesitate to reach out! _________________________________________________________________________________________________ Mobile, AL Market Trends: _________________________________________________________________________________________________ - Mobile has seen a 6% increase in rents per month over the last year which constitutes immense growth in rental demand _________________________________________________________________________________________________ - 72% of the population is under the age of 45 which attracts more of the younger population of which 40% have said they are interested in renting _________________________________________________________________________________________________ - 76 days is the average days on market for a single-family residential property _________________________________________________________________________________________________ - The rental vacancy rate is 11% over the last 6 months for single-family residential properties _________________________________________________________________________________________________ - There has been a 6.7% increase in appreciation in homes over the last year _________________________________________________________________________________________________ - 42% of single-family homes in Mobile are renter occupied _________________________________________________________________________________________________ - The median rent for this year is $900 _________________________________________________________________________________________________ Business Sector: _________________________________________________________________________________________________ There are 10 downtown residential developments currently in play and they include: _________________________________________________________________________________________________ • Meridian at the Port, 300 N. Water St., with 267 units in construction and a $51 million investment; _________________________________________________________________________________________________ • Temple Lodge, 558 St. Francis St., with 12 units currently under construction and a $2.7 million investment; _________________________________________________________________________________________________ • Gayfers, 165 Dauphin St., with 60 units in design and an $11.9 million investment; _________________________________________________________________________________________________ • 360 Dauphin Street, 360 Dauphin St., with eight units currently available for lease and a $1.5 million investment; _________________________________________________________________________________________________ • Russell School, 304 S. Broad St., with 26 units available for lease and a $4.6 million investment; _________________________________________________________________________________________________ • Staples Pake property, 100 N. Royal St., with 20 units currently under construction and a $6 million investment; _________________________________________________________________________________________________ • Marine Street Lofts, 901 Government St., with 48 units now being leased and a $6 million investment; _________________________________________________________________________________________________ • The Fort of Colonial Mobile, address to be determined, with 131 projected units currently under design and a $58 million investment; _________________________________________________________________________________________________ • Seamen’s Bethel, 350 St. Joseph St., with 60 units currently in design phase and a $6 million investment; _________________________________________________________________________________________________ • Merchants Plaza, 106 St. Francis St., with 84 units in design phase and a $35 million investment. Overall, unit availability for downtown residential living spaces now encompasses some 716 units with a collective investment of $182.75 million. This level of investment in the market constitutes that this would be a great time to get into the market if you're interested. _________________________________________________________________________________________________ - Alan Belcher Mixed Martial Arts has leased 4,100 square feet of studio space at 109 Furr St. in Mobile. Belcher, a professional MMA instructor and former UFC competitor, plans to open a kickboxing gym at the location. _________________________________________________________________________________________________ - 6.5 million tourists spent $4.77 billion in Baldwin County last year, sustaining 51,636 jobs and generating $938 million in taxable retail sales plus $527 million in taxable lodging sales. That’s tax money that translates directly into more revenue for the cities, the county, the school system and more. _________________________________________________________________________________________________ - The 2019 Gulf Coast Real Estate & Economic Education Conference was recently held at the University of South Alabama’s (USA) Student Center for the second consecutive year, drawing local area real estate professionals as well as developers from across the country. The conference highlighted Alabama’s third-place national ranking as the best climate for business, second-place ranking for workforce training and fifth-place ranking for economic growth potential. _________________________________________________________________________________________________ - The recent auto manufacturing investment attracted $3.3 billion dollars to the state of Alabama in 2018 with expectations of creating nearly 5,500 new jobs, and the forest industry saw $1.3 billion in new capital and created 2,000 new jobs. Development in rural areas saw gains as well, with $1.1 billion in new investment and creation of more than 1,100 new jobs. _________________________________________________________________________________________________ - Here are some recent newcomers to Alabama that include Facebook, Amazon, Shipt, United Launch Alliance and Mazda Toyota, bringing $8.7 billion into the state in new investment and 17,000 new jobs. _________________________________________________________________________________________________ - Wal-Mart is building one million square feet of warehouse space in West Mobile County and Amazon is building 400,000 square feet of warehouse space nearby just off Interstate 10. Similar projects will continue to be opportunities for commercial growth in Mobile & Baldwin County _________________________________________________________________________________________________ - A residential market assessment commissioned by the Downtown Mobile Alliance shows more residential properties are needed downtown for the foreseeable future. The draft study indicated more than 250 new rental and for-sale housing units can be accommodated per year over the next five years. The majority of those, between 155 and 186, would be lofts and other styles of apartments. The study also showed a need for 18 to 28 large condominiums or for-sale apartments per year over the same period. The study also supported adding 21 to 34 new row houses and 11 to 18 new cottage-style homes or bungalows per year during that period. The study also showed the amount in rent the area could sustain. For microloft and studio apartments from 400 to 1,000 square feet, the rent suggestion is $625 to $1,500 per month. For one- and two-bedroom apartments from 550 to 1,100 square feet, the study suggested rents from $925 to $1,800 per month. _________________________________________________________________________________________________ That concludes our, Provident Properties LLC, very first newsletter! I hope I've helped increase your knowledge and tool belt on what might be the best investment path for you. If you have any questions, comments, or just want to connect please don't hesitate to email or call me! To your success!

