All Forum Posts by: Lennon Lee

Come join us at our September 2018 Meetup for an amazing night of networking and knowledge sharing!

For this event we will be having Brad Williamson as a guest speaker. Brad is a Senior Director at Berkadia, one of the largest originators and servicers of multifamily and commercial mortgages in the country.

Brad has over a decade of in-depth knowledge of commercial real estate fundamentals. Has successfully underwritten, structured and closed over one billion dollars of commercial real estate transactions consisting of both debt and equity.

Get your tickets here.

As always we'll be meeting at the amazing spaces of Wework Security Building in Downtown Miami on Thursday September 13th at 6:00 pm

Come ready to learn, build relationships, and share some knowledge with other multifamily investors and industry pros. We'll be having some inspiring conversations over a few cold beers and some hors d'oeuvre.

Get your tickets here.

The nearest parking garage is College Station Garage and it's only $5 after 6 PM. There is also public parking on the streets nearby.

TICKETS WILL BE $20 AT THE DOOR. (ONLY CASH)

Hi Krishna,

I have personally invested both as LP and GP alongside Ashcroft on a few deals. My experience has been great, but maybe I’m biased so feel free to ask around and get comfortable with whatever sponsor you end up investing with.

Here is an article I recently wrote on Vetting Multifamily Syndicators:

https://www.biggerpockets.com/blogs/9859/73520-vetting-multifamily-real-estate-syndicators

I hope this helps. Happy investing!

 Troy,

Yes you can get bring in up to 35 non-accredited investor if you structure it under rule 506(b) of Reg D.

You are required to have a pre-existing relationship with all of the investors and you can’t publicly advertise the investment opportunity.

Consult with an SEC attorney to confirm the best structure for you but generally speaking, the answer to your question is Yes.

Understanding that a good (or bad) deal is not only about the the numbers and returns, for simplicity let’s look at it only from the returns point of view for now.

So here it goes, a good deal is one that hit’s the returns you are targeting. And a bad deal is the one that doesn’t.

I am seriously not trying to be a smarta$$. But I think we can all agree that what is a good deal for you might not be a good deal for me. Return targets are not the same for everyone, people have different goals and strategies, and ultimately we all might have a different reason WHY we are investing.

So the answer really boils down to IT DEPENDS. 

That being said, FOR ME a good deal starts with one where we can apply the necesary strategies to ensure the preservation of our investors capital. (Healthy cash flow from day one, qualifies for long term debt, we have enough capital to fund a healthy cap-ex and reserves account). 

Only after making sure of that, a good deal for us will have to have the ability to hit our target Cash-on-Cash returns (In today’s market minimum 7-8% year one, and 8-10% yearly avg over the holding period). 

The third component that makes a good deal FOR ME is the potential for appreciation, both forced and organic. We like to be able to go in and add real value to our deals to the extent that we can achieve an equity multiple of 1.75 to 2 for our investors.

Lots of other details that we look for before investing in a detail but generally speaking that is what a goos deal looks like for me and my company. I know 100’s of other investors that have a diferent picture of what a good deal looks like and no one is right or wrong. 

I hope this helps. Get your education game going and your own definition of a good deal will start to take shape.

There are many different approaches you can take to actually start investing in multifamily.

Before deciding on HOW you want to start taking action, you first need to stop and think about WHY you are doing it. Is it because you are looking to be more “time-wealthy” and therefore want a passive role? Or is it that you don’t like your corrent job and would like to become a full time active investor in multifamily? 

The answer to those questions will give you a better picture of the approach you should take. But regardless, you should always start by educating yourself, which it looks like you are doing already.

Next step would be to determine what vehicle or strategy within multifamily is going to take you to where you want to go. You shouldnt focus/invest in all kinds of multifamily (ground up development, small multis BRRRR, large apartments syndication, medium size multifamily wholesale, etc). Study them and decide on the one you will be putting all your efforts on.

Lastly go ahead and look at the different options you have to start getting involved: Go and work for an established local (or not) that does what you want to do, become a member of an investor club where you can potentially partner up with experienced investors (you need to bring value), start deploying some capital into some passive opportunities to start learning the process, start buying some properties with your own capital and grow from there....

I hope this is somewhat helpful. At the end of the day only you know where you want to go and by way of education will be able to determine the best route. There’s no right or wrong path.

Your property management company should have all the strategies and systems in place to keep your property occupied.

If you are self-managing from out-of-state (typically a bad idea) then you want to make sure that you work with a local "leasing agent" (depending o  the size of the property) and you have a solid budget allocated for marketing and ideally get to the point where you have a waiting list.

Definitely include property management fee (Around 10% for that size) in your operating expenses. It doesn't matter if you will self-manage or not. 

Travis,

I'm going to second what David said. You will very likely have to come up with 20%.

My two cents here would be that since you have about a year before you make that move, then you should start focusing on building relationships with potential sellers in your area and start conversations about maybe getting some seller finance for the remaining 10%.

There are many other creative strategies for you to get into a $1MM deal having only $100K. Check out Brandon Turner's book on Investing With Low and No MoNey Down.

Dan,

There are many line items you are missing.

You need to account for vacancy and concessions on your gross income calculations.

On your operating expenses you are not including things like landscaping and/or common area maintenance, property management (yes, even if you plan on managing the property yourself), repairs and maintenance, make ready, capex reserves (some people like to include this below the line but I'd go above the line), administrative.

Make sure to include those and maybe some that may be specific to the property and/or location.

The Multifamily Investing Club is getting together for our July 2018 Meetup! We are inviting all those investors, entreprenuers and real estate professionals interested in multifamily investing.

This month we'll be talking about Real Estate Joint Ventures. We'll discuss the Ins and Outs of this structure and understanding how JVs play a crucial role in the development and financing of most large real estate projects.

Purchase your tickets here: https://www.eventbrite.com/e/the-multifamily-investing-club-ins-and-outs-of-a-real-estate-joint-venture-tickets-47473577749

Our guest speaker this time will be the amazing Carlos Imery, partner at IG3 Real Estate and leader of the acquisition and asset management of income properties for the IP Family Office as well as select third parties.

Carlos has a strong finance background and extensive experience in negotiating leases, JV agreements, and contracts in general. Carlos has a vast professional network and is uniquely poised to exhibit the flexible creativity and resourcefulness to make the best out of the ever changing economic and real estate cycles.

Just like last month, we'll be meeting at the amazing spaces of WeWork Security Building (Downtown Miami) on Tuesday, July 10th at 6 PM.

Purchase your tickets here: https://www.eventbrite.com/e/the-multifamily-investing-club-ins-and-outs-of-a-real-estate-joint-venture-tickets-47473577749

It'll be a fun evening of knowledge sharing and quality networking with new and experienced multifamily investors, and we'd love to have you join us!

The nearest parking garage is College Station Garage and it's only $5 after 6 PM. There is also public parking on the streets nearby.

TICKETS WILL BE $20 AT THE DOOR. (ONLY CASH)