All Forum Posts by: Percy N.

@Thomas Bryan, make sure you account for proper amount of CapEx based on the age of the property.

Make sure that you also account for vacancies.

Do you have a lender willing to loan on these properties? It will most probably be a recourse loan.

Don't know if a Freddie Mac small balance program can be used here - https://mf.freddiemac.com/docs/product/small_balan...

Who is going to manage these units?

How geographically distributed are they?

I find that it is easier to scale apartments vs SFRs (1-4 units)

The economies of scale start kicking in around 75-100 units.

- Angel investing or early stage capital

- Structured Finance

- Factoring

Congratz  @Brian Adams !

374 units for $16mm is a great price. What is the purchase cap on T12 (I know its not a perfect metric).

We are buying 284 units in TX for a lot more.

If you have an "active" role in the GP, you do not need to be accredited.

However, not sure why you are looking to invest in the class A shares. 

As a sponsor, you get the option to invest in another class of shares (class B) which will have slightly different rights but depending on your waterfall may yield a better IRR and equity multiplier. This is one of the few benefits the sponsors get for doing a ton of work.

Confirm with your SEC lawyer.

First off, are "lame" and "lamer" trademarked? 

How big is the MSA of these properties? I am sure there are plenty of qualified PMs.

Why did you decided to use 2 different companies? I think if you combine all 64 units, you may get a slightly better PM and may even get a better rate.

David Schmidt you get to share in your percentage of the depreciation based on equity contribution when you invest in syndication as well. The difference will be that your investment as an LP will be considered passive, vs if you are an owner/operator, it is most likely active income. Now if you are a "real estate professional" as defined by the IRS, you can write off your passive paper income loss against other active income. Confirm with your tax accountant.

Do you want to accept vouchers or get the building certified as section 8? Really depends on your county, talk to the housing program folks in your county.

We use CoinMach (https://www.coinmach.com/) in a 284 unit property.

There are a couple vendors but not sure they would install only a few machines.

Personally, I would look on eBay and buy some used old machines or rethink the business value of this endeavor.

How much revenue boost will this provide to your NOI? Are you accounting for service cost?

John Heffner it comes down to how well this investment will perform in the next few years (or whatever your investment horizon) vs other opportunities you might be evaluating. Personally, I am liquidating some SFR rentals which have appreciated over the past 4-5 yrs and were generating 2% but I can get better investments in larger apartment deals and it scales much better.

For those landlords who are not comfortable saying NO, let me suggest an alternative - tell the tenant you need to check with your business partner. This lets you give the issue some thought and come back with a reasonable option or even a "sorry, my partner was not agreeable to that" response.