Sorry about all of the lines... After copying and pasting this is the only way it would let me separate paragraphs. Happy New Year Everyone!! It's officially 2020 and I'm so excited to begin this year out talking about having a vivid vision for your future! _________________________________________________________________________________________________ Disclaimer: I wasn't actually the first person to coin this phrase "Vivid Vision". There is actually a phenomenal book called just that by Cameron Herold that I HIGHLY recommend going and reading. _________________________________________________________________________________________________ What even is Vision? According to Google, Vision is "the ability to think about or plan the future with imagination or wisdom". Almost like a child who imagines he wants to go to the moon. Let your imagination run free and see what you come up with. You might even be surprised! _________________________________________________________________________________________________ Now I'm sure you guys have heard all about creating a vision at least a thousand times, and you might even be aware of the fact that most every successful business man or woman has a written vision for their life, but the question is, are you really implementing this key component in your business/life? Why don't more people do this? How much more could you succeed if you did this one simple task? Well today I would like to give you guys some key components on what to include in and how to structure your vivid vision/goals so that you can begin living the life you've only ever dreamed of. _________________________________________________________________________________________________ You want your vision to be - _________________________________________________________________________________________________ Future Oriented: What will your business/life look like, feel like, think and say in the future? Where are you headed? What does your full potential look like? _________________________________________________________________________________________________ Inspiring and Challenging: What vivid and energizing image do you want to create for people about your desired outcomes and goals? What is your dream? What mountaintop are you striving to reach? What catalyst will impel you to move toward that dream? _________________________________________________________________________________________________ Motivating and Memorable: What notable and emotionally connecting future direction do you want to keep reaching and pushing toward? _________________________________________________________________________________________________ Purpose-Driven: What is the larger sense of purpose you are striving to obtain? Are you building a cathedral or are you laying stones? ________________________________________________________________________________________________ Unique: This vision is 100% you and your goals, so don't be persuaded by what others are doing! _________________________________________________________________________________________________ Now I want you to take a moment and write one important goal for each of the following facets of your life: physical, spiritual, work or career, family, social relationships, financial security, mental improvement and attention, and hobbies. It doesn't matter if you plan to achieve them 40 years from now or 40 minutes from now, just make them! But don't forget, you want to make them S.M.A.R.T. goals, and you want to use the above tips. _________________________________________________________________________________________________ S-Specific M-Measurable A-Attainable R-Relevant T-Time-bound _________________________________________________________________________________________________ If we can make all of your goals meet this criteria, then you have a goal that's just risky enough to truly push your limits of life and business, and help create the ultimate life you've always wanted! _________________________________________________________________________________________________ Then what? _________________________________________________________________________________________________ If all you do is this exercise, you will likely see some benefits, as your vision will stick in the back of your mind and you’ll unconsciously work towards it. _________________________________________________________________________________________________ However, if you want the best chance of making your vision happen, you’ll need to go further. _________________________________________________________________________________________________ You need to build a system for yourself, where you review your vision and goals regularly, and update your action plan for accomplishing those goals. _________________________________________________________________________________________________ Your main priority should be making your system a habit, something that you do no matter what, that you don’t have to think about or remind yourself about. Start with calendar reminders and task list items and build life planning time into your daily and weekly routines until it becomes habit. They say it only takes 66 days to create a habit so if you can just follow through on one 90 day goal, you'll be closer than 92% of Americans to achieving those goals! _________________________________________________________________________________________________ I, personally, use Brandon Turner's Intention Journal on Biggerpockets for my everyday action plan. It helps keep me accountable and always focused on what matters most to me. Of course I slack off sometimes and sleep-in, or let the busy day get the best of me, but I never feel as accomplished and successful when I don't start the day off with my vision and goals. Keeping them in front of me on a daily basis has been a true catalyst to my continued efforts and success in life and real estate. _________________________________________________________________________________________________ Twice the Advice: A new segment of the newsletter where I add yet another golden nugget of knowledge unrelated to the topic of the month. _________________________________________________________________________________________________ I.D.E.A.L. investments are the only investments you ever want to put your money, or anyone else's money, into. What I mean by that is there are so many opportunities for making money out there. Nowadays people can invest in literally anything, and more than likely either lose money, or not make nearly as much as they thought they were going to make. However, this quick and clever acronym will help teach anyone why real estate is the ideal investment. Income, Depreciation, Equity, Appreciation, and Leverage. I have yet to find any other investment vehicle out there that offers all of these fantastic opportunities to increase your wealth! Since your reading this newsletter you too believe in the power of real estate so whenever someone asks you "why real estate?" just tell them it's the most ideal investment on the market. _________________________________________________________________________________________________ Deals: We are currently searching for Mobile Home Parks and Apartment buildings anywhere in Mobile or Baldwin County. We'll even consider outside of