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All Forum Posts by: Joseph Bramante

Joseph Bramante has started 11 posts and replied 152 times.

Originally posted by @Jonathan Jewell:

Speaking of syndication attorneys.  I did speak to a well known one out in CA (Not naming names), and it was really not a good overall experience.  Basically was told I had to do all the marketing, and all the contacting of potential investors, set up the websites etc.  I then asked what exactly then does the $15k fee I'm paying cover if I'm doing most of the work????   Answer was the fee was to file the 506c paperwork because its really complex and time consuming.  Just completely turned me off.  But reading through this thread got me interested again,

 After doing several PPMs, I can tell you that a lot of the language is boilerplate. After you have done a few PPMs through attorneys and other sources, you can take a stab at writing them yourself. I'm sure I will get a lot of grief from the attorneys on here who specialize in this, but myself and several of my mentors have or currently write our own PPMs. You do NOT need to be an attorney to write these. The attorneys will certainly do their best to scare you into using them and list the thousand different ways you can end up sued or in jail but that is just scare tactics. And you should certainly listen to their advice when you are new because you need to know these things. Once you are dealing only with accredited investors, it takes a lot of responsibility off of you and puts it onto them, since in the eyes of the law "they should know better". Nonaccrediteds have a lot more protections in place to prevent people from ripping them off, but those "rich" accredited's have fewer protections and should be well versed in the risk of every investment, so they don't need you to tell them of the risk in your PPM. This is why you can advertise to accrediteds but not nonaccrediteds if you have the right offering open. 

But yes, you will be spending about 20k all in (including operating agreement) before you even have a PPM to raise capital. Takes money to make money, as they say. 

Originally posted by @Mike Dymski:
Originally posted by @Joseph Bramante:

@David Thompson great article, though i do have a few comments in regards to some of your items:

3) When will I get my original investment back and what is the holding period? We typically return our investors their investment after 2-3 years via a Cash Out Refinance. We try not to sell any of our assets.  

Joseph, do you take your investors out of the deal with the refinance and then you own the property 100% or do they stay in the deal?

Our investors stay in the deal, even after we distribute over 100% of their proceeds. The only time they are ever out is if they sell their shares or we sell the property. We would much rather use the money from the refi to buy another property than try to own 100% of a single one. This way we are diversified in the market. Don't have all of our funds in a single property. Great question!

@Jillian Sidoti Great advice. Something I know I personally need to do a better job of. Thanks for your comments. 

@Todd Dexheimer I think the most important thing that is universal and you touched on this in your comment is to know your numbers and not bid above them. Its easy to get carried away during the bidding process. Brokers try their hardest to get people emotions worked up so they can raise the price and they (the brokers) make more money. So no matter what size property you are buying, don't buy above what your numbers say the property is worth. 

ok guys. not going to get into a word smithing argument with you.  

@Mike Dymski Sorry, yes obviously any competent CPA will be depreciating expense below 2500. But that is not a "cost segregation" A cost segregation is a 20-30 page document that gets included with the properties taxes that is requires an engineers approval. It is important not to confuse the two since they are two different things. 

@Mike Dymski According to the IRS, the person completing the cost segregation study needs to be familiar with the construction processes. They can not be a normal CPA. You will need to use a firm that specializes in Cost segregation studies. I have done this twice already with a 3rd planned. It is typically best for big value add projects, not small 3k/unit rehabs since the survey itself cost you a few thousand bucks. 

https://www.irs.gov/businesses/cost-segregation-au...

@Jonathan Jewell The answer is "very carefully". jk. Talk to a Securities attorney. They can brief you and the dos and don'ts within an hours time. Check with @Kim Lisa Taylor. Sorry to hear about your deal. That sucks when you get to the finish line but can't close due to equity. Just be sure to back out before you lose anything and be honest with your broker so they don't feel mislead if you back out suddenly. Your reputation is everything among brokers. Do what you say you will do. 

@Todd Dexheimer Agree to disagree. 1) yes you can get non-recourse but not likely as a new buyer. I have non recourse on my 26 and 61 unit. In general new buyers will be buying recourse, especially if there is any construction hold back. 2) Your expenses do not grow linearly with your income. Your total expense per unit decreases as you do bigger deals. That is just facts. 3) You are operating several MFs like a SF with a shared property mg and maintenance man. Most people will not have several small MFs. Especially if this is there first one. Also, a SF prop mgr and a MF prop mgr are too diff skill sets. Similar but the MF PM must handle more. 4) Until you bid on larger properties (200+), you won't understand. Your statement is all based on assumption.  

Close those deals you have under contract that are over 100 units and maybe you will agree with me on the above. But for now, your perspective is entirely based on the small deals you have done. No offense. I'm providing perspective from somebody who started small and grew big. You want to be only doing big deals if you can. From reading your comments, i know you are well on your way to getting there. Just a matter of time. 

Post: Large apartment investors please chime in

Joseph BramantePosted
  • Developer
  • Houston, TX
  • Posts 157
  • Votes 132
I started in 2010 so missed that down turn fortunately. But I know several people who now have day jobs because of it. I was in a situation on my first property where we loaned the property 80k during its renovation for carry cost since we vacated the entire complex to convert the class D to Class A. Or most recently, we were pushing rents 200$ above previous rent and didn't respond quick enough when we finally got some resistance and dropped to 75% occupancy temporarily. We deferred our Mgmt fees until the occ and cash flow improved. I think most syndicators do the right thing and have good intentions since it's hard to be a crook in this industry. So if they make a mistake, they fix it quickly and put their investors money ahead of theirs. The last thing you want to do is piss off a group of investors.

Post: Large apartment investors please chime in

Joseph BramantePosted
  • Developer
  • Houston, TX
  • Posts 157
  • Votes 132
Andrey Y. The problem is every syndication is a private company so it's nearly impossible to get an answer especially one that's accurate. That question is better asked to a group of passives who have invested in multiple syndications with multiple sponsors. As syndicators, we tend to only focus on our own performance and not our peers. We have nearly doubled the NOI on all of our properties.