All Forum Posts by: Michael Bishop

@John R Olson I've never heard of any of these funds or groups but can provide some general feedback.

1. From my experience, your 2 year max criteria will be fairly difficult to find. I'd suggest some flexibility on this as many funds (or individual asset deals, for that matter) project a 5-7 year hold but really end up exiting in 2-3 years.

2. 12-15% is also very good. Be cautious of any group that promises that. If current income is your primary objective, be sure to pay attention to preferred return and CoC. Often you'll see a pref (normally 7-10%, but in your case perhaps 10-12%) but the projected cashflow is more like 4-5% and the pref will be caught up at an equity event. Not saying this is bad, just something to consider.

3. I suggest considering splitting your investment up among your top 2-4 choices to spread risk and increase likelihood of continuous distributions.

4. I have a few groups/funds that may be worth considering but can't post publicly, feel free to DM me if interested.

@Ryan Lowe you may get some more thought out answers if you provide more detail. But, and I'll admit I'm a bit bias here, I would consider syndications like @Account Closed suggested. About as passive as it gets in real estate, you mostly just need to vet the Operator, and it has some incredible potential tax advantages. I say potential because you need to make sure the Operator actually knows how to leverage them. Feel free to reach out.

I'm surprised at the lack of mention of vacancy risk in this thread. With "all numbers equal" -- I'm assuming you mean all in cost, cash down, total revenues, net income, etc. -- I would go with the 15-unit MF strictly for vacancy risk. You'd have to have 3 tenants vacate and leave and the units remain vacant to have the same impact to your bottom line as just one SFH. That's not to mention the ease of management and ability to achieve economies of scale that comes with MF with all units being in one physical location.

Class A 9-10%
Class B 7-8%

Any lower than that would raise some flags for me. A CoC lower than the pref is okay for the first year or two with justification; burning off bad debt, low occupancy during renovations, building out new units, etc. The preferred accruing, or "rolling over" if you will, is also an import consideration.

@Mike Miller often times in order to 1031 into someone's deal (as opposed to 1031ing from one of their deals that you've invested in to another), they will require higher amounts of capital to make it worth the additional efforts. If you have that amount to 1031, I may have some folks I can connect you with. Don't hesitate to reach out privately to discuss.

I love this. You've echoed a lot of what I wrote on the topic a few years back.

@Sasang DocI find this thread interesting as I'm in a similar position myself. Diversification and leverage are key to me, so I'm doing just that. Residential multi in my local market, one AirBnB (this one is the furthest out from execution, as I'm still only narrowing down the market), and throwing the rest into syndications as they're about as passive as can be and syndication funds offer the most diversification bang for your buck, in my opinion. If you want more info on the latter, feel free to reach out.

@Allen Smith have you considered investing in syndications? Seems right up your ally based on this post.

@Bryce Clark I also agree with the syndication suggestions here. I do like STRs, but nothing can hold a candle to syndications in terms of passiveness. Maybe even diversify and do both.

You could fairly easily net your buddy $240,000/yr cash flow on that sum(this is very conservative), show a paper loss on that sum yearly, plus benefit from forced appreciation that will likely outpace the speculative appreciation in most markets; all while barely lifting a finger.

Of course you’d no longer be managing that large sum, but I’m sure something could be arranged for your mutual benefit.

@Marcin Nurek are you able to share yet?