All Forum Posts by: Michael Bishop

@Nathan Platter thanks for the mention.

@Joshua Goston its kind of hard to answer your question without knowing what kind of deal you're looking to put together, as structure differs depending on the deal. That being said, some general tips (that come from some assumptions I've made based off of your original post):

1. When syndicating a deal, you've now turned it in to security. Talk to securities attorney. Best piece of advise given all the legal implications if you do things incorrectly and given your level of understanding of syndication in general.

2. I'm not sure what type of deal you're looking to put together, but by your wording "a rental property deal" I'm guessing it's SFH or small MFH. If that is in fact the case, consider another alternative. The legal consultations, PPM/subscription agreement, etc. will cost you thousands upon thousands of dollars alone, which is why syndication is typically used for larger deals that can support the cost.

3. If I'm wrong and you are putting a larger deal together (commercial MF, self-storage, mobile home parks, retail space, etc.) or you still want to look into syndicating regardless, @Kim Lisa Taylor may be able to help you out.

@Jon Horton I think the answer to your question largely depends on your desired activity level (passive vs. active) and your risk aversion. If you like passive opportunities on investments with downside protection built in, I would recommend looking in to syndication deals - multifamily, self storage, mobile home parks, etc. At 54 I wouldn't take too many risk, but as @Larry Fried said, you can certainly find low risk deals. Here are some blog articles I wrote to get the wheels turning:

What is Apartment Syndication?

8 Reasons Apartment Syndication is an Appealing Investment Vehicle

Happy to connect and discuss so don't hesitate to reach out!

@Justin Thiesse a bit late, but some thoughts I had as I read through the thread:

1. I haven't heard of Scott Meyers, but apparently we both need to look in to him!

2. I'd echo what @Kris Bennett said and recommend to base your numbers on the market, not what others in different markets are saying. There is not going to be any one size fits all CAP rate, occupancy rate, supply/demand equilibrium, etc. As Kris said, try to find 1-,3- and 5-mile radius SS unit supply and population numbers, and compare to the widely used national average of 7sq.ft./person as the equilibrium. Under supply favors you, as do infill locations.

3. Don't compare to MF. Different asset classes, different key metrics. Dangerous game to compare the two.

Best of luck, and happy to connect and discuss!

@Yishai Cohen I would add to what everyone else is saying and recommend that you be forthright with your investors that cost segregation/accelerated depreciation efforts are a  tax deferral and not a tax avoidance. While it's an amazing tax benefit to defer payments and grow your investment tax free on your initial capital PLUS your earnings, it should be made clear that they will eventually pay taxes on capital gains when the property is sold.

Still better off than with many alternatives, though.

@Robert Naucke Jr, the requirement that one must be accredited to invest in certain alternative asset classes is regulated by the SEC, so no, no way around it... unless that person/company wants to go to jail. While many agree the accredited status is high, there are reasons for it (namely to protect everyone involved, especially the investor) and the SEC has also allowed non-accredited/sophisticated folks to invest in these types of deals through a different structure - the 506(b).

It is 100% okay for you to reach out to Sponsors or other people putting together the deals you're referring to. In fact, that is the ideal situation for Sponsors/those raising money. Requirements will still be the same though - past relationship, understanding of investments knowledge/accredited status, etc. The SEC doesn't put steadfast rules on it (i.e. "Sponsor must know investor for 21 days exactly before presenting them with an investment opportunity"), but some guidelines are in place that all Sponsors/Operators in the space will follow.

That being said, you're best off finding a Sponsor who may offer investments structured as 506(b) if you really want to get in to the space. Keep in mind though that most have a minimum investment of $50K-$100K with hold periods anywhere from 3-10 years (ish, this varies of course), so you'll be tying up a good chunk of your solo401k as most of the time it's advised that these types of deals be considered "illiquid."

Love the representation from Crown Point here. I'm from Crown Point myself, moved to Austin in 2014.

@John Woosley you're off to a great start, so kudos on that. 2 simple recommendations (aside from just keeping up what you're doing already), but big ones:

1. Never stop learning

2. Never stop making connections

#2 especially, real estate is 110% a relationship business.

Hi all, I'm running a meet-up here in the Austin area that was formed, and had our first meet, in January. We have a (slight) focus on commercial real estate syndication, but welcome any and all individuals interested in any aspects of real estate. We have members in every area.

Structure is fluid at the moment as I aim to cater the the group consensus, but we are meeting and "going with the flow" as we grow.

Feel free to PM me your email address if interested and I'll add you to our distro!

@Chase Gu, here are a couple of blogs that may help you understand MF syndication a bit better:

What is Apartment Syndication?

Recipe for Successfully Investing in Mult-Family Syndication

Hope this helps. Happy to connect and discuss.

@Alex Silang I think there's a very fine line to walk between your REI life and respecting your W2 employer. That said, it is certainly acceptable in certain situations to talk about your REI side hustel. I wrote a blog article on the topic recently if interested:

3 Tips for Balancing Real Estate Investing and a Full Time Job

@Pavlos Kasselouris, as @Michael Le & @Omar Khan have indicated, it's really more about the specific deal and how you want to structure it. If it's a small multi-family flip that you only need $200K for, or if the only people who will be investing are family and friends, deals along these lines.. syndication would be a terrible choice because of the resources it requires.

However, if you want to take down an entire apartment complex, or a big office space, and require millions in capital for which you'll need to go outside of your inner circle, syndication is basically a necessity.

So, you need to know all the nitty gritty about your deals before deciding how to structure it in terms of raising private equity. If you do decide to go the syndication route.. advice or general discussion on BP is great and all, but don't take anything anyone says as the holy grail (unless they're a securities attorney). Instead, get in touch with a securities attorney to CYA (cover your a$$). @Kim Lisa Taylor is a pretty active securities attorney here on BP and may or may not have some insight for you.