All Forum Posts by: Paul Moore

Hi @Suhaib Rehman! You got some great information from folks above. @Brian Burke's articles are golden. 

I think you asked why do we need an exit cap rate. The exit cap rate allows you to calculate the full return on investment. It's usually calculated in terms of IRR. The exit cap rate will allow you to calculate the projected sale price and therefore give you a full picture.

I would recommend you use a conservative cap rate of 1.5% higher than your entrance cap rate. That may seem overly conservative, but with interest rates on the rise, at least temporarily, I think that's the reasonable thing to do. Good luck!

@Aj Parikh thank you for your kind words. Here is a link to a podcast I was on that discusses the7 Paths to Commercial Real Estate. Please feel free to PM me if you want to talk more. I hold a mentor call a couple of times a month and can have you join. Good luck!

 Hi @Danielle Shipp. I am glad you asked. Let the BP community know if we can help you any further. 

 @Fernando E. thank you, that is very kind of you. I am always happy to share. I do not do any paid coaching, however, I am happy to answer any BPer questions. I do a free call most weeks where I answer questions and if you would like to get information on how to join, please PM me. I plan to do one on October 19th. 

I wrote a book on multifamily, humbly titled The Perfect Investment, in 2016. If you PM me, I can send you a PDF copy. I absolutely do not think multifamily is undervalued. This is why our company stopped investing in multifamily for years and expanded into self-storage, mobile home parks, RV parks, etc. We do occasional multifamily, but only under rare circumstances. Multifamily in my humble opinion is the poster child for overvalued real estate in this cycle. I would stay away from it for now. Look for opportunities if the recession takes hold in the next 1-2 years. 

Good luck and happy investing!

Hi @David A Pennell! Congratulations on taking your first steps to getting into self-storage. 

Thanks @Scott Krone and @Nathan Gesner for the shout outs. I learned about self-storage because my firm has been investing heavily in this arena for a number of years. Before that however, I learned much, or shall I say most, of what I know about self-storage from Scott Meyers https://selfstorageinvesting.com/. I highly recommend his academies and think that you will do well by starting there. I believe he has some online materials if his schedule is not conducive to yours. 

I didn't say much about this in the book. I think for beginners it is not a bad idea to try outdoor and boat storage first. By leasing or buying a piece of semi-rural land, you can learn the business, test your marking skills, and get a start there. 

Another thing that wasn't in the book is automating a small facility. Automation has come a long way in the last several years and I think it's time has come. Good luck and let me know if I can help you. 

Hi @Greg R.! Great post and great follow up here. The latest 12-year bull market has produced more fakes and scammers than ever before. Why? Because social media allows a beginner with no track record or experience to advertise themselves using sweat equity and a few dollars here and there, to become a celebrity. While there have always been scammers from the beginning of time, I think there might be more now. And especially because of this run up in real estate values. 

But things aren't different this time. And trees don't grow to the sky. And as economist Herbert Stein Wyrley observed, "if something can't go one forever, it will eventually stop." 

The rising tide has indeed lifted all boats, but as Mr. Buffett reminds us, some day that tide will go out and we will see who is skinny dipping. The day of exposure is almost at hand and we will likely see the exposure of many frauds. Hopefully the BiggerPockets community is not falling for this stuff. I am glad to be part of the BP realm and hope that more people start ignoring these get rich quick schemes. 

Hi @Tony Aliatim! Congratulations on your first deal! I used to live in Royal Oak and other places around Detroit. I was an engineer working at Ford until 40 years ago. 

My BiggerPockets book on self storage covered this question in detail: how do I jump from residential to commercial real estate investing? I get that question a lot and in fact I just spoke on that Tuesday in San Diego at BPCon 2022. To get all of the details, you can buy the book and flip to the last 1/3 of the book. 

In summary, here are 7 unique paths: 

1. Stair stepping from small to large deals

2. Become a capital raiser and general partner in deals

3. Become a deal finder and a general partner in deals

4. If you have a lot of capital, go big from day 1

5. Get a job (property manager, mortgage lender, commercial real estate broker, etc.)

6. Invest passively in syndications or a fund and stay involved

7. Find an unpaid mentor opportunity or a paid coach

Good luck and happy investing!

Hi @Sarah Msuya! I would have thought this would just be a joint venture, and I have done many of these in years past. However there may be things an attorney can tell you that you should know. I've done many JV's and syndications as well. If you can make it a JV I recommend you do. Good luck!

Hi @Roy Mitle! You got some great replies above. I would recommend getting @Brian Burke's book The Hands-Off Investor. I would also recommend checking out 

Left Field Investors. They are a powerful community of passive investors and I think it would really benefit you.

Another group you might want to look at is Ian Ippolito's Private Investor Club with The Real Estate Crowdfunding Review. The Private Investor club is designed with someone like you in mind. Ian had the same frustration when he started planning to invest in private syndications. He put this forum together to help investors to review opportunities. I think you will benefit from that as well.

You should do a lot of due diligence, regardless of how much you know about them. Check out their track record, their team, their underwriting, the history, their plan, have someone else look over, ask the hard questions, do a criminal background check. If you have a bad gut feeling of any kind, trust your kind. There is a lot of due diligence that goes into this, as you are potentially putting in your hard-earned money. Best of luck to you! 

Best of luck to you!

Hi @R Durney! You got some great advice above and I also recommend @Brian Burke's book, as well as getting involved with LeftField Investors group. They are a powerful community of passive investors and I think it would really benefit you. 

Another group you might want to look at is Ian Ippolito's Private Investor Club with The Real Estate Crowdfunding Review. The Private Investor club is designed with someone like you in mind. Ian had the same frustration when he started planning to invest in private syndications. He put this forum together to help investors to review opportunities. I think you will benefit from that as well. 

Please reach out if I can help and good luck!