All Forum Posts by: Paul Moore

Hi @Frank S.! I've been in the commercial investing realm for a while and I even wrote a BP book on self storage. Though I may be proven wrong, I think that outdoor boat and RV storage is one of the best on ramps for investors to access real estate right now. I would even consider the possibility of doing a rent-to-own on a piece of property. Start offering a place to park boats and RVs on grass. If it works out well, gravel part of it. If that works well, pave part of it. If that works well, put a fence up and security cameras.  If that all works well perhaps add some electrical outlets for cold climates at least. If that all works out really well, rinse and repeat. 

In my area there is rural land available very cheaply. But there is a world-class resort lake (Smith Mountain Lake, VA) nearby. It seems to be a great opportunity and I agree with @Terry Campbell above that it could potentially be automated. Good luck and happy investing!

Hi @Michael Figueroa! Congratulations on having $500k to invest. I'd love to hear what your goals are and if you are planning to manage this real estate full time. Unless you have some experience and full time dedication I would offer the following controversial thoughts...

If you were going to bet on half a million dollars on an NBA game, would you bet on an average college team or the Golden State Warriors? I'd place my money on Stephen Curry. 

If you were going to bet on the next best performing electric automobile maker, would you invest you half million with Elon Musk...or the guy tinkering in his garage down the street? 

I don't mean to be offensive. Really, I don't. But there are people with teams who have a full time obsession managing commercial and residential real estate. If you can find one you trust I recommend investing with them. Investing with a great syndicator or fund will likely produce much better results with almost 0 hassle compared to what you could get doing this yourself. Much lower risk. No debt in your name. And even with their fees and splits I've found it usually works out better. I've talked to over 2000 investors in the last decade and the overwhelming consensus is that managing your own deals part time is very challenging and does not produce the expected results. 

Now if you want to be in the real estate game full time that changes my answer. Lots of good advice above. Happy investing and good luck! 

Hi @James Nix! You got some great advice above and you should be all set to find deals in this market. The question is this: do you really want to buy deals in this market. Thought I wrote a book on multifamily investing, I've been avoiding it for a number of years and it's perhaps worse than ever now with higher interest rates but consistently compressed cap rates. 

I hope and pray that my idea will not come to pass but it could: if you wait about 1 to 3 years, it's likely that you will be able to acquire some foreclosed multifamily deals from banks. I hate to see this happen and in general multifamily deals are less abundant than single family and other types of assets, however this has been a long drunken binge for many multifamily syndicators, especially newer ones. Many of them have debt that needs to be refinanced in the next few years and it's possible some will end up under water and lose their properties. 

Again, I hope this never happens. But if it does you will need to be prepared with experience, a team, liquidity, high net worth, or the ability to get a co-signer to sign on the loan and a great property management team. You will need this to convince the bank you are a worthy buyer if that opportunity arises. Good luck and happy investing! 

Hi folks. I commented on this a few weeks ago. I'm curious, since I'm writing about this topic in the BiggerPockets blog...are you investors seeing much movement in cap rates? They inevitably have to expand to keep up the changing interest rate. I'm wondering what you all are seeing? 

Hi @Solomon Floyd! Great point. I completely agree. And I'm glad to hear you are talking about private REITs. My issue with public REITs, like @Mike Dymski said, is that their value is impacted by CEO scandals, wars in Europe, random tweets and the mood on Wall Street. Private REITs and diversified commercial real estate funds can pay a strong ongoing yield and simultaneously provide appreciation in many cases. Happy investing!

Hi @Chris Anderson! You got some fantastic advice above. I agree, that an LP under 20% should generally not have to sign on the loan. Let us know what you come up with! 

Hi @John P.! You got some great advice above. This is a very informative thread and I am glad for the conversation. 

@Shafi Noss, your comments above were extremely informative. I've been a part of several discussion like this over the years but I love the way you explained it above. Thanks! 

@John P. the issue is not whether you can do a TIC structure or not. It is legal. But I don't really believe it's preferable for the vast majority of syndicators. In fact, in all the years I have been in this business I think I've only seen one or two syndicators who allowed this and it was usually for a very large equity investment or because the investor brought the deal to the table and wanted to stay in. If you find syndicators who are willing to work with you on this, then I would love to hear more about that. Not because I want to invest, but because I have been under the impression for a long time that it is very rare.

If anyone out there, including you @Dave Foster, know a way around the TIC structure for 1031 investors to enter a syndication or fund, I would absolutely love to hear it!

Thanks for the shoutout @Nathan Gesner! I think my book would be helpful and if you order it from BiggerPockets directly, you will get some fun bonus material, including a detailed case study.

My friend AJ Osborne also wrote a great book on self-storage that you can get on Amazon.

If you get serious about self-storage, I highly recommend joining a coaching program. I got my start in a coaching program with Scott Meyers. The website is  https://selfstorageinvesting.c.... Good luck and let me know if I can help! 

Hi @Sanjay Sharma! I share your enthusiasm for investing in syndications. I wrote a book about investing in multifamily syndications called The Perfect Investment. It's available on Amazon, but I would be happy to send you a PDF copy if you PM me. I have a lot of thoughts about this topic if you want to jump on a call I will be glad to do so. I do a free call where I take and answer questions almost weekly. Again, PM me. Good luck!

Hi @Glenn Driban! You got some great responses above. This is an era known as "negative leverage." At least for some asset types in some locations. 

There are 3 ways I can think of to mitigate this issue: 

1. Take on less leverage. 50% debt for example.

2. Quickly grow NOI through raising under-market rents to market levels.

3. Find a steep value-add deal and address it through a very experienced team with a track record for extracting value from under managed and under valued properties. 

Note that number 2 and number 3 should be appropriately evaluated through the lens of significant risk and that you may not be successful. You should be prepared in that case to come out of pocket for a long time to pay your debt. Not something I would want to do. That is unless I am investing with an experienced team with a track record to find significantly undervalued deals. Actually, that is what I am currently investing in :) Good luck and happy investing!