All Forum Posts by: Neil Henderson

I was about to come in here and say pretty much exactly what @Michael Wagner and @Scott Meyers said. ;o) Listen to them, they are wise and know of what they speak.

I'd add, don't forget to get a feasability study before getting too far down the road. Bob Copper is a name I hear often.

Hi Nathan, boy do I hear you! Real estate syndication is exciting and rewarding but it is a LOT of work. IMHO, a lot more work than investing in single family homes, but with an outsized return on that extra work.

Some thoughts based upon what you've said here:

• It will be very hard to syndicate a deal that's only 6-12 units. The costs associated with setting up the PPM (Private Placement Memo) and getting it legally ready to take to investors would kill most deals of that size.
• If the smaller commercial multifamilies in that range (6-12) still interests you, you are more than likely looking at a joint venture. Find one or two AT MOST people with complimentary skills to partner up with to find and take down a deal. Everyone has to be actively involved in the deal in someway, sourcing, marketing, managing, project managing, etc. No one can be a purely passive investor in the deal as that gets into syndication territory. DISCLAIMER: I am not an SEC attorney. Seek out legal advice. @jilliansidoti at Crowdfunding Lawyers is a great resource.
• Keep in mind, with units of that size, you are likely going to be self managing as it's probably too small for professional management. Make sure someone on your team is experienced or comfortable handling that.
• If you are interested in taking down larger deals, 80 units or more, I would suggest to stop trying to do it all. Pick one aspect of syndication and focus on that. Most people start with the deal and then try to go find money to pay for it. Personally, I think that's bass ackwards. Begin building relationships with investors first, create a sample deal presentation, "I don't have a deal yet, but when I do it will look a lot like this..." Get verbal commitments from investors and tally up how much you have committed, figure on about 50% of those people actually investing, often less. Now that you know how much money you have to work with, you have an idea of how large a deal you can go look for. 
• Network with experienced syndicators with a good track record and reputation of executing the kind of stratgey that appeals to you and your investors and offer to bring money to their deals. 

Good luck to you!

I would strongly caution against renting storage units to people other than your tenants.

Value add to your existing tenants? Yes, offer them the storage space for an extra fee.

Renting to the community at large? Run away fast. Too many legal and zoning pitfalls.

@Alex Jones To not have my W-2 income be a single point of failure for myself and my family. We are building multiple streams of income to live on so that if one goes bad, it’s a small percentage of our income, not 100%.

Update. We have started using TurnoverBnB and have been very happy so far. We have access to a crew of cleaners who are notified automatically when we have a new booking and they are able to assign themselves to the job when it pops up. 

A new challenge to train the new crews on how we like things to be cleaned, but overall very happy. 

@Stephan Kraus 7-10 turnovers per month

@Stephan Kraus We are in Central Summerlin, near 215 and Town Center.

We have been very fortunate to have the same cleaning team handling the turnover for our short term rental for the past four years.

Unfortunately, that cleaning team has moved out of the area and we have been struggling to find someone to handle the cleaning for our short term rental.

One problem we are running into is the space is very small, only about 300 square feet. It’s a guest house with no kitchen. We have paid our crew $40 a turnover to clean it for the last two years, it takes me (a non-cleaner) just at an hour to clean the space.

Most professional cleaning services we’ve contacted want a three hour minimum that totals about $90 at minimum, most are much more.

Any suggestions on how we could go about finding a new cleaner?

@Asa Hunt I was not directly involved in this deal but I know an investor who was.

Fully stabilized large apartment community across a highway from a University. Property was 95% occupied going into the Spring. During the Summer, the city shutdown the pedestrian bridge that crossed the highway to the university to do emergency retrofit. The occupancy dropped to 60% and did not come back in the Fall. The loan came due during that period and they approached the bank about a refinance. The bank, who they did not have a long term relationship with, saw an opportunity to acquire a solid asset for a huge discount. They foreclosed on the property and the investors lost all their investment. Fortunately, the syndication sponsor was a large enough operator that they were able to pay the investors back their original investment.

The lesson:

1. Make sure the terms of your debt allows you enough runway to execute your business plan.

2. Make long term relationships with lenders.

@Mark DeLorenzo @Alexander Felice Is a master of the delayed finance BRRRR. Perhaps he could answer this question.