All Forum Posts by: Brian Gerace

Thanks Sam.  I appreciate your response.  So typically capital is not returned until a major event(refi or sale), that makes sense.  Thanks for the explanation.

Investing as a syndication limited partner, when is capital returned.  I know there are alot of variables(buy hold, vs value add, etc), but what is typical.  Let's assume a buy an hold scenario that has stabilized.  If there is a preferred return of 8% that is distributed that is a return on capital, correct? What if the property is a home run and there are funds available to pay out more.  Is it distributed? And if so is it a return on capital or a return on capital? Any thoughts are appreciated about typical distribution scenarios.

Could you possibly add some detail to this statement:

"Wee did not negotiate a lot on the price as the property was sold at 6% cap rate which is market rate. I just know that improved value at proforma of 12% cap rate. That’s why entry cap rate does not matter."

Can you talk about why it was a 6 cap but you knew it could be a 12 cap. 

Thanks for the input, based on my numbers that it what i was finding. Some of these deals have great ROI but the 70% rule doesn't come close.

Does the 70% rule hold relatively true in higher priced areas such as CA. I am looking at a home listed at 1M needs about 100K rehab and has an ARV of 1.3M. Using the 70% rule, my max purchase price should be 810,000. Seems a little implausible to obtain for 190k under ask. It seems like as priced there is enough profit to make the deal go. I am sure I am missing something so any thoughts would be appreciated.

I have a friend with quite a bit of idle cash. He always approaches me to find/partner with him on multifamily investments. My background is in SFR real estate investing. I have always been excited to enter into the large multifamily investment space. He would put up all the money and be considered a very passive investor. I would investigate and analyze the deal. On a percentage basis, how would you structure the joint venture. Could I justify a straight split(ie, 70/30) of all cash flow/profit upon exit?

Im a newbie in CA so I wanted to pick your brains. Is it realistic to purchase a buy and hold property that cash flows in CA with current prices and investor demand. Or are investors banking on future appreciation? I am thinking that without an enormous down payment, basically forcing cash flow, the only way is to find a super distressed property to rehab and hold. Thoughs?

Rick,

Am i understanding this to mean refinace to extract any excess equity?

Thanks,

Brian

David, can you explain the math when calculating the ROI of 69% and COC of 58%. Sorry a newbie here.