All Forum Posts by: Paul Ko

Hi All,

I wanted to share my latest experience as I have noticed a trend.  Since the beginning of the new year, private capital has come out of hiding and is ready to start working again.  When it feels like your investor base is beginning to tap out, how are you getting deals done in 2023 and beyond?  

I am starting to run into more and more fund managers and syndicators that have investors looking to deploy capital without a pipeline. My first thought was, where are the people that are looking to invest right now, and how do I get in front of them? Surely there are many ways to get to them, but have you considered partnering up or structuring a Co-GP?  Now is the perfect time to be open and creative to get deals done.  Now is the time to get after it, get creative, and fill your pipeline.

What other creative ways are you getting deals done in 2023 that you haven't tried before?

Paul Ko

Do you have some capital gains this year that you would like to defer? Do you need to close on a 1031 exchange by the end of the year? We have new LEED Gold Certified duplex units primed for your next investment! Contact me for more details!

I have an off market 10 unit townhome project for sale that may be of interest. It's a Pre-TCO Qualified Opportunity Zone Investment with Expected Delivery February 2021. Developer is looking to sell at Pre-TCO for buyer to take advantage of full OZ tax benefits. Great location directly adjacent to the expanding Swedish Medical Center in Denver, CO (Englewood).

Being sold as a bulk package at $4.8m which equates to a projected 5.1% CAP rate and that doesn't include OZ tax benefits.

PS - we also have an additional 18-unit pocket listing down the street from the same seller if your group would like to gain greater OZ scale and benefits at 28 units vs 10.

Be glad to talk through the project with you. Feel free to reach out with any questions/interest.

Paul Ko

720-442-4170

[email protected]

Thanks for everyone's reply, this certainly helps.  This was more aimed at private equity groups that we are vetting, and trying to make our conversations more effective by flushing out who is real or not.

Does anyone have a list of DD questions to vet potential partners, investors, and/or lenders?  I've noticed that a lot of the time they only vet you and doesn't really give you an indication if they are the real deal.  What type of questions would you ask a potential investor/partner to show that they are for real and that they have the capital to take action?

Bump

Hello BP Community,

I am the CFO of a very successful Denver based real estate company. Our company is dynamic in that we handle acquisitions, architecture, entitlement work, property management, brokerage, and have great relationships with local and regional banks. Our biggest weakness is our cash and balance sheet are not robust enough to truly take advantage of all that we can do and all that we offer. We currently have 62 units of for sale and for rent development under construction that we have been the sole guarantor on. Each deal from here until these are done and sold/refinanced it becomes harder and harder to be the sole guarantor. We have two more deals near permit ready and more in the pipeline we are close to solidifying. Our largest need is the right financial partner. In life if you don’t ask the odds of finding what you need or desire are nonexistent. So we are asking. Please send us a private message if you are game for a 10-15 minute intro call and to learn more about who we are and what we do.

Paul

Thanks everyone for your feedback, it certainly helped us tremendously!

The assets we are picking up will cash flow, and will be able to cover monthly pref payments, debt service, and operating expenses. We will plan to take a 65% LTV loan from an institutional lender. We will plan to pay out pref payments quarterly. We are putting together the fund through Reg D offering and have already got an attorney rolling on the docs.

As an update, we have revised our figures for our investors:

1)  7.5% Preferred Interest paid out quarterly.

2) 75% Investor/25% Sponsor on profit splits to 17% IRR total (including pref)

3) 50% Investor/50% Sponsor on profit splits in anything over and beyond the 17% IRR to investor.

I'd greatly appreciate any additional feedback on the revised figures or any advice!

Thanks All!

Paul

Hi All,

Long time follower, first time posting.  We are getting ready to launch an equity fund for an opportunity we have found.  I wanted to get some feedback to see if our offered returns are "market rate" and to see if we need to change anything to attract investors.

1. Pref payments to investors paid out monthly at 4%

2. 100% profit split to investor to next 4% IRR (total 8% IRR to investor)

3. Waterfall up to next 3% IRR (Investor 75% - Sponsor 25%)

4. Waterfall anything over and beyond (Investor 50% - Sponsor 50%)

Depending on the deal, the investor is looking at 8% IRR at a minimum, and after profit splits they would be looking at between 11% - 18% IRR total.

Any feedback would be greatly appreciated!