All Forum Posts by: Account Closed

@Corvez L Kendrick Congrats on jumping into the multifamily world! I have some pretty strong opinions about coaching groups after being in 2 before I found a coach and group that was genuinely built for member success. 

A word of caution - the coaching industry can be pretty crowded and if I may be blunt (I'm Texan and I can't help it) - it's pretty slimy, too.  There are many programs designed to build a coaching empire - NOT a real estate empire (clue - many sub-coaches). After spending $53K BEFORE I found the right group, I learned some crucial lessons - my 2 cents below on what to look for and what to avoid.

1. Willing to partner with you in ANY market as long as they like the deal (you need the credibility and financial backing) - there are groups out there that will only partner with you in a specific market (i.e. within a certain # of miles) and this creates a ton of competition where all the members are fishing in the same pond.

2. One-on-One coaching DIRECTLY from the "main" guy/expert - avoid groups with "sub-coaches" (<--these are put in place because they can't handle the volume of new members)..makes you wonder if they're focused on building a coaching empire and making a ton of money from that - OR building a successful real estate portfolio & focusing on the success of their members. If there are a bunch of sub-coaches you may also notice that anyone can join the group if they can pay the fee - look for groups that vet their members since these will be your future partners.

3. Make sure your coaching is coming from someone with 7K - 8K unit portfolio - across multiple markets - and has been through a full deal cycle on multiple deals. There are a lot of gurus popping up selling coaching and they've only done a few deals. You need a strong backing when doing these deals!

4. Avoid groups with weird rules (must use their buying broker and/or can't talk to brokers directly, can't partner with people outside of their group, the coach will only partner with you in a specific market, must use their PM, nickel and dime you on additional fees, etc)

5. Culture of the group - is it established & maintained? These people will be your partners - make sure integrity, character, etc are required values to join the group. This starts at the top with the leader.

6. Reputation in the industry - with investors (is the portfolio hitting targeted returns), with brokers (are deals closing once under contract), with lenders, etc. Be careful who you learn your underwriting from! *I have a really great webinar series on underwriting if you want some structure around what to look for - can't post the link here so feel free to message me

7. How many people in the group are doing deals and getting into General Partnerships? How long does it take to do so? What is the track record of members? How long does it take a member to join a GP? 

8. You have to pay to play in this world - if you want the fast track.  Don't cheap it on a coach - you get what you pay for. If you put the work in and dedicate yourself, it can pay off 10 fold and more - get a coach that can get you there faster (they'll probably cost more).

Hope this helps! Trust your gut and intuition...if it feels like a dog & pony show with a lot of flash & money & sales pressure...it's most likely just that. Find a coach who cares about your success and members in their group who are successful!

Best of luck! Feel free to reach out if you have questions.

@Jonathan Carrera Call an SEC/RE attorney - HIGHLY recommend Dugan Kelley.  He has been our attorney for all of our capital raises/acquisitions and he's exceptional. 

@Donald DiBuono - a typical deal in the syndication space would charge a 2% asset mgmt fee (as described above) and an acquisition fee of 2% (based on the purchase price and paid to the GP team at closing)

@Suresh Kannan My father and I have a financial market background - he's a professional trader (Forex & Futures) and managed a small hedge fund for years - I was on the financial education side of the business.  We noticed many shifts in the markets that made it more challenging to achieve the returns our investors were accustomed to, so we decided to pursue hard assets and realized Multifamily would be the most recession-resistant. In our first year, we closed 173 units (then Covid hit, so it slowed down our acquisitions), 2nd year, we closed 236 units, and now we're using the same syndication model to invest in Texas Vineyards - while still pursuing more MF deals. If you're looking to pursue the Active side of MF, I'm happy to chat on a call and share the good/bad and the ugly :) 

@Guy Idan Highly recommend Mark Kenney with Think Multifamily - his portfolio is 10,000+ units and has had many deals go full cycle - very happy investors.  He also did a really great webinar series for investors titled "Tricks Syndicators Play to Make the Numbers Look Good." There are many nuggets of info and great questions to ask operators as you're evaluating a deal and their underwriting. Shoot me a message if you want the link - it won't let me post it here. Cheers!

@Serena Kim I agree with what Charles said above - the other advice I'd add to this is the attorney - HIGHLY recommend Dugan Kelley - he has done all of our acquisitions and is incredible - especially when you have a challenging seller - he's great at keeping the deal moving forward. Our costs are about in the middle of your range listed - if the deal is more complex (i.e. has 1031), the cost can increase another $10K - $15K. Best of luck!!

@Brian Warren - YES it's possible.  We did it - went from very little RE experience to 173 units as our first acquisition.  As many on this thread have said, it's a different world when you start looking at 100+ units - you need an experienced partner's track record and credibility to get the attention of brokers and lenders. We (my Dad and I) decided to hire a coach and leverage his experience and community to help us get deals closed. If you pay to play, you can get there much faster. A good solid team can help you raise capital, put up earnest money, KP, etc.  You could certainly start smaller and work your way up...but if you're going to end up there eventually, why not skip all that and GO BIG. When we first started we didn't realize it was possible to acquire 100+ units so we started with a 6-unit and WHAT. A. HEADACHE. It's so hard to scale a portfolio and grow. When you work with a team of partners you can continue building your portfolio because you don't run out of resources. Best of luck!!

@Andrew Merritt Yes - can be referred to as a sub-syndication or like @Taylor L. said, "fund of funds." You'll be responsible for your investor's K1s and you'll definitely want a good attorney to help you set it up.  HIGHLY recommend Dugan Kelley - he has set up numerous funds like this for my partners. Best of luck!!

@Jacob Maes Thank you! We certainly could not have done it with our GP team - it takes a village :) Yes, we hired a coach - our success came with our 2nd coach because the first one was a bust.  When we hired the 1st coach we were brand new - didn't really know what to look for and the coaching space is pretty crowded and confusing.  If you find yourself going down the coaching route, feel free to reach out - I'd be happy to share our lessons learned and what to look for in a coach/community. 

@Jacob Maes It took us about 4.5 months to find it and closed it around the 7-month mark - 173 units.  It's certainly a game of patience and waiting for the right deal.  I wouldn't say all deals take that long...I have partners who are acquiring 2-3 large properties/year. The first one can be the most challenging as you're building credibility and broker relationships - hard to go into it "brand new" but easier if you have a partner/coach that you can leverage their track record.