the city limits, but will need further information. Anything over 50 units with a 15% IRR on average. We are always looking for deals and are always willing to help anyone who can find us a deal. We love meeting new people too so don't be shy and reach out to us! Let us know if you have any questions, advice, or deals! We'd love to connect. _________________________________________________________________________________________________ Mobile Market: _________________________________________________________________________________________________ - Airbus will expand its footprint at the Brookley Aeroplex in Mobile by increasing its manufacturing rate to seven planes per month by the end of the year and adding 275 jobs _________________________________________________________________________________________________ - The company will also invest another $40 million through construction of an additional support hangar, increasing its overall investment in Mobile to more than $1 billion _________________________________________________________________________________________________ - This announcement comes as the company plans to produce 63 A320 family aircraft per month worldwide in 2021, according to the statement. The announcement also follows huge growth in 2019 that saw Airbus add 600 new jobs at the manufacturing site with plans in place for the production of four A220 aircraft per month in Mobile by 2025. Airbus is on track to produce about 130 aircraft in the Port City each year for its airline customers _________________________________________________________________________________________________ - An 85-year-old, 3,600-square-foot property, located at 119 S. Ann St. and near the Griffith Service Station in Mobile, will soon open as a high-end, retro barbershop and retail vintage store called Mob Town Proper and Vintage. The concept is the brainchild of local business partners Pete Blohme and Nick Dimario. _________________________________________________________________________________________________ - The duo is probably best known for four popular eateries found in the region: eponymous Panini Pete’s (Fairhope), eclectic Squid Ink (Mobile), beach-themed Sunset Pointe at Fly Creek Marina (Fairhope) and iconic Ed’s Seafood Shed (on the Causeway). _________________________________________________________________________________________________ - Also included in their portfolio is a podcast studio that produces a show called “Hot Off the Press,” which profiles well-known chefs from across the country and is produced locally. _________________________________________________________________________________________________ - “We want the vibe to be a communal, neighborhood space where people can connect,” Blohme said. “There will be ’80s arcade games to play, a jukebox, gourmet coffee to drink and, since I’m an avid collector already, we’ll have a connected antique shop to look around in while waiting.” _________________________________________________________________________________________________ - He went on to say the space will also offer beer and bourbon tastings during the year, celebrity barbers will be brought in for workshops, and cross-promotional offers will be set up within the restaurant chain to generate interest. ________________________________________________________________________________________________ - Also acquired was a plot of blighted residential property, sitting on a third of an acre and located directly across the street at 104 S. Ann St. Plans are in place to convert one-quarter of the property into public parking for the barbershop, with the remainder potentially being developed as residential space along the lines of townhomes or condominiums over the next 18 to 24 months. _________________________________________________________________________________________________ - An opening date is tentatively set for sometime between the next six to eight weeks, pending ongoing city ordinance approvals required during buildout. _________________________________________________________________________________________________ - P.S. Taco Company is setting up a second site in Saraland, with plans to open in April 2020. The Foley-based, fast-casual chain is leasing 1,470 square feet of space in the Publix Shopping Center located at 47 Shell St. _________________________________________________________________________________________________ - TV personality and cooking show host Paula Deen arrived in Foley Monday to hold a grand opening for her latest Family Kitchen restaurant in OWA, a massive 520-acre entertainment complex owned and operated by the Poarch Band of Creek Indians. The 8,000-square-foot space follows the footprint of her three other locations, with seating capacity for nearly 300 patrons. _________________________________________________________________________________________________ - The new eatery also created 150 local jobs in the area upon opening, meeting needs for executive chefs, managers, line cooks, prep cooks, bakers, dishwashers, bussers, bartenders, servers, hosts and retail sales associates. At the event, Savannah, Georgia-domiciled Deen mentioned spending a significant amount of time down on the central Gulf Coast during childhood, so the return to Foley was a bit of a homecoming. _________________________________________________________________________________________________ - Mobile’s economic development efforts through expansion over the past decade have garnered $1.7 billion in capital investment and more than 17,400 jobs with an average annual salary of $54,000. Mobile is ranked one of the nation’s best places to live and grow a business. The low cost of doing business, diverse business base, availability of professional and skilled workforce, intermodal transportation hub and quality lifestyle continue to attract people and business. _________________________________________________________________________________________________ Well guys, this concludes this months newsletter. I hope I've added some value to you and your business, and don't forget to create that vivid vision! If anyone has anything that they would like to hear about in any upcoming newsletters just email me your ideas and I'd love to go over them with you. I'm so ecstatic to be able to be a part of your journey in this new year and if any of you have any questions about anything please don't hesitate to ask! To your success!

Thanks for the input everyone! I'm actually going to be starting a podcast towards the beginning of 2020 and you're all welcome to tune into it! I'll post more about it closer to the start date. I am actually a part of two local REI groups in my area, plus a non-business/friend group, plus a sports group, plus a mastermind group, plus I play drums at my local church and have a church small group I attend as well. I'm just always looking to expand my reach and positively influence others whilst also being positively being influenced.

I’m looking to create lifelong relationships in my local area with other like-minded individuals who strive for excellence. I’m a multi-family syndicator, specializing in Mobile Home Parks. I would love to get to know you and see how we can benefit one another in our businesses and personal life! I look forward to meeting each one of you! Thanks in advance!