All Forum Posts by: Percy N.

We have done the occasional swag (Nike golf shirts, Underarmor Pullovers, pens, etc) but these are more promotional items from our marketing budget.

We have done gift baskets for larger investors and don't underestimate the power of personalized handwritten notes/cards.

The best "holiday gift" is the returns our investors receive (we are in the midst of 2 sales), but this year I am also thinking of a box of gourmet handmade pretzels dipped in chocolate, caramel and nuts that a small producer in the Philadelphia area makes (keeps with the Penn theme).

@Ragnar, please do not judge all syndicators via this one example.

Most good syndicators will not only include these financial projections but also identify that all investments have some degree of risk and would not recommend investing outside your means.

We also share our underwriting and walk investors through our model.

This has worked for us since the vast majority of our investors are in multiple deals with us.

Flashy "Moghuls" have to get their multitude of planes and cars paid for somehow (guessing by the partnership). Not sure if these are called out on the financial statements.

@Corey Philip if you are looking to defer taxes while being in a high-income tax bracket, did you consider an asset class that offers more accelerated depreciation (e.g. MultiFamily, Hotels, Conservation Easement, etc)?

I would start by making an objective list of what your unique value proposition is. i.e. why should someone invest with you vs the myriad groups out there?

Would also say that without capital and experience, it would be hard to get a good deal under contract.

Start making contacts with investors, lenders, etc at local REIA and other forums.

Last but not least, I would also encourage you to make sure your underwriting is robust and supports the correct assumptions (vacancy, leasing staff, maintenance staff, etc). We find that it is very hard to justify a full-time leasing agent and maintenance for less than 80-100 units, depending on the market.

Hope that helps.

If you can truly find high-quality (off-market) deals, then you can bring it to a few groups you build relationships with.

Partnerships can be very complicated, particularly long-term ones. My advice would be to start out as a flat fee structure for finding the deal and then roll into the GP side (with the proper legal framework) after the first few deals.

Reading on the subject is a good start, but there is nothing like real-world experience.

I can't begin to tell you all the things we encountered as owner/operators vs what is in books.

My recommendation is to try to partner with someone who can give you a peak behind the scenes.

Where is the property located?

Do a quick title search. Some states allow people to reside in and take over a property if vacant for a period of time (I think there were a lot of attempts of this during the 2007-09 crisis in FL). 

I would put no trespassing signs, install an alarm system (you can get a wireless cellular one like Simplisafe for $300) and report any breakins to the police as a break-in as well.

@Travis Heppe did you do a feasibility study to determine the highest and best use?

What are the soft costs incurred thus far on the plans, etc?

@Javen Wilson, for larger multifamily the lender will most likely want you to hold the property in an SPE (Single Purpose Entity). If you bring in passive investors, you will need to follow some SEC rules and do a PPM.

You will need some seed/pursuit capital to tie up the deal (deposits, 3rd party reports, lender deposit, etc).  For larger multifamily, this will typically be $200k - $500k+

Lender will want to see net worth equal to the size of the loan and about 10% liquidity.

Every lender is slightly different, but this is what I have seen in the 1000+ units we own and operate.

@Erica Hutchinson, lending on anything over 5 units is considered a commercial loan so it is really up to the lender. Most will require a 20-30% downpayment.

For mid-sized loans ($5mm+) they may allow you to bring in some equity, but will require a certain percentage to be from the Key Principals (guarantors) and will require about 10% liquidity to be maintained through the loan term.

How large is the loan? Talk to some local banks and credit unions. If you bring in passive partners, remember to do a PPM and register an exemption for the securities.

Hope that helps.