All Forum Posts by: Mike Lawrence

Thanks Kash for the recommendations! We'll add them to our list. 

Thanks Greg for the feedback! We'll add Lifestyles Unlimited to our list to research. Congrats on all of your success!

It's possible that the 24K is the fee for the property management company, (usually around 5% of Income) not an on-site staff member. If there's a listing broker, ask for clarification. If there's not a listing broker and you're local, go for a site visit to verify. My guess is there's no on-site staff. 

My wife and I have been investing in real estate for the past 20 years and we have decided we want to focus on multifamily investing in order to scale up cashflow and create wealth at a more rapid pace. We are also entrepreneurs who have run a successful marketing firm since 2011, so we have experience building a business from scratch, hiring, marketing, building and leading teams, high-level negotiating, etc.  We are go-getters who are looking to scale up fast, but we also realize that we need to do it right. We've already taken a few online courses and read some books, so we're getting our head around the multi-family syndication business. And we realize that it IS a full-time business. All that being said, we're considering hiring a mentor who can provide guidance, keep us from making mistakes, and partner with us to close deals since we don't yet have the experience and investor network to close deals on our own. We have come across Michael Blank, Mark and Tamiel Kenny, and Brad Somrock as potential mentors to work with. Can anyone share from personal experience working with any of these guys? Or perhaps another mentorship program? And in general, do you believe it is worth the 25k+ price tag? Or do you think we could network to find mentor/partners and avoid the large up-front investment? 

Jason,

My wife and I are on a similar journey looking to transition into the multifamily arena. We are in the education phase right now. A great book to read to gain some incredibly valuable knowledge and insights is "Best Ever Apartment Syndication Book" by Joe Fairless. He does a fantastic job breaking down what it takes to become an apartment syndicator and everything involved with finding and closing deals. It is definitely something that comes with a massive responsibility because you are dealing with millions of investor capital, and it is your duty to preserve, protect, and grow that investor capital as a syndicator. Our approach that we have decided on is:

1. Get educated - read books, take courses, listen to Podcasts, learn everything we can

2. Network - connect with local multifamily investors, join FB groups, Meetups, Multifamily investor groups

3. Find a Mentor - someone who will guide you through the process, potentially partner with you, you may invest in a mentor to speed up the process or network to find someone who will take you under their wing for free.

4. Add Value to Mentor - find ways you can add value, you mentioned "boots on the ground", however you can help

5. Partner on deals w/Mentor - you won't have the credibility or experience to do your own deals at first, but you can leverage the credibility and experience of a mentor to close deals. Even if you get a small piece of the equity, it could still be a huge upside if it's a big deal. As you gain experience and are able to bring more value or start building your own network, team, etc. you will eventually gain the experience to be the lead on a deal. 

Good Luck!!!

Litan,

The Asset Manager will be the one who is responsible for overseeing the business plan and holding the property manager and/or property management company accountable for executing the plan. So when evaluating a deal, ask who will function as the Asset Manager, and then ask about that person's experience with this particular type of investment. It will likely be one of the sponsor/syndicator/operator's. And perhaps even more important than the Asset Manager, is whomever is in charge of the strategy or business plan for the property. Find out who that is, and ask about their experience in executing this type of investment strategy. Ask for them to share case studies from previous deals that are similar asset class and strategy. Execution of the plan is very important, but having the right plan to begin with is most important.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $740,000
Cash invested: $260,000

Single Family Rental property in HOT Austin neighborhood minutes from The Domain

What made you interested in investing in this type of deal?

We have another rental property in the area and it has done very well over the years. The Austin market is super hot right now and we believe the area around The Domain will continue to appreciate massively.

How did you find this deal and how did you negotiate it?

We found the deal through online listing and hired Taylor Drolette from Sprout Realty to negotiate the deal. There were multiple offers and Taylor helped us win the property!

How did you finance this deal?

We used Park Place Finance to secure a 30 year note, but we were able to get the first 5 years interest only, resulting in even better cashflow. We put 35% down, so we have plenty of equity in the deal and feel confident it will appreciate massively, so the interest-only option made perfect sense for us.

How did you add value to the deal?

