All Forum Posts by: Ken Martin

@Jon Ladas @Matthew Watson @Rich Hupper @Andrew Johnson

Have you guys found that a certain time of day gets more responses or a more talkative owner? Also, have you tried using a service that does the cold calling for you? I'm curious as to how effective a service is given they're probably less personable. 

Is it worth paying membership fees for NAA or a state-level apartment association? We purchased a 60 unit apartment building in Charlotte, NY, and want to make sure we have a lease template that is thorough and protective for that area. Is it worth paying the membership fee for a NC Apartment Association membership, or is a one-time fee to a local lawyer more cost-effective. I have been told by a number of institutional players that NAA or state-level association is definitely the move, but it sounds like an unnecessary cost to me. Is there any other resource to get NAA quality leases by state? Do they offer other value-add services? Any thoughts would be helpful!!

Is it worth paying membership fees for NAA or a state-level apartment association? We purchased a 60 unit apartment building in Charlotte, NY, and want to make sure we have a lease template that is thorough and protective for that area. Is it worth paying the membership fee for a NC Apartment Association membership, or is a one-time fee to a local lawyer more cost-effective. I have been told by a number of institutional players that NAA or state-level association is definitely the move, but it sounds like an unnecessary cost to me. Is there any other resource to get NAA quality leases by state? Do they offer other value-add services? Any thoughts would be helpful!!

Hi BP community, I am currently having a debate around how to structure GP and LP interests in a real estate syndication. My ideal structure would be through three different entities. 1) Property level LLC that the asset will be purchased through, 2) GP level LLC that will only collect fees and promote/carry from the deal, and 3) Company level LLC that will invest in the Property level LLC along with all of the other individual LP investors. In this structure, the Company level LLC would participate in the deal essentially as an LP but maintain majority voting rights, while the GP level LLC won't technically be investing any money in the deal, it will be wholly owned by the Company level LLC, and will be involved in a management capacity while collecting fees and promote. This structure just seems very clean to me, but are there obviously legal, accounting, or tax issues with this structure that I'm missing? What is the ideal structure that minimizes the number of LLCs that need to be created?

@Dave Foster thanks for the detailed response, this is very helpful. None of our investors will be 1031'ing INTO the syndication, so that's not as much of a focus currently. I guess I have one follow up question, and one point of clarification.

1) Why don't more syndications use the TIC approach? I think I read that it would require every investor/tenant to be on the loan, which seems prohibitive? Any other glaring hurdles?

2) Am I understanding you correctly that in an LLC structure, the investors that DON'T stay in for the 1031 roll will essentially be taxed through the entity level before they get their cashout distribution? Will they ALSO be taxed again on their own personal level on that final distribution, or is the entity-level tax on the shoe (and subsequent reduction to their final payout) the only taxation they'll see?

Hi BP community, I am about to kick off a syndication/raise for a great multifamily property in the midwest, and a few potential investors have expressed concern around investing given they would want to be able to INDIVIDUALLY 1031 their profits into a new property in 5yrs when we exit. I've done a lot of reading on different strategies, and am trying to understand which is the most applicable. It sounds like structuring the deal as a TIC upfront is very difficult from a lending standpoint? It also sounds like a Drop and Swap can get hairy if done at the end of the hold period, especially with a promote structure. Is there a way to just pay out the investors that don't want to 1031 at the end of the hold period, and execute the exchange with the remaining group? Is there a tax consequence for those investors you buy out? Any clarity is very much appreciated.

Hi BP community, I am about to kick off a syndication/raise for a great multifamily property in the midwest, and a few potential investors have expressed concern around investing given they would want to be able to INDIVIDUALLY 1031 their profits into a new property in 5yrs when we exit. I've done a lot of reading on different strategies, and am trying to understand which is the most applicable. It sounds like structuring the deal as a TIC upfront is very difficult from a lending standpoint? It also sounds like a Drop and Swap can get hairy if done at the end of the hold period, especially with a promote structure. Is there a way to just pay out the investors that don't want to 1031 at the end of the hold period, and execute the exchange with the remaining group? Is there a tax consequence for those investors you buy out? Any clarity is very much appreciated.

Hi BP community, I am about to kick off a syndication/raise for a great multifamily property in the midwest, and a few potential investors have expressed concern around investing given they would want to be able to INDIVIDUALLY 1031 their profits into a new property in 5yrs when we exit. I've done a lot of reading on different strategies, and am trying to understand which is the most applicable. It sounds like structuring the deal as a TIC upfront is very difficult from a lending standpoint? It also sounds like a Drop and Swap can get hairy if done at the end of the hold period, especially with a promote structure. Is there a way to just pay out the investors that don't want to 1031 at the end of the hold period, and execute the exchange with the remaining group? Is there a tax consequence for those investors you buy out? Any clarity is very much appreciated.

Hi BP Community, I am currently in the process of trying to close on 2 Multi deals in SW Michigan, and am curious as to what type of financing terms you're seeing. I guess the question is, post the 150bp of emergency Fed cuts, are you seeing 3.5% IR on fixed or floating with 5yr term and 25-30 yr amm? Curious what I should be pushing for vs what is expected at this point in the market. One of the properties is a small unstabilized 6 unit (2brs) property, and the other is a larger 30+ unit property. Any thoughts?

Hi BP community. I currently have one apartment building that has appreciated materially. I am negotiating financing on a second property in the same market. The new lender is recommending refinancing the first property (which I planned on doing anyway) by basically paying off my original mortgage, combining the two properties under a new loan / mortgage.

How should I be thinking about this? It seems like it would save me a decent amount of origination fees, etc. Does it prevent a future sale or 1031 of just one of the properties? Does it make my properties more vulnerable? I planned on using the 1st property at collateral for the second anyway. I just want to make sure I’m thinking about this the right way!