All Forum Posts by: Paul Moore

Hi @Melissa Steinour! Welcome to BP. It looks like you got some great advice above. 

After speaking with a few thousand investors over the past decade, I would recommend that you don't buy and actively manage your own property unless you are passionate about it and want to dedicate the time needed to do this. A lot of investors try to do this on the side and while it works for some, it can be a big hassle for others. I've seen both. 

Given the passive investment opportunities available these days, I would recommend you consider passive investments. Unless, like I said above, you are passionate about real estate and are sure you would be excited to manage these properties, or are willing to pay a property manager. Good luck! 

Hi @Allen Wu and Hi @Barry Fuchs great questions. It is really smart to do due diligence on sponsors and as @Jim Pfeifer said, this is the most important aspect of investing in private commercial real estate. 

Dan seems to be a great guy and their firm seems to be providing a lot of value for investors. I can't imagine it being a scam. I had Dan on my podcast and I've been on his and he seems to be a wonderful leader and I've heard investors say positive things about their investments with them. 

I recommend that you join a community to find and vet the best operators and investment opportunities. @Jim Pfeifer's Left Field Investors is a community I can highly recommend. 

You may also want to pick up Brian Burke's outstanding book, The Hands-Off Investor. As a new passive investor, I recommend you do everything in your power to learn all you can about syndicators and fund managers, and be ready to walk away quickly if everything doesn't check out. It looks like you are off to a great start. 

Hi @AP Horvath! I agree with the comments above. I would start with a very lowball number and tell them they are going to need to owner finance as well since "what bank is going to touch this deal?" 

I also agree that the finances can be estimated by reconstructing. This is where being part of a mastermind or having a mentor would be really helpful. I was in residential real estate for over a decade and when I hired a mentor in commercial real estate almost a decade ago it was extremely helpful. Without having a team of experienced people around you I would not touch one of these deals. Good luck and happy investing!

HI @Jason Thompson! It is so hard to get started in this business as the comments above point out. I am not trying to sell books, however my BP book on self storage devotes the last 1/3 of the book to the topic of how to get started in real estate syndications. (It specifically addresses self storage, but the paths are the same for other asset types.) 

I also covered this many times on BiggerPockets Facebook Live events if you can dig those out from around 2020 and 2021. Best wishes and happy investing!

Hi @Holly Williams! Congratulations. Your post created a lot of stir and I'm glad you achieved this...and that you told the world about it. 

You are 4 years older since you made this post. Your daughter is out of high school now. What is life like for you now these past 4 years? How is everything going for you now? 

Congrats again!

Hi @Caleb Smith and Happy New Year! 

You have it right. Preferred returns are given to investors before profits are split with the syndicator. As far as the return of original capital, it can come in at one of at least 3 ways: 

1. Through the refinance of the property

2. Through the sale of a property

3. On an ongoing basis as preferred return hurdles are exceeded

This last one could be a bit confusing. What I mean is that if a return hurdle is 8% and the syndicator is distributing 10% to the investor, the amount above the hurdle, that last 2% in this case, can be considered a return of capital in some syndications. 

What I described above is generally considered an American Waterfall. There's also a less popular European Waterfall. The European Waterfall treats all cash flow of every type as a return of capital to the investor until they are fully repaid first. Once that capital is repaid in full, the preferred return hurdle essentially goes away and the profit is split per the PPM. 

Good luck and happy investing! 

Hi @Reden Dionisio! You got some great advice above. I also recommend checking out The Left Field Investors community. They will give you great guidance and you will be able to meet a lot of people in this realm. Good luck and happy investing!

Hi @Karma Senge! There really aren't a lot of options I've seen. There is a MHP buying group on LinkedIn. There are a couple MHP groups here on BiggerPockets and you should track them down. 

Frank Rolfe from Mobile Home University was a guest on the BP podcast in 2018 or 2019, if I recall correctly. He has an extensive course and you should check that out. 

There is also a great book called that came out in 2020 called The Mobile Home Park Manifesto by Glenn Esterson. Good luck and happy investing!

Hi @Scott E.! Great question and you stirred up a lot of comments here. Great job! 

This is certainly something that can be done. About a decade ago, my multifamily mentor partnered with a number of his students who essentially wholesaled apartment deals to their firm. It worked like this: the student found a deal and did initial due diligence. The student brought the mentor in to conduct formal due diligence and the partnered together to make an offer on the property. If the property was successfully acquired, the mentor would keep the student in on the deal with a pre determined ownership slice. Rather than getting a wholesale fee or commission, the student got his name on the deal with no debt. The student also got great experience and was able to stay in the deal over the long haul. 

I know this isn't exactly wholesaling. It's more of a deal finder path to commercial real estate ownership. I talked about this in some detail in my BiggerPockets book Storing Up Profits on self storage. I spent the last 1/3 of the book in fact discussing 7 different paths to get into commercial real estate investing and this was one of them. 

That said, I did wholesale a $4 million mobile home park once and it went very well. So it can be done! 

Hi @Rick Martin! There are some syndicators who actually buy their LP investors out of deals as part of the refinance proceeds or afterward. Of course there is probably nothing wrong with this as long as this is clear to the investors upfront. 

Like you, our fund keeps LP investors in the deal until the very end. Good luck!