The upside on this deal is the cashflow and appreciation. It was renovated beautifully, so there was nothing to add in terms of rehab. Where we added value is being bold enough to ask for $3,500 per month in rent. That price is way above comps in the area, but we felt given the state of the market (HOT) and the quality of the home, we could pull that rent. Our boldness paid off! We got multiple offers and ended up renting in for $3,600.

What was the outcome?

$1,300/mo in CASHFLOW

Lessons learned? Challenges?

Many investors would shun paying 740K for a rental property. Even in the super hot Austin market, most investors are looking for properties in the 300-400K range. We did not intend on going THAT high, but this house is a GEM, and we believe strongly in the market surrounding The Domain. Going against conventional wisdom paid off, and now we have a $1,300/mo cashflow property that will likely be worth 1MM+ in the next 3-5 years.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Taylor Drolette with Sprout Realty did a fantastic job helping us win the bidding war on this house and also finding great tenants at a fantastic rental price.

Investment Info:

Other other investment.

Purchase price: $400,000
Cash invested: $40,000
Sale price: $933,000

A pocket listing Lake Travis waterfront lot in Jonestown, TX

What made you interested in investing in this type of deal?

We knew there was equity in the deal and anticipated the value going way up due to the scarcity of quality waterfront lots on Lake Travis.

How did you find this deal and how did you negotiate it?

Through a local agent who had it as a pocket listing. It was early 2021, so the Austin market hadn't exploded yet, but we could see that a wave was coming. We felt the lot was worth at least 100-200K more than asking, so it was well worth the risk. 2021 ended up being the biggest year in Austin real estate history, so the lot value went way up.

How did you finance this deal?

Hard Money loan through Easy Street Capital.

How did you add value to the deal?

Investing in fantastic videography, pictures, website, marketing. My wife and I own a marketing firm, so we are always looking at marketing. It blows our mind how many times we see poor marketing, whether it's bad videos, pictures, writing, websites, etc. And we've noticed it's even worse when it comes to land. Land in Austin is EXPENSIVE, and many times you will see lots 400K-1MM+ and they just throw up a few crappy pics and a short description. We did the opposite and it PAID OFF!!!

What was the outcome?

We closed on the lot for 933K, generating about 470K in profit after all interest, marketing, buyer's agent fee, and all closing costs on both sides of the transaction. 470K profit in 6 months with no rehab!

Lessons learned? Challenges?

Sometimes real estate agents can be an amazing source for leads. That was the case in this deal. Because we were actively looking for land and meeting several agents that were selling land, this deal came to be.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Gabe Correll from Easy Street Capital came through with the best hard money loan option for our project. We called several of the top rated lenders in Austin, and narrowed it down to the top 3. The process with Easy Street was as advertised, pretty easy, and it worked out great for us.

Investment Info:

Other other investment.

Purchase price: $400,000
Cash invested: $40,000
Sale price: $933,000

We found a pocket listing on a Lake Travis waterfront lot and the seller was asking 400K. We played it cool, but soon followed up with a full price offer knowing it was well below market value. We used hard money to buy the lot and negotiated a 10% down payment at 9.9% with 2.5 points to close. We hired the top real estate videographer in Austin, JP Morales, to make an awesome video and take some fantastic drone shots. My wife and I built a custom website and listed the lot ourselves through an MLS listing service. In less than 6 months, we closed on the lot for 933K, generating about 470K in profit after all interest, marketing, buyer's agent fee, and all closing costs on both sides of the transaction.

What made you interested in investing in this type of deal?

Massive upside

How did you add value to the deal?

Investing in fantastic videography, pictures, website, marketing. My wife and I own a marketing firm, so we are always looking at marketing. It blows our mind how many times we see poor marketing, whether it's bad videos, pictures, writing, websites, etc. And we've noticed it's even worse when it comes to land. Land in Austin is EXPENSIVE, and many times you will see lots 400K-1MM+ and they just throw up a few crappy pics and a short description. We did the opposite and it PAID OFF!!!

Lessons learned? Challenges?

Sometimes real estate agents can be an amazing source for leads. That was the case in this deal. Because we were actively looking for land and meeting several agents that were selling land, this deal came to be.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Gabe Correll from Easy Street Capital came through with the best hard money loan option for our project. We called several of the top rated lenders in Austin, and narrowed it down to the top 3. The process with Easy Street was as advertised, pretty easy, and it worked out great for us.

Thanks Kevin! That is a great idea. I will speak to the lender about that option as well.