All Forum Posts by: Dylan Tanner

Right now I am just ramping up my mailers.
About a thousand this month but increasing at a fast clip next month.

I am different in that I own a commercial real estate company and as the head broker I am searching for listings to obtain and also off market properties for my buyers and myself. So I am targeting specifically triple net properties and larger apartment buildings because they are what I focus on day in and day out for my clients.

I have a full time research analyst doing nothing but building my mailing list and research from scratch that is local to me. It is a ton of work sourcing the information as each county in my state has different zoning codes, different assessor search functions they use by county, etc.

I am using a white envelope mailed every month and we were using labels but switched to printing out from the printer on the envelopes because it's cheaper and I am not limited on a label size with what I can print. The larger label size the less labels you get for the money.

I bought an HP 8100 only printer that was 150 on sale at Staples for 96 bucks to give to my assistant to use. The XL black cartridge costs 36 bucks and does about 2,500 full size pages. Since we are only printing return mailing address and mailing address on each envelope the copy count should be around 7,000 to 8,000 envelopes or more because of the limited text. The auto tray holds 250 envelopes at a time and we mail merge the lists to auto print. I like print on the envelopes because we can choose a handwritten font for the outside for the addresses.

I have a local UPS store that will print black and white copies for 4 cents a piece which is cheap that I go to. They wanted 8 cents to print out the envelopes outside addresses so I decided to do those ourselves. I can print the outside addresses for less than 1 cent per envelope. Best price on envelopes I have found is Staples at about 8 dollars for 500. Occasionally they run a sale with coupon to where you can land for 5 bucks and I stock up.

I checked into bulk mail and first class would go from 46 cents to 36 cents but I would have to pay an annual fee. With the volume I will be doing the fee will be worth it.

So far I have :

Letter 4 cents Envelope at 500 for 8 bucks at 2 cents Mail at 46 cents currently but I am working on 36 cents and annual cost factor Print outside of envelope 1 cent (ink cost) Roll sticks so you do not have to lick the envelopes 1 stick at 2.00 does about 2,000 envelopes marginal cost at a fractional of a cent

So I am at 49 cents per piece mailed and I haven't even factored in savings from getting envelopes for 5 bucks instead of 8 or saving with bulk mail.

I like the fact I have a full time assistant who only focuses on my business and nothing else. I know many cannot afford such a person but for me and what I am doing it works. Yes the assistant is a cost of mailing but I have other things they do for me as well. I plan to get up to about 4,000 to 5,000 a month.

Originally posted by @Dylan Tanner

• 70/30 for any return after the 8% PRR

Let's clarify this statement since I have heard it done in two different ways. First off, the preferred return that we offer is to let our potential investors get the first chance at the pie,

Option 1

Once they have received the preferred rate, then the sponsor gets to catch up until the split equals the 70/30 or whatever was agreed upon.

Option 2

In your statement, it sound like you are going to give the investor 8% and then split everything after that.

So here are the scenarios.

8% total return

In Option 1- all goes to the investor

In Option 2- all goes to the investor

10% total return

In Option 1- 8% goes to the investor. 2% to the sponsor.

In Option 2- 8% goes to the investor plus 1.4%(70% of the 2%) and the sponsor receives .6% (30% of the 2%)

12% total return

In Option 1- 8.4% goes to the investor. 3.6% to the sponsor. Straight 70/30 split. Preferred return does not kick in, since the investor is receiving above the preferred return rate.

In Option 2- 8% goes to the investor plus 2.8%(70% of the 4%) and the sponsor receives 1.2% (30% of the 4%).

I don't know about the other syndicators, but if I can get my investors the stated preferred return, it my turn at the table until we catch up with the stated split. In the third example the investor is getting a 10.8% return to my 1.2%. To me this is not a viable option.

What do you do when you need to approach the investors for more money? Let's say for example you're purchased an office building and a very worthy law firm wants to sign a 10 year lease, but requires $X in TIs that require"

Initially we raise sufficient funds to cover our startup costs and capex. We the budget and build reserves to cover unexpected expenses. We are not currently buying commercial properties other than MF, therefore don't deal with tenant improvements. If we did, we would build reserves for it and vacancies. In our model a cash call for more funds is one of the last things we would do to prevent the deal from failing. We mitigate risks as much as we're can by planning and reserves.

-Yes, the investors expect to get paid for use of their money. Holding it and not paying pref. on it while it is in use will be hard to sell

-How the classes get paid is extremely complicated and has to do with capital account allocations, etc. It also depends on when the dollars get deployed versus when they're taken in to the project or fund. It also depends on how you structure things. We have a make-up return or match that keeps the percentages level provided there are enough dollars to go around at distribution time. So the promoters get a "match" on the preferred return to keep us in balance according to our splits. So if things go as anticipated/expected the split is 60/40 with 60 going to the investors. There are a billion different ways to structure this though and it depends on the project and a number of other things

@Dylan Tanner

The old forum was closed for some reason. BP consolidated a lot of the old forums and groups. I would like to see a syndication forum make a comeback and be combined with crowdfunding.

Withdrawals can be handled in many ways. Your agreements should spell out how they're handled. Ideas:

1. Penalties for early withdrawals where you use a dutch auction to other investors to sell the shares

2. Offer a different class of shares with shorter time horizons to add liquidity for the investor with the tradeoff being a smaller preferred return for said shares and/or a less favorable back-end split

There are many other ways to handle this, but each of the items above are used in agreements I have seen or participated in.