All Forum Posts by: Kyle Vogeler

Hey Nicholas! Love the plan to slowly grow your portfolio. I am a PA based realtor myself - lets connect and discuss strategies at some point. 

Although it is possible to start out at such scale, you have to remember that you are going to make beginner mistakes and may want to consider a partner for your first deal. Not only will it help from an experience point of view, but the banks will prefer it and may not lend to you unless you have a partner. 

That being said, I purchased a 6-unit and then a 26-unit only 6-months later. It definitely wasn't impossible, I did research like crazy and I made sure to have adequate cash reserves for any issues that may arise.

Would love to talk about this more and tell you about some of the things I learned so you don't make the same mistakes!

Welcome, Josh! Do you know what area of real estate you want to get into?

This is a good question and the answer really lies with the investor.

I have a decently wide search radius when I look for properties because I don't necessarily care about proximity to me, I care more about the individual deal. 

Each option you choose comes with its own challenges. 

If you choose to invest in only one area, then your growth may be slowed as you don't have as many deals to choose from. You're also more prone to portfolio fluctuations if that area is hit with economic hard times. 

If you invest in many areas, then you have to do extra work with each deal. You have to learn the desirable and undesirable parts of the city you're looking at, you have to create a whole new list of contacts for maintenance and management in that area, and much more.

So, as I said in the beginning, it really comes down to your personal goals and preferences. 

From my experience, it is very hard to get a 100% financed deal. Most lenders just won't accept you not having any "skin in the game". However, that doesn't stop me from trying to get my deals 100% financed...eventually I may find a way to make it happen. 

Personal story - I've had a deal under contract before where the bank would provide 75% of the financing. I then made a deal with the seller where they would pay for ALL closing costs and hold 25% of the debt with NO lien on the property. It would've been a true 100% financed property. I thought the bank would give it the "OK" since there was no additional lien on the property, but they still said no and lowered the amount they were willing to lend. I was upset to say the least. 

Shawn, 

I love the goal! Do you have a track record in real estate? One hurdle you may run into is finding attractive financing rates if you have no prior properties. The banks like to see experience, so it may be best to find a partner on your first property. Not only will you learn from your partner, but you will get better returns our of your deal - a win-win!

All, 

I am working on putting together my first formal syndication and would like guidance from those who have completed them before.

- What are the biggest challenges you faced? 

- What took longer than expected? 

- What was easier/quicker than expected? 

- What resource or team member did you have that made the process easier? 

- Any other concerns or steps that I should be cautious/aware of?

Thank you all in advance!

Dario, 

In order to give creative financing advice, I'd need to have a better understanding of the tools currently available to you.

For instance - 

1. Do you own a home that you could refinance or use a HELOC? Equity in your personal residence could be a source of capital for your first rental property.

2. Do you have an IRA? If so, you could designate the IRA as self-directed or take a loan from your IRA to purchase an investment property.

3. Find a seller that is willing to seller finance. In certain scenarios, you may be able to find a seller that is willing to hold a portion of the debt while a bank covers another portion, leaving your out-of-pocket requirements to be low.

4. What I recommend you do, is begin to grow your network. Attend events and meet-ups, let people know you are interested in getting into the game and want to partner on a deal. Your first deal may require that you give 90% of ownership to the other partner (given experience and capital), but 10% of something is better than 100% of nothing and it lets you get your foot in the door!

Leroy, 

Using the equity in your properties all depends on your personal goals. Are you looking to build a substantial portfolio or do you want to maximize your monthly cash flow? 

Refinancing will give you access to roughly 75-80% of the equity you've built in your property, but the cash flow on that property will be significantly reduced. 

If refinancing allows you to buy another property that would increase your total monthly cash flow OR if you are in an area where properties appreciate quickly, then it would be in your best interest to make that move.

But, if refinancing to buy another property has a net negative impact on your monthly cash flow and/or you are in an area that doesn't appreciate quickly, then you may want to consider selling your first property in search of another bigger property.

As for student housing, I do not have personal experience with this, but like the aspect of continuous demand due to a continual flow of students.

What methods of fund raising for syndications have given you the most success? Or has it been a mixture of multiple